MGT 550 Organizational Design and Change Management
Assignment: Prepare a brief summary of the main concepts addressed in the article. Also prepare a question outline that would facilitate your leading the class discussion.
In the article “How Industries Change” Anita McGahan states that companies need to understand how the industry is changing in order to understand which way an organization should change. In order for a firm to gain capital it needs to be in sync with the industry’s change trajectory. Determining which strategy to choose can affect the success of the company. The article explains that there are four trajectories: radical, progressive, creative and intermediating that makes industries evolve.
Radical change occurs when resources and capabilities are threatened by outside influences for example when new technologies are introduced. Industries that make it through radical change and survive are usually profitable. Radical change is inevitable for some companies so they have to be prepared for the risks.
Intermediating change occurs when core activities of industries are threatened. Buyers and suppliers gain access to new information therefore threatening assets and restructuring relationships. This change in an industry is the most difficult because supplier and customer relationships become fragile. Companies in intermediating change must use their resources to enter into a new industry or sell to competitors.
In a creative change trajectory companies are in stable relationships but have no stable assets. Top companies continue to succeed in a creative trajectory because they capitalize on their networks. They don’t neglect important relationships and learn to outsource projects and tasks.
Progressive evolution means major improvements in a sustaining business. Core assets are not threatened, so large amounts of capital are not at risk. Companies rely on...