Technological Changes and Their Impact on Business

Introduction

All organisations exist in environments that are susceptible to changes that may occur within or outside the organisation. Changes in the business environment subject organisations to initiate various changes in an attempt to adopt coping strategies and structures to thrive in the new organisation environments. Dynamic aspects of the environment, such as legal structures, technology, and ethical business ethics, among other aspects, may have significant effects on the functionality of an organisation.

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The way in which an organisation adjusts to such environmental changes determines its accomplishment of goals and objectives. For instance, rapidly changing technological developments in the last decade has had profound effects on business organisation, forcing them to change their operational structures and business strategies in order to meet the ever-increasing demand for quality and quick service and product delivery. Therefore, the efficiency in which an organisation relates to its internal and external environment is important for the assessment of factors that influence its success. This essay provides an insight into the effects of technological change on organisations.

Environment

The ‘environment’ refers to those forces within or outside an organisation that influence its functionality (Suikki, 2007). The author reveals that there is a persistent relationship between an organisation and its environment. The dynamic nature of the environmental forces leads to either probable opportunities or threats to an organisation. The occurrence of opportunities creates new avenues for expansion of business and entry into new markets.

However, threats such as economic recessions, the emergence of a similar organisation, and/fluctuation of market rates negatively affect the functionality of an organisation. Therefore, there is a need to understand the complexity and dynamic nature of an organisation’s environment as it has significant effects on its development. Knowledge about the organisation’s environment enables business leaders to determine opportunities and threats. It also enables identification of business accomplishments and flaws, thus enabling managers to devise appropriate directions for growth. Organisations exist in two kinds of environment, namely the external and internal environments.

An organisation’s external environment refers to those forces that occur outside the business that affect its functionality. These forces emerge from political, environmental, social, technological, economic, and legal factors (Mashhadi & Ijaz-Ur-Rehman, 2012). Uncertain political and legal regulations influence the economic structure of a country, resulting in profound effects on organisations. Changes in environmental regulations, labour laws, tax policies, trade restraints, and general political volatility have significant effects on organisations. Fluctuating economic factors such as economic growth, sudden variations of interest rates and inflation rates affect decision-making processes and overall business processes. The most influential factor in the external business environment is technology.

The internal environment entails those forces emanating from within the organisation that affect its processes. Uzkurt, Kumar, Kimzan, and Sert (2012) suggest that factors such as management structure, organisational culture, the behaviour of employees, leadership styles, company policies, organisational hierarchy and/or business targets form the internal environment in an organisation. The internal business environment revolves around an organisation’s ideologies to offer quality products and services in an attempt to satisfy customers and gain some competitive advantage in the market. In a broader sense, the internal environment involves the organisation of people and nonhuman resources such as people, information, facilities, infrastructure, equipment, machinery, supplies, and finances (Grimshaw, Cooke, Grugulis, & Vincent, 2013).

Changes in both the external and internal environment are important to the stakeholders of an organisation in varying ways depending on their responsibilities. The key stakeholders are business leaders, customers, employees, support partners, business watchdogs, and interest groups. The complexity of the effects of changes in the business environment is relevant to the organisation on terms that relate to the stakeholders’ competitiveness and ability to adopt change. Change implies a number of impacts on the various stakeholders of a business organisation that might have a profound influence on the operations of the business. The existence of a change creates pressures and challenges that may affect the relationship amongst the stakeholders. Therefore, organisations have to establish sound values that protect the business in case of a change (Sapprasert & Clausen, 2012).

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Technological Change and its Effects on Businesses

Technological change emanates from the external environment and calls for a change in the overall processes of an organisation to implement new production processes and functions. In the last decade, organisations have experienced major technological changes due to the ever-creasing rate of innovation, invention, automation, and general dispersion of high-tech processes that have led to the implementation of new and efficient technological systems. Technological change and related issues have permeated modern decision-making processes as organisations seek the best production processes in an attempt to gain a competitive advantage in both regional and global markets. Indeed, technological change has become inevitable in organisations because of its major role as a key driver of productivity growth (Sapprasert & Clausen, 2012).

Technological changes have both positive and negative impacts on business operations. Ljungquist (2014) reveals that technology presents a number of tangible benefits. At the outset, technology is actually a tool that improves productivity in many organisations. With the emergence of the internet, invention, innovation, and dispersion of multifaceted modern technology such as smartphones, netbooks, iPods, tablets, and laptops have forced most organisations to adopt systems that are more efficient. Powerful internet tools such as social media, email messaging, and advertising platforms have improved the manner in which businesses advertise, promote, and sell their products.

Nonetheless, technology has some negative effects such as job elimination. The introduction of technology in most business displaces workers as modern machines conduct a number of tasks quicker, efficiently, and simultaneously whilst producing quality results. Although these technology characteristics reduce the operational costs for the business owner, they put employers with little competence or outdated skills at the risk of losing their jobs. In addition, technology has also brought about infringement of privacy. As a result, it has aggravated the need for installing surveillance equipment (e.g. CCTV Cameras) and key cards in the premises of organisations in an attempt to increase the security levels. The issue of security has also heightened monitoring of cell phone and internet usage, a situation that has raised questions about the privacy of workers (Sapprasert & Clausen, 2012).

