3.10 Managing Strategic change Flashcards
Causes and types of change:
Internal
External
Incremental
Step
Disruptive
Internal Causes of Change
This is change caused by decisions taken by the business itself
It includes restructuring
It also includes delayering
New leadership
External Causes of Change
These are linked to changes in the external environment facing all businesses or businesses in specific markets and/or locations (link to the PESTLE analysis)
Social trends/attitudes
Economic conditions
Laws/regulations
Technological advances
Incremental Change
These are the many small changes that businesses make day-to-day as management respond to opportunities and threats
Example = small and continuous changes to the quality of a product and the quality process it undertakes
Step Change
These are the more dramatic or radical changes which management make
They are often triggered through the arrival of new senior leadership and/or when it is recognised that the business is suffering from strategic drift
Disruptive Change
This is a form of step change that arises from changes in the external environment
Types of organisational change:
Strategic
Structural
Process orientated
People centred
Strategic Change
This is the management needed to adjust the firms strategy to achieve the goals of the company, or even to change the mission statement of the organisation in response to demands of the external environment
Nokia started off by making wood pulp and paper based products such as toilet paper in 1865 until 1967 when they diversified into forestry, cable rubber, and electronics – they made computers and started to enter the phone industry in 1985 and became the market leader.
Structural change
Organisations often find it necessary to redesign the structure of the company due to influences from the external environment (relating to the PESTLE analysis)
Hierarchy of authority
Goals
Structural characteristics – (e.g. labour to capital)
Administrative procedures
Management systems
Process-Orientated Change
Organisations may need to reengineer processes to achieve optimum workflow and productivity
This is often related to an organisations production process
Example = the adoption of robotics in manufacturing plant OR of laser scanning checkout systems at supermarkets
People-Centred Change
This type of change alters the attitudes, behaviours, skills, or performance of employees in the company
Advantages of change:
Sustain a competitive advantage
Align its business strategy with changing customer needs and wants
Take advantage of developing technologies
Gain from improved productivity and a better work environment
Develop a more appropriate and effective organisational structure which will result in better communication and decision-making
Build a reputation for embracing change rather than fearing it
Flexible Organisation
This is one that is able to adapt and respond relatively quickly to changes in its external environment in order to gain advantage and sustain its competitive position
Restructuring
This is the corporate management term for the act of reorganising the legal, ownership, operational, of other structures of a company for the purpose of making it more profitable of better organised for its present needs
Delayering
This involves the removal of one or more layers of hierarchy from the management structure of an organisation
