Literature Review of Approaches to Strategic Change

Organizations require change as they live through time. This change which adjusts according to new demands and procedures is known as Strategic Change. This paper sheds light on the importance and approaches of strategic change as an important part of the strategic management. It studies two models of strategic change management and an organizational example which requires strategic change.

Introduction

Pasmore (1994) writes that we live in a dynamic environment where change is happening to everybody and everything. He notes that this change encompasses our organizations as well. Pasmore (1994) further notes that many of us, even the organizations usually do not realize this change and this is where they face competitive disadvantage, assuming a non-monopolistic society. To deal with such changes, and also with many others, the educators and researchers of this world introduced the notion of strategic change. Strategic change is a concept involving a reorientation of an organization’s resources, both human and physical, products, services and structure. An organization needs strategic changes to,

Maintain, or enhance it competition position

Grow

Growth and stability is an important factor, probably which all organizations strive for. To keep growing then, an organization has to evolve. The market in which an organization exists is pretty much like our environment that surrounds us. Through the process of “natural selection” those fittest to survive the wrath of the natural change, live. The others disappear into history books.

The responsibility of bringing about a change in an organization rests greatly upon the shoulders of the managers of the organization. Because of the variable and highly diversified nature of organizations, the theories and models of strategic change management are numerous. In fact, the truth remains that each manager of the firm can up with a new model to support and direct his organization. Nevertheless, researchers have developed models which basically serve the purpose of enhancing the thinking abilities of to-be or current managers and to actually provide them with a direction.

Literature Review

To define a complex concept like strategy in a line or two would be unjust to the concept itself (Sadler and Craig, 2003). The concept can however be explained by linking various phrases. According to Saddler and Craig (2003), strategy is the

Purpose or mission

The policies

The decision

Implementation of decisions

Analyzing and utilizing strengths and opportunities

Gaining competitive advantage

Basically, strategy is the “course of action” used to achieve the major objectives for an entity (Brown and Harvey, 2006).

Tichy (1983) defines strategic change as the modification in the structure, resources, products and services of an organization.

“In light of the discontinuous, large scale changes facing the world, organizations will be required to undergo major strategic reorientations.”(Tichy, 1983)

Because of various reasons, including the shift in technological progress and increase in overall market competitiveness, organizations are finding it increasingly indispensible to bring about strategic change (Brown and Harvey, 2006).

When bringing about a strategic change in an organization, the consideration of the culture of that organization is extremely important because the culture of an organization includes basically the set of priorities and values in the air of an organization (Brown and Harvey, 2006).

The reason why most strategic changes fail is the inability of an organization to deal with change itself (Hyde, np).

Strategic Change: The Models

The introduction section of this paper clearly points out that strategic change cannot be explained and executed through any one standard model. In fact, there can be as many models as the organizations in this world and probably more.

Some famous models however do exist. This section therefore is going to talk about three of the models.

CBA Model of Strategic Change

CBA is an acronym for Conceive, Believe and Achieve (Black and Gregersen, 2002). These three are in general the three dimensions of the model. Talking in terms of the model specifically, Conception, Belief and Achievement have been defined as the brain barriers hindering the implementation and the execution of the change (Black and Gregersen, 2002).

Conceiving the idea is actually making the employees see its worth. This includes making the employees believe that the current practices, that were right yesterday are not right anymore and therefore must be changed with new ones. This is probably the biggest obstacle that the executives face while trying to bring about a strategic change in the organization.

Next comes, Believing! Black and Gregersen (2002) define this as the second brain barrier to bring about a successful strategic change. Under this point, the employees have to believe in the fact that the path they are taking to bring about the change is correct. That is, they should believe that they are doing that new thing rightly.

Last is Achieving. The employees should have the sense of achievement regarding the successful strategic change. This factor is important for two reasons. Firstly because, you stop trying when you know you have achieved something. The knowing of the end point thus, marks the successful shift of strategy. Secondly, the sense of achievement is important to encourage undertake further ventures.

These might sound like three, unconnected pieces. The binding force for these pieces then is the idea and need of Leadership. CBA model believes that without proper education, training and support of the employees, bringing about a significant strategic change in an organization is not possible (Black and Gregersen, 2002). Furthermore, this model holds that the executives should always be champions of the change. The reason is that the employees would always be as serious about the venture as the executives.

