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What is Strategic Change?

Discuss about the Strategic Change for Business Environment.

Globalisation, complexity and competition are the three key terms that define today’s dynamic business environment. Change today is not only considered as the key to survival but also to success (Jacobs, 1997). Defined as the process of transformation from the know state to the unknown state, change is associated with high uncertainty and insecurity which gives rise to resistance to change. To remain competitive organisations ensure that their business and corporate level strategies are defined in a way that it makes the organisation adaptable and flexible enough to response spontaneously to environmental changes. Events, developments and trends that have the potential to impact an organisation’s strategy are referred to as strategic issues. Strategy makers within an organisation can perceive these strategic issues either as threats or opportunities and accordingly define changed strategies (Samson & Bevington, 2012). This report aims at defining the process and types of strategic change and reviews PWC consulting firm structure to determine how different types of strategic change supports or hinders the achievement of their organisational goals.

Change is inevitable and is often seen as a means to manage several challenges such as those related to effectiveness, efficiency, competitiveness, shared values, cooperation, understanding and quality (Lewis, 2011). Change sometimes appears as the only way of achieving learning and improvements and rectifying past failures. Change is sometimes necessary because it provides an opportunity for development, growth, increasing resources and capturing moments which if missed can have negative impact on the organisation. Globalisation, advancement in technology and generational differences are found to be the three key pressures behind change. Organisational changes never happen spontaneously and are often triggered by occasions and problems and then are led by leaders (Vithessonthi & Thoumrungroje, 2011). These changes can be as simple as reorganising specific departments or of a strategic nature affecting the whole organisation such as changing its culture, strategies, resources and employees. Strategic change is the process of restructuring the marketing or business plan of an organisation in a way that is leads to achievement of organisational objectives. It is important to ensure that these changes are managed in a thoughtful and structured way (Roberts, 2008). Thus, the process of strategic change is not only concerned about deciding what changes are to be made but also deciding when and how to change specific elements of one’s strategic orientation. Urgency for strategic change is driven by a dramatic decline in organisational performance or changes in business environment or because of both forces acting together.

Types of Strategic Change

The process of strategic change is divided into four steps namely; Strategic analysis which is the first step and involves analysing the current strategic orientation of an organisation, studying its external and internal environment and evaluating its effectiveness in achieving its mission and objectives (Rezvani, Dehkordi, & Shamsollahi, 2012). Second step is strategy making which involves defining new vision and orientation for the organisation. It includes defining products and services that the organisation aims to offer in future to realise its new goals. During this step organisations define their target market and develop competitive strategies. The underlying culture and processes of the organisation is analysed to determine their role in the change process. Strategic plan design is the third step in the strategic change process and defines how the change process will be actually implemented considering the impact of current organisational culture and the existing sources of resistance to change (Rezvani, Dehkordi, & Shamsollahi, 2012). Final step in the process of strategic change is the implementation of the plan which involves developing timetables and budgets, assigning tasks and roles that will guide the process, effective communication of the vision for managing resistance to change and allocating support resources such that the transition to new orientation occurs in an effective manner.

Depending upon the extent of change required and the speed at which it is must be achieved, strategic changes are classified into four types namely, evolution, adaptation, revolution and reconstruction (Bateh, Castaneda, & Farah, 2013). Evolution is the transformational change which is implemented gradually following a series of interrelated initiatives. It is a form of proactive change that is undertaken when a need for change in future is identified. Adaptation is the realignment change implemented in a series of steps to realign the existing operating policies and procedures of the organisation (Erwin & Garman, 2010). Revolution is the transformational change that is implemented through simultaneous initiatives on different fronts. It is a forced or reactive change that occurs within an organisation when faced by changing competitive conditions. Reconstruction is the realignment change that occurs through many initiatives implemented simultaneously. It involves realigning the way in which organisation operates when forced by a changing competitive business environment (Galavan, Murray, & Markides, 2008). Among the four different types of strategic change, transformational change is the most challenging form of change and requires high amount of efforts. Ultimate goal of transformational change is to bring about considerable changes in the culture of the organisation, it requires changing the way individuals think about their work and behave towards others, a process that requires time. It is important to understand that organisations cannot undergo revolutionary changes until the readiness for change among employees is very high (Lewis, 2011). An organisation that aim to bring about immediate changes often look forward to replacing its existing staff with new employees. There are times when organisations want to achieve transformational change in a revolutionary manner but they often fail doing so owing to the expense and enormity associated with the transition task.

