| | 54 Management ——__ activities. The present-day society expects that business should engage in a responsive and, ify, +H Possible proactive role for the overall welfare of society. ; This sense of responsibility also originates from the fact that business entities operate withing city and are dependent on society for getting inputs and marketing their goods and services. Therefore ¢°% ness organisations need to look after the welfare of their different stakeholdérs including the sign > at large apart from providing goods and services. DEFINITION The term ‘social resp tion of social respon: The concept of social respon: ‘Corporate Social Re. refers to the businessman’s decisions and actions taken for reasons, at least partially, iity’ means different things to different people, No single approach or def, is accepted by academicians and the practising managers’ all over sponsibility (CSR), beyond the firm’s direct economic or technical interest’. So, Corporate Social Responsibility (CSR) is defined as the . In other words, the domain of the responsibility of business tural rights of individuals and has ‘An operational perspective of CSR is that the management is the same time, it and CONSTITUENTS OF CORPORATE SOCIAL RESPONSIBILITY PLANNING The development of a social responsibility plan for a business entity involves the following key areas. (a) wolved in the operations of a business entity. ment of the top management to performing various operations in a socially responsible manner. © ETS ED pe OTE TTS hcg a systematic manner by employing sustainable development practices in busi fons. (@) Ensuring the Ss SET eal cig tunan cos while performing diferent business operations. (6) Designing and developing community programmes to eile the qualiivlef COPING bE. SuEEgemaiy ix which a business entity operates. () Development of metrics to assess and measute the performance of business With respect tO, tesponsibiigitives (@) Determination of mechaiisin fOPFepOrtAg the performance of sBRial FPO AATaUNELY the entire value chain (OTSOPDIES® (h) Encouragi eth olvement of different constituentsa a aa Corporate Social Responsibility 55 | DIFFERENT APPROACHES TOWARDS ORATE SOCIAL | RESPONSIBILITY CORPORA | | | pifferent schools of thought or different approaches in the domain of CSR are discussed below. . According to the traditional or classical approach, the only social respon- sibility of business is to maximise profits (create a financial return for its investors) by operating in the best interests of the stockholders (owners of the corporation). Nobel laureate Milton Fried- man‘, an eminent economist, is a strong advocate of this school of thought. This approach is based on the belief that expending a firm’s resources on doing ‘social good’ unjustifiably increases the costs and wastes the time and energy of human resources. This may increase the prices of services and products being marketed by the firm. It may ultimately lead tg a decrease in profits thus ha i olders of the business. Different approaches of CSR . | ‘The social § ‘responsiveness z view The socio-economic view |The social obligation Ww (The classical y view aches Towards Corporate Social Responsibility Friedman did not mean that business organisations should not be socially responsible. However, + The Social Obligation View: The proponents of this approach believe that the SOgialiresponsiziy a i y It implies the responsibility of a business entity lies only up to the extent of respecting the law of the land awe eee oe' a 56 Management ——+ where is ‘An organisation that follows this philosophy pursues those social goals whi help it achieve its economic goals. . Seg? dcconsing to this school of thought, corporations are not merely jomie entities that are responsible only to their stockholders. They ae ao scio (b) Economic indicators both in presenbtimes aiid what they are expected to be in 1 We © a particular product in a given marker. @ 4 particular product or service at a particular time. (e) Situation with respect to the (SSE a paricole market (g) Likelihood ‘cause of multifarious factors. ‘The economic environment in a country is created and shaped by the following policy framework and instruments: Dakegromic ‘System: The economic system determines the degree of attractiveness OF UOing bISi=y in a country based on certain economic factors prevalent in that country. These ar * Economie structure ofthe country such as capitalistic, socialistic or mixed SeonOMMTeIE * Nature of economic planning in the count (b) (Ee@nomiePoliey:>The economic policy comprises different sets of policies formulated by the government from time to time. These policies create a framework within which a business oper- ates. These policies are the tools in the hands of the government to give a desired direction to the economy and business activities in a country. Following are some of the economic policies. . licy: It determines the basic definition for the different types of industry outlines the provision of different incentives to different types42 Management — of business entities. It also lays down conditions for setting up a business organisation in g particular country. : This policy instrument determines the rules and regulations with respect to yy the government. The extent of tax col. the nature and extent o . in different domains significantly impacts the profit lection and position of a business entity, . SaSRERESPOR, This policy framework i ‘omy. Depending on the requirement of a country t ae Giiongits government makes modifications in the monetary policy. These changes impact both the availability and the cost of funds for business organisations. The monetary policy also influences the value of the national currency in the international market, thus impacting the profit position of the companies operating in the global market. 