Another model for strategic change considers teamwork more important than leadership (Fogg, 1994). This model deems the following factors as important when considering and implementing strategic change.

Security of future

Provision of roadmap

Setup of priorities

Optimized resource allocation

Get inputs and ideas

Gain commitment

Coordinate the execution

The factors are pretty self explanatory in their own self. The point or the binding force of these factors, according to the team based model is Team Work. According to this, working together and understanding each other’s needs helps bringing about the change in the true sense.

Strategic Change: The Crux

It is useful to be reinforced here that the last section, Strategic Change: The Models can go on infinitely. Starting from the day the term, strategic management was coined till now thousand of models for a successful Strategic Change have been made. Thus, it is impossible to fit in all the models in this paper. The crux however of successful strategic change can be defined.

Understanding the Culture of an Organization

Brown and Harvey (2006) state that the culture of an organization is in effect the values held and shared by the members, which differentiates one organization from another. Further Brown and Harvey (2006) state that the culture of an organization has the following characteristics:

Individual autonomy

Sensitivity to the needs of the customers

Support

Interest in developing and carrying out new ideas

Openness of communication

Risk management

Understanding the culture thus, is extremely important because it is the employees of the firm that make up its culture and then again, it is the employees of the form that have to execute the change. Unless all the employees believe and change their working modes, significant strategic change cannot be brought by and any investment that is then done will be in vain. Balogun (2010) points out that the culture of an organization is the “interlinked set of organizational subsystems in which the paradigm drives the visible manifestations of culture, such as the organizational symbols, routines and rituals, stories, control systems and structures”. These assumptions and rituals then define the type of change that is being brought into the organization. This is to say that a change in these basics of the organization will bring about a transformational change. A change, holding the culture more or less constant is a realignment change (Balogun, 2010).

Planning the Change

Since the strategic change that is being brought to the firm will affect the future stability and growth of the firm, it is extremely important to take as much time as required to properly plan each and every detail of the change, smoothing out the rough edges by either skillful implementation or incorporation of policies. Fogg (1994) suggests that it is extremely essential for a successful Strategic change to be carefully and consciously tailor the planning course in accordance to the size, complexity, culture and strategic situation of the organization. This planning would be different for a firm in financial and competitive crisis and different for a firm that is seeking expansion. The process of planning according to Fogg (1994) involves three stages:

Pre-work: departmental evaluation of the status quo including strengths, weaknesses, opportunities and threats facing the individual members and also the organization as a whole.

Priority setting: Discussion on various proposals with respect to finances, environment, market, customers and the overall reputation of the firm and thus setting the priorities according to which the change will be processed.

Strategic planning: Discussion of strategies, plan of actions, resources and communications to strategize the change.

Post-work: evaluation of the completed plans.

Working as a Team

Hitt, Ireland and Hoskisson (2009) point out that according to research evidence, the executives who boost about their “no mistake making capabilities” are more likely to make strategic errors. Thus, when important structural changes are being brought to the organizations, the managers and the executives should work as a team and develop an open communication with the employees. The reason is that it is the employees who really know the work that is going on in the organization. Incorporating them as a team of the bigger picture can help bring about a successful strategic change in the organization. The teams can also be divided into various divisions. Hitt, Ireland and Hoskisson (2009) also mention that the organizations that have a heterogeneous top management i.e. executives with different educational and experiential background, can operate under the benefitting shadow of different perspectives.

The idea of working as a team also focuses on the need of a leader for this processing. The leader acts as the central, integrating personality to whom people can deliver their plans and problems. Moreover, the presence of a leader is indispensible lest the entire organization becomes a cookery show where everybody is doing their own cooking and the result is a spoiled main dish. Somebody needs to host the show.

Evaluating

Finally, as the strategy for change has been implemented, it has to be evaluated. Hyde (np) notes that a change in the behavior of the employees or the general change in the culture of an organization is only visible after the change has been implemented. Thus, once the execution has been completed, the top management should require a proper evaluation of the changed organization. This is important for a lot of reason. The first and the most significant reason is to check whether the results are in accordance to the proposal or not.