Furthermore, the author reveals that the advancement of technology in organisations sometimes leads to supervision challenges that have led to deteriorated relationships between managers and their employees. The usage of phones, computers, and other internet-enabled gadgets has become a prerequisite for the destruction of attention, especially for employees. The click of a mouse button or an icon on a smartphone readily avails information about politics, game, and music among other items of interest. Lastly, but not the least, technology raises the need for training employees and managers in order to enable them to gain knowledge and skills about the new technology. Training restrains an organisation’s budget due to increased expenditure to hire professionals to coach employees and managers on the new technology.

Key Drivers of Technological Change

Various key drivers lead to technological change in organisations. Lozano (2013) suggests that the world’s ever-growing population is one of the key drivers for technological change in contemporary organisations. The author emphasises that demographic variables have increasingly led to a demand for the improved technological infrastructure. The world’s population is ever dynamic in aspects such as age structure, density, and migration.

These factors affect the population size within different regions of the world, creating new demands for basic needs and moderate to luxurious lifestyle goods and services. Therefore, a need arises for organisations to adopt technologies that are more efficient in attempts to satisfy the needs of the population. In addition, rising economic demands have led to a need for adopting modern technological processes in order to improve production processes whilst using systems that are more efficient. The aspiration for high quality life is also a major driver towards technological change in organisations. Living in a modernised world, people have heightened the need for superior lifestyles that is achievable through technological means.

Planned/Unplanned Changes

Technological change may be planned or unplanned depending on the nature of change. Some technological changes in an organisation are foreseeable and organisations have made appropriate plans to implement such changes. In such cases, organisations have created the desire for change in order to improve productivity and meet consumer demands. Planned technological are mostly met with a lot of resistance from the workers as they may imply displacement of roles and loss of jobs for employees. However, a research conducted by Uzkurt, Kumar, Kimzan, and Sert (2012) to evaluate the extent to which organisations were able to manage change indicated that indicated that approximately 39-percent of the world’s organisations were able to plan for technological change appropriately. The authors emphasise that organisations have attempted the best methods to manage technological changes in order to maximise benefits.

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Nonetheless, rapid innovation, invention, and worldwide diffusion of technologies in the last decade have led to unplanned technological changes for many organisations. Borghans and Weel (2006) define the process of invention and innovation as a complex system of economic, political, social, and industrial interactions. The authors attest that most organisations have had a difficult time in detecting technological change in last ten years.

According to the authors, the dynamic nature of innovation has left organisations with little time to foresee long-term technological changes. Indeed, there is unlimited potential in the development of chip technology. As a result, many changes in technology have remained unidentified, a situation that has led to coping problems as organisations fail to prepare for technological developments. Nevertheless, the world’s organisations should anticipate the rate of technological change to continue elevating, as more technologies emerge day-to-day.

Some of the technological changes have been “disruptive” to the functionality of organisations. Ljungquist (2014) reveals that rapid changes of technology have disrupted the operations of organisations as they shift their focus to implementation of new production systems. Although disruption of organisational activities by technological change seem to have plateaued in the last one to two years, the author claims that emergence of new technology still interrupts a sizeable number of organisations.

The future of disruptive technology is foreseeable for organisations. In a research carried out by Sapprasert and Clausen (2012), 7 out of 20 business leaders believed that development of technology in the future would certainly have more severe disruptions in a few years. In fact, 2 out of 9 respondents feared that their organisations would vanish by the year 2020, if the trend of technological changes continues. However, in a separate survey conducted by Dauda and Akingbade (2011), approximately 30-percent of the business executives who participated in the survey suggested that there is still an opportunity for improving the efficiency of organisations and their abilities to adopt change appropriately. The author emphasises that improvement of the operating effectiveness would sustain most organisations in a world that is experiencing swift technological modifications.

Change Interventions

Most organisations have used the precautionary principle in an attempt to manage technological changes. Precautionary principle is a managerial technique that organisations use to seek awareness of both economic and social products and services are determined by technological novelties. The technique also requires an organisation to be cautious of the threats, suspicions, and ethical problems among other pressures that accompany technological advancements. Lozano (2013) reveals that many organisations have used the managerial methodology to prepare for technological change as a way of evading the possibility of unsuspected effects.

Other organisations have adopted suitable business models that have had additional value to the embracement of technological developments. However, despite the application of the precautionary principle, other organisations have adopted unsuitable business models that could not enable them to cope with rapid developments and disruptive changes associated with change in technology. According to Dauda and Akingbade (2011), most organisations have highly specialised personnel, reputable product brands, and advanced technological systems. However, many leaders of such organisations fail to focus on the near future of their businesses due to the urge to satisfy self-interests.

