What is a dynamic environment? How does it affect larger companies versus smaller companies? What is critical to an organization’s survival in a dynamic environment? [3 Marks]
In small company’s technological changes, inflationary trend, competition, infrastructure facilities and changing consumer preferences still remain a problem. These companies do not have the advantage of economies of scale to adapt to these changes .they should learn from the past experience gained in order to survive, make profit and expand their operations by meeting consumer needs and increasing business capacity to adapt to such change.
For large companies market leadership is becoming a difficult target to attain as a strong relationship between profitability and industry is becoming nonexistent. The probability of a market share leader becoming a profitability leader is declining. It is becoming unclear for these companies to know in which industries they are competing.
The companies need to opt for following ways to survive and thrive in today’s dynamic environment:
- Accept the fast pace change and adapt to such change with similar speed and accept that future is hard to predict
- Constant innovation is important to keep up with the fast changing environment. Employees need to be motivated to innovate. Communication flow should be free to transfer knowledge.
- Organization structure requires a change from being bureaucratic to agile
- Constantly scan the environment and find new ways to meet the customer needs rather than just focusing on improving operations and efficiency.