Revolutionary and Evolutionary Strategic Changes with Reference to PWC Consulting Firm

Revolutionary and Evolutionary Strategic Changes with Reference to PWC Consulting Firm

Strategic organisational changes either occur slowly or quickly depending upon the urgency of change and the extent to which changes are required (Hellriegel & John W. Slocum, 2011). The revolutionary changes are forced down, dramatic and immediate. They come as high pressure mandates from senior leadership when they say certain changes are to be made at any cost. Once the decision is finalised the leadership team entertains discussion however it is made clear that the desired changes must be implemented (Hellriegel & John W. Slocum, 2011). Revolutionary changes being quick in nature are often more successful. All available resources are allocated in the process as the senior leadership team feels the change is inevitable. There are fewer changes of internal politics as the senior leadership applies full political power to reduce the affects of opposition. Mergers and acquisitions are considered as important instruments of strategic change (Kansal & Chandani, 2014). They are examples of revolutionary changes that are initiated at senior leadership level and are imposed as mandatory action. Mergers and acquisitions enable organisations increase their core competencies and strengthen their competitive advantage. PwC’s acquisition of Booz and Company is an example of revolutionary change that happened in year 2014 (PWC, 2014). This revolutionary change at PWC will help the organisation navigate disruptive and unprecedented threats and strengthen its current market position. PWC consulting firm’s structure served as a catalyst in the path of this revolutionary change that was required by the organisation and will help the organisation achieve its organisational goals (King & Lawley, 2013). PWC and Strategy & together will make PWC competent enough to change and lead the landscape of consulting business across the globe (PWC, 2014). PWC’s goal is to change the way in which strategy work is done and what world thinks about strategy, and its acquisition of Booz and Company will facilitate achievement of this goals (PWC, 2014).The company has a well defined organisational structure with clearly defined roles and responsibilities thus ensuring full political power in times of revolutionary changes. The addition of Booz and Company helped PWC widen their talent pool and get increased access to more skilled employees in Asia and Australia (PWC, 2016). Though revolutionary changes can hamper the culture of an organisation however in this case PWC’s strong and interlocked organisational structure facilitated effective management of resistance to change.

Evolutionary changes when compared to revolutionary changes occur gradually and are built collaboratively (Hellriegel & John W. Slocum, 2011). The need for change is not driven by senior management however it is important that they are effectively engaged in the change process. Senior Leadership during evolutionary changes is responsible for communicating the need for change and empowering employees to take on the change. The change happens in small steps and people are gradually trained to accept the changes and live by it. PWC’s diversification from Audit to IT services to increase its market share is an example of evolutionary change that helped the company achieves its organisational goals. Diversification in IT services enables PWC support their technology clients in developing long term strategic objectives and solve their technical and business issues (PWC, 2016).Implementing the desired strategic changes required to company to realign its existing operations and recruit new employees who possessed relevant skills. The company had to make huge investment in the training of its employees and building the required infrastructure (Tadena, 2015). This evolutionary change was carried out effectively at PWC owing to its knowledge sharing culture and strong leadership (Kotter & Schlesinger, 2008). Employees were effectively engaged and the change was communicated effectively to win their empathy and support. Implementing this evolutionary change helped the company increase its overall market share and retain their competitive advantage (Hellriegel & John W. Slocum, 2011) .PWC lead this evolutionary change with its culture making it the winning strategy. It is important to ensure that all layers of management are involved in the evolutionary change process (Sirkin, Keenan, & Jackson, 2005). An analysis of PWC consulting firm’s structure reveals that the structure might serve as an hindrance in the achievement of their organisational goals at the time of evolutionary change because too much decision making power is saturated at the leadership level (King & Lawley, 2013). Effective communication at all level of organisational structure and employee engagement was be the key to successful evolutionary change at PWC consulting firm.