Businesses have undertaken various types of organisational development interventions in attempts to cope with technological changes. Interventions to establishment of new technologies in organisations have forced business leaders to seek deep knowledge about the dynamics of the value chain model. The value chain model has enabled many of the organisations to maintain sustainable functionality at times of technological change. The organisational leaders have had to learn diverse needs and behaviours of both the customers and the clients in order to incorporate technological systems appropriately (Suarez & Oliva, 2005).

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The authors reveal that some organisations have extended their efforts to develop appropriate solutions for their customers by development of business models that align with revenue models in order to regain competitive advantage after undergoing technological shifts in their organisational structures. For example, Lozano (2013) reveals that BT Group PLC, a British multinational telecommunications services company based in London, England, and the United Kingdom, works close with its suppliers in order to adopt technology that generates merchandise that enables net-positive carbon elimination in order to align production with its revenue model.

In most cases, businesses face numerous barriers to change implementation. Borghans and Weel (2006) unveil that poor planning for innovative processes is a major barrier to the implementation of technological change in most organisations. Many business leaders have failed to prepare their stuff for developmental changes in their organisations. Technological changes imply reshuffling of responsibilities and loss of jobs for some employees as technology assumes human responsibilities due to its multitasking and efficient nature of production. As a result, employees and managers resist change, as they fear loss of jobs and assignment of new tasks.

Another barrier to change in an organisation is the introduction of disruptive technology. Employees and managers have readily resisted the introduction of disruptive technology in their organisations. According to Suikki (2007), disruptive technologies lead to discomposure of employees and sinking of market leaders as they focus on short-term profits rather than long-term strategies to meet future market demands. A research conducted by the author to determine disruption and the rate of embracement of new technology in businesses indicated that the rate of adoption is normally low at the beginning of implementation. However, the rate of adoption elevates to approximately 55-percent at the climax of implementation before it tends towards zero when nearly every employee accepts the technological change.

Conclusion

The essay has explored the effects of environmental change on organisations. An analysis of the effects of technological changes that have occurred in organisations due to rapid inventions, innovations, and dispersion of rapid technologies has proved that businesses have changed frameworks and business models in order to sustain their growth in stiffly competitive markets. Deliberations on technology issues have permeated the decision-making processes of modern organisations. Business leaders and partners want their businesses to gain competitive advantage in the international markets.

Therefore, technological change has become inevitable as technology has the capability to multitask and generate high quality products within cost-effective business frameworks. However, regardless of the effectiveness of such changes in business operations, organisations meet technological developments with varying resistance due to a number of factors mentioned above. Therefore, there is a need for modern organisations to review their operational strategies in order to improve the adaptability of change in their organisations. Business leaders have to take the responsibility of preparing the human resources with necessary knowledge, skills, and importance of integrating new technology in production processes.

Reference List

Borghans, L., & Weel, B. (2006). The Division of Labour, Worker Organisation, and Technological Change. The Economic Journal, 116(509), 45-72. Web.

Dauda, Y.A., & Akingbade, W.A. (2011). Technological change and employee performance in selected Manufacturing industry in Lagos state of Nigeria. Australian Journal of Business and Management Research, 1(5), 32-43. Web.

Grimshaw, D., Cooke, F., Grugulis, I., & Vincent, S. (2002). New technology and changing organisational forms: implications for managerial control and skills. New Technology, Work, and Employment, 17(3), 186-203. Web.

Ljungquist, U. (2014). Unbalanced dynamic capabilities as obstacles of organisational efficiency: Implementation issues in innovative technology adoption. Innovation: Management, Policy & Practice, 16(1), 82-95. Web.

Lozano, R. (2013). Are Companies Planning their Organisational Changes for Corporate Sustainability? An Analysis of Three Case Studies on Resistance to Change and their Strategies to Overcome it. Corporate Social Responsibility & Environmental Management, 20(5), 275-95. Web.

Mashhadi, A.H., & Ijaz-Ur-Rehman, Q. (2012). Impact of External Environment on the Performance of the Fast Food Industry. International Journal of Management, Economics and Social Sciences, 1(1), 19-25. Web.

Sapprasert, K., & Clausen, T.H. (2012). Organisational innovation and its effects. Industrial & Corporate Change, 21(5), 1283-1305. Web.

Suarez, F.F., & Oliva, R. (2005). Environmental Change and Organisational Transformation. Industrial and Corporate Change, 14(6), 1017-41. Web.

Suikki, R. (2007). Changing Business Environment—Effects of Continuous Innovations And Disruptive Technologies. Oulu, Finland. Oulu University Press. Web.

Uzkurt, C., Kumar, R., Kimzan, H.S., & Sert, H. (2012). The Impact Of Environmental Uncertainty Dimensions On Organisational Innovativeness: An Empirical Study On SMEs. International Journal of Innovation Management, 16(2), 1-23. Web.

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