2 These norms regulate the flow of foreign direct investment (FDI) in different sectors of economy in a country. These norms by encouraging or restricting the FDI flow influence the availability of financial resources as well as the nature of competitive activity in an industry. (c) Economic Indices: Different indices are developed in order to determine the overall strength of an economy. They provide an indication to a business organisation whether a particular country would offer a viable market for its products/services or not. Some of the economic indices are described as follows: . Computed in the terms of Grossi National Product (GNPY or GrOSSDS2, overall national income gives a fairly good idea about the size of the economy of a country. « Distribution of Income: It describes how the Awealthiis eeatiered imong the population of a country and thus (di © Rate of Growth of GNP: This factor clearly indicates the Fatel6f Browth or contraction of his index helps business organisations plan for the likely demand for their products and services inthe near future. + Per Capita Income: This figure indicates the average ineoine OF the elizens OF a COU It is ani citizens of countries wit . Sele las agaebgvort: Higher quantum of exports by a country reflects upon the ; Which further determines the strength and value of its currency. These factors have a significant impact on the ¢ost"and’ demand of different prodicts and services and the profitability of business entities. (d) State of Economic Infrastructure: The extent to which the finaneial or €conomic infrastructure is prevalent in a country determines the ease of doing business in that country. It consists of factors like: + Nature and extent of the SpreadOf finainialjinsttutions and:bankingiifkastrictireea Management of Business Environment 43 . unity of mods of cominicntion andl SSRRGBUOARTARBAY diteren facilities like bank- ing, service providers, etc. (c) Strength of Money and Capital Markets: The extent to which the devel- oped in a country determines the possibility of raising o' panies from ‘general public and instiitional investors. -Thos, it influences the cost of capital and the overall profitability of business entities. Economic Trends and Events that Affect Business Performance All the companies (smnall or large), that are engaged in strategic planning, examine the economic environment of markets that they are operating in. The following economic trends and events affect the performance of busi- nesses. . Bateson orresugence of economies that result in the rise or deeline or stability in economic growth rates at global and national level * Availability o Extent ment. + Mold ood producti level's a panicula time + Rate oF inflation inn economy. + Extent of iberalisatigny globalisation aititation With Blobal economy. For example, the USA is a market of high vali ai low/arowthiWhereas the Indian mMaFRECSORIOWy herefore, the nature of the customer demand is different in these two markets, and accordingly different types of products have to be offered in these two markets in order to be suc- cessful. For example, Scorpio, an SUV model of the Mahindras, was able to revolutionize the SUV market in India, But the same model could not repeat its success in the US market, initially. f national economies and financial sector by the govern- Sources of Information for Analysing Economic Environment Relevant published in- formation is usually gathered, analysed and interpreted by business organisations for use in future plan- ning and managerial decision-making, This information can be obtained from the following sources: * A company can occasionally buy specific and détil@QGCOROMEMARSAMALIN from private sources, * Some information can also be obtained from. -s that gather spb eno data = The information about the economic environment can be analysed by an organisation by applying econometric models and different computer software applications for arriving at meaningfuul conclu- sions. Large corporations with many divisions have developed their econometric-models of different businesses. The data used for these models are stored in online databases which are regularly updated.44 Management 4 Political Environment The political environment consists of factors related to the management of public affairs that have g considerable impact on the business of an organisation. A political system serves as a primary-factor for economic development if it and ensures Of the people; and, assures s. It impacts the legislations and government rules and regulations under which business organisations operate in a country. The political system prevailing in a country decides, promotes, encourage ite. an SRDEABATSESsehvHLG? 0 that couniry. All business organisations operation the country have to abide by the provisions laid down by its politi as the law of the land. Governments around the world See diese strengthen their competitiveness through various fiscal and monetary measures. Political support can play a key role in the industry's , search for markets abroad and without it the industry may face a difficult situation. The infiuence of political environment and political trends on business is enormous. For example, in the United States one can expect greater emphasis on social programmes and an increase in goverment spending on social welfare activities when Democrats are in power in the White House. Therefore, com- panies in the business of providing social services may expect greater opportunities during Democratic administrations. Top management of business organisations needs to study both domestic and foreign political hap- penings by reviewing select published information to keep in touch with political trends and interpret the information pertaining to their industry