We operate in these environments also, and will be faced with a lot of forces for change in all environments. If organisations responded continuously to the need for change, there would be no need for frame-breaking change. However, in the real world, it is not as simple. Tushman et al. (1988) and Johnson (1987,1988) describe of a phenomenon whereby the organisation personnel become so comfortable with ‘how we work here’ and ‘what we hold important here’ that they also become blind to the warning signs of coming from the environment.
To understand the external environment, I have decided to use the PEST analysis as it is the most widely-used and recognised. It’s a useful mnemonic that categorises the four main external factors that influence an organisation’s structure, and its strategy. The analysis is shown in the next section. The reason that we have customers is mainly due to the Legislation in U. K that states all electronic equipment are eligible for three years after-service. This doesn’t mean three year warranty, but manufacturers having a duty to fix the equipment for three years.
Usually out of this, one year is covered under Warranty. People then have an option to extend this warranty to 3 years for a slight fee. In other countries such as Korea, the after-service length is only a year. However, there are a lot of just Electronics Repair shops that fixes almost anything electrical regardless of its make, or age. When you break something in U. K, you don’t expect to see it again for at least 3 months. In Korea, you get it fixed in a day, and brought back to you for very reasonable prices. The U.
K legislation stops companies such as these entering the market, making the whole country very dependant on organisations such as Goodies. Our contract is with several firms in the Far East (Korea, Taiwan). They account for more than 75% of our current work. In 1997, there was a big Financial Crisis in the Far East where Taiwan and Korea were severely affected. A lot of Korean firms went bankrupt during this time. Korea had to ask IMF for help. Both the economies (especially Korea) have bounced back strong and are now in the process of stabilising. Another crisis of this sort will be fatal to us.
With more and more people becoming computer-literate due to reasons such as Internet, and 3-D Games, there has been an increase in demand for the Monitors market. The development of 3D Graphic Accelerator Chip has enabled realistic 3D effects, leading to increased sale of computer games. More and more gamers are appreciating playing games on a larger, better monitor. Desktop computers need a VDU (Visual Display Unit) of some sort to operate and therefore it is safe to assume that there will be more than enough monitors to fix for the Repair Centres.
We are currently situated in Bedford. This place is popular for warehouses, and factories because of the cheap rent, and cheap and abundant work-force. I felt that the people that live in Bedford were a lot different from London. They were all pretty much happy with their lives and jobs which gave the organisation a laid back atmosphere. They did what they were told and they did it for much less pay than what would be expected in London. Bedford is also not too far from London, while being in a good transport location for the Postal Services to deliver and pick up monitors.