Change Management as part of Strategic Management

Subject: Strategic Management
Pages: 11
Words: 3066
Reading time:
12 min
Study level: PhD

Introduction

Strategic administration involves a group of continuous deeds and all-inclusive procedures that businesses deploy to categorize and align possessions in an orderly approach. Actions in strategic management are aligned with the organisation’s mission, vision, and plans (Dess, Lumpkin & Taylor 2005). Such activities change a static plan into an organisation that gives strategic performance outcomes to reach decisions while enabling strategies to develop as requirements and situations change.

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Premeditated administration focuses on analysing the company’s ambitions, which include dreams, duty, and agenda, which go hand in hand with scrutiny of the business’ in-house and outdoor settings. Change management concerns itself with directing and controlling various organisational decisions to enhance continuous success. Such decisions involve changing how an organisation conducts its business to enhance its competitive advantage. To this extent, organisational change management is potentially an aspect of strategic management. However, the paper will emphasise that strategic management is a part of organisational change.

Different authors have different views on management. For instance, Barley and Kunda (1992) assert that management constitutes a tool for directing and controlling sophisticated business entities. The authors further reckon that management theories have gone through a series of historical changes, which have evolved since the early 1870s (Barley & Kunda 1992). The scholars revisit historical evidence, which proposes that the supervisory paradigm is based on modernisation, human relations, system rationalism, organisational ethnicity, and eventuality. Gustafson and Widerlund (2010) maintain that a definition of management must include aspects of decision-making.

These authors analyse decision-making as the basis of management and supervisory speculations. Consistent with the claim that management involves decision-making, strategic management also involves administrative duties, which have to be backed by evidence on the likely implications of the decisions.

Traditional paradigms of strategic management approached it from the context of being composed of some set processes. To this extent, strategic management involves the analysis and synthesis of weaknesses, strengths, threats, and opportunities of an organisation in a bid to develop decisions that correlate or match an organisation’s aims, missions, goals, and objectives (Stroh 2005). Quinn, as cited by Stroh (2005), reveals that management comprises tactics and programmes that are adaptive and reactive to the existing environmental operation dynamics. Consistently, strategic management decisions are aimed at ensuring short-term and long-term organisational success. The decision must also be consistent with the organisations’ operational dynamics.

Environmental factors are the chief determinants of the most appropriate strategy for organisations’ success. In turn, the strategy dictates the best organisational managerial structures to enhance its implementation (Stroh 2005). Thus, good management entails identifying strategies, which will fit a particular environment and the capacity to develop proper plans for the execution of the strategy. Nevertheless, Stroh (2005) notes that management, which is also the decision-making arm in any organisation, also chooses the right environment. It may also endeavour to alter the environment through strategic plans. To this extent, decision-making entails deliberate processes in which the management department plans to explore particular strategic courses (Stroh 2005).

Theoretically, strategic management is an aspect of change that enables managers to formulate, implement, and evaluate various strategic processes that are necessary for pursuing and realising organisational goals (Deming 2012). Scholarly evidence suggests that managers deploy management theories to discriminate various success strategies in the effort to identify the most paramount and effective course of action (Teece 2010). Studies in the discipline of organisational management provide evidence that managerial practices are effective in enabling managers to achieve organisational goals and objectives (Deming 2012). Deming (2012) suggests that strategy encompasses a discourse that is implemented, notwithstanding perceptions, contents, aims, and objectives of managerial processes.

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Strategic management entails a mechanism of implementing managerial discourses. Xin (2010) accepts this proposition by adding that strategic management constitutes an instrument of retaining organisational political power. Barley and Kunda (1992) also believe that organisational structures and management practices are inherently political. However, Teece (2010) focuses on different scholars who consider strategic management a body that plays diverse roles within an organisation. This claim presents it as an inhomogeneous approach for enhancing organisational success since not all strategies are effective to the same extent in different organisations.

