Rapid, Volatile, Discontinuous Change in the Strategic Management of Organizations - Essay Example

Rapid, Volatile, Discontinuous Change in the Strategic Management of Organizations Name: Institution: Rapid, Volatile, Discontinuous Change in the Strategic Management of Organizations Abstract Rapid, volatile, discontinuous change is a concept that refers to irregular and drastic transformations that have the capability of causing upheaval within a company. Application of the concept within strategic management can help a company develop and sustain a competitive advantage over rivals. Different models can help assess the way that the process has affected an organization such as the rational approach. To ensure that the process does not afflict an organization in a negative way, it is important for CEOs to prepare their companies and make them capable of adapting to various situations. Introduction Over the past century, advances in technology have changed the world in tremendous ways, affecting all fields of life. Through the advent of globalization and innovation such as the internet, the world now operates in a drastically different manner. One of the areas that have changed considerably over the past few decades is the field of business. Globalization brought the world closer together, giving rise to massive companies that have operations in virtually every continent on earth. The emergence of these corporations and the possibility of business operations that transcend continents have changed the internal and external environment in which modern companies operate. Some of the changes that typify the changing business environment of the twenty-first century include the emergence of the internet as an effective tool for corporations, the development of global markets through globalization. Accordingly, organizations have to deal with various transformations including discontinuous change. While continuous change is a concept that many executives can deal with, discontinuous change presents more harrowing challenges that could determine a firm’s future success or failure. This discussion will analyze the concept of rapid, volatile, discontinuous change within the context of strategic management. First, the essay will define the key concept, looking at its various dimensions. The paper will then look at how discontinuous change applies in strategic management. The third part of the essay will discuss models that asses the implications of the change, followed by an analysis of the way that company executives should react when faced with the concept. The last part of the paper will show how different executives have actually dealt with situations regarding rapid, volatile, discontinuous change. Rapid, Volatile, Discontinuous Change According to Pullen (2003), change within organizations and corporations normally areas concerning product, mission, technology and organizational values. The change that afflicts these areas can be either continuous or discontinuous. While companies are already familiar with the concept of continuous change, discontinuous change is new. Discontinuous change has come about through the development of new phenomena in the world that are affecting companies in different ways. These phenomena include globalization, new technology and increased international trade and cooperation. Accordingly, discontinuous change is an issue that concerns many companies and their executives because of their lack of familiarity with it. While change in its basic and continuous form is already unsettling, discontinuous change brings forward new challenges and problems that many firms have never dealt with in the past. Rapid, volatile, discontinuous change is a concept that encompasses many ideas. Unlike continuous change, this concept entails transformations that are rapid, volatile and discontinuous. The rapid aspect of the change refers to the quick pace at which the transformations occur. Scholars explain that in the modern world, internal and external environments are highly susceptible to various stimuli (Ramanujam, 2003). These stimuli could trigger processes that transform a company at a high pace, thus necessitating immediate action from the people in charge. To deal with such rapid change, it is important that the leaders of various organizations be willing to have an open and positive attitude towards such alterations. Many scholars argue that the best way for executives to deal with change is by embracing it and using it to their advantage (By, 2005). Accordingly, having a positive attitude towards change processes would make it easier for the executives to take the necessary actions. The second aspect of this change, volatility, concerns the way that such transformations affect the organizations involved. With regard to this particular concept, volatile change makes it more difficult for companies to operate because they have difficulties predicting future occurrences. In the modern world, the emergence of new technologies and changes to political atmospheres can result in significant upheavals of industries and markets. For instance, the development of social networking sites made it possible for people to advertise their business at little cost and allowed many small ventures to grow exponentially. This has changed the way that large corporations conduct their business, as they are now aware that smaller entities pose significant challenge to them (Schreyogg & Kliesch-Eberl, 2007). With discontinuous change, companies have to deal with transformations that are very different from what they have faced in past centuries. Ramanujam (2003) defines discontinuous change as a transformation within an organization that is irregular and sporadic in nature. Such changes are normally drastic and affect major aspects of an organization such as its strategy, culture or structure. By (2005) adds that serious internal problems or significant external shocks can force a company into discontinuous change. Because of its nature and causing factors, discontinuous change also differs from continuous change by being a single and sudden transformation from past