Managing Strategic Change - Essay Example

Strategic management An Assignment Submitted by Strategic management Organisation’s functioning and strategy formulation can be strongly influenced by its external and internal environment. According to the factors or changes that are happening in those environments, organisations need to come up with their own set of changes. In that direction, organisations and its CEOs can initiate the concept of rapid, discontinuous changes. These changes can evoke favourable response from the CEOs in most scenarios. However, in certain cases, they may not respond appropriately. Introduction Organisations cannot function in a static mode or at a “consistent” speed in all the scenarios. Instead, it has to adapt or speed up or change based on the constantly and rapidly changing business environment. There will be factors at “play” both in the external and internal environments of the organisations, and it is up to the organisation to play or function according to those factors. Although organisations may function or change based on those factors, it is of vital importance that how rapid and also how discontinuous those changes are. This is where the happening concept of rapid, volatile, discontinuous change comes into the picture. If an organisation initiates change management which is rapid and discontinuous, it can garner number of benefits for it, particularly strategic competitiveness in line with the strategic management process. It is imperative on the part of the organisational leaders or management or Chief Executive Officer (CEO) to initiate as well as manage this rapid, discontinuous change. So, the report starts by outlining the concepts of rapid, volatile, discontinuous change as part of literature review. Then, it will discuss where and how this concept fits within the strategic management process. Following that, the focus will be on the R.A.P.I.D, which can be used to assess the role, impacts and implications of rapid, discontinuous change for an organisation. The final section will focus on the role of CEOs during this change, particularly the ways they respond to the change as well as why they could not respond appropriately to the change during certain occassions. Concept of rapid, volatile, discontinuous change Organisations of contemporary times are operating in a dynamic business environment, and so they are bombarded by factors in its external and internal environment. Organisations need to initiate rapid and discontinuous changes on their part to match up with those internal and external changes. “This sort of rapid change can be triggered by major internal problems or by considerable external shock” (Todnem, 2005, p.371). The changes has to be rapid and discontinuous mainly because the external changes or factors may not be slow, regular, and patterned, and instead they will be rapid and discontinuous. So, those rapid and discontinuous external changes or factors have to be met with rapid and discontinuous changes inside the organisation. This basic perspective of rapid, discontinuous change was validated by Todnem (2005, p.370) who stated: “Since the need for change often is unpredictable, it tends to be reactive, discontinuous, ad hoc and often triggered by a situation of organisational crisis”. Among the two key components of this concept, rapid changes are a crucial one. Although, the importance of being rapid in thoughts and actions needs little explanation, the fact is that organisations have to think and act rapidly and immediately after a challenging situation arise, or even when an opportunity filled situation develops. So, these rapid changes based on the scenario need to be visible in organisations’ strategy formulation, structural changes, organisational culture, and so on. Grundy (1993, p.26) toes this point by defining rapid, discontinuous change as “change which is marked by rapid shifts in either strategy, structure or culture, or in all three”. On the other hand, “discontinuous” part of the concept focuses on the fact that organisations instead of “continuing” earlier formulated strategies has to be adaptive or discontinuous to the changing environment. That is, it can no longer formulate and continue strategies based on past records, redundant business factors, earlier trends, and so on, and instead have to adopt an organisational approach where the strategies are discontinuous but apt for the emerging opportunities and challenges. It is a non-incremental and rapid change, which modifies the underperforming structures in the organization, and instead comes up with effective and applicable discontinuous change (Balogun, 2006). With the Strategic Management process The strategic management process involves a systematic analysis of organisations’ external environment (including its competitors, customers, political factors, economic factors, social aspects, and so on) as well as its internal environment (including its employees, suppliers, and others), with the intention to guide the organisation to come up with effective strategies that can optimize its competitiveness. On those lines, Ireland, Hitt, Camp and Sexton (2001) defines strategic management as a process during which organisations analyses its external and internal environment in order to establish as well as exploit its competitive advantages. That is, from external global factors like globalization to internal basic issue like organisational culture, all can impact an organisation’s strategy formulation and functioning. If the organisation is not reflecting and accordingly changing to the above-mentioned varied factors, then it could be simply left behind, losing its customers and market share, getting overrun by its competitors, face losses, and ends up as a failure. Considering this worst case scenario, it is paramount on the part of the organisation particularly its CEOs, in line with strategic management, to keep pulse of the changing business environment and current trends. Keeping in touch and observing the changes is only half a job done. Organisations have to respond and that too rapidly. As above-discussed, as organisations responds in a rapid, discontinuous manner mainly based on the systemic analysis of external and internal environment under strategic management process, it is clear that there is a close connection between discontinuous change and the strategic management process. That is, organisations can initiate rapid and discontinuous changes primarily based on organisation’s needs, problems, opportunities, goals, and so on. All these aspects can be found and delineated through the strategic management process, and then the rapid, discontinuous change can be initiated. When there are increased levels of competition, uncertainty, and even opportunities in organisation’s external environment, these rapid and discontinuous changes can be applicable. Nelson (2003, pg.18) states that “Change cannot be relied upon to occur at a steady state, rather there are periods of incremental change