Meaning of Strategic Change

Strategic change is a complex process that involves a corporate strategy focused on new customers, new way to look at organizational development, new markets, new way of dealing with intermediaries, new approach to competitors, new way to deal with  suppliers, new  products & services and new ways of doing business

Strategic change is a change for future, based on anticipated environmental forces. The changes in the environmental forces often require businesses to make modifications in their existing strategies and bring out new strategies.

 

 

Steps in strategic change

There are three steps in initiating strategic changes

1. Need to change recognized facet of the organization
2. Shared vision creation to manage change
3. Institutionalize the change

Need recognition for change: The first step is to diagnose which facets of the present corporate culture are strategy supportive and which are not. This basically means going for environmental scanning involving appraisal of both internal and external capabilities may be through SWOT analysis and then determining where the lacuna lies and scope for change exists.

Shared vision creation to manage change -Objectives of both individuals and organization should coincide. There should be no conflict between them. This is possible only if the management and the organization members follow a shared vision. Senior managers need to constantly and consistently communicate the vision to all the organizational members. They have to convince all those concerned that the change in business culture is not superficial or cosmetic. The actions taken have to be credible, highly visible and unmistakably indicative of management’s seriousness to new strategic initiatives and associated changes.

Institutionalize the change this is basically an action stage which requires implementation of changed strategy. Creating and sustaining a different attitude towards change is essential to ensure that the firm does not slip back into old ways of thinking or doing things. Capacity for self-renewal should be a fundamental anchor of the new culture of the firm. Besides, change process must be regularly monitored and reviewed to analyze the after-effects of change. Any discrepancy or deviation should be brought to the notice of persons concerned so that the necessary corrective actions are taken. It takes time for the changed culture to prevail.

Kurt Lewin’s Model of Change:

To make the change lasting, Kurt Lewin proposed three phases of the change process for moving the organization from the present to the future.

These stages are

1. Unfreezing,

2. Changing to new situation and– HC kellman – Compliance, Identification and Internalization

3. Refreezing

1. Make individual aware for change required
2. No surprise change –socially destructive and morally lowering
3. Break down old habit, custom and tradition
4. Start with clean slate
5. Hold meeting and promote new ideas

Unfreezing the situation: The process of unfreezing simply makes the individuals aware of the necessity for change and prepares them for such a change. Lewin proposes that the changes should not come as a surprise to the members of the organization. Sudden and unannounced change would be socially destructive and morale lowering. The management must pave the way for the change by first “unfreezing the situation”, so that members would be willing and ready to accept the change.

Unfreezing is the process of breaking down the old attitudes and behaviors, customs and traditions so that they start with a clean slate. This can be achieved by making announcements, holding meetings and promoting the new ideas throughout the organization.

1. Behaviour pattern need to be redefined
2. H.C. Kelman -Three method for reassigning new pattern of behaviour compliance, identification, internalization
3. Compliance –Enforcement of reward or punishment for good or bad behaviour
4. Identification -Choose role model with whom psychologically impressed
5. Internalization-Change in thought process, learn and adopt new behaviour

Changing to the new situation: Once the unfreezing process has been completed and the members of the organization recognize the need for change and have been fully prepared to accept such change, their behavior patterns need to be redefined. H.C. Kelman has proposed three methods for reassigning new patterns of behavior. These are compliance, identification and internalization.

Compliance: It is achieved by strictly enforcing the reward and punishment strategy for good or bad behavior. Fear of punishment, actual punishment or actual reward seems to change behavior for the better.

Identification: Identification occurs when members are psychologically impressed upon to identify themselves with some given role models whose behavior they would like to adopt and try to become like them.

Internalization: Internalization involves some internal changing of the individual’s thought processes in order to adjust to the changes introduced. They have been given freedom to learn and adopt new behavior in order to succeed in the new set of circumstances.

1. New behavior normal
2. New behavior has changed old completely
3. Reinforce new behavior
4. Cyclical and continuous

Refreezing occurs when the new behavior becomes a normal way of life. The new behavior must replace the former behavior completely for successful and permanent change to take place. In order for the new behavior to become permanent, it must be continuously reinforced so that this new acquired behavior does not diminish or extinguish. Change process is not a one-time application but a continuous process due to dynamism and ever changing environment. The process of unfreezing, changing and refreezing is a cyclical one and remains continuously in action.