Change can be brought about by many reasons be it political, economic, social or though technology. Political Factors: can result due too change in government or governmental policy and this can have a huge significant impact on businesses as a whole. Businesses deed to keep abreast of the political climate in which they operate. Changes in public spending, relationships with other countries. International conflicts can reduce the amount of trade done from a business which can then see the profit margins begin to fall.
The change within the European Union can open or close business markets, but the accession of new members to the EX. can bring about new business opportunities. Governmental changes in legislation can bring about changes in employees rights within a business which could effect, sick pay, tribunals, maternity leave, and changes to income tax. Many of these changes could stimulate growth ND also make things easier for the employer. From time to time the government will change the rules and framework , changing the ways of how business operate therefore business is keenly affected by government policy.
Social Factors: Advertising, public relations, images, consumer attitudes, ethical issues and demographics are all social components and the social environment of a business can be integral to its success or failure. One of the social factors can involve the customer, so the image of the business is very important and the social environment of a business can have an impact on the type of customers that it attracts. Customers who experience a negative social impact will tend to avoid the business and move to a conveniently located competitor there for the attitude of the consumer is of vital importance to a business.
Social changes may have a major impact on a business as societies habits and tastes are changing. People are more aware of environmental issues and therefore look for businesses and services that are more environmentally friendly. Social trends can affect a business market. It can decline or increase interest which can be short live or enable permanent change. When demand in the social market rises there will be a change within the business to meet the increased need for the said market.
Both profits and loss are directly affected by social factors/trends so businesses can be severely affected by this. Technological factors: this can refer to changes in production techniques, machinery that is used to make a product or computers. Over the past few years it mostly refers to the use of computers/information technology that has improved business efficiency . Technology changes rapidly which then has important implications for businesses. Businesses can be affected by, technological changes in production, in services and in the office.
This change can lead to improved production as new technology can improve the speed of production and also improve the quality of the product. Technological changes within an office can speed up information and the way that information is dealt with. For example internet, websites and email. Technological changes are very rapid so businesses must keep up to date with the latest information.