Strategy of an Organization

Topics: Strategic management, Culture, Management Pages: 11 (4009 words) Published: May 19, 2006
. A critical literature review on an organizational issue which requires intervention by top strategic team of the organisation.

Strategic change
In the world of new technology, transforming economy, shifting demographic, fluctuating customer taste, and dynamic competition, it is necessary for every company to be able to constantly align with their environments by reacting to external events or by proactive shaping the businesses in which they operate. Strategic change adopted by a firm and the consequent direction of action is a response to the company's perceived current weakness and the current environment and how that is expected to change. Strategic change may take three main forms which are threatening actions from various sources, arising from the spread of markets occupied by the company, and the speed and variability of such change. Because of the substantial changes in various factors such as economic and business environment, every company has to be able to adjust and adapt themselves to changes in their environments and thereby improve their competitive performance. The importance of these adjustment and adaptation processes is considered to be a crucial aspect of the competitiveness issue which needs to be intervened by the top strategic executive team of an organisation. A company has to assess the changing factors like economic, business and political environment around it, then formulate and implement strategic and operational changes. It is also necessary to have an important input which can lead the company to the maintenance and improvement of competitive performance. According to the McKinsey 7-S model, it can be seen that strategic change in a company affects other six interrelated elements in the organisation's architecture; systems (processes), structure (virtual organisation), shared values (mission or goals), style (culture, leadership), staff (empowerment), and skills (competences). This framework is a Value Based Management (VBM) model that describes how one can holistically and effectively organise a company. When combined these factors all together, it determine the way in which a corporation operates and it also helps a manager to address the difficulties of organisational changes. The 7-S framework is necessary for strategic change in an organisation because it is used for managerial analysis and action that provides a structure with which to consider a company as a whole. As a result, a company's problems may be diagnosed and strategy may be developed and implemented. It illustrates the multiplicity interconnectedness of elements that define a company's ability to change so that a manager knows how a company could be improved. To be effective in improvement, it does not just a matter of devising a new strategy and following it through or setting up new systems and letting them generate improvement but a company must have a high degree of fit or internal alignment among all the 7 Ss. Each S in the framework should be consistent with and reinforce the other Ss. Because of they are related, a change in one has a ruffle impact on all the others. Thus, to improve your organisation by creating a new strategy (strategic change), a manager or leader must master systems thinking and pay attention to all of seven elements at the same time.

Areas of strategic renewal
Organisations are complex systems, consisting of many elements and each of which can be changed. To have a potential change, organizations need to be analytically dissembled into a number of component parts. The most fundamental distinction that can be made within an organisation is between the business system and the organisational system . Business system refers to the way a company conducts its business; it is supported by the organisational system which refers to the way a company gets its people to work together to carry out the business. According to Barlettt and Ghoshal (1995), the organizational system can be divided...
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