Change Management as Part of Strategic Management

Introduction

Contemporary organisations have experienced rapid changes in different areas of business. Managers charged with overseeing the smooth running of such organisations often encounter complex and challenging pressures and opportunities. Such pressures and opportunities do not happen in a vacuum. Rather, they often require the organisation to institute changes that will most likely accommodate the pressures and make them more bearable, or take advantage of opportunities and hence enhance the business aspect of an organisation. New technology, global markets, changing customer needs, social, political, and economic forces have all separately or collectively forced a new thinking about the processes of business management.

Strategic management involves a group of continuous actions and all-inclusive procedures that businesses implement to achieve desired goals. Actions in strategic management are aligned with the organisation’s mission, vision, and plans (Dess, Lumpkin & Taylor 2005). Specifically, strategic management is defined as “the process of identifying and executing the organisation’s strategic plan, by matching the company’s capabilities with the demands of its environment” (Dessler 2014, p. 78). Strategic management is made up of three distinct processes namely planning, implementation/execution and evaluation (Dessler 2014). In the planning phase, the mission of the organisation is developed, its strengths and weakness identified, the threats and opportunities it faces established, goals formed and courses of action identified (Dessler 2014).

On its part, change management concerns itself with directing and controlling various organisational decisions to enhance continuous success. Although a standard definition of the term does not exist, one of the widely used definitions indicate that change management is “the strategy of planned and systematic change, which is achieved by the influence of the organisational structure, corporate culture and individual behaviour, under the greatest possible participation of the employees” (Gabler 2006 cited by Kneer 2013, p. 2).

Comparing the two definitions above, one gets the impression that organisational change management is potentially an aspect of strategic management because with each strategy comes some changes which need to be managed if the organisation is to be successful in its strategy implementation. This paper will, therefore, argue in support of the proposition that change management is a part of strategic management.

Different authors have different views on management. Barley and Kunda (1992) for example, state that, management constitutes a tool for directing and controlling sophisticated business activities. The authors further consider that management theories have gone through a series of historical changes, which have evolved since early 1870s (Barley & Kunda 1992). The scholars revisit historical evidence, which proposes that supervisory model is based on modernisation, human relations, system rationalism, and organisational ethnicity. Gustafson and Widerlund (2010) maintain that the definition of management must include aspects of decision-making. These authors analyse decision-making as the basis of management. Consistent with the claim that management involves decision-making, strategic management also involves administrative duties, which have to be backed by evidence on the implications of the decisions.

Traditional models of strategic management approached it from the context of being composed of some set of processes, which are identified as the formulation and implantation processes (Mintzberg & Quinn 1996). During the formulation process, an environmental analysis, which includes external and internal environmental analysis, is done (Mintzberg & Quinn 1996). The implementation process, on the other hand, involves making decisions related to managing organisational resources in order to attain objectives that have been formulated in the formulation process. During implementation, change management is critical because some strategic management decisions overturn the status quo in an organisation, hence the need to manage change. Environmental factors are the chief factors of the most appropriate strategy for organisations’ success. In turn, the strategy dictates the best managerial structures to enhance its implementation (Stroh 2005). Proponents of the foregoing position argue that structures follow strategy.

Theoretically, strategic management acknowledges the importance of managing change, especially as managers formulate, implement, and evaluate various strategic processes that are necessary for pursuing and realising organisational goals (Deming 2012). Scholarly evidence suggests that managers use management theories to distinguish various success strategies in an effort to identify the most important 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 a strategy encompasses a discourse that is implemented. The author argues that a strategy that the perceptions, contents, aims, and objectives of managerial processes into consideration.

Strategic management involves a mechanism of implementing managerial discourses. Change management is one such managerial discourse that has attracted a lot of debate regarding what effective change management should be (Tyler 2005). Other ‘forms’ of management, which are equally relevant, include human resource management, process management, logistics management, and production management among others. Xin (2010) accepts the proposal that strategic management is essential in implementing managerial discourses. In other words, Xin (2010) confirms that indeed, change management (and other forms of management) are part of strategic management. He further notes that strategic management constitutes an instrument of retaining organisational political power. The argument by Xin (2010) means that changes that occur during the implementation of a new strategy need to be properly managed for managers to retain the political power in an organisation. The foregoing argument supports the proposition that change management is part of strategic management. Barley and Kunda (1992) also believe that organisational structures and management practices are inherently political.

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 prearranged plan. The adaptive model suggests that every strategy that is adopted by an organisation must be consistent with the changing organisational operational environment. The interpretative model is rather a new approach of analysing the functions of organisational management. It exists in the attitudes of individuals within an organisation while 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. Change management depends on power and politics for functionality too, but on a smaller scale (Buchanan & Badham 2008). According to Buchanan and Badham (2008), strategic management is more detailed and involving when compared to change management. However, managing change can have its own minor strategies, which need to be managed equally well. For example, a manager may need a strategy on how best to communicate change to the employees in order to enhance their likelihood of embracing the same change. A critical look of the aforementioned exemplar case, however, reveals that even the minor strategy is part of change management, which ideally feeds into the bigger strategy management because change is not advocated for just for the sake of it. Rather, change happens because the firm has a strategy for accomplishing a specific organisational goal.

