Page 180 - E2 Integrated Workbook STUDENT 2018

Chapter 13

1.3 Internal triggers for change

 Philosophy e.g. new ownership, new CEO or new management style

 Reorganisation e.g. takeover/merger, divisional restructuring, rationalisation or
cost reduction

 Personnel e.g. promotions, transfers, changes in rules or procedures, training
or development

 Conditions e.g. location change, outsourcing, introduction of flexible working

 Technology e.g. new procedures or systems, changing information demands
or integration of roles

1.4 Problem identification

The above triggers can be reasons why change is considered or even necessary.
However, further strategic analysis is needed to determine what needs changing.

For example, if a company has experienced falling profits, declining margins and a
loss of market share over the last two years, it will try to identify the problems which
have caused this situation. If it discovers that the main reason for this decline is
increasing competition from overseas manufacturers, it can identify that external
trigger for change is increased competitive rivalry, but it then has to address what
needs changing.

Suppose poor quality is identified as the underlying problem.

Even then, it is not obvious what needs changing. ‘Poor quality’ could be an
underlying problem of customer perception related to brand or design flaws, the
quality of raw materials, production problems or an underlying culture where quality is
not valued highly enough. Determining the main cause(s) could involve discussions
with customers, competitor analysis, Porter's value chain analysis, SWOT and /or
benchmarking.

Only then will the directors have a clear idea of what needs changing.

174