BUSINESS STRATEGY

51110 / MKT3002
LECTURE Twelve

• Topic 12: Managing str ate gic change

 Module 12
Managing strategic change
 Learningoutcomes- 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
 Transformational change
 Learning organisation
 Forcefield analysis
 Zone of uncomfortable debate
 Education and communication
 collaboration
 intervention
 Direction
 Coercion
 Routines
 Symbols
 Change agent
 Middle managers
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.
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.
Understanding types of
strategic change (Cont)

Nature of change
Management role

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

Change and approach.
learning oriented the learning
organisation
organisation
 Instigate the share of knowledge and information.
 Managed change
‘Unfreezing’ and the management of change
Organisational ‘symptoms’ Stages Pressures for conformity

Unfreezing mechanism Early signals made sense

Questions and challenges
of within paradigm

Organisational anticipation Political pressures not to

‘Felt need’ for change
‘rock the boat’

Competing views of causes Organisational flux Attempts to reconcile competing

of problems and remedies views within current paradigm
Information collection and Information made sense of
Information building
political ‘testing’ of support within the paradigm

New ideas tested out Experimentation Resistance to new ideas

Refreezing or Sustaining 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).

Imposed (Forced) change

 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.
Diagnosing strategic change
needs
 Strategic drift: ‘occurs when the organisation’s
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.

Detecting strategic drift

Identifying forces
blocking and facilitating
change

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

Forcefield analysis
An openness to change
 Zoneof 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

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)

 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)
 Powerand political processes in managing
change
◦ Reconfiguration of power, acquiring additional
resources, building alliances.
  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
member’s perspective.
 Change tactics
◦ Timing.
Managing strategic change
◦ Job losses and de-layering.
process (Cont
◦ Visible short-term wins.
Three key categories
◦ The change agent;
◦ Middle managers; and
◦ Other organisational members (eg. External
stakeholders, outsiders).

Roles in the change

process
The change agent
 Thechange 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
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
 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
 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
 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

Managing strategic change

objectives, staff members’ behaviour in reinforcing the
strategy.

and strategic management

◦ Strategic change is consistent with the environmental changes.
◦ The strategy is feasible (the organisation has the required

(Cont)resources).
◦ Strategic direction aims to achieve competitive advantage.
Understanding types of strategic change
Diagnosing strategic change needs
Managing strategic change processes
Roles in the change process
Managing strategic change and strategic
management

Lecture 12 review
Unit revision.
Next lecture and tutorial
Exam preparation.
No tute