Concept of Rapid, Volatile, Discontinuous Change and Its Impact on Strategic Management - Essay Example

Concept of rapid, volatile, discontinuous change and its impact on the strategic management of organizations Concept of rapid, volatile, discontinuous change and its impact on the strategic management of organizations The business environment has experienced massive growth since its start in the ages of barter trade to the current complex business environment today. These changes have affected businesses both positively and negatively depending on how the management of the organization reacts to the situations. Rapid, volatile and discontinuous changes are an emerging trend in the social-political and technological environments of all businesses despite their sizes or geographical locations. Despite the competition in the market and the challenging market situations, any Triple Crown organization must be strategic in-order to stand these forces and continue earning returns. (Durand, 2012) .Each organization encounters change that challenges the top management leading to failure of organizations or continuous reduction in the levels of profits made. Global economy and technology being the major drivers of competition, affect every organizations management process and due to this, models have been designed to help managers respond to discontinuous changes. The business environment has become very turbulent and uncertain which relates directly to rapid, volatile and discontinuous changes. This situation has reduced stability of the business environment leading to a difficulty in understanding the relationship between causes and their consequent effects. Rapid changes refer to situations that occur more frequent and are determined by the level of urgency demanded. Each manager must learn to evaluate a rapid change and choose the mode of action correctly. The wrong choice of measure to respond to the urgent situation leads to low profits or even high losses. (Galavan, Murray & Markides, 2008) Discontinuous changes are market situations that make it difficult to predict what to experience in the future basing facts from what has been happening in the past. It is a change that endangers the existing structure because it changes the norm of happenings. It occurs when new technologies are introduced and new markets come up leading to the un-certainties in prediction. This situations cause imbalance and therefore the top management must be well equipped with knowledge to deal with this complexity. (David, 2010) Volatile changes refer to situations that are characterized by increased risks and reduced power to foretell the fluid boundaries of various industries. Such situations are caused by environmental eventualities and precariousness, which cordially increase the instability of the environment and thus produces less information to deal with cause-effect relationships. Management refers to the initiatives taken by the management staff with regard to running of the organization in both the internal and external environments. It is majorly divided into operational and strategic management. Strategic management deals with external issues affecting the business such as competition forces and customer needs, which are the most important elements in business success. Strategic management involves various principles that should be put in place to deal with rapid, volatile and discontinuous changes. (Galavan, Murray & Markides, 2008) Creating an unequaled and high position is the major principle towards strategic management. Each organization needs to be unique in its own way in-order to win their customers loyalty which will assure the organization of a market now and in the future. The uniqueness of their service or product is what draws customers closer and in the end the organization attains stability in the market. Another principle commonly used is making trade-offs by the right choice of what to do and what not to do. Many companies experience losses due to poor choices of trade-offs. A correct trade off should take care of all the changes in the business environment which is guided by a correct choice of a model. Crafting a ‘fit’ principle is also instrumental in the success of an organization. Despite the changes in the business environment, no business can co-exist solely and hence has to relate with aligning companies so that they can support a chosen strategy. Strategic management involves making clear objectives for the firm, creation of policies to attain the goals and finally setting aside resources to implement the plans. Rapid volatile and discontinuous changes are advantageous and disadvantageous at the same time in that they may create threats as well as opportunities for any given organization. They create a market situation where more competitors, substitutes and faster obsolescence, which are uncontrollable factors and their results, are hard to control. Resulting from this, strategic analysis requires a lot of emphasis in-order to have the capability to analyze internal and external business environments. A competitive manager should have capability to balance strengths, weaknesses, opportunities and threats for an outcome that will benefit the organization with profits above average. The dynamic business environment requires innovativeness so that the strategies laid become long lived. According to the sigmoid curve, at one point in growth of the organization, resources and time are equal but at some other time the situation changes. (Galavan, Murray & Markides, 2008). This suggests that correct choices of strategy must be made to adapt to changes and keep achieving organizational goals. Models have to been created in order to survive business environment changes. A good model should merge and align commitments and actions to exploit competence and gain advantage in the market. Various models exist and their choice is dependent on the nature of the business, the services it offers and its size. Every