Conclusion

Successful strategic change management process starts with the preparation for the strategic planning procedure. Strategic decision makers are expected to define clear vision, mission and values for the organisation. It is important to identify key stakeholders and evaluate their needs and motives. External and internal business environment analysis is important to identify the gap between current and expected state of the organisation. Depending upon the identified strategic issues, strategic decision makers expand existing goals, performance measures, objectives and action plans of the organisation to ensure future expectations are achieved. Once the future goals and objectives are clear, strategic decision makers evaluate and work out strategies which are implemented once commitment from all stakeholders is received. An organisation’s structure can sever as a support or hindrance on path of strategic change depending upon the degree of change required and time needed to achieve it. 

References

Bateh, J., Castaneda, M. E., & Farah, J. E. (2013). Employee Resistance To Organizational  Change. International Journal of Management & Information Systems (IJMIS) , 17   (2).

Erwin, D. G., & Garman, A. N. (2010). Resistance to organizational change: linking research  and practice. Leadership & Organization Development Journal , 31 (1), 39-56.

Galavan, R., Murray, J., & Markides, C. (2008). Strategy, Innovation, and Change: Challenges for Management. Oxford: OUP Oxford.

Hellriegel, D., & John W. Slocum, J. (2011). Organizational Behaviour (13th Edition ed.).  New York: Cengage Learning.

Jacobs, R. H. (1997). Real Time Strategic Change: How to Involve an Entire Organization in Fast and Far-Reaching Change. San Francisco: Berrett-Koehler Publishers.

Kansal, S., & Chandani, A. (2014). Effective Management of Change During Merger and Acquisition. Procedia Economics and Finance , 11 (1), 208-217.

King, D., & Lawley, S. (2013). Organizational Behaviour. Oxford: OUP Oxford.

Kotter, J. P., & Schlesinger, L. A. (2008). Choosing Strategies for Change. Harvard Business Review , 1-14.

Lewis, L. (2011). Organizational Change: Creating Change Through Strategic Communication. New Jersey: John Wiley & Sons.

PWC. (2016). Consulting. Retrieved 2016, from PWC: https://www.pwc.com/gx/en/industries/engineering-construction/services   solutions/consulting-services.html

PWC. (2016). Organisational Structure and Governance. Retrieved 2016, from PWC: https://www.pwc.com/jp/en/assurance/corporate/organization.html

PWC. (2014). PwC completes its acquisition of Booz & Company. Retrieved 2016, from   PWC: https://www.pwc.com.au/press-room/2014/strategy-and-mar14.html

PWC. (2016). Technology. Retrieved 2016, from PWC: https://www.pwc.com.au/technology.html

Rezvani, S., Dehkordi, G. J., & Shamsollahi, A. (2012). Managing Strategic Change for Organisations. International Journal of Academic Research in Economics and        Management Sciences , 1 (3), 112-122.

Roberts, C. (2008). Implementing Educational Technology in Higher Education: A Strategic Approach. The Journal of Educators Online , 5 (1), 1-16.

Samson, D., & Bevington, T. (2012). Implementing Strategic Change: Managing Processes and Interfaces to Develop a Highly Productive Organization. London: Kogan Page    Publishers.

Sirkin, H. L., Keenan, P., & Jackson, A. (2005). The Hard Side of Change Management.  Harvard Business Review , 109-118.

Tadena, N. (2015). PwC Pushes Further Into Design, Digital Business. Retrieved 2016, from The Wall Street Journal: https://www.wsj.com/articles/pwc-pushes-further-into-design digital-business-1444192201

Vithessonthi, C., & Thoumrungroje, A. (2011). Strategic change and firm performance: the moderating effect of organisational learning. Journal of Asia Business Studies , 5 (2),   194-210.

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