Organisational Strategic Change - Term Paper Example

? Strategic Change is Fundamental to Business Success Introduction In the increasingly dynamic world, strategic change is fundamental to business success. Managers should know how to apply strategic change. This skill requires experience and the art of creativity, and in applying it, managers should be supported by effective and selfless members of the team. Team working is a must in times of uncertainties. Business and technology force managers to change ways and their managerial thinking. Managers have realised that risks cannot anymore be predicted and measured, but are also temporary (Baskerville, 2005 as cited in Newkirk, Lederer, & Johnson, 2008). The uncertainties brought about by globalisation and technology have reduced business performance, challenged information systems management, ‘and making the selection of new IS all the more critical’ (Raymond et al., 1995; Choe et al., 1998 as cited in Newkirk et al., 2008, p. 198). Firms have to design operational plans and structures to reduce the effects of risks and uncertainties. Managers and employees must be involved in the process of change. The activities and complexities involved in change are large and if these are implemented late, they can lead to disaster for the firm (Black & Gregersen 2002, p. 5). Effective implementation of strategic change requires a combination of several factors, like an application of values and principles along with change in the organisation’s culture. It is said that ‘culture is a barrier to change’ (Robbins 2001, p. 516). The business environment is continuously changing, and so people in the organisation have to change. Continuous learning and knowledge management must be introduced in organisations. Activities in strategic change involve large group meetings across many departments of the organisation, which should cooperate to craft a collective future. If large groups are involved, change can happen faster than expected as the entire organisation is involved. Plans and activities should be aligned with the overall strategy wherein everyone has to work for change. Small and large organisations can work for strategic change and the fundamental framework is to get everyone in the organisation provide talents and capabilities. (Jacobs 1997) Planning is an important factor in strategic change, and time comes with planning which is too often overlooked. A plan structure is a key to a successful change. (Newkirk et al. 2008) Definition and concept Change occurs every day for firms, but change is not all the time bad. Change can provide a window of opportunity for firms. Successful firms today were battling the forces of change before and they emerged successful, like Microsoft, Apple, Wal-Mart, and many others (Pasmore 1994, p. 4). Business change is defined as ‘the rate of product/series obsolescence and the rate of product/services technology change’ (Miller & Friesen, 1983 as cited in Newkirk et al, 2008, p. 200). Technology and expertise help in the process of business change. There are catastrophic consequences for not meeting the challenge of change. Established companies experienced the negative impact, like Xerox, Lucent, and Kmart in the United States, and other companies in Europe and Japan. These companies assigned new managers but still failed. Only when they realised the lessons of their failures did they get things straight and they became successful. There are other thousands of managers whose careers were severely affected because of ineffective change measures. No matter how good are managers’ experiences in leading change, they may falter because of the many barriers to change. People resist change. Business environments are dynamic and may change anytime in the course of business. (Black & Gregersen 2002, p. 5) A principle in meeting the challenges of change is that a leader must not force to meet change right away, or he/she may encounter a strong force of resistance. Instead, the leader must have a map or a plan, conceived as mental maps, in order to be effective in battling the forces of change. But the leader must have a team to support him/her and the plans that will be pushed through the barriers. There are maps inside our brain that need to be tapped and if we are successful in remapping our mental terrain we will be able to provide plans for a successful strategic change and a successful business. In order to address change, everyone in the organisation must acquire continuous learning. Peter Drucker (as cited in Wolff, 1999) said that organisations have to be learning organisations in order to survive in the competition. Learning provides knowledge for innovations in the company. Many firms provide knowledge to their present knowledge stock as this is a part of the firm’s intangible assets. Intangible assets are part of the firm’s wealth that cannot be substituted or taken away even if some employees who have learned from the company transfer to other firms. Firms can have exploitative and exploratory learning (March, 1991 as cited in Hitt, 2011). Employees have the capacity to learn if they have former knowledge that permits them to absorb new knowledge from outside source. Organisational learning can be attained when strategic alliances with other firms are formed. Change management has to be applied in this situation. A firm’s experiences can help in coping with uncertainties. Opportunities brought about by technology and cooperation among firms can outweigh the threats. Firms should expand horizons up to the long term. There are large amounts of data available for firms to analyse and with these data, they can draw their plans. Strategic planning is vital to apply a successful initiative. (Grant 1999) Simon and Hitt (2009 as cited in Hitt, 2011) argued that managers should use resources in ways that emphasise the strategies of the firm in order to positively influence performance. Competitive advantage can be attained when managers simultaneously focus on capability strengths and capability weaknesses. Plans should be focused on this area because it emphasises resource and capability strengths. Most