The concept of strategic management is based on logical, adaptive, linear, and interpretive models of organisational management (Teece 2010). The linear model suggests that management has noble responsibilities to ensure effective allocation of resources to achieve goals and initiatives of an organisation while following a predetermined plan. The adaptive model suggests that every strategy that is adopted by an organisation must be consistent with the changing organisational operational environment (Teece 2010).

An interpretative model is rather a new approach to analysing the functions of organisational management (Teece 2010). It dwells on the attitudes of individuals within an organisation whilst emphasising the function of communication in enhancing strategy success. The model also views strategy as an emerging necessity as opposed to a planned necessity. Planning a strategy is difficult since it is preceded by a learning process and negotiation.

Strategic management depends on some aspects of management such as power and politics for its functionality. Deming (2012) asserts that strategic management functions through corporate legitimacy and well-organised structures. It is marked by the dominance of decision-makers and the presence of discursive practices. Similar to managerial approaches, it is a stage wise process of enhancing an organisation’s success.

Indeed, according to Stroh (2005), it comprises two main stages, namely strategy design (planning) and strategy implementation. Strategic planning calls for strategy developers to establish the objectives and goals of the desired strategies. In this process, such strategies must take into consideration external and internal environments, which can influence organisational processes (Ledez 2008). To this extent, similar to managerial decision-making processes, strategic management requires one to consider potential success factors and hindrances. The strategic implementation process puts into action any strategic goals that are established in the planning phase. Change management becomes an important aspect of organisational management.

The chief function of strategic management entails developing mechanisms of ensuring that an organisation gains a competitive advantage (Gustafson & Widerlund 2010). The need to establish mechanisms of enhancing organisational competitive advantage arises from the changing business aspects on global platforms. Hence, strategic management is an important facet for managing organisational change to gain short-term and long-term competitiveness.

Management professionals in organisations that seek to change their processes or organisational structures to make them more effective and responsive to environmental changes develop different strategies for ensuring that the change process proceeds in productive ways. This claim suggests that strategic management becomes effective when managerial functions of planning, directing, and controlling are incorporated in the strategic planning and implementation processes. As such, management theory links with strategic management. This link is perhaps clear upon consideration of concerns of organisational change management.

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Organisational Change

Change leads to the adjustment of organisational structure through a logical and predetermined set of processes. The goal of change entails the harmonisation of various functions of an organisation (Ledez 2008). It also responds to the organisational external environment. This claim suggests that change must also incorporate alteration of external environmental forces. Markiewicz (2011) agrees with this line of thought by stating that the process of organisational change encompasses a radical process, which alters the operation components of any organisation in a bid to achieve some well-defined objectives and goals.

Gustafson and Widerlund (2010) assert that the world undergoes a process of continuous change that prompts temporary organisations to change. However, they maintain that organisations need to consider the importance of change and how they should change to keep in pace with environmental requirements (Gustafson & Widerlund 2010). Amid the necessity of change, all organisational stakeholders do not overwhelmingly welcome it. Gustafson and Widerlund (2010, p.4) argue that it encounters resistance, which requires effective management to enable an organisation to flourish within a sophisticated environment.

Organisations can deploy proactive and reactive approaches to change management. It can also be adopted following the occurrence of a crisis. Changes in the operation of an organisation underline the major cause of the need to embrace change. Organisations, which can identify the need for change before factors that prompt its necessity to interfere negatively with its operations, stand a better competitive advantage compared to those that adopt reactive approaches in change implementation. Change that is implemented following the occurrence of a crisis translates into high organisational costs and high probabilities of failing to recover the lost competitive advantage.

Change Management

Change management refers to the process of planning and controlling change within an organisation. The change enables organisations to respond immediately to changes in the external environment whilst managing various internal changes in an efficient manner. This process requires the benchmarking of customers’ anticipation with competitors, especially the market leaders (Gustafson & Widerlund 2010). This observation suggests a necessity of aligning change with a certain predetermined strategy. This process involves change management.