sandwiched between more violent periods of change”. The bottom line is that as organisation can respond in a rapid, discontinuous manner, mainly after the strategic management process, it is possible to state that the concept fits well during as well as after the strategic management process. Use of the R.A.P.I.D model The acronym of R.A.P.I.D, developed by Bain & Company Consultants named Paul Rogers and Marcia Blenko, is Recommend, Agree, Perform, Input, and Decide. Fig 1: R.A.P.I.D Model (Rogers & Blenko, 2006) As the acronym implies, it involves a 5-step process under which a decision or change that is first formulated gets implemented eventually. It starts with the recommendation of the change and ends with deciding on that particular change, so that the organisation can commit on that change and implement it successfully. This model can be used to assess the role, impacts and implications of rapid, discontinuous change because as the name implies, this model focuses on rapidly formulating and implementing the change. During rapid, discontinuous changes, where things will keep on moving quickly, a model that can keep track with that movement appears to be an apt one. On those lines, R.A.P.I.D model appears to fit that bill. This focus on quickness in the R.A.P.I.D model is validated through the study by Rogers and Blenko (2006, p.54), which states: “When we surveyed executives at 350 global companies about their organisational effectiveness, only 15% said that they have an organisation that helps the business outperform competitors. What sets those top performers apart is the quality, speed, and execution of their decision making”. So, when an organisation adopts rapid, discontinuous changes, R.A.P.I.D model can complement it aptly and in particular quickly. How CEOs should respond to discontinuous change As being discussed above, the rapid, discontinuous changes have to be implemented quickly and at the same time effectively. Considering such scenario, it is important for the organisations to come up with strong measures that will equip them in advance and make them prepared to respond positively to the change. The individual who could come up with such strong measures has to be the CEO. He/she being the head and leader of the organisation has to lead the employees, educate them, and equip them regarding the changes, so all the employees as part of the organisation can effectively respond to the change. Before influencing the employees to respond or act to the changes, the CEO should first have to trust, be confident, and be optimistic about the rapid, continuous changes. Once he/she completely imbibes this concept, he/she can be expected to respond positively as well as quickly (Wiersema & Bantel, 1992). As those changes happen in a rapid manner, it is obligatory on the part of the CEO to rapidly respond to the changes. In that direction, CEO has to constantly set or importantly reset organisation’s goals or objectives. Then, CEO has to quickly and effectively instil the benefits of this concept in the employees’ mind and thereby influence them to positively contribute to the changes. One of the benefits of rapid, discontinues change is that it can be non-intensive to the employees and cost-effective to the organisation, as it does not promote a never-ending process of continuous work and costly change initiatives (Beer & Nohria, 2000). Once the benefits are conveyed to the employees, CEO’s next response needs to be educating and developing the employees regarding all the intricacies of rapid, discontinuous change. All these responses of CEO can confidently impact the changes. Evidence that CEOs do no respond appropriately to discontinuous change Although, from the above analysis, it is obvious that CEOs respond aptly and effectively to rapid, discontinuous change, there are certain occasions where they may not respond that aptly. First, when the CEOs in association with other employees skip carrying out effective strategic management process. That is, as mentioned earlier, rapid, continuous changes can be implemented only after the organisation and its CEO study and analyzes the external and internal environment of the organisation, as part of the strategic management process. However, if the CEO due to oversight or inefficiency did not effectively carry out the analysis, the organisation will not get a clear picture regarding the changes that need to be implemented. So, it is clear that during cases of deficient strategic management process, CEOs may not respond appropriately to discontinuous change. When CEOs view rapid, discontinuous change in a negative light, they may not respond aptly. That is, there are certain negative attributes to rapid, discontinuous change and as Todnem (2005, p.371) states this approach “allows defensive behaviour, complacency, inward focus, and routines, which again creates situations where major reform is frequently required”. When certain CEOs think on above lines about the change, then they may not respond favourably. Conclusions and implications Based on the above analysis of rapid, discontinuous changes, its relation to strategic management process, R.A.P.I.D model, and the role of CEOs, it is possible to state that this concept can have effective applications in organisations, when it is implemented aptly. As discussed above, it is not enough for organisations to just act according to its external and internal environment; importantly it has to act rapidly in accordance with the constantly changing environment. When efficient systemic analysis is done through strategic management process, it can complement and support the rapid, discontinuous changes. Although, in most scenarios, CEOs positively respond to these changes, there may be few occasions, in which they may be sceptical. However, the fact is, this concept of rapid, discontinuous changes are being adopted and implemented by many organisations and its CEOs, as it is providing good benefits.. References Balogun, J. (2006). Managing change: Steering a course between intended strategies and unanticipated outcomes, Long Range Planning, vol.39, pp 29-49 Beer, M & Nohria, N. (2000). Cracking the code of change. Harvard Business Review, May- June Grundy, T. (1993). Managing strategic change. London: Kogan Page. Ireland, R. D., Hitt, M. A., Camp, M & Sexton, D. L. (2001). Integrating entrepreneurship and strategic management actions to create firm wealth. Academic Management Perspective, 15 (1): 49-63 Nelson, L. (2003). A case study in organisational change: implications for theory. The Learning Organisation, 10(1), pp. 18–3 Rogers, P & Blenko, M. (2006, January). Who has the D? In Harvard Business Review. Retrieved from: http://www.asec-sldi.org/dotAsset/292785.pdf Todnem, R. (2005). Organisational change management: A critical review. Journal of Change Management, 5 (4): 369–380, Wiersema, M. F & Bantel, K. A. (1992). Top management team demography and corporate strategy change, Academy of Management Journal, 35 (1): 91-121 Read More