BUSINESS STRATEGY 51110 MKT3002

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BUSINESS STRATEGY 51110 / MKT3002

• LECTURE Twelve
• Topic 12 Managing strategic change

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Module 12 Managing strategic change

• 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.

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Key words and concepts

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

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Introduction

• 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.

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Understanding types of strategic change

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

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Understanding types of strategic change (Cont)
Nature of change
Management role
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Change and the learning organisation

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

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Managed change
Unfreezing and the management of change
Organisational symptoms
Stages
Pressures for conformity
Early signals made sense of within paradigm
Unfreezing mechanism
Questions and challenges
Political pressures not to rock the boat
Organisational anticipation
Felt need for change
Competing views of causes of problems and
remedies
Attempts to reconcile competing views within
current paradigm
Organisational flux
Information collection and political testing of
support
Information made sense of within the paradigm
Information building
Experimentation
New ideas tested out
Resistance to new ideas
Sustaining change
Refreezing
or
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Imposed (Forced) change

• 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).

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Diagnosing strategic change needs

• 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.

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Detecting strategic drift

• 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.

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Identifying forces blocking and facilitating
change

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

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An openness to change

• 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.

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Managing strategic change process

• 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

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Managing strategic change process (Cont)

• 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.

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Managing strategic change process (Cont

• 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.

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Roles in the change process

• Three key categories
• The change agent
• Middle managers and
• Other organisational members (eg. External
  stakeholders, outsiders).

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The change agent

• 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.

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Middle managers

• 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.

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Other organisational members

• 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.

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Managing strategic change and strategic management

• 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

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Managing strategic change and strategic
management (Cont)

• 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.

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Lecture 12 review

• Understanding types of strategic change
• Diagnosing strategic change needs
• Managing strategic change processes
• Roles in the change process
• Managing strategic change and strategic management

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Next lecture and tutorial

• Unit revision.
• Exam preparation.
• No tute