BUSINESS STRATEGY 51110 / MKT3002

LECTURE Twelve

Topic 12: Managing strategic change

Managing strategic change

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Module 12

Learning outcomes- at the conclusion of this module, students should be able to:
Describe the main types of strategic change processes; Define a learning organisation; Undertake a forcefield analysis based on cultural web mapping; Describe the main styles of managing change; Describe how political processes and change tactics might facilitate change; Undertake the role of a change agent and the roles of others in managing strategic change; and Understand how effective strategic change relates to wider aspects of strategic management.

Key words and concepts

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Transformational change Learning organisation Forcefield analysis Zone of uncomfortable debate Education and communication collaboration intervention Direction Coercion Routines Symbols Change agent Middle managers

Introduction
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The success of strategic change in an organisation depends on the extent to which people change the beliefs and assumptions that they hold and their behaviour in their organisational lives. Main focus
A clear view within an organisation of the strategy to be followed. Commitment to change in the organisation. Managing strategic change is context dependent. Paradigm and cultural web.

Understanding types of strategic change

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Types of strategic change

Incremental change:
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Build on skills, routines, and beliefs of organisation. Change is efficient and likely to win commitment. Realignment of strategy based on existing paradigm. Change which cannot be handled within the existing paradigm and organisational routines. Make changes to the way of doing things.

Transformational change:
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Understanding types of strategic change (Cont)

Nature of change

Management role

Incremental Transformational change change Proactive Tuning Reactive Adaptation Planned transformational Forced transformational

Change and the learning organisation

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Learning organisation: is capable of benefiting from the variety of knowledge, experience and skills of individuals through a culture which encourages mutual questioning and challenge around a shared purpose or vision.
(Johnson & Scholes 1999, p. 498)

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Changes in the business environment need a learning oriented approach. Instigate the share of knowledge and information.

Managed change
Unfreezing and the management of change
Organisational symptoms
Questions and challenges Felt need for change

Stages Unfreezing mechanism

Pressures for conformity

Early signals made sense of within paradigm Political pressures not to rock the boat

Organisational anticipation

Competing views of causes of problems and remedies Information collection and political testing of support New ideas tested out

Organisational flux Attempts to reconcile competing

views within current paradigm Information made sense of within the paradigm Resistance to new ideas

Information building Experimentation

or

Refreezing

Sustaining change

Imposed (Forced) change

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Imposed change can be either because of:

changes in the industry environment (eg. Competition, technologies); or some external agency forces change (eg. government impose regulation, GST, quality control).

Diagnosing strategic change needs

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Key issues:
Why strategic change is needed; The basis of the strategy (purpose); Specific directions and methods of strategy development; and Changes in strategic architecture required.

Detecting strategic drift

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Strategic drift: occurs when the organisations strategy gradually moves away from relevance to the forces at work in the environment. Symptoms:
Little toleration of questioning or challenge in the organisation; Major power blockage to change; An organisation with little focus on the external environment; and Deteriorating relative performance.

Identifying forces blocking and facilitating change

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Cultural web
Stories, symbols, power, organisation, controls, rituals and routines, and paradigm.

Forcefield analysis

An openness to change
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Zone of uncomfortable debate (ZOUD): encompasses sensitive aspects of the organisation and managerial attitudes and beliefs which tend to be avoided in open discussion.
(Johnson & Scholes 1999, p. 498)

Managers have to enter the ZOUD to discuss and tackle issues formally to overcome those blockages to change.

Managing strategic change process

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Changes in structure and control systems (chapter 9 and 10) Styles of managing change (differ between contexts and circumstances)
Education and communication Collaboration Intervention Direction Coercion

Managing strategic change process (Cont)

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Changes in organisational routines Symbolic processes in managing change

The creation and manipulation of symbols has impact to reshape beliefs and expectations (eg. uniforms, information and control system)

Power and political processes in managing change

Reconfiguration of power, acquiring additional resources, building alliances.

Managing strategic change process (Cont

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Communicating change
Change in strategic direction is complex; Communicate the priorities of the strategy; Gathering feedbacks; Involvement of staff members; and The need of knowing what will happen from the staff members perspective.

Change tactics
Timing. Job losses and de-layering. Visible short-term wins.

Roles in the change process

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Three key categories

The change agent; Middle managers; and Other organisational members (eg. External stakeholders, outsiders).

The change agent

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The change agent: is the individual or group that effects strategic change in an organisation.
(Johnson & Scholes 1999, p. 530)

Characteristics:
Sensitive to internal and external context of change (eg. values & beliefs of organisation, environmental factor -competition) Understand the required strategic architecture. Employ appropriate style of managing change. Have visionary capacity, good at team building and playing, self-analytical.

Middle managers
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Middle managers are implementors of strategy and their roles include:

Allocation and control of resources; Monitoring performance and behaviour of staff members Explaining strategy to their subordinates.

They could also be blocking the change process.

Other organisational members

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External stakeholders
Influences will be based on their level of interest and political power. Approaches to managing change will differ from different stakeholders.

Outsiders
A new CEO brings a fresh perspective on the organisation. New middle and senior executives require adequate support from the CEO to manage the change process effectively. Consultants the symbolic importance of the change process.

Managing strategic change and strategic management

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Environmental assessment
Managers and staff in the organisation should continually monitor the environment to determine the effectiveness of the changed process.

Leading change
Managing change is not just a concern of following a set of activities. Changes should be made on the basis of organisational context and the values and beliefs within the organisation.

Linking strategic and operational change

Managing strategic change and strategic management (Cont)

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Strategic human resources management

Integrating HR policies with the strategies and the strategic change process. Eg. Training, salary packages.

Coherence in managing change.

Consistency between the intended strategy. Eg. Strategic objectives, staff members behaviour in reinforcing the strategy. Strategic change is consistent with the environmental changes. The strategy is feasible (the organisation has the required resources). Strategic direction aims to achieve competitive advantage.

Lecture 12 review
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Understanding types of strategic change Diagnosing strategic change needs Managing strategic change processes Roles in the change process Managing strategic change and strategic management

Next lecture and tutorial

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revision. qExam preparation. qNo tute