1381688173

Overview

Due to the increase of globalization in recent years, there are significant change occurred in both internal and external environment. Changes occur in organizations can be approximately divided into two forms: continuous change and discontinuous change and this paper is going to have a deep analysis of discontinuous change which plays an important role in strategic management for an organization.

Introduction

This paper will mainly focus on the rapid, volatile, discontinuous change for an organization. Firstly, it will identify the concept of rapid, volatile, discontinuous on the basis of literature review. Secondly, it will discuss where the concept of the change fits within the Strategic Management process. Thirdly, the rational model will be illustrated for assessing the role, impact and implications of rapid, volatile, discontinuous change for organization. Furthermore, the paper will identify how CEOS should respond to discontinuous change and provide the evidence about whether CEOs respond appropriately to discontinuous change. Last but not least, there will be a conclusion to emphasize the main points of the paper.

Analysis of rapid, volatile, discontinuous change

The concept of rapid, volatile, discontinuous change

There are four main areas of organizational change including mission, product, technology and values (Pullen 1993).

According to (Pullen 1993), change can be either continuous or discontinuous and the discontinuous which has been discussed in this paper can be briefly defined as change occurs in response to an abrupt event in the environment which is not an organizational precedent for the company. The rapid, volatile, discontinuous change represents an interrupt of the past or current direction of an organization which leads to a rapid and basic shift in the business and requires a redefinition of the internal logic by the firm.

Meyer et al. (1990) indicate that in addition to the first-order change, the continuous change, discontinuous is the second-order change transforms fundamental properties or states of the system. There are two levels of change: firm level and industry level (Meyer 1990). On firm level, discontinuous change focuses on the frame-breaking change within organizations and the mechanisms of the change are life cycle stages and configuration transitions (Ginsberg 1988). On the other hand, discontinuous change pays attention to the emergency, transformation, and decline of industries on industry level and the mechanisms on this level refer to the punctuated equilibrium and quantum speciation.

How the rapid, volatile, discontinuous change fits within the Strategic Management process

Hanson et al. (2011 cited in McDonald 2013, p. 8), Strategic management process is “the full set of commitments, decisions and actions required for a firm to strategic competitiveness and earn above-average returns”. There is an inseparable connection between discontinuous change and the strategic management process. Firstly, on the basis of the definition of discontinuous change, it requires organization to redefine the current direction of the organization and the organization should additionally adopt an effective innovation according to the change (Meyer 1990). The change is the compass for the strategic management process due to its rapid, volatile and discontinuous features. Secondly, a good response to the discontinuous change is also a decisive factor to enable organizations to earn competitive advantages. There are five broad elements of the strategic management process including strategic analysis, strategic direction-setting, strategic choice, strategic implementation and strategic evaluation (McDonald 2013). Illustrated by Anand et al. (2010), the discontinuous changes which occur regardless of the external or internal environment are one of the most important elements for business to pay attention to as a core consideration for its strategic planning, implementation and evaluation. Therefore, the discontinuous change can highly fit within the strategic management process.

The model used to assess the role, impacts and implications of rapid, volatile, discontinuous change for an organisation

Due to the complexity and emergency and abrupt features of the rapid, volatile, discontinuous change, the rational model can be adopted by organizations in order to assess the role, impacts and implications of change for an organization. There are 9 steps of the model for organizations to achieve better performance on the basis of discontinuous change which has been shown in Figure 1 (McDonald 2013).

According to McDonald (2013), the rational model has been adopted frequently by organizations in practice particularly relevant for situations requiring major change. In addition, the model is iterative and sequential which is easy for both employers and employees to understand and implement. Therefore, the rational or formal model is the most appropriate model for managers to assess the role, impacts and implications of the change.

Figure 1: The strategic management process: Rational or formal model

How CEOs should respond to discontinuous change

CEO is the person who can decide the direction of an organization and it is important for CEO to consider the impact of discontinuous change for decision making in strategic management. According to Lant and Mezias (1990), due to the unpredictable feature of discontinuous change, it is essential for organizations to make active preparation in order to respond to the change. For example, the CEO needs to actively respond to discontinuous change immediately due to its sudden character and select innovatory direction for the organization on the basis of the change. It means the mission and vision objectives of the organization might be changed by CEOs according to a discontinuous change.

On the other hand, Garavan and Deegan (1995) indicate that it is important for top management to use training and development interventions to develop creativity in order to effectively and efficiently respond to discontinuous change. Therefore, CEOs should also implement a systematic basis for heuristic competence to encourage employees to be more creative.

In addition, due to the criticism of the rational model which indicates that CEO or senior management maybe not strong enough to keep process on track (McDonald 2013), it is important for CEOs to consider being…