Punjab University

Established by the British in 1882 in Lahore, Punjab University (PU) is the first university to be established in the Asian Sub-continent. It has given to the world gems like Dr. Abdus Salam and Har Gobind Korana. Today, it is a part of Pakistan, still headquartered in the lively, historical city of Lahore. Punjab University has over 500 affiliated colleges and hosts almost 350 examinations for over 450,000 students in Pakistan. Today, even though new universities have come about in Pakistan and Punjab University’s position has shifted to a competitor rather than a monopolist, it is still a well reputed and looked up to institution in the field of education (Punjab University, 2010).

The other side of the coin however is that Islamic Jamiat-e-tulaba, a student union, promoting (rather enforcing) the twisted, orthodox and chauvinist Islamic views in the University. This student body has a hold, stronger beyond imagination. Most of the members of this union are graduates who keep taking up degrees to stay in the campus hostels and thus maintain the hold. This union is funded by the members mostly. They also manage to pull out money from the Vice Chancellors of the University. Moreover, the overall environment of the University is now become conservative. Earlier where the cream of the student body went to PU, it has now become the third or fourth option for students residing in Lahore. Those out of Lahore, place it even down. Most of the professors who are currently educating the youth o Pakistan in universities like Lahore University of Management Sciences (LUMS), Lahore School of Economics (LSE), Institute of Business and Administration (IBA) and other started their carrier at Punjab University. The loyalties however have changed due to the difference in the salary structure and the general atmosphere of the university.

As good professors and promising students choose other universities, the budget of the University for spending on infrastructure and technology has gone down, causing further problems for the status and educational ability of the University.

Even though in terms of area and campus, Punjab University still beats all other Universities in Pakistan. It has campuses all over the country. However, in terms of organization, management, educational capability and investment PU’s reality has been taken over by other new and well managed Universities in the country.

What Punjab University now needs is a well managed Strategic Change.

The Strategic Change Proposal

It is evident enough that the goal of the change that would be brought about in the university would be to steer it to the same fame and respect it had throughout the 20th century.

Following are some proposal for the change.

Increase the Budget: for any strategic change that is to be brought in an organization, investment in a must. And what PU requires is a transformational change. This extra amount of fund is proposed to be used on renovating the classrooms, laboratories, libraries and on hiring new Professors. This budget, if utilized optimally can also be used to renovate the hostels for the students who come from outside Lahore.

Reduce the hold of Islamic Jamiat: With all the terrorism been listed in the CVs of Muslims, this Islamic student body, watching any un-Islamic acts in the university, fighting and punishing people for mistakes looks like a terrorist group to many people. Parents think twice before sending their child into this kind of atmosphere. Thus, the reduction in the number of excellent students coming in. Especially students, who did their O and A levels instead of the government matriculation program, hardly ever choose to come to PU. One of the contributing reasons to this is the strong hold of a strict Islamic body. Management should strategically remove the hold of this union.

Marketing: no matter how good an organization is, people come to know of it mostly when the product is being marketed. The product PU is selling is education and a memorable university life and thus, it should strongly focus on marketing the product. It may require initial investment but the results would be awesome. It can also help in changing the perspective of people regarding the conservative and strict environment of the University. Moreover, students would see PU as a good option in terms of their future.

This change can be strategically planned by the board of directors. To improve the process further, one student representative from each department can be chosen to present ideas, demands and existing problems. Through this, the stakeholders i.e. the students’ wishes and problems will be answered and they will become a part of the Strategic Change process. Moreover to reinforce this idea to inclusion of stakeholders in the process of change, from each campus a faculty member can be selected to represent/department the problems that campus/department.

Conclusion

Organizations have to grow with time. The last two decade especially saw a remarkable social shift in Pakistan. Media grew and so grew awareness. This it became extremely important from the organizations in Pakistan to grow and change socially but also in terms of the product they offered.

One the renowned organization in Pakistan is Punjab University. However it so seems that it has not grown dynamically in the social context especially. Educationally, obviously there have been forms for example the construction of the computer Labs. However, this is not enough. Students come to university, not only for education but also to live a life before they enter into the practical world. For the vulnerable age that the University entering students are in, it is very important to give them a memorable life with sports, social events seminars so that they do not think that they are missing out on the life that other university going students are having.

Thus, PU should change strategically to reduce i) the hold to the Islamic union, ii) invest to improve infrastructure iii) focus on marketing.