firms exhibit weaknesses and have to counterbalance their weaknesses with strengths by providing strategies capitalising on their capabilities. People in charge of strategic planning are those coming from the planning department, specially trained and educated for such purpose and are under the direct supervision of top managers. Their job is to predict and to prepare (Mintzberg et al., as cited in Jelenc, 2009, p. 241) so that resources can be used without waste of time and money. Resources and competencies that are important to strategic planning are of three types: ‘1) physical resources, to include technology, finance, property, raw materials; 2) human resources, to include training, experience, intelligence of employees; and 3) organisational resources, to include formal management structure, formal and informal planning, control and coordination systems, informal relations between groups both within and outside the organisation’ (Ouedraogo 2007, p. 84). The firm that has the three types of resources and know how to use it, with an application of knowledge management, will surely be ahead in the competition. Organisational Strategic Change In the planning processes, there are a number of areas that management should consider over the short and long-term goals to achieve business success. These were introduced in Wilson’s (1992). First, firms’ managements should guide business schools on what the industry needs, for example, management training. Training students to adjust change when they become management practitioners themselves will help them apply measures that may deal with uncertainties in the future. Training for change is also encouraged by government. Students can focus on leadership and teamwork. (Wilson 1992, p. 4) Human resource management can help a lot in the process of introducing change in the organisation, although, as said earlier everyone should be involved in the process of change. But while change is taking place, the HR department has the expertise to introduce and deal with change. Strategic change involves strategies and people. If the organisation has to change so must the culture of the managers and employees. As stated in the introduction, culture is a barrier to change. Employees have to accept change and this requires a step-by-step process. Training is important in changing the culture of the employees. Conclusion Strategic change involves providing changes in the strategies of the organisation. This is done during the introduction of plans and strategies. Existing firms have to revise their plans and strategies, like they are starting from scratch. But it is not from scratch, actually. Experienced and skillful managers know how to provide effective strategies. In order to effectively deal with change, firms must have these kinds of managers and leaders with innovative ideas, effective strategies and techniques, and are able to plan steps and activities for the uncertainties. Strategic change foresees the uncertain future by having a definite set of plans whenever contingencies occur. The key is to provide the steps in the strategic planning process because this where goals are set; but strategic change is part of a continuous implementation. There might be steps that have to be changed in the process of implementation. The plans and past experiences of managers can be part of best practice within the organisation and among business partners and suppliers. Bringing change to an organisation does not only involve strategies and plans, but it also involves relationships of managers and their employees. Effective management is needed in a dynamic environment (Briggs & Keogh 1999). Human resource management is important. Leaders must know how to motivate people and must emphasise excellence by recognising individuals and team performance. Strategy also involves satisfying customers. Customer satisfaction and loyalty are vital to business success. This must be incorporated in the strategic change in the organisation. References Black, J & Gregersen, H 2002, Leading strategic change: breaking through the brain barrier, Financial Times Prentice Hall, New Jersey. Briggs, S & Keogh, W 1999, ‘Integrating human resource strategy and strategic planning to achieve business excellence’, Total Quality Management, vol. 10, nos. 4-5, viewed 8 December 2013, via ABI/INFORM Complete. Grant, R 1999, ‘Transforming uncertainty into success: the strategic leadership forum 1999’, Strategy & Leadership, vol. 17, nos. 4-5, pp. 31-36, viewed 7 December 2013, via ABI/INFORM Complete. Hitt, M 2011, ‘Relevance of strategic management theory and research for supply chain management’, Journal of Supply Chain Management, vol. 47, no. 1, pp. 9-13, viewed 6 December 2013, via ABI/INFORM Complete. Jacobs, R 1997, Real time strategic change: how to involve an entire organization in fast and far-reaching change, Berrett-Koehler Publishers, Inc., San Francisco, California. Jelenc, L 2009, ‘Review of theories in strategic management field – toward the creation of schools of strategic management’, The Business Review, Cambridge, vol. 14, no. 1, viewed 6 December 2013, via ABI/INFORM complete. Newkirk, H, Lederer, A, & Johnson, A 2008, ‘Rapid business and IT change: drivers for strategic information systems planning?’ European Journal of Information Systems, vol. 17, pp. 198-218, viewed 8 December 2013, via palgrave-journals.com. Ouedraogo, A 2007, ‘Strategic management in African firms: a local perspective’, Problems and Perspectives in Management, vol. 5, no. 1, pp. 82-147, viewed 7 December 2013, via ABI/INFORM complete. Pasmore, W 1994, Creating strategic change: designing the flexible, high-performing organization, John Wiley & Sons, Inc., New York. Robbins, S 2001, Organizational behavior (ninth edition), Prentice-Hall, Inc., New Jersey. Wilson, D 1992, A strategy of change: concepts and controversies in the management of change, Thomson Learning, UK. Wolff, M 1999, ‘In the organization of the future, competitive advantage will lie with inspired employees’, Research Technology Management, vol. 42, no. 4, pp. 2-4, viewed 6 December 2013, via ABI/INFORM Complete database. Read More