Strategy and Capability Sustaining Organizational Change

Strategy and Capability, Management, Organizations, and Business Series

Contents

1 How Organizations are Changing and Why

Modern managers are beset by two pressing, urgent and intractable problems. On the one hand life is becoming increasingly difficult: they face increasingly dynamic, complex and unpredictable environments where technology, the nature of competition, industry boundaries and the rules of the game are changing dramatically. 

a. Changing Structures

One of the most important and pervasive types of recent organizational change is structural change. This is popular and highly pervasive. This is change whichalters the ‘shape’ of the organization, the number of levels of management, the nature and number of jobs, or the principles by which organizations are structured (region, product, function, client group, or some combination of two or more of these)

b. Changing Processes

Another common form of recent and current organizational change focuses on the stages involved in the production of the key outputs of the organization: the ways in which the tasks and functions that are divided and differentiated by organizational structures must actually combine in sequences of operations or tasks, which must add value to what is particular to a customer

c. Changing Cultures

The question of employees’ attitudes is the key focus of our third type of prevalent and pervasive current organizational change: culture change. This deservesattention not only because of its pervasiveness but because many of its key propositions have been too readily accepted and incorporated into management thinking with little impact on organizational performance and little impact on the ability of managers to understand why their well-meaning attempts to improve performance have failed.

d. Using Consultants

e. Developing Strategic Human Resources

As well as the sort of highly prescriptive, consultancy driven change packages discussed above, recent years have also seen the emergence and growing acceptance (to varying degrees, admittedly) of the body of ideas mentioned above called strategic human resource management (SHRM).

2 The Model: Five Ways to Improve Organizational Performance

a. Understanding Strategy

Organizational environment
Organizational capability

b. Understanding Organizational Capability

3 ‘Fit’: Fitting Organizational Structures to Business Strategy

Understanding Organization
Exploring Organizations
Designing Effective Organizations

4 The Resource-Based View of Strategy

Resources and Capabilities
Analysing Sources of Advantage
The Practicalities of Strategic Capabilities

5 Formulating Strategy

Organizations are systemically prone to two types of cognitive limitation. One consists of a variety of information-processing limitations, as managers shortcircuit the classic rationalistic model of decision-making. The second consists of shared structures of meaning and interpretation within organizations.

6 Developing Strategy

In this section we will briefly explore different conceptions of strategy. Whittington (2000) usefully summarizes four different perspectives on strategy: classical, evolutionary, processual and systemic. The classical perspective assumes that the manager understands and has control over how to allocate the resources of the firm. The manager can thus manipulate the internal organization of the firm to better suit these objectives. So strategic behaviour is guided by rationality, opportunism and self-interest. 

7 The Adaptive Organization

The ‘fit’ theorists argue that the greater the degree of fit between an organization’s structure, processes, culture and systems, and the skills and attributes of its employees, and its strategy and environment, the better its performance. The approach, although stressing multiple levels of accommodation, essentially assumes a process that results in a new stability, and that achieves consistency and fit.

Summary and Conclusion

First published 2003 by Blackwell Publishing Ltd 

Library of Congress Cataloging-in-Publication Data

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We shall not cease from exploration
And the end of all our exploring
Will be to arrive where we started
And know the place for the first time.
T. S. Eliot, Four Quartets