Some important theories of organisational change management include organisational development, systems theory, and social world theories. Social world theory holds that change arises in an organisation through negotiation followed by renegotiations among various stakeholders in an organisation (Amagoh 2008). It insists that an organisation that is implementing change needs to consider parties that deploy the change, change indicators, and the functions for which the indicators seek to accomplish. Tensions always emerge in the evaluation of issues that are necessary to realise the change efforts with necessities for achieving the desired satisfactory quality improvements in the change process.

Organisational development theory emphasises that changes within an organisation must be planned. The leadership in any organisation that is seeking to implement change to drive the organisation’s competitive advantage must have foreseen the need for change (Spector 2007). This claim suggests that human processes are important in a change process. The theory highlights the significance of an agreement between various individual goals and organisational objectives.

In this context, an organisational culture forms an important medium to facilitate change implementation. The theory maintains that people resist change because of discontent with the change due to the status quo’s capacity to meet their needs, mishandling of the change process by the management, doubts on possibilities of success of the change, and/or when the change threatens employee jobs so that its cost is higher than the anticipated benefits.

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The systems hypothesis asserts that various mechanisms of a business are interconnected. Change arises due to the need to improve the second component upon the improvement of the first one (Piderit 2000). While determining the overall implications of change, the theory suggests that it is important to measure an organisation’s aspects such as infrastructure, resources such as human capital and financial capital, technologies, and/or organisational tasks to determine their relationship. When these variables are altered, whether singly or in combination, organisational change is experienced.

Change Management and Strategic Management

Strategic management plays an important role in a business entity. It assists a business in terms of remaining on top of the competition. Organisations gain a competitive advantage in case they can make higher profits compared to other organisations that operate in the same industry. Dess, Lumpkin, and Taylor (2005) assert that strategic management constitutes an asset of decisions and acts that are taken by managers in the effort to increase the performance of a firm.

This claim means that managers have a noble role in analysing the external and internal operational environment to determine the likelihood of success for the organisation that they manage. Consequently, to make decisions on the most viable decision that can make an organisation achieve a competitive advantage, any company must conduct a SWOT analysis to determine its strengths, weaknesses, opportunities, and threats to its operation.

The goal for conducting a SWOT analysis is to help the management capitalise on the opportunities and strengths whilst delimiting any weaknesses and threats to drive organisational success. Hence, strategic management entails a tool for predicting both the foreseeable and unpredictable dynamics that may affect a company. This claim suggests that strategic management serves the function of organisational control intending to achieve some desired goals that an organisation does not currently meet.

Such a process requires a planned change. Gustafson and Widerlund (2010) support this assertion by adding that change management and strategic administration are related and mutually interrelated tools that facilitate the attainment of targets that are set by an organisation. Cui, Calantone, and Griffith (2011) further assert that strategic management constitutes a long-term change planning through the enumeration of goals and objectives, their implementation, and evaluation.

Strategic management permits organisational stakeholders to recognise the significance of upward and downward information flow in an organisational structure. This plan helps in the establishment of the impacts of a strategy on individual employees, customers, suppliers, organisational shareholders, and other parties that have stakes in the operation of an organisation. Strategic management aids business entities in terms of preparing for any undue course of action or preparing for any unseen eventuality, which requires urgent change through the allocation of required resources to meet performance objectives and goals (Spector 2007).

As revealed before, strategic management comprises strategy planning and implementation. Markiewicz (2011) asserts that in these two stages, change management is important as it forms an essential tool for strategy implementation. Change management enables managers to create an appropriate organisational climate for the success of strategy implementation as stipulated in the strategic plan. Indeed, managers have responsibilities for matching long-term and short-term goals for an organisation and its stakeholders. Where a strategy re-orients such goals, change management is necessary to prepare stakeholders to embrace the new strategy, which compromises their expectations in an organisation.