in order to develop effective business strategies. The politi- cal environment of a country or a state needs to be taken into consideration before entering a market to avoid the abandoning or failure of a project. For example, TATA Motors was forced to shift their car assembly plant from Singur in West Bengal to Gujarat due to the unfavourable political environment in Singur that it could not foresee carlier. This not only led to the loss of crores of rupees but also affected the original plan for the launch of ‘Nano’ car, The political environment includes the factors outlined below: 5 of a country. . the goverment and expected change in policies with the change in government Role and aprox ghits government with respect to business— whether it is proubusiness or Level of a state or a country. Nature and extent of political revalent in a state or a country in matters with respect 10 business world. Provision of pubugWOHe Services, Degree of /faitiess and transparency inllallOeation ORUBUSINESSItS different competing organisations. Nature of legislation with respect to labourimaeket Pegulation.™” Constitutional provision with respect to starting a business and closing it.= Management of Business Environment 45 « Probability of getting uch a situation arises. Extent of ity. Nature of property rights, Prevalence of. Symbiotic Relationship between Business and Government As is evident from Figure 2.2, both business and government need each other. Business provides taxes, employment opportunities, foreign currency earnings through exports; income to government services and support to governments of different political parties; and, strengthens the overall economy of a country. The government, on its part, provides security, policy framework, regulations, contract enforcement, physical and financial infrastructure, support to exporters and protection to domestic companies. oe ese [Law and order q [2 contracts Feaeind 3 2 Gases “Tariffs and quotas Zz pola ey aay ind aed SSP oD 2.2. Symbiotic Relationship between Business and Government Demographic Environment cludes factors like size, density and location of human populations; distribution of a particular market in terms o} tistical in- formation. These factors have a considerable impact on the business as they determine the size of the market for different types of products and services and also influence the cost of serving that market. ‘The demographic environmen Legal Environment ownljstéia of law. ‘The companies operating in the global market have to take es with which Every country follow: into account the provisions with respect to the legal environment prevalent in the countri they do business. | Companies also have to take into consideration the probability of grant of justice and the speed at Which the justice is likely to be delivered to the complainant party. The strength of the judiciary varies46 Management —+ from country to country, All these factors affect the security of the investment made in a country and thus influence the decision to undertake business in that country. The legal provisions also impact the tion that a company would like to establish in a country. nature of business organi Environmental Concerns Issues relating to greener environment and pollution control are emerging as key global forces affect. ing the business decisions. These issues assume significance not only due ‘fblpbtemneeties ike the luce carbon emission but also because of rising consumer preference for environ. mentally sustainable products and services. In a recent study, the Global Carbon Project stated that carbon emissions from human activity have grown nearly four times faster during 2000-2007 than in the 1990s. The emissions grew at 3.5 per cent er year between 2000 and 2007 as against 0.9 per cent per year between 1990 and 1999. In the wake of damaging consequences that are predicted on account of global warming and climate change, business organisations would have to change their practices ar odologies significantly to make themselves environmentally sustainable. aR emerged as a dominant global force which ho organisation would afford to ignore in the near future. Of the 151 proposed coal power plants in the USA, 59 have been cancelled, either because the state regulators refused to give licences or due to strong opposition by local population. To overcome the challenge of environment pollution, companies have to clean up their processes or buy carbon credits. To do this, first and foremost, companies must measure their carbon footprints that is, how much carbon they emit, Then they must use new technologies to reduce these emissions Finally, they need to create new, clean alternatives to their existing product lines. Here, the green initia- tive, undertaken by GE, is noteworthy. GE's Ecomagination initiative, which began in 2005 with 17 products and $ 700 million in research, had 60 green products with $ 17 billion in revenues and $ | bil- lion in R&D in 2008. The company’s order book stands at $70 billion. In just three years, the company witnessed huge demand for such products and solutions, David Wheat, whose consultancy firm Hara Bara Inc. helps SMEs transit to low-carbon mode, says that turning green may be India’s best chance to “steal a march on the Chinese”. Earlier, consumers wanted cheaper products. So, retailing giants such as Wal-Mart went to China to source them at low prices. Now, they want environment-fricndly products. “Indian companies will be able to supply these,” says Wheat* (2008). (Different approaches and strategies to enable business organisations manage the vital concem of environment and emerge as environmentally sustainable has been discussed in detail in Chapter 3 on Corporate Social Responsibility.) HOW TO MANAGE BUSINESS ENVIRONMENT Management of the business