model represents a process that is acceptable and comprehensive for strategic management and shows the relationship among the components of the process. All models tend to answer the questions of the current position of the organization, its aim and achieve the set aim. Five forces model analysis is useful in helping managers in examining the threat posed by new competitors and substitutes in the dynamic market. Another model that works the same as this is the pest model that conducts extraneous evaluation for the company. Value change analysis that works similarly to the VRIO model is usually deployed for internal analysis. Both models use a theoretical account to assess the resources and potentialities of the firm. They examine the measure, infrequency, imitativeness and formation of the firm. The business rules group model is widely accepted and allows managers to understand the efficiency and suitability of their strategies. The CEO is the overall corporate officer in any organization and takes full mandate and responsibility towards management of any given organization. They play crucial roles in decision-making and hence have the determining power of the success of the organization. Every CEO is en-trusted in implementing the most effective strategy to sustain the organization in the highly competitive business market. A normal business experiences phases and at one point, it is subject to recession. (Sven, 2004). During the recession, period companies either make innovations or increase the standard of the commodity or service they were offering. This decision lies in the hands of chief executive officers and researches have proved that the companies that invest more on innovation rather that upgrading the product become more profitable. For correct decision-making, the CEO should analyze both the internal and external models. Proper analysis provides facts on the potential threats in the market such as new entries substitutes and competitors. Managers should ensure that they are on the look on policies in other regions where their products can be marketed. These policies should match the current ones to keep pace in competition and can be easily achieved using the VRIO model. Research should be carried out before making the decision of which new field to invest in. CEOs should carry out extensive research or else delegate the responsibility to a competent individual so that they can understand the new fields and the potential threats likely to be experienced. They should also evaluate whether they have skilled and experienced labor force to work out the new projects. The results of discontinuous change in the market could be very severe if not well evaluated. The top managers are therefore required to show competence in terms of correct prediction basing facts on models. The CEO should have the capacity to assess organization goals and objectives using strategic analysis. This involves the ability to organize resources, weigh threats as well as understanding the strengths and weaknesses of the firm. The way in which the organization spends its resources should create an advantage to them in terms of value for customers and how much the competitors can achieve. The CEO should utilize the different types of strategic management that range from intended, realized and emergent. With the rampant globalization, each manager requires to be flexible in strategies, which is achieved by having an organization slack. The managerial team should ensure that their management is sustainable and is aligned with market demands. For any firm to make above average profits, the management should be in a position to utilize the resources in a better way than their competitors do, which creates a greater value for customers. A successful CEO should identify and classify changes. However, this rarely happens in the discontinuously changing markets. It is a hard task to depart from traditions and to handle the crisis of galvanizing events. In most cases, the notion of strategies fails when the strategies cannot match the business environment, which poses a great problem to all the CEOs (Sven, 2004). They also lack to understand the interaction and impacts associated with change variables. Most management strategies on reaction to change end up not attaining maximum capability to compete due to high levels of competition in the market and the fact that all the competitors use the same strategies. Lack of the CEOs making appropriate response to the volatile and discontinuous changes leads to the failure. An example is the blackberry smart phone that did not respond effectively to the stiff competition by other brands of smart phones and it led to a huge decrease in sales as well as customer loyalty. However, various companies have stood this test and maintained their position in the market like the coca cola company that was not bitten by the new rival Pepsi. A realistic approach must consider varied forces able to face the changing social, political and economic business environment. In conclusion, it is the duty of every chief executive officer to improve the management strategies in the best way possible in order to counter the rapid , volatile , and discontinuous changes in the market. The CEO should utilize the models that have proved working in a bid to gain more success and expand the organization. Any approach they use should always be mindful of the many forces of competition in the market. References David, J. (2010). Business Models, Business Strategy and Innovation. Long Range Planning, 43(2), 172-194. Durand, R. (2012). Organizational evolution and strategic management. London: SAGE. Galavan, R., Murray, J. &Markides, C. (Ed) (2008).Strategy, Innovation, and Change: Challenges for Management: Challenges for Management. Oxford: Oxford University Press. Sven, C. (2004). The organizational fitness navigator: enabling and measuring organizational fitness for rapid change. Change Management, 4(2), 123–140. Read More