According to Deming (2012), strategic management functions through well-organised structures. It is marked by dominance of decision makers and presence of broad practices. Similar to managerial approaches, it is a stage-wise process of enhancing an organisation’s success. According to Stroh (2005), it comprises two main stages, namely strategy design (planning) and strategy implementation. Strategic planning calls for strategy developers to establish 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). Therefore, similar to managerial decision-making processes, strategic management require that the organisational decision makers to consider potential success factors and boundaries. Attaining strategic goals often requires organisations to change certain aspects in their operations, and this involves change management. Therefore, change management and strategic management by extension become an important aspect of organisational management.

The chief function of strategic management involves developing mechanisms of ensuring that an organisation gains a competitive advantage (Gustafson &Widerlund 2010). Incidentally, change management also has a similar goal. As Richanbach and Ridell (1993) indicate, change management puts an organisation in a position that enables it to cater for the changing needs and demands of its customers. Interpreted, the foregoing statement by Richanbach and Ridell (1993) imply that change management is necessary as a means of attaining competitive advantage. The need to establish mechanisms of enhancing organisational competitive advantage arises from the globally changing business environment. Hence, strategic management is an important part 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 is successful. Strategic management becomes effective when managerial functions of planning, directing, and controlling are included in the strategy planning and implementation processes. As such, management theory links with strategic management.

Organisational change

Change leads to the adjustment of organisational structure through a logical and prearranged set of processes. The goal of change requires the coordination of various functions of an organisation (Ledez 2008). It also responds to the organisational external environment. The claim by Ledez (2008) suggests that change must also include aspects of external environmental forces. Markiewicz (2011) agrees with this line of thought by stating that the process of organisational change includes a radical process, which changes the operation components of any organisation to achieve some well-defined objectives and goals.

Gustafson and Widerlund (2010) state that the world undergoes a process of continuous change that prompts contemporary organisations to change. However, they argue that organisations need to consider the importance of change and the manner in which they should change to keep in pace with environmental requirements (Gustafson & Widerlund 2010). In spite of the necessity of change, all stakeholders in an organisation do not always overwhelmingly welcome it. Gustafson and Widerlund (2010) argue that change experiences resistance, which requires effective management to enable an organisation to grow within a complex environment.

Organisations can implement proactive and reactive approaches to change management (Gustafson & Widerlund 2010). 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 that can identify the need for change before factors that prompt its necessity 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 (Gustafson & Widerlund 2010). Change management enables organisations to respond immediately to changes in the external environment. Additionally, change management enhances the efficiency with which various internal changes are handled. The process of change management requires an organisation to benchmark its own performance against customers’ expectations and the performance by its competitors (Gustafson & Widerlund 2010). Such benchmarking enables the firm to identify its performance relative to what the customers expect and what competing firms are doing. From the benchmarking, the firm is then able to align desirable changes with a prearranged strategy.

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). The social world theory further indicates that an organisation that is implementing change needs to consider parties that organise change, change indicators, and the functions for which the indicators aim to accomplish. Tension is inevitable in the change process (Amagoh 2008).

Organisational development theory emphasises that changes within an organisation must be planned. The leadership in any organisation that is seeking to implement change must have foreseen the need for change (Spector 2007). This claim suggests that human processes are important in the change process. The theory highlights the importance 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 states that people resist change for different reasons. Such reasons include: doubts on possibilities of success of the change; change process mismanagement; or when the change threatens employees’ jobs so that its cost is higher than the expected benefits (Spector 2007).

Systems theory holds that various components of an organisation are interrelated (Piderit 2000). Piderit (2000) further argues that change is indicative of an organisation’s desire to get better. While determining the overall implications of change, the theory suggests that it is important to measure an organisation’s aspects such as infrastructure, resources, and organisational tasks to determine their relationship. When these elements are changed, whether singly or in combination, organisational change is experienced.

Change management and strategic management

Strategic management plays an important role in an organisation. It supports the organisation in terms of remaining on top of the competition. Organisations gain competitive advantage by being at the same or slightly higher market position or profitability as other organisations that operate in the same industry. Dess, Lumpkin, and Taylor (2005) claim that strategic management decisions by managers are made in an effort to enhance the competitive position of a firm. The foregoing claim means that managers have a noble role of analysing the external and internal operational environment to determine the probability of success for the organisations that they manage. SWOT analysis enables managers to make decisions that affect the competitive advantage of a firm positively.

The goal for conducting SWOT analysis is to help the management take advantage of the opportunities and strengths while determining weaknesses and threats in an effort to drive organisational success (Gustafson & Winderlund 2010). Hence, strategic management involves a tool for predicting both the expected and unexpected forces that may affect the company. This claim suggests that strategic management serves the function of organisational control with the intention of achieving some desired goals that an organisation does not currently meet. Such process requires a planned change. Gustafson and Widerlund (2010) support this statement by adding that change management and strategic management are related and mutually interrelated tools that facilitate the achievement of targets that are set by an organisation. Cui, Calantone and Griffith (2011) further state that strategic management constitutes a long-term change planning, whose success benchmark is hinged on the implementation and evaluation of strategic plans against set goals and objectives.

