Concept of Rapid, Volatile, Discontinuous Change and Its Impact on the Strategic Management of Organisations - Coursework Example

Name Professor Course Date Outline and discuss the concept of rapid, volatile, discontinuous change and its impact on the strategic management of organisations Abstract Rapid, discontinuous and volatile change is an intrinsic element of contemporary business atmosphere that results from surfacing of the worldwide economy, swift technological shift and diffusion. These forces instigate ‘hypercompetition’ which assumes instability, constant change and uncertainty besides an augmenting focus by organisations on developing their competitive edge. Tackling rapid, intricate and discontinuous change calls for good leadership. Successful firms have leaders who comprehend the temperament and repercussions of external change, the capacity to develop efficient strategies that put change into consideration, and the determination and propensity to actively manage the impetus of the firm. All these activities are known as strategic management and the most apparent leadership manifestation in a firm entails the presence of strategic management. When, rapid, discontinuous and volatile change occurs, novel and high-speed leadership and strategic management procedures become more crucial than ever. This essay draws round the concept of rapid, volatile, discontinuous change and its impacts on the strategic management of organizations. Introduction Change in firms occurs in two different means. This entails changes that take form of a slow, evolutionary and incremental change. In such changes, firms systematically alter and enhance existing practices and processes to make them better. Notwithstanding that those changes takes place slowly and almost imperceptibly over time, they can instigate disparities from the way the firm management used to do things. In addition change can assume the form of discontinuous, revolutionary and rapid change which firms break entirely with the past and execute something novel and revolutionary. In the present business environment, firms encounter volatile, swift and discontinuous changes that create challenges to strategic management given the technological advancement and global economy. Such challenges affect strategic management procedures calling for CEOS to adopt models that help firms in reaction to rapid, volatile and discontinuous changes. This essay outlines the concept of volatile, rapid and discontinuous change, and discusses where these concepts fit within strategic management procedure. The essay also outlines and discusses models employed to evaluate the role, effects and implications of volatile, rapid and discontinuous changes for firms. This essay underlines how CEOs should react to discontinuous change. The essay culminates with proof regarding whether CEOs do react suitably to discontinuous change, feasible conclusion and implications. The Concept of Rapid, Volatile and Discontinuous Change Most organizations encounter external environment characterized through volatile, rapid and discontinuous change. Contemporary firms are functioning in a swiftly-shifting world where numerous shifts happen frequently in the milieu of the globe, nation and regions. These shifts take place in technological, environmental, economic and political sphere1. For examples, terrorists’ attacks and natural disasters affecting various nations exert great impacts on firms across the world. Numerous companies close down due to financial crisis while other firms experience low profits and sales margins. Change can take the form of rapid, volatile, revolutionary or discontinuous change thereby breaking entirely the past and executing something revolutionary and new. Rapid and volatile changes are prompted by increased opportunities and markets. Discontinuous shifts entail major challenges in organizational structure, work procedures, corporate strategies, business model, staffing and technology sphere2. These changes are non-incremental and rapid changes that threaten the functioning of organizations. Discontinuous change instigates reinvention of organization in a comparatively short period while still functioning in a volatile, ambiguous and uncertain business environment. Rapid, discontinuous and volatile changes are prevalent in modern business setting. These changes are triggered by surfacing of swift technological, environmental, political, social and economical shifts. Conducting business in such unstable and dramatic business environment calls for increased efforts in establishing and executing feasible business strategies. This is because these changes can bring threats and opportunities. In this regard, it is essential for firms to hold efficient and appropriate management strategies. The developed competitiveness caused through globalization is also a major challenge to most firms. As a result, management strategies must be kept competitive. Rapid, Volatile and Discontinuous Change and Strategic Management process Strategic management entails the procedure of identifying, selecting and executing actions that promote