Page 131 - F1 - AB Integrated Workbook STUDENT 2018-19

External analysis – social, environmental and technological factors

Technological factors

3.1 Introduction

Technological changes can affect a firm in many different ways, such as:

 Organisational structures – e.g. employees working from home but still able to
access files and systems at work.

 Product developments – e.g. turntables were effectively replaced by CD players
which in turn were replaced by MP3 players.

 Production changes – e.g. computer-controlled machinery.

 Marketing – e.g. using the internet to sell the product.

3.2 Impact on organisational structure

These changes have resulted in downsizing and delayering in firms.

Downsizing is a term used for reducing the number of employees in
an organisation without necessarily reducing the work or the output.

Delayering is often linked to downsizing. It is the process of removing
layers of management. This is usually to change the organisation
from one with a rigid hierarchical framework with numerous layers of
supervisory grades into a ‘flatter’ organisation with minimal layers of
management.

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