STRATEGIC CHANGE

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Change Management MGMT625

LESSON # 26

STRATEGIC CHANGE

Before going to discuss the concept of strategic change let us first discuss the concept of strategy. What

do we mean by strategy, its components and its usage as a word "strategic" especially? For instance one

may observe its wide usage as strategic investment, strategic management, strategic finance and strategic

planning and strategic marketing etc. Therefore when ever we talk of strategy it is essentially assumed

that we are also dealing with its inalienable components which are as under:

1. Objectives - this may also mean vision, mission, goals and targets

2. Resources financial, human, informational, technological etc.

3. Environment Government, customer, society, economic conditions and specific environment means

particular to industry in which organization operates like vendors, buyers competitors etc. The

environment may be friendly, hostile or neutral.

4. Time orientation short term or long term orientation

5. Competitors strategy or tactics of competitors, nature of competition and rivalry

Therefore for students of business it is important to know the constituent elements of the word strategy

whenever it is referred.

This lecture is based on the chapter of a very popular book on strategic management, comprising of a

comprehensive framework for managing strategic change is given which is as under.

A Framework for Managing Strategic Change

1. Diagnosing the Change situation

· Types of Strategic Change

· The Importance of context

· Organization culture

· Force field analysis

2. Management Styles and Roles

· Styles of managing change

· Change agency roles: Strategic leaders, Middle managers, Outsiders

3. Levers for managing change

· Structure and control

· Routine

· Symbolic processes

· Political processes

· Communication

· Change tactics

Change Management MGMT625

1. Diagnosing the change situation

· Types of Strategic Change

First step in diagnosing the change situation is whether change is needed or not. If the change is needed

then related question would be of what type? Therefore our concern is to identify various types of change.

Balogun and Hailey have given the following typology of strategic change so as to identify the types of

change required. The nature of change in an organization can be incremental or big bang one. Incremental

change is built on skills, routines and beliefs for bringing in efficiency. While the big-bang approach to

change might be needed on occasions, for example if the organization is facing crisis or needs to change

its direction. The scope of the change means whether change can occur within the current paradigm that

is, current organizational beliefs and assumptions, and can be classified further as realignment of strategy

rather than a fundamental change of strategic direction. Or change requires a paradigm change, that is,

transformational change. Combining these two axes we have four types of strategic change, as given in

the figure below:

Scope of Change

Realignment

Transformation

Evolution

Adaptation

Incremental

Nature of Change

Revolution

Reconstruction

Big bang

Adaptation is change which can be accommodated within the current paradigm and occur incrementally.

It is the most common form of change in organizations

Reconstruction is concerned with rapid change and upheaval in an organization. For example

organization may make structural changes like major cost-cutting programmes to deal with difficult or

changing market conditions.

Evolution is change in strategy which requires paradigm change but over time. Evolution can also

explained in terms of taking organization as learning system continually adjusting their strategies with the

changing environment. This we discussed earlier as learning organization. But the danger in following

incremental and evolutionary and incremental change lies in experiencing strategic drift, as organizations

are based and bounded by the existing paradigm and routines of the organization

Revolution is change which require rapid and major strategic and paradigm change, or where strategic

drift has resulted in developing extreme pressures for change.

· The Importance of Context

There is no one right for the management of change. The success of managing change will also be

dependent on the wider context in which that change is taking place. Balogun and Hailey therefore build a

number of important contextual features that need to be taken into account in designing change

programmes. Some contextual features are:

i) Time - How quick change is needed?

ii) Scope - What degree of change is needed?

iii) Preservation - What characteristics to retain and what combination to change?

iv) Diversity - How homogeneous or heterogeneous the organization is from within?

v) Capability - What is the managerial and personal capability to implement change?

vi) Capacity - What is the degree of change resource available?

Change Management MGMT625

Vii) Readiness - How ready workers and managers at multiple levels are?

Viii) Power - What power does the change leaders have to impose? Who has the power to effect

change?

Organisation Culture as context

It is the organization culture which always shape and guide strategy. We will now look more closely at

the process of culture change. Culture change is difficult and time consuming because "culture" is rooted

in the collective history of an organization, and because so much of it is below the surface of awareness.

In general, the process of culture change must include the following steps:

- Uncover core values and beliefs. These may include stated values and goals, but they are also

embedded in organizational metaphors, myths, and stories, and in the behaviours of members.

- Acknowledge, respect, and discuss differences between core values and beliefs of different

subcultures within the organization.

- Look for in-congruencies between conscious and unconscious beliefs and values and resolve by

choosing those to which the organization wishes to commit. Establish new behavioural norms (and

even new metaphor language) that clearly demonstrate desired values.

- Repeat these steps over a long period of time. As new members enter the organization, assure that

they are surrounded with clear messages about the culture they are entering.

- Reinforce desirable behaviour.

- It's clear that culture change is an ongoing process, so it's very hard to identify organizations that

have "completed" a successful culture change.

Force field Analysis

We have earlier talked about force field analysis. A force field provides an initial view of change

problems that need to be tackled, by identifying forces for and against change. More relevant questions in

this context can be asked like the followings:

What aspects of the current culture might aid change in the desired direction, and how might these be

reinforced? What aspects of the current culture would block such change, and how can these be

overcome? What needs to be introduced or developed to aid change? Johnson and Johnson have identified

a generic example of force field analysis as pushing forces and resisting forces

Pushing forces

Resisting forces

High quality service

Work load / Overload

Ethos of hard work

Fire fighting

Flexibility

Departmentalism

Devolved services

departmental barons

Formality of management

Stories of good old days

Blame culture

Deference

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