the long-term performance of firm via setting direction and establishing constant compatibility amid internal resources and skills of the organisation and the shifting environment through which a firm operates. Strategic management as a complete set of decisions, actions and commitments needed for an organisation’s strategic competitiveness. According to Cox, Daspit, Malaughin, and Jones strategic (2012), management is the procedure of determining the goals and mission of a firm within the context of its external setting and internal weaknesses and strengths3. Organisations experience catastrophic changes. These shifts are so extensive and sudden that they modify the trajectories of firms, overpower the adaptive abilities of resilient firms and surpass comprehension of experienced managers. Rapid, volatile and discontinuous changes are restructuring firms and altering the foundation of competition. As the pace of regulatory, socioeconomic and technological change increases, the survival of organisations rely on devising business entrepreneurial reactions to unpredictable discontinuities. Strategic management offer guidance to managers experiencing such conditions4. When firms experience unpredictable changes and competition, strategic management is crucial as it entails a complete set of decisions, actions and commitment needed for an organisation to attain strategic competitiveness. Strategic planning, execution and constant assessment is paramount. Given the increased uncertainty levels in the external setting, managers centre on strategic management and espouse strategic flexibility that entails development of abilities to react to specific risks and take advantage of opportunities5. The concept fits in the business strategy given that a firm’s business strategy acts as the objective and direction of the business. A firm’s management should track changes taking place in technological, economic, political and social environment. Managers must make suitable and effective response during rapid, volatile and discontinuous external change. Strategic management helps in updating and altering a firm’s business strategy to address external shifts affecting the business. In the event of volatile, rapid and discontinuous changes, firms redefine their direction to adopt productive innovation. Relevant Models forAssessing the Role, Impacts and Implications of Rapid, Volatile, Discontinuous Change for an Organisation Organisational change takes place in different forms: through establishment of novel technology, novel products, novel administrative processes and systems6. Strategic analysis calls for collection and assessment of two forms of information: the external environment and internal environment which is used to prepare SWOT analysis. In the age of unanticipated volatile and discontinuous change caused by rapid technological change, global economy and ‘hypercompetition’, success of firms depend on strategic flexibility7. Strategic flexibility entails the set of abilities employed to react to diverse opportunities and demands that are a portion of a vibrant and uncertain competitive atmosphere. For a firm to be strategically flexible, it must establish the ability to learn which entails understanding how to assess firms’ external is setting on constant basis. There are several models that can be used to assess the roles and implications of rapid, volatile and discontinuous change for an organisation. PESTEL analysis assesses the political, economic, social, technological, environmental and legal aspects that affect a firm. The PESTEL analysis identifies the megatrends that face a firm in its external environment8. The Porter’s Five Forces plus Government model assess the threats and opportunities a firm faces in its specific environment. This model offers a useful means to systematically underline where shifts are caused within a specific industry or environment. This model assesses threat of new entrants, suppliers’ bargaining power, buyers’ bargaining powers, threat of substitute products and rivalry among competing organisations. Work Cited Cox, Marcus Z, Daspit, Josh, McLaughin, Erin & Jones, Raymond. Strategic management: Is it an academic discipline. Journal of Business Strategies, 29.1 |(2012):25-42. Gerstner, Wolf, Konig, Andreas & Hambrick, Donald. CEO narcissim, audience engagement and organisational adoption of technological discontinuities. Administrative Science Quarterly, 58.2( 2013): 257-291. Kevin, Zhou, Tse, David & Li, Julie. Organisational changes in emerging economies: Drivers and consequences. Journal of International Business Studies, 37. 2( 2006): 248-263. Marianne, Lewis, Constantine, Andriopoulos & Wendy Smith. Paradoxical leadership to enable strategic agility. California Management Review, 56.3 (2014): 58-77. Meyer, Alan, Brooks, Geoffrey, & Goes, James. Environmental jolts and industry revolutions: Organisational responses to discontinuous change. Strategic Management Journal, 11. 4 (1990):93-110. Wirtz, Bernd, Mathieu, Alexander & Schilke, Oliver. Strategy in high-velocity environments. Long Range Planning, 40.3(2007):295-313. Read More