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Managing change

Strategy implementation involves different types of change. Understanding the extent and nature of change can help the successful implementation of strategy (Johnson, Scholes and Whittington, 2011, p. 483).

Johnson, Scholes and Whittington (2011, pp. 484-486) recommend the following stages for managing change:

  1. Adaptation - This is change that is gradual, building on or amending what the organisation has been doing in the past and in line with the current business model and organisational culture. This might include changes in product design or methods of production, launches of new products or related diversification.
  2. Reconstruction (or turnaround strategy) - This is change that may be rapid and involve a good deal of upheaval in an organisation, but which does not fundamentally change the culture or the business model. There could be a need for major structural changes or a major cost-cutting programme to deal with a decline in financial performance or difficult market conditions, in the absence of which a business could face closure, enter terminal decline or be taken over. The emphasis is on speed of change and rapid cost reduction and/or revenue generation. The need is to prioritise the things that give quick and significant improvements.
  3. Revolution - This is change that requires rapid and major strategic, as well as cultural, change. This could be in circumstances where the strategy has been so bounded by the existing culture that, even when environmental or competitive pressures might require fundamental change, the organisation has failed to respond. This might have occurred over many years and resulted in circumstances where pressures for change are extreme – for example, a takeover threatens the continued existence of a firm.
  4. Evolution - This is change in strategy that results in transformation, but incrementally. Arguably, this is the most challenging type of strategy change as it involves building on and exploiting existing strategic capabilities while also developing new strategic capabilities. In successful organisations, many will see no pressing need for change, and there will be a tendency to stick to historic bases of success, so the exploration of new ways of doing things may be limited.

Change is inevitable sometimes. Therefore, it is important to foresee arising needs for change, develop organisational capabilities and systematically plan and embrace change. A smooth change following the right process helps to avoid forced experiments like many organisations that did not embrace digitalisation and are now struggling to survive due to Covid-19 impacts.