Strategic management allows 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 helps organisations in terms of preparing for any unexpected course of action or prepare for any unseen outcome, which requires urgent change through the allocation of necessary resources to meet performance objectives and goals (Spector 2007).

As shown before, strategic management comprises strategy planning and implementation. Specifically, there are three essential elements in strategic management that each organisation takes into consideration. The first element is strategic analysis since it enables the organisation to analyse any important factors and changes that affect the current and future organisational performance (Dessler 2014). The second important element is strategic choice, which enables the organisation to select the best option among the available strategies. The third and final important element for strategic management is strategy implementation, which enables the organisation to convert its chosen strategy into actions. The final step is especially relevant to change management because, as Dessler (2014) notes, a lot of plans are needed for strategy implementation to be successful. The planning involves the careful handling of changes (i.e. effective change management) that are implemented in the organisational structures as part of the new strategy. In other words, strategy implementation, involves processes that put the strategic goals devised during strategic planning into their respective functions in an organisation. At this stage, change management is critical; hence an indication that it is indeed a sub-set of strategic management (Ireland & Hitt 2005). Furthermore, Markiewicz (2011) states that during strategy planning and implementation, change management is important. Specifically, change management enables managers to create an appropriate organisational climate for the successful implementation of the strategy. The strategy is usually indicated in the strategic plan. Notably, managers have a responsibility to match 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.

Ledez (2008) confirms that change management is a part 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 limits of a strategic management process with the aim of making adjustments to the current business conditions in order to improve the effectiveness of business operations. Nevertheless, the change process outlines some prearranged processes, which align organisational goals with the employee’s interest.

From the above suggestion, change management increases the realisation of strategic objectives and goals by following the listed operation processes (Afonina & Chalupsky 2012). The scholars also claim that strategic management helps in balancing various internal and external factors that influence the business environment, which potentially delays change implementation. This claim suggests that strategic management and change management are interdependent in enhancing organisational competitive advantage. Strategic management provides the necessary information to organisational leaders and managers for improving the process of creating change. On the other hand, Ireland and Hitt (2005) reveal that political, technological, legal, economic, and societal information is important in designing change processes.

In some situations, organisational management demands change due to changing internal and external needs. Such needs include lowering the rate of turnover, meeting organisational targets, lowering operational costs, or modifying organisational processes and products to meet the emerging consumer needs. Such changes do not occur spontaneously. A strategy is required to ensure a smooth transition. In fact, internal change forces 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. Strategic management is hence vital in a change process. Specifically, it (strategic management) provides feedback to managers and leaders, who in turn use the feedback to generate sufficient knowledge on matters such as change necessities and cooperation that is needed during change implementation (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 the configuration schools of thought as the main categorisation of strategic management theoretical discourses. The prescriptive school relates to design, planning, and positioning of organisational strategies (Bull 1999). The prescriptive school of thought opines that strategy formulation drives organisational change. The descriptive discipline reflects themes of power, organisational learning, and cultural change. The main goals involve explaining how an organisational change takes place. Configuration 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). Arguably, the different opinions among scholars regarding change management underscore the importance of tailor-made organisational success strategies, which arguably enhance the manner in which change is managed in specific organisations.

The work of Stroh (2005) reveals that some organisational management scholars consider strategies as being different from change. As cited in their work, Tsoukas and Knudsen (2002) claim that the configuration school of thought is not a paradigm for strategic management, but for corporate change. Nevertheless, Stroh (2005) demonstrates that Mintzberg, the author of these schools of thought, claims the formation of strategy concentrates on change even though its concept is greatly related to stability. Stroh (2005) further states that strategic management presents a paradox to an organisation. He says that in an effort to achieve 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. He argues that questioning the strategies may have a negative effect on the implementation process.

From Stroh’s (2005) work, strategic management encloses change management discourses, although it forms part of organisational change elements. Change management forms an important aspect of strategic implementation. To gain competitive advantage, organisations must have essential techniques and procedures. These techniques are supplied by strategic management discourses. In turn, the ability of an organisation to acquire appropriate management procedures forms an essential factor of effective change implementation.

Conclusion

This paper has provided information concerning change management and strategic management. Many studies have been conducted to find out the relationship between the two forms of management. While organisations apply them as if they are synonymous, the paper reveals that strategic management is a much broader concept. Specifically, this paper has borrowed from other literature sources to show that strategic management addresses all tactics and procedures that an organisation can follow to achieve its strategic objectives. The paper also supports the argument that change management is an aspect that lies within the field of strategic management. The foregoing position by this paper is informed by the understanding that change management is among the options that businesses adopt as part of a bigger strategy to meet set goals and objective. Arguably, therefore, it would be adequate to state that change management is a division of strategic management.

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