environment includes all the activities that involve prediction and utilisa~ tion of external and internal forces in favour of business, so that they could result in a positive impact on business outcome or their negative impact is reduced or minimized. Managers must learn to deal effectively with sudden global changes (like currency fluctuations, sharp changes in prices of petroleum products), multiple cultures and political systems in the midst of rapidly changing markets and technology. As presented in Fig. 2.3, managers must be able to anticipate theManagement of Business Environment 47 - changes that happen in the ever changing business environment in order to develop strategies and com- petencies at all levels in their organisations to effectively deal with this dynamic phenomenon that too in a timely manner, Figure 2.3 Management of Business Environment ‘Source; Adapted from ‘Managing Complexity’ Robin Wood www.1000ventures.com/business_guide/business_environ- ment.htm Although the impact of changes in the business environment may be felt throughout a business or- ganisation, it is felt the most on the strategic perspectives. To cope with a complex and dynamic environ- ment, the individuals involved in strategic planning for different functional areas must find new ways to forecast the shape of things to come, analyse strategic alternatives and, at the same time, develop greater sensitivity to long-term implications. Given below are the steps that can help a practicing manager plan and develop strategies to deal with and manage the business environment in order to gain favourable results, i Etna age pT MONEE ferent constituent $ environment and their impact on the bi viewed from time to time. For example, in the arca of / the tre Broad trends in dif iness entity may be r information processing may be s ogy for the business. Banerjee’ (1999) has classified the process of analysis of the business environment into the fol- lowing four stages. . SEER, involves exploratory identification of emerging trends in the business environment, have a significant impact on the business. et includes an in-depth analysis of the trends that are perceived to be relevant for the organisation after they have been identified at the monitoring stage. St appropriate application of technol-48 Management —+ + ores Is an endeavour to determine the likely direction, scope, and intensity of , ‘onment trend in the form of the extent of opportunity or threat. USINeSS eNvil sesso Th stage involves determination of the extent of implication of the environ. ntal trend on the business of the organisation. Effective executives scan the following seven situations for generating opportunities for their organisations (Drucker®, 2004), © Changésiin the industry and market structure. ofithiatigesinaeinowaphiesor the market. be mn, etc. . eee in the form of process, product, or service, * dimoyationsinvthe-processprodlict Or SeAiee, inside and outside the enterprise/industry. Sudden success or failure within the organisation or in the industry. + NewsknowledgertechnoloyyithitGan influence the organisational/industry dynamics, 2. Determine the relevance of a business environment trend: Not everything that happens in the business environment may be relevant for a company. Therefore, attempts must be made to select those trends that have significance for the company. There cannot be any hard-and-fast rules for making a distinction between relevant and irrelevant trends. Management's creativity and far- sightedness would play an important role in pinpointing the relevant trends. Given below are some mechanisms for identifying relevant trends in the business environment: . ih the scanning of the business environment. Entrusting a senior person wit + Finalising the list Of relevant publications that need to be studied to scan the environment. + Appointing’ pei8on fo go througisthe publications and gather the relevant information. « Each piece of information that is gathered may be given a particular code based on the topic. ‘A company can use efteseur GeR Sr ATES eas Gch ab marketing, manufacturing, customer service, distribution, social trends, ete. é gathered information and present higher recommendations, A reviewer shoul |, in the form of an abstract to the scanning committee. * Select portions from th lered relevant fe anisation, le means can be: of communication. This would help in solic employees about a given trend and its implications. * The managers who are most likely to be affected by the disseminated information should be Pci iat the scanning committee for detailed analysis. The scanning committee can then present the select trends with detailed analysis to the people involved in strategic decision-making and top management for consideration and approval. ing a response from a wider cross-section of 3. Examine the likely impact of a business environment trend on a product/market: A business environment trend can either pose a threat or create an opportunity for a company’s product in @ particular market. Organisations need to study the likely impact of this trend on the performanceof their business both in the short and long terms of determining the degree of severity of the likely imp: The impact of a business environment trend is usuall what will be the future productimarket performa take any action ‘ager needs to be given the responsibility ct gradual. A company needs to understand ice in view of an emerging trend if it does not It proves advantageous to recognise a trend carly and take action, but the company can decide to wait to see which way the trend proceeds. For example, people did not replace their black and white television sets overnight after the advent of colour televisions. Same is the case with new plasma and LCD technology-based televisions which co-exist