Change Management

Change Management
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CONTENTS

Introduction
Managing Strategic Change
Conclusions

Once a business decides that a change in strategic direction is required, the one area it will always have problems with is managing strategic changes.

Often strategies are put together very badly with little thought to how the strategy is to be implemented. The aim of this section is to expand on how to manage strategic change.

MANAGING STRATEGIC CHANGE

To bring about strategic change effectively, we must firstly examine how power and influence exist in an organisation.

Handy (1985) suggests several types of power which may persist. Three main categories are described (a) The relativity of power, (b) The balance of power, (c) The domain of power. Handy expands further by describing categories of power:

PHYSICAL POWER - Based on one person being physically stronger than another.
RESOURCE POWER - Based on the resources on one person has, being stronger than another.
POSITION POWER - Based on the seniority position of one person in an organisation.
EXPERT POWER - Based on skills and technical knowledge.
PERSONAL POWER - Based on individual personalities.
NEGATIVE POWER - Based on the principle that an individual can disrupt power in an organisation.

Handy states that a business needs to recognise the different spheres of power within it's structure, prior to implementing change, as these spheres could prove to be disruptive.

Johnson & Scholes (1993) further expand on power in an organisation:

STATUS - Power of the individual or group, based on position in the organisation.
CLAIM ON RESOURCES - Power based on resources available to the individual/group, for example the financial budgets.

Johnson & Scholes also suggest that power can come from outside the business, covering:

SUPPLIERS
CUSTOMERS
NEGOTIATED ARRANGEMENTS - Between the suppliers to the business (Purchasing function) and the customers of the business (Sales function).

Power affects a business in a variety of ways as Morgan (1986) suggests the following areas are the most important sources of power:

'Formal Authority.
Control of scarce resources.
Use of organisational structure, rules, and regulations.
Control of decision processes.
Control of knowledge and information.
Control of boundaries.
Ability to cope with uncertainty.
Control of technology.
Interpersonal alliances, networks and control of 'informal organsiation'
Countrol of counter-organisations
Symbolism and the management of meaning.
Gender and the management of gender relations.
Structural factors that define the stage of action.
The power one already has.'

Morgan further states that the sources of power enhance their own interests during periods of conflict.

CONCLUSIONS

Power exists visibly and invisibly within any business. The visible levels of power are those which exist in terms of the hierarchy of the business. It is the visible holders of power who are perceived as being the people who hold power and steer the business in the correct strategic direction.

The invisible holders of power, those people who through personal relationships and influence have a bearing on how successful a strategy is implemented.

When developing the strategic direction of a business, management must realise that to be successful, the strategy needs to be discussed with everyone who is going to be involved as a result of it. There are no firm conclusions we can suggest for effective strategic change management, only pointers:

Look at the effectiveness of existing strategy, does it take your business to the correct direction.
If a new strategy is to be looked into, see how effective it has been in other companies, don't be afraid to ask your competitors, see the initial problems faced by different organisations.
View how the strategy will affect your external influences the customers and suppliers.
Consult all internal parties to be involved in a new strategy.
Ask employees what they feel could be amended to the strategy and what unforeseen obstacles are there?.
Set out a clear definition of the new strategy and what this entails.
Layout clear implementation dates for which the business must achieve various parts of the strategy.
Ensure everyone within your organisation is given clear and precise information as to what the new strategy entails.
Analyze the performance of the new strategy and review how effective the strategy has been.
Make changes where necessary, set annual performance targets.
Remember that a new strategic direction will not happen overnight, it needs to occur over a long term period, and not just as a short-term fix.

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