Implementing Strategic Change

Implementing Strategic Change

Levels of change

Change occurs at three levels

i) Individual level

ii) Group level and

iii) Organization level

At the individual level change is reflected in such developments as changes in a job assignment, physical move to a different location, or the change in maturity of a person which occurs overtime. It is said that changes at the individual level will seldom have significant implications for the total organization. Most organizational changes have their major effects at the group level. This is because most activities in organizations are organized on a group basis. The groups could be departments, or informal work groups. Changes at the group level can affect work flows, job design, social organization, influence and status systems, and communications patterns. Changes at the organization level involve major programmes that affect both individuals and groups. Decisions regarding these changes are generally made by senior management and are seldom implemented by only a single manager. Frequently, they occur over long periods of time and require considerable planning for implementation. Example of these changes would be reorganization of the organizational structure and responsibilities, revamping of employee remuneration system, or major shifts in an organization’s objectives.

Organizations that seek to create and sustain competitive advantage should be ready to change and implement the proposed changes. The major forces for change are: technical obsolescence and technical improvements; political, economic, and social events; globalization; increase in organizational size, complexity, and specialization; greater strategic awareness and skills of managers and employees; and competitive dynamics. The level of change could be at values, culture, or styles of management; objectives, corporate strategy, or organization structure; competitive strategies, systems, and management roles; and functional strategies or organization of tasks. It is crucial to clarify the level of change and tackle needs and problems appropriately.

The major types of strategic change are re-engineering, restructuring, and innovation.

a)   Re-engineering: It is also known as Business Process Reengineering. It is fundamental rethinking and radical redesign of business process to achieve dramatic improvements in critical, contemporary measures of performance such as cost, quality, service and speed. The strategist must completely think how the organization goes about its business. Instead of focusing on company’s functions strategic managers make business process the focus of attention.

b)   Restructuring: It is the second form of change to improve the firm’s performance. There are two basic steps to restructuring. First, an organization reduces reduces its level of differentiation and integration by eliminating divisions, departments or levels in the hierarchy. Second, an organization downsizes by reducing the number of its employees to reduce operating cost.

c)   Innovation: It is the process by which organizations use their skills and resources to create new technologies or goods and services so they can change and better respond to the needs of their customer. Innovation can be done with the help of research and development department.