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Strategic Organizational Change

Pakistan auto industry is one of the major sectors of economic importance and tax collection. But year 2018 has proved a tough year for the sector and they had to go through a bumpy road. A number of key developments happened on the macroeconomic front that made the sector difficult to operate and almost all major players ended up with reduced profits in spite of raising their car prices. Among these events there are two most important issues that sector faced previous year.

  1. In the fiscal budget of 2018-19, the Government of Pakistan had taken a surprising decision to ban the sales of cars to non-filers to encourage people to file their income tax return. The decision reduced the number of potential customers to a considerable extent and the organizations had to change their system to book vehicles only for those who were tax filers and in addition to that they had to cancel the already car bookings of some clients. To avert the loss from this decision of the government and keep the revenue on track they increased their car prices that further reduced the sales.
  2. Another major event that happened in the previous year when Pak Rupee depreciated massively against US Dollar. All the major players are dependent on imports of automobile parts to assemble their vehicles in Pakistan. As all trade used to happen in dollars, this further increased the cost of doing business and reduced profit margins. To cover up this, organizations again increased car prices that further dented the sales.  

Point of Discussion

  1. Strategic organizational change can be originated from within the organization or from outside the organization. On the basis of above mentioned information, identify separately for each case whether the source of change is internal or external with logical statement to defend your viewpoint.
  2. Do you think that increasing car prices was the right choice of the automobile organizations? Given logical reasoning to defend your viewpoint.

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