with conventional televisions. ieeeoe ee n i ght shift in markets due to a new trend Highiprices, . rode or Sve esti sen Thus, the diffusion process of a new trend should be predicted and understood by the stratevic planning team before arriving at a conclusion. Identify and examine the new opportunities that a business environment trend appears to provide: A business environment trend may not be relevant for a company’s existing product/ market, but it may indicate promising new business opportunities in the near future. For example, the energy crisis provided an easy entry point for fuel-efficient Honda cars into the US car market. Relate the outcome of a business environment trend to corporate strategy: Based on different trends and their impacts on the business of an organisation, a company needs to review its strategy from two perspectives: (a) Changes that may be introduced in current products/services: A company usually makes an attempt to align its products and services to the ones that are being offered by its competi- tors. This continuous upgradation aid eaiihibalising OF Existing products and services helps a company to remain contemporary. But, even if a business environment trend poses a threat to a company’s product/market, it may not always be necessary for the company to immediately come out with a new product to replace an existing one. Neither itis necessary for every com- petitor to adopt the ‘change’. Even without developing a new product, a company may find a niche in the market to which it could cater despite the introduction of a new product by a com- petitor. For example, the electric razor did not drive the safety razor blades out of the market. (b) Feasible opportunities that the company should follow for taking an action: Changes in the business environment offer a wide range of opportunities, but a company has to select which opportunities would be the most appropriate for it to follow. This may create a situ- ation of comparing apples with oranges if an organisation has to decide whether to open a hospital or an educational institute. Although the environment can be scanned in a structured manner, it is nevertheless an art in which creativity plays an important role. Thus, to adequately study the changing busi- ness environment and relate it to corporate strategy, companies should make an attempt to develop a culture that is an ideal e part of its managers. All the employees of the organisation should be made an active part of a regular process to scan, identify, analyse, discuss and develop an action plan to align the business with the changing business environment,?) -7 ao S Se © 5 Change Management Management is nothing more than motivating other people. —Lee Iacocca, Former Chairman, Chrysler ATMS S ss Alter studying this chapter, you should be able to: * comprehend the diffrent types of organisational change and factors responsible for them * understand the diferent approaches towards managing change explore the factors affecting suecesstl implementation of change identi the reasons behind resistance to change, and strategies to reduce resistance to change know about the diferent aspects, staes and constituents of change management * understand the cifferent models of change management INTRODUCTION Nobody can underestimate the importance of effectively managing the change in the present context when the business environment is changing at an accelerating pace. Businesses are finding it hard to Tearn how to survive and thrive in the ¢haos and created by th e brought But it is evident to one and all Wironment to stay competitive.- _——— Change Management 565 Change is linked wi ising SHERRY csiering new technologies for meeting customer needs and evolving new manag ices’. Even though change has always been a part of the man- Retina ause the environment is forcing busi. neste fo Nonlin eee ewe ate have been doing things fo years. The organisations of the 21% century must be built around the concept of flexibility so that they a re capable to adapt, adjust and change aS per the environment. This very fact is evident from the observations cited in Exhibit 22 1. LRUezee Reasons for BM Debacle in 19909 For decades, IBM was a clear technology leader working atthe cuting edge of technology But, by the early 1990s, 1M Marg sauna bitons of dollars. How did this happen? Gersiner, IBM's Chiof Executive from 1993 1» 200 diagnosed the following reasons for this debacle: (2) Employees had largely stopped listening to customers or competitors. (©) Acuiture, designed to allow all voices to be heard, created a fray Could ‘nen-concur and stall the needed changes. (©) Im order to capture everyone's opinion, the company developed a huge bureaucracy for Vetting new initiatives, but it resulted in discouraging individual accountability @ IBM's earlier extraordinary successes were also partly responsible for its problems. ‘Source: Landry, J.T. (2003). ‘Books in Brief. A Revi Tumaround by Louis V. Gerstner, Jn’, p.22. Agmented system of fiefdoms where any unit manager ‘ew of Who Says Elephant Can'tDance? Inside IBM's Historic | » Harvard Business Review, Motivating People, January 2003, Vol. 81, No.1, | Types of Organisational Change ogramme re, techn ganisational changes can be classified into 1 the following three types. | 1. Strategic Change: A strategic change occurs with any ganisation, like iswision; mission goals; objectivesystratepies, et. This change affects the entre | organisation in one way or the other. 