Ledez (2008) confirms that change management is a constituent of strategic management since the implementation of strategies calls for the creation of a healthy environment for executing the change. On the other hand, change management takes place within the confines of a strategic management process intending to make amendments to the current business conditions in a bid to improve the efficacy of business operations. Nevertheless, a change process profiles some predetermined processes, which align organisational goals with the employee interest.

From the above proposition, frameworks for change management boost the realisation of strategic objectives and goals by following the enumerated operation processes (Afonina & Chalupsky 2012). The scholars also claim that strategic management aids in balancing various internal and external factors that influence the business environment, which potentially delays change implementation. This claim suggests the interdependency of strategic management and change management in enhancing organisational competitive advantage. Strategic management supplies the requisite information to organisational leaders and managers for enhancing the process of creating change.

On the other hand, Ireland and Hitt (2005) reveal political, technological, legal, economic, or societal information is important in engineering change processes. This information is a by-product of Porter’s five-force approach to the organisational operational environment, which is an important aspect of the strategic management process.

In some situations, organisational management demands change due to an emerging need for lowering the rate of turnover, meeting organisational targets, lowering operational costs, and/or modifying organisational processes and products to meet the emerging consumer needs. Such a change does not occur spontaneously. A strategy is required to ensure a smooth transition. Internal change compels organisational management or leadership to gather information on the financial position, marketing trends, employee reaction to the change, and the degree to which such forces comply with organisational strategic goals.

This observation indicates that strategic management is vital in a change process. It provides feedback to managers and leaders to generate adequate knowledge on matters such as change necessities and cooperation that is needed during change execution (Afonina & Chalupsky 2012).

Different schools of thought on strategic management indicate a relationship between change management and strategic management. Bull (1999) identifies prescriptive, descriptive, and congressional schools of thought as the main categorisation of strategic management theoretical discourses. The prescriptive school relates to the design, planning, and positioning of organisational strategies (Bull 1999). Therefore, the school relates to strategy formulation to drive organisational change. The descriptive discipline reflects themes of power, change cognition, organisational learning, and cultural change.

The main goals entail explaining how an organisational change takes place. Congressional school of thought recognises the importance of the other two schools. However, it advocates the implementation of strategies based on business specifications at any particular time (Bull 1999). This case implies the necessity for a tailor-made organisational success strategy to enhance a change that is only peculiar to a specific organisation.

The work of Stroh (2005) reveals that some organisational management scholars consider strategies different from change. For instance, the configuration school of management claims that it is not essentially a theoretical paradigm for strategic management, but corporate change (Stroh 2005). The author further asserts that strategic management presents a paradox to an organisation. He says that to attain goals and objectives, an organisation must adapt to changes in its internal and external operational environment. Stroh (2005) also claims that organisations do not necessarily have to question the strategies for success.

They may impair the process of their implementation. However, it is important to note that an organisation cannot evaluate their effectiveness without interrogating them. In real effect, change management becomes problematic.

From Stroh’s (2005) work, strategic management houses change management discourses, although it forms part of organisational change elements. It forms an important aspect of strategic implementation. Strategic management enhances the change management process through the provision of necessary transformational strategies to boost organisational functionality to facilitate the materialisation of objectives and goals of an organisation. This claim suggests that organisations must have the requisite techniques and procedures for executing their businesses as an initial stage for gaining a competitive advantage. These techniques are supplied by strategic management discourses. In turn, the ability of a business entity to acquire appropriate management procedures constitutes an essential determinant of effective change implementation.

Conclusion

In conclusion, the paper has provided detailed information concerning change management and strategic management. Many studies have been conducted to find out the relationship between the two elements. While organisations apply them as if they are synonymous, the paper has gone further to reveal that indeed change management is an aspect that lies within the field of strategic management. Strategic management addresses all tactics and procedures that an organisation can follow to attain its targets and/or agenda. Since change management is among the options that businesses adopt as part of the strategies, it suffices to declare it a subset of strategic management.

References

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