Strategic Change

Strategic Change

Introduction

There is indications that in the coming years the business environment will change more frequently, with higher speed and with greater intensity than before. To remain competitive in the long run the enterprises needs to meet these environmental changes. However, the changes in the environment will become increasingly difficult to foresee. A multitude of management concepts has been developed to provide managers with better receipts to meet this changing business environment and the problems that arise (Pfeifer, Schmitt, & Voigt, 2005). This challenges the enterprises to meet and conquer upcoming situations with the, for their explicit situation, suitable strategy. What goals an enterprise striving after might will with no doubt matter when forming strategy. A common goal for most, if not all, of today’s organisations is to create sustainable competitive advantages. However, because of the fierce competitive environment and the risk of imitation, it is crucial to seek for continuous innovation if the organisation is to succeed on the market. To avoid getting in a situation doing just what the competitors do, a way is to break the rules of the market by strategic innovation (Jacobs & Heracleous, 2005), thus a change of the organizations’ strategy.

Strategic change as a subject has for long become a question of importance, within the strategic management field. The reason to why strategic change is important is “because it represents the means through which an organization maintains co alignment with shifting competitive, technological and social environments” (Kraatz & Zajac, 2001). Strategic change can though damage existing resources and performance especially among organizations highly dependent on human resources, these organizational resources decrease the propensity to adapt strategic change, because of new roles, tasks and circumstances (Kraatz & Zajac, 2001). Strategic change is nothing that will be carried out without affecting the company as a whole. It is argued that the organisational approach can be an integral and vital part of the strategy. This means that when a strategic change occurs, the organisational structure may also have to change, if it is to support the strategy (Englehardt & Simmon, 2002). Almost every organization goes through some change, small or big, at some time in their existence. Not only are these ongoing processes hard to cope with for the organization itself, but also for the individuals who work within it. The changes affect the ways things are usually done within the organization, and thus create uncertainties and fears among the employees about what will happen in the future and whether or not they will be able to cope with the new situation (Vakola & Nikolaou, 2005).

Pfeifer et al. (2005) argue that most of change processes within a company fail at operational level. Thus they mean that it is not as much the right strategy, but the effective implementation of the right strategy, which decide business success. Further they discuss how the different units in the company should be organized in the change process in order to deliver the best possible quality. To ensure that these quality criteria are taken into consideration they suggest a procedural model as guideline. No strategy will remain eternally valid, and therefore the change process is by no means finished after the completion of the implementation. This understanding got Pfeifer et al. (2005) to develop a control loop system. This model is not sequential, because after implementation of the new strategy the loop will be completed and the process will have to be repeated. This characteristic enables the procedural model to be applied in an environment of continuous and rapid change. This procedural model is the first on to meet the requirements to deal with continuous change (Pfeifer, Schmitt, & Voigt, 2005).

Their loop model or procedural model for implementing a new strategy consists of five basic steps, which are; decision, preparation, design, implementation and reinforcement. As earlier mention, the operational level is the one on which most change process fail. Therefore, the authors consider the design step as the most important. Design is the third step in the model called, and here you should motivate, enable, brief and authorise people to pursue the change and you should identify constraints for implementation. The fifth, and last, step will take you back to the beginning of the process to complete the loop, this is the reinforcement step. Here it is important to understand that this can continue several years after implementation of the strategy. Environmental factors will decide if further strategy development is needed. The control loop will hereby be closed and the process would have to be repeated, starting with the further development of the vision (Pfeifer,