practices. The two forms of change also differ in the manner in which they occur. While continuous change involves cumulative and moderate alterations, discontinuous change can occur through singular events that involve several initiatives. Additionally, a period of consolidation may follow every single event or initiative that formed a part of the process of discontinuous change (By, 2005). Two key issues stand out within the concept of discontinuous change. Firstly, the concept has emerged in the modern business world because of the unpredictable nature of contemporary markets and industries. Events such as the late 2000s global economic collapse are evidence of the dynamic nature of the modern business world and the effects that such dynamism can have on different corporations. This unpredictability differs from the past where executives were capable of predicting the future with a high level of surety. This made it easier for them to make decisions and develop plans (Schreyogg & Kliesch-Eberl, 2007). The second issue that stands out within discontinuous change is the fact that the change normally has far-reaching effects on an organization’s structure and operations. Accordingly, the nature of these transformations makes it possible, and sometimes likely, that the entire leadership structure and culture of a company will change. This differs from continuous change, where the transformations take place over time allowing the company to adjust, thus avoiding any drastic effects (Schreyogg & Kliesch-Eberl, 2007). Discourse on the effects of discontinuous change has failed to provide a consensus on whether the process is beneficial or detrimental to an organization. According to Ramanujam (2003), some studies have found an increased likelihood of accidents happening within an organization after discontinuous change has occurred. Though the studies failed to elaborate on the relationship between the two events, conclusions imply that the process of discontinuous change was a determining factor (Ramanujam, 2003). In other studies, researchers discovered that the employees of different organizations rarely found discontinuous change to have any benefits to the organization. Instead, most respondents felt that discontinuous change was impractical, unrealistic and detrimental to the fortunes of the company. For other respondents, discontinuous change was simply a disruptive process that consumer plenty of resources and increased the stress that the members of an organization were facing (By, 2010). By (2005) adds that in some cases, the effects of discontinuous change do not last long, making the process a waste of time and resources. Conversely, proponents of discontinuous change claim that the process is more appropriate and cost-effective because it does involve a procedure that is drawn-out over a long period. The immediate and brief nature of the process ensures that a company can get through the necessary transformations in a brief amount of time and move onto other issues. Application of Discontinuous Change within Strategic Management Strategic management is the process through which the leadership in a firm develops plans and initiatives that a company will follow by taking into consideration key factors such as the resources that the corporation has as well as the conditions in the external and internal environments of the entity. Normally, companies in the world of business apply strategic management when they want to develop and maintain competitive advantages over their rivals. The process of strategic management normally involves analysis, the taking of actions and the making of key decisions. The three activities are a crucial aspect of strategic management and they occur continuously throughout the process (Nag, Hambrick & Chen, 2007). For modern corporations, strategic management is a concept that goes together with discontinuous change. The connection between the two concepts first appears through the way that discontinuous change enables an organization to make the changes that are sometimes a part of strategic management. Discontinuous changes normally result in drastic transformations of a company that can sometimes be similar to upheavals. If a company utilizes the changes correctly, it would be capable of securing advantages over its rivals. Such a situation would call for the leadership in a firm to consider the change a reorientation of the company’s perspectives and priorities. Accordingly, executives can use discontinuous change along with the principles of strategic management to give their companies an edge over competitors (Schreyogg & Kliesch-Eberl, 2007). Discontinuous change also relates to strategic management through the way that it transforms a company. In some cases, transformations to the conditions of the company’s internal or external environment force the discontinuous change into effect. As the change sweeps over the organization, the leadership can use the transformations to plan for the company’s future by realigning the ambitions and plans in a manner that suits both the discontinuous change and the alterations to the environment (Pullen, 2003). Models for Assessing Change Scholars have developed various models that companies can use to assess change and its effects. Lynn and Nahmias (2010) explain that many of these models help assess various kinds of change but are not as effective for firms dealing with discontinuous change. For instance, the economic efficiency-based adaptive models can help companies assess different kinds of transformations but they do not have adequate explanations on how discontinuous change affects a firm. One model that can help assess the impact of discontinuous change on companies is the population ecology method. The approach is based on the assumption that the key driver of change within an organization is the selection of the most suitable organizational structure to fit the business climate. Structural inertia normally makes organizations resistant to change, a key factor that analysts look at when analyzing transformations within companies (Lynn & Nahmias, 2010). Another way to assess