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Discussion: Issues and Challenges
With the availability of services such as Afterpay, a price tag is not enough to shy one-off from whatever a buyer wants to acquire. Instalment payments have been there for a long time, such as Layby, but an option of where the buyer carries home that product immediately is welcome to many. In the study, we focus on change and innovation in Afterpay, buy now and pay later digital public limited company with its origination in Sydney, Australia, in 2015. The study seeks to analyse the management of change and innovation in relation to the company and self-reflection on the same. Besides, there will be a brief insight for the profile of Afterpay Ltd and the model of change management that it has applied in its innovations and changes since it began its operations.
Afterpay Ltd is a financial technology public limited company based in Australia, UK, New Zealand, and theUS. It provides financial services to customers with the option of buying goods and then pay later in four instalments (Ibrahim, 2018). A customer is allowed to take the product they want as they pay off later. The customers are not charged additional interest, and they need no deposits or guarantees before full payment. However, there is a fee charged for late payment of goods or missed payments. The company has its headquarters in Melbourne under Anthony Eisen and has over 4.6 million users across its different zones (Ibrahim, 2018).
Change within an organisation involves the known while with innovation; there is the exploration of the unknown and new ideas (Wadood, Gharleghi, &Samadi,2016). Change and innovation should be carried out in bits and when necessary. There are various theories relating to managing change, such as the AKDAR model, the McKinsey 7S model, and more. Afterpay is one of those that adapted the McKinsey 7S model in its innovation that is driven by demand for services, needs skills, style, and change in systems (Suddaby & Foster, 2017). As noted, Afterpay innovated their mobile app and restructured their website as a prerequisite for the expansion of their business and reduced traffic by increased numbers of users.
Change and innovation are measured by the growth rate of a company, market research, among other factors (Suddaby & Foster, 2017). Notably, change and innovation in all organisations, including Afterpay, have been inclined towards technology to manage their data, revenues, market researches, and so on. There are various benefits accrued to the management of changes and innovation, such as increased productivity of the employees, increased returns, higher sustainability of the organisation and even more flexibility of operations (Lee &Yoo, 2019). However, lack of proper management of change and innovation may bring risks such as resistance by employees, disruption of operations, and more (Ceschi et al., 2016).
With the invention of Afterpay and further innovation of its mobile app, it has opened doors to anyone over 18 years to make impulse purchases and to live off a luxurious lifestyle. The shop directory that allows users to see what stores are connected with Afterpay has paved the way for them to pay for flights, buy designer clothes, go above their budget limit with the added incentive of a greater purchase limit with good repayment records. It has raised concerns over consumer protection. For one, Afterpay is targeted mostly to the millennials. These are people with limited sources of income, or even still dependent on their elders.
Some legal institutions fear Afterpay may be exempt from being regulated on consumer protection rights since their repayment period is usually about six weeks, which is less than the 62 days stipulated in the law (Rodger, 2015). Furthermore, there are issues of how Afterpay is not just leading millennials into a generation of debt, considering they are its main target for business (Bekkers & Tummers, 2018). After all, it seems to allow people to spend more than what is in their pocket with no stringent measures of verifying whether they are capable of paying up.
Afterpay should put purchase limits to millennials according to their ages. In this sense, the older the buyer, the more conscious they are of their financial management. As such, this may render them selective of their purchases and only take what they need but cannot fit into their tight budgets. For the younger ones, lower limits may discourage them from loads of unnecessary purchases hence prevent them from debts they cannot pay and eventually affect their mental health (Holmes & Shore, 2015). Furthermore, Afterpay should partner with government regulatory authorities to verify the financial history of its users before allowing them to purchase on the app or through the website. Thus, this will help reduce cases of unpaid debts and financial liabilities.
From a personal perspective, Afterpay is a platform for undisciplined use of money, especially among the millennials. I was raised in a background where if there is no money, I cannot get what I want. If we went shopping with my parents, then I would not get a toy or doll or extra snacks if their money was not enough. This mentality has always guided me not to spend more than what I already have. Looking at Afterpay, therefore, even my friends who still depend on allowances from parents have the app and use it in stores.
On the flip side, the company has come in to fill gaps in acquiring whatever people need but cannot afford at once. For people with low salaries, they can purchase things and be able to pay up slowly. People can manage to buy household goods with ease now. It is a good escape plan for an unplanned purchase of a nightgown, a new toaster to replace a broken one, and so on. I understand that it is of massive help to those not well endowed and helps them get through life (Holmes & Shore, 2015).
Afterpay has bridged the gap in the acquisition of a good lifestyle. Nowadays, people can afford plane tickets or high-quality products with ease. However, there is a balance that needs to be taken by every user of such services; that is for whatever you are buying requires financial management. As such, change may be good or bad, depending on the management. Additionally, innovations may also be of a greater good in the short run but may pose dangerous risks after that, as is the case with the Afterpay. I feel that any change or innovation should be taken up with a sense of responsibility to avoid deceiving us of a good present, but spelling doom for our futures.
Innovation and change are the primary source of growth for most businesses. It allows them to expand, improve on brand image and reputation, fasten their service provision, and so on. However, this only occurs with proper management of change and innovation. Notably, Afterpay has grown because it facilitated lots of incapable buyers through its invention and innovations. This, however, has come with concerns that may turn into future realities of financial problems and consumer exploitation. It is, therefore, imperative that every user and potential user take up self-reflection on the usage of such services and weigh whether it supports their growth or not.
Bekkers, V., &Tummers, L. (2018). Innovation in the public sector: Towards an open and collaborative approach. International Review of Administrative Sciences, 84(2), 209-213.
Ceschi, A., Costantini, A., Scalco, A., Charkhabi, M., & Sartori, R. (2016). The relationship between the big five personality traits and job performance in business workers and employees’ perception. Int. J. Bus. Res, 16, 63-76.
Holmes, J. H., & Shore, J. D. (2015). Perceived risk: Its effects on installment credit buying. In Proceedings of the 1982 Academy of Marketing Science (AMS) Annual Conference (pp. 604-606). Springer, Cham.
Ibrahim, T. (2018). Afterpay: What is it and can it be trusted? The digital checkout service where you take now and pay later is quickly growing in Australia. CHOICE. Retrieved from https://www.choice.com.au/shopping/online-shopping/buying-online/articles/what-is-afterpay-and-can-it-be-trusted-170320
Lee, K., &Yoo, J. (2019). How does open innovation lead competitive advantage? A dynamic capability view perspective. PloS One, 14(11).
Rodger, B. J. (2015). The Consumer Rights Act 2015 and collective redress for competition law infringements in the UK: a class act?. Journal of Antitrust Enforcement, 3(2), 258-286.
Suddaby, R., & Foster, W. M. (2017). History and organizational change. Journal of Management, 43(1), 19-38.
Wadood, S., Gharleghi, B., &Samadi, B. (2016). Influence of change in management in technological enterprises.In Fifth Internationalconference On Marketing and Retailing (5thINCOMaR), Procedia Economics and Finance (Vol. 37, pp. 129-136).
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