Given its dynamism, the fields of business and management are always subject to change. Companies and personnel operating within such a space need to be adaptive and embrace change when necessary. However, change should always be done in consideration of its potential effects, challenges, resistance from affected persons, and effectiveness. As a result, the field of strategic change has garnered popularity across the business world as it enables an organization to adopt a raft of new strategies within its processes beyond the traditional routine. Organizations have to embrace strategic change in their efforts to remain competitive.
Basis of Strategic Change
While there are many definitions, strategic change refers to the analysis of the business environment and identifying and selecting necessary changes, implementing them effectively, and undertaking follow-up actions regularly (Odera and Muendo, 2017). Strategic change necessitates a departure from the traditional routines and structures in favor of new ones in an effort to enhance or maintain a company’s competitive advantage. While there are concerns over the validity and necessity of strategic change in management, the universal agreement is that it is an inevitable component of strategy and management. There are numerous drivers of strategic change which all come from transformations in the business’ external environment and have a direct impact on a company’s leadership, mission, or culture (Errida & Lotfi, 2021). Strategic management recommends that companies should stay vigilant for any changes in the business environment that may trigger or necessitate strategic changes.
When companies stay vigil, they increase their chances of identifying opportunities when strategic change is needed. However, if such an organization does not have units that function in harmony, there is little opportunity to identify opportunities for strategic change. Without a strategic map that allows companies to follow a step-by-step process in its strategic goals, companies may fall into strategic drift which is a severe dilemma of gradual loss in competitive action (Alabadi & Joudeh, 2020). Companies can use strategic drift as a motivation for implementing strategic change as failure to address it leads to loss of competitive advantage. Strategic decisions can be made to address the specific issues that cause strategic drift.
Understanding the Need for Strategic Change
Strategic change is underlined by transformations in the business’ external environment that directly affect it. However, the global business environment is volatile and broad which implies that drivers of change are widely varied. Digital transformation, business agility, and the need to satisfy customers are prime drivers of change (Sundaram, Ziade, & Quinn, 2020). For instance, digital transformation is an enabler of technological progression that enhances a company’s ability to analyze data appropriately and use it to improve its business practices. On the other hand, business agility enables a company to adapt to information management and take necessary measures to meet competitive demands. Lastly, the need to satisfy customers may require a business to alter its traditional methods of operation with mechanisms such as adjusting the operating hours and reducing prices in what constitutes strategic change.
Strategic Change Methodologies
There are different approaches used to implement strategic change with the popular ones being planned versus emergent methods. Planned change implies that a change management strategy takes sequential steps to altering both individual and organizational behaviour (Garcia-Lorenzo & Liebhart, 2010). With planned change, all involved persons are usually brought on board with the decision to be taken after stakeholders have reached a decision to implement change. Planned change allows for barriers to be addressed beforehand and lessen the potential resistance to change that occurs once traditional methods of doing things is altered.
However, the limitation of this approach is that it may take a long time to implement change due to its largely democratic procedure. On the contrary, emergent change is unpredictable and unintentional and often involved informal self-organising (Garcia-Lorenzo & Liebhart, 2010). Emergent change is as a result of the volatile nature of the modern business environment. Organizations continue to operate on the edge of chaos and this makes them susceptible to change. Unlike planned change, emergent change is limited as it is prone to less cooperation by the involved and affected persons were not brought on board before the changes were adopted. Both methods can be applied in order to realize newfound business goals, depending on the scope of change and the timeframes necessary. In cases where results are needed quickly, emergent change may present companies with a competitive advantage, while planned change allows organizations to account for risk and determine the best possible path forward.
Besides planned and emergent change approaches, organizations may opt for a less aggressive approach and adopt logical incrementalism. Logical incrementalism is a middle ground between the two radical approaches of planned and emergent change. Initially coined by James Quinn, logical incrementalism is a strategic change approach that combines formal planning processes with power behavioural perspectives (Camillus, 2018). With this approach, organizations retain a high degree of flexibility as they can only adopt change when there is an acceptable level of risk involved. In cases where it is difficult to determine a path forward, managers can utilize this method to their advantage. However, Camillus (2018) warns that logical incrementalism can plunge organizations into total ambiguity as they risk “muddling through” change rather than purposefully enacting it.
In implementation of change, strategic choices can take a deterministic or voluntaristic nature. The deterministic school of thought proposes that change is conceived by planners and implementers with managers assuming a limited role to the process (Muller & Kunisch, 2017). Deterministic change takes into consideration the long-term implications of change and the time when the changes will be adopted. On the other hand, voluntaristic perspective assumes that managers have a lot of influence on the implementation of strategic change. According to Muller & Kunisch (2017), other people besides the decision makers and implementers choose to enact changes willingly as they empowered. Organizations have to decide whether to adopt determinism or voluntarism in their implementation of strategic change by deciding who is affected by the change and the specific timeframe within which the change should be completed.
In conclusion, strategic change is a fundamental aspect of running an organization properly. The main motivation of strategic change is to prevent organizations from structural drift. Its main drivers include digital transformation, business agility, and customer satisfaction. In implementation of strategic change, an organization may use a deterministic or voluntaristic style with changes being in planned or emergent format. Lastly, a strategic map equips a company adequately when dealing with strategic change.
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Liebhart, M., & Garcia-Lorenzo, L. (2010). Between planned and emergent change. The International Journal of Knowledge Culture and Change Management Annual Review, 10(5). Web.
Müller, J., & Kunisch, S. (2017). Central perspectives and debates in strategic change research. International Journal of Management Reviews, 20(2), 457-482. Web.
Odera, A., & Muendo, D. (2017). Factors affecting strategic change management in the public sector: a case of the ministry of energy and petroleum. The Strategic Journal of Business & Change Management, 4(4). Web.
Sundaram, R., Ziade, J., & Quinn, E. (2020). Drivers of change: an examination of factors that prompt managers to enforce changes in business. International Journal of Management, 11(5). Web.