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Activity 1.1:

Internal and External Factors Explaining Reasons for Change

A business organization has both internal as well external business environment to deal with as they play a vital role in regards to the business functioning of an organization. The organization brings in change based on the internal and external factors of their business environment which provides them with the challenges that need to be addressed using the change mechanisms. Considering the internal business environment of the Apple Inc., following are the internal factors that drives changes within the organization:

  • Innovation and Creativity- It is important for an organization like Apple to be constantly innovative and creative so to be able to come up with products that the customers want with the technological changes in the market. And considering this, it becomes imperative for the Apple Inc. to adopt change so to be able to remain creative and innovative for longer by changing their work processes and culture (Davenport, 2013).
  • Economic Restructuring- Apple Inc. relies on economy of scale and with change in the demand, it is important for the organization to revisit its financial policies and to bring in change into them to use it for advancement of the company in the market. Financial restructuring requires changes in the policies and structure of the organization (Davenport, 2013).
  • Organizational Culture and Structure- In the post Steve Jobs era, Apple Inc. is struggling to keep up the same organizational culture and structure as it was in the time of Steve Jobs and for that matter, it is imperative for the organization to change its organizational culture and structure to suit it as per the current time (Davenport, 2013).

Following are the external factors that drives or influences the changes within Apple Inc.:

  • Technological Advancements- The technology in the outer business environment is constantly changing and to incorporate the new technologies within the organization and into its work processes and systems, it is important that a proper change process has to be ensued so to facilitate the changes in technology (Pettigrew, 2011).
  • Competition- The competition in the tech industry, especially in the smartphone sector has intensified and for that Apple Inc. has to bring in strategic changes to retain its pole position and competitive advantage in the market (Pettigrew, 2011).
  • Legal Issues- The laws and regulations in regards to taxation policies, business operations, labor and employment, and environmental issues have become more stringent and that asks for compliance from the business organizations. In that regards, it is important that the Apple Inc. changes its work processes and organizational compliance policies in regards to the changing legal systems (Pettigrew, 2011)
  • Reputation- Changes will bring in a new confidence within the organization and will help them earn enhanced reputation in the market and within their industry (Pettigrew, 2011).
  • Staff Morale- Any changes within an organization impacts the employees the most as they feel insecure due to the change process and that leads to reduced staff morale.
  • Restructuring- Change brings in a change in the organizational structure and its culture which requires complete restructuring and that can bring in vulnerability within the organization.

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