the effects of discontinuous change in an organization is by using the rational model. Many companies adopt the rational model when trying to assess change or sustain it. The sequential nature of the model makes it easy for executives to use and apply within their organizations. The rational model normally involves a nine-step process. The first five steps involve the analysis of the company’s internal and external situation. This analysis normally looks at external conditions such as threats and opportunities, as well as the internal situation, which includes strengths and weaknesses. The next three steps involve a reorganization of the company, with emphasis on culture, values and strategies. After the reorganization, the company can then assess the results and establish how well it has dealt with the discontinuous change. Through this assessment, executives understand the capabilities of their companies to deal with adverse situations, particularly those that involve discontinuous change (Schreyogg & Kliesch-Eberl, 2007). Dealing with Discontinuous Change According to Beer, Voelpel, Leibold and Tekie (2005), the best way for managers and executives to deal with discontinuous change is to embrace the process and utilize it in a manner that benefits the organization. This is because such disruptive change processes are fast becoming a mainstay in the environments that modern business companies deal with. Resistance to such recurring and powerful processes could only cause harm to a company, especially because it is futile. Beer et al. (2005) argue that the CEOs of a company can deal with discontinuous change by making sure that an organization is fit. In this context, fit refers to the ability of the business entity to operate at an effective level within its environment and while utilizing its capabilities. Organizational fit also requires a company’s capabilities, strategy, design, culture and leadership to match each other and the overall situation. Executives can use analytic frameworks when trying to determine whether an organization is fit. The use of frameworks can help executives assess the health of an organization without neglecting some of the features that are commonly ignored such as core values, leadership styles and culture (Beer et al., 2005). By carrying out the right analysis and achieving organizational fit, executives can make sure that their companies are capable of adapting to discontinuous change within the environment. The ability of some modern companies to adapt to the highly volatile markets in which they operate shows that some CEOs are willing and capable of dealing with discontinuous change. The continuous and rapid evolution of technology in the modern world has made the field of business highly unpredictable as companies struggle to cope with ever-changing conditions. However, some companies have managed to use these transformations to their advantage. For instance, Apple, Inc has established itself as a giant in the consumer electronics industry by seizing opportunities that have emerged through changing conditions in the environment. Conversely, companies such as Microsoft have failed to seize such opportunities and lost the competitive advantages that they had in their markets. Despite having dominated the personal computer industry since the 1980s, Microsoft failed to take full advantage of discontinuous changes that emerged through the development of the internet and the growth of the smartphone industry. The company’s structural inertia prevented it from accepting the imminent discontinuous change process. In Microsoft’s case, discontinuous change would have involved a complete shift of the company’s business focus from personal computers to handheld devices and internet initiatives. However, the firm’s inability to adapt to the changing external environment resulted in a missed opportunity for the company. Conclusions and Implications Discontinuous change is an issue that many scholars have addressed with regards to the operations and nature of modern organizations and markets. The process is becoming increasingly common in the modern business environment because of the advent of globalization and the development of new technologies. Though scholars fail to agree on whether the process is beneficial or not, the consensus is that a company’s ability to adapt to such change could help it become successful. Various models can help executives assess the impact of discontinuous change within an organization. The rational model is the preferable option of because of its simplistic and sequential nature. The population ecology model could also apply because of its focus on structural inertia, a key issue that revolves around change. The best way for executives to deal with discontinuous change is by ensuring that the organization is fit, as all of its key elements combine well with each other. References Beer, M., Voelpel, S. C., Leibold, M. & Tekie, E. B. (2005). Strategic management as organizational learning: Developing fit and alignment through a disciplined process. Long Range Planning, 38, pp. 445-465. By, R. T. (2005) Organizational change management: A critical review. Journal of Change Management, 5(4), pp.369– 380. By, R. T. (2010). Ready or Not … Journal of Change Management, 7(1), pp. 3-11. Lynn, C. & Nahmias, A. H. (2010). Competencies for managing change. International Journal of Project Management, 28(4), pp. 405-512. Nag, R., Hambrick, D. C. & Chen, M. J. (2007). What is strategic management really? Inductive derivation of a consensus definition of the field. Strategic Management Journal, 28, pp. 935-955. Pullen, W. (2003). Strategic shocks: Managing discontinuous change. The International Journal of Public Sector Management, 6(1), 30-37. Ramanujam, R. (2003). The effects of discontinuous change on latent errors in organizations: The moderating role of risk. Academy of Management Journal, 46(5), pp. 608-617. Schreyogg, G. & Kliesch-Eberl, M. (2007). How dynamic can organizational capabilities be? Towards a dual-process model of capability dynamization. Strategic Management Journal, 28, pp. 913-933. Read More