The concept of rapid, volatile, discontinuous change and its impact on the strategic management of organizations

Strategic Management

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The concept of rapid, volatile, discontinuous change and its impact on the strategic management of organizations

Overview

The management of organizations in a volatile environment is primarily about managing transition. If business organizations are to survive in the next three decades then they must be in a position to effectively and quickly respond to dynamic business environments. This places a focus on a number of capabilities for instance: responsiveness, adaptability and flexibility. Successful firms are those that will be able to act fast and first compared to their competition and their CEOs will have to be flexible in order to be successful anticipators.

Introduction

In the contemporary climate of evolving political priorities and economic pressure rapid, volatile and discontinuous change is increasingly becoming a critical priority within organizations. However, this kind of change is a complex process that could have positive as well as negative consequences therefore it is important to comprehend the outcomes whether positive or negative to ensure that the entire process of change is conducted in an effective and efficient process.

Against a backdrop of shifting accepted work practices, rapid technological development and a growing knowledgeable workforce change is increasingly becoming an ever present tenet of organizations (Burnes, 2004). As much as most organizations do welcome the necessity for change most of these programs that come with change do not attain their intended objectives (Balogun and Hope Hailey, 2004).Effective CEOs do comprehend that in order to be proactive in the existing cut throat competition they must without ceasing create an environment where all employees work together with openness and trust, develop the strengths of their critical employees, encourage active participation and share power with them.

The Concept of Rapid, Volatile, Discontinuous Change

The global business environment was subjected to an accelerated and rapid change particularly in the 1990s. This change continues to create a more complex and uncertain environment in which organizations operate. Business Managers in organizations are finding that old proven recipes, methods and beliefs for success redundant since they are no longer in a position to generate solutions not only for current but even future challenges. This is because when organizations are faced with rapid and volatile change the previous patterns are not likely to reoccur in similar or even precise formats. Turnley (2003) asserts that the volatile business environments tend to change continuously and nearly instantaneously and its uncontrolled changes oblige a new way of transacting business.

Where this Concept fits Within the Strategic Management Process

Times of volatile change still hold even today, however, for strategic organizational managers instead of these occurrences becoming threats to them they do become opportunities. Certainly a time of turbulence for other business managers could transform into a time of opportunities for strategic organizational managers particularly if they can comprehend, recognize and develop new realities. Organizations that are flexible and ready to acclimatize to a changing environment are in a position to exploit new opportunities and prevent threats more effectively in comparison to their competitors (Elrod and Tippett, 2002).

Model (S) Used to assess the Role, Impacts and Implications of Rapid, Volatile, Discontinuous Change for an Organization

Rousseau (2003) proposed a three step model for organizations to use in assessing the role, impact and implications of volatile and rapid change. The model suggests that change tends to first unfreeze the existing behavior, it then moves to the new behavior and finally freezes the new behavior. Even though it is popular the three step model has been disparaged for being founded on small samples and more so due to the fact that it acts under stable conditions that can be thought out and planned for.

The emergent approach model was harnessed to replace it. The model perceives change as being so impulsive and fast that it is difficult to control it from the top down. In its place the model opines that change should be perceived as a learning process where an organization acts in response to external and internal environmental transformations. Todnem (2005) points out that this model is focused more on facilitating change and change readiness rather than the provision of explicit preplanned steps for each change initiative and project. Emergent school proponents may not necessarily support this model but offer a succession of actions that could make volatile and rapid change be positive to an organization. These include: empowering employees, creating a vision, creating strong leadership and establishing a sense of urgency.

How CEOs should respond to discontinuous change

Effective CEOs who would want to effectively manage change in their organizations are aware that positive transformations are leader directed. Transformations are initiated through awareness and cannot be implemented without prior insight. The most critical factors for CEOs to effectively respond to discontinuous change are organizational and individual awareness. An elevated level of organizational and individual awareness augments staffing decisions, leadership effectiveness, team building, culture and communication. If CEOs are aware they will be able to get insights that could change bad results into great results (Kotter, 2006).

Effective CEOs comprehend that to be proactive in the face of discontinuous change they must deeply comprehend their emotions, motives, strengths, values and limitations. They must be honest and realistic about themselves and with themselves.

CEOs’ Response to discontinuous change

Lots of explanations have emerged to explicate the broad challenges that CEOs face in their attempts to respond appropriately to discontinuous change. For example, one school of thought focuses on firm level rationalization for instance differential incentives amongst CEOs in embracing the new business models and technology (Oreg, 2006), inertia forces for instance commitment escalation, path dependencies and irreversible commitments within CEOs, their entrenchment within well-known industry networks or organizational pressures that could impede successful responses. Of late, explanations have swung the emphasis to organization’s internal explanations and specifically to the senior management core role of mustering successful responses to scientific discontinuities by introducing concepts such as the significance of management being attentive to such discussions and the recognition of discontinuities

However, more research indicates that some CEOs have managed to thrive in the face of discontinuous change through developing the required capacity to succeed in the new environment or in certain cases they even go ahead to initiate their own discontinuities. Such successful CEOs have made use of ambidextrous organizational structures, complimentary assets, spin offs and alliances to handle the transition. More recent research in strategy’s cognitive perspective is already opening up the process by which they can build up successful responses to discontinuous change.

Conclusions and Implications

The beliefs of top managers do not convert automatically into successful actions. Especially, when faced with discontinuous change that could necessitate new operating models, knowledge or capabilities CEOs need to build up an efficient path to transform the acknowledgement of a discontinuous change into a set of actionable steps that forms the qualification for such organizations to function within the new environment. This kind of transformation occurs via a set of actions and decisions that build on the acknowledgement of change.

Implications

As uncertainty becomes rapid in the business environment of organizations, CEOs could enhance their capacity to adapt to such business environments through becoming more flexible. Through flexibility organizations can increase their capacity to adapt to a business environment. Flexibility also augments the capability of an organization to efficiently and quickly respond to stimulus from its business environment than its competitors. Flexible organizations are thus in a position to better deal with change and are likely to persist when there is turbulence.

References

Balogun, J. and Hope Haily, V. (2004) Exploring Strategic Change, 2nd Edn (London: Prentice Hall)

Burnes, B. (2004) ‘No such thing as …a “one best way” to manage organizational change’, Management Descision, 34, 10, pp.11-18

Elrod II, P. D. and Tippett, D. D. (2002) ‘The “death valley” of change’, Journal of Organizational Change Management, 3, pp. 273 – 291

Kotter, J.P. (2006) ‘Leading Change: Why Transformation Efforts Fail’, Harvard Business Review, 73, 2, pp. 59-67

Oreg, S. (2006) ‘Personality, context, and resistance to organizational change’, European Journal of Work and Organizational Psychology, 15, 1, pp. 73 -101

Rousseau, D. M (2003) ‘ Psychological and implied contracts in organizations’, Employee Responsibilities and Rights Journal, 2, pp. 121-39

Todnem, R. (2005) ‘Organisational Change Management: A Critical Review’, Journal of Change Management, 5, 4, pp.369 – 380.

Turnley, W. H. and Feldman, D. C. (2003) ‘Re-examining the effects of psychological contract violations: Unmet expectations and job dissatisfaction as mediators’, Journal of Organizational Behavior, 21, pp. 25-42

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