2. Structural Change: It occurs with any change in the following: SiCbiraLdesign’Ghthe company, | systems of workifip; and féchnologies; and organisational tasks, s, Oli? “Cie® and rilles: It can also include the ts, thodels’and that re- ; , salesiand ceo | 3. People-Centred Change: tenon ay ates inthe sil nd peHormaiee OF employe” he can | * be brought about through training and replacement of present employees Factors Responsible for Organisational Change | , , i - | ing the factors that lead to different types of change in an organisational setting is the frst Uae ee to leam how to effectively manage the change. Various factors responsible for or step for risational change may be grouped into two categorie: ga566 Management = (0) ERePHALFAEOR: These factors ate related to the events that occur outside an organisation and are beyond the control of the organisation. The, In accordance with these facto 5 i Some of the external factors are outlined below. 1. Changes in market conditions: As per Michael Porter's Five Forces Model, the two of the five forces that signi .ct the competitive position of an organisation in an industry are: (internal rivalry) a Se ining power of b ny change in these forces ‘Aligning the business with new scenario may warrant suitable changes within the organisation to enable it maintain its market position. 2. Technological cl The competitive position of an organisation is affected when there is ngs ol onto its competitors adopt new technology. The organisation may become relatively less efficient or effective in serving its customers in comparison with its competitors. As a result, itis forced to change or adopt new technology. For example, provision of the networked ATM facility by different foreign and private sector banks forced the Indian public sector banks to do the same. The Once Bill Clinton stated in a lecture that when he became President in 1993, there were a mere ‘SO WebSites in exis- tence but when he left the office eight years later, there werepso Taree and rising. Therefore, the present-day organisations will have to develop an appropriate strategy so that their business is not negatively affected by the advent of widespread e-commerce. 3. Social changes: Over a period of time there are changes in . These changes affect both the expectations of employees as well as the buying behaviour of customers. Therefore the needs of their customers and employees. 4, Political and legal changes: Political and legal factors significantly determine the activities that can be pursued by an organisation and the methods which can be adopted by it for ac- complishing its objectives. For example, ‘Gmission by automobiles requires the automobile manufacturers to modify their operations for designing such engines that meet Bharat III norms. Similarly, with the change in the PrESTeinalen shana This compels organisations to realign their business operations. For example, the thrust on rural lending by the government has made it mandatory for the banks to go rural by opening rural branches or adopting other mechanisms. It has necessi- tated a change in the banks’ organisational working. Sudden changes in the political environment can even threaten the existence of a well-estab- lished business?. For instance, Sunil Bharti Mittal’s trading business, Bharti Overseas, be- came the country’s largest importer of portable diesel generators in just four years after b ce euaiedg ‘when the port of diesel generators was baned.!Change Management S67 5. 'rans-national Corporations (TNCs) are one of the major agents of change in the present-day business scenario. Businesses have to keep pace with the changes in the business environment brought about by the advent of TNCs in their industry. when ™ latter decided to start its soft ae usiness in Pras ee ) Any change in the factors that are internal to an organisation also necessitates bringing in a change in the manner in which things are done. The two internal factors of change are described below. 1. Change in Managerial Personnel;2 ageria ‘their e RAs aresult, they make an attempt to introduce those practices and the organisation has to change accordingly. aces, that are pGuIng HEISE n by in ne fas. These changes might be introduced in the form of new policies, approaches and strategies. Approaches towards Change There are various ways in which people respond to change. The different approaches in which people respond to the phenomenon of change are classified into the following categories. (a) Reactive Approach: A change creates a sudden sense of urgency and the people who are affected or going to be affected by it start reacting to it more on the basis of their natural instincts with little planning. This is, unfortunately, the most prevalent but not the most effective approach to change. The following problems are associated with this approach towards change: ‘© The solution suggested to manage the change in the environment may not be the optimum one. © The suggested solution may solve a problem but in process may create other problems. The new problems created by the solution may be bigger than the one that it intends to solve. © The suggested solution may lead to resistance from the employees. () Responsive Approach: This approach involves development of a detailed plan to tackle the change. In this approach, a manager responds to the change in a planned manner by taking into account the following aspects: « Properly understanding the various facets or aspects of the change, to define it in a compre hensive and specific manner. © Properly evaluating the pros and cons of different alternative solutions before selecting the optimum one to manage the change. ® Selecting the most optimum solution in accordance with the given situation. * Planning the implementation strategy in detail so that there is least amount of resistance when the solution to manage the change in the environment is implemented. (©) Proactive Approach: This approach towards change involves being conscious of how the exter- nal and internal environment of the organisation is likely to be in the near and distant future, This