Page 210 - DCOM506_DMGT502_STRATEGIC_MANAGEMENT

Strategic Management

Notes Rate of Change

When the organisation operates in a more dynamic environment, it needs to be able to respond
quickly to the rapid changes that occur. In static environments, change is slow and predictable
and does not require great sensitivity on the part of the organisation. In dynamic environments,
the organisation structure and its people need to be flexible, well co-ordinated and able to
respond quickly to outside influences. The dynamic environment implies a more flexible, organic
structure.

Degree of Complexity

Some environments can be easily monitored from a few key data movements. Others are highly
complex, with many influences that interact in complex ways. One method of simplifying the
complexity is to decentralize decisions in that particular area. The complex environment will
usually benefit from a decentralized structure.

Market Complexity

Some organisations sell a single product or variations on one product. Others sell ranges of
products that are essentially diverse. As markets become more diverse, there is usually a need
to divisionalise the organisation as long as synergy or economies of scale are unaffected.

Competitive Situations

With friendly rivals, there is no great need to seek the protection of the centre. In deeply hostile
environments, however, extra resources and even legal protection may be needed; these are
usually more readily provided by central headquarters. As markets become more hostile, the
organisation usually needs to be more centralized.

The effectiveness of traditional organisational structures can be improved by regular revision
and development of the skill sets held by the employees. If change is not handled correctly, it
can be more devastating than ever before. The management has to identify those employees
that are high performers and have the potential to reflect, discover, assess, and act. The management
has to instill the new focus of connecting the heads, hearts, and hands of people in the organisation.
On big problem may be the problem of strategy implementation. The management as well as
the team heads must learn how to motivate others and build an efficient team.
Structural changes are essential to better position the organisation as compared with its
competitors, focus on client needs and move forward in development and sustainability
programmes. Sometimes reorganisation maybe required to provide a framework for longer-
term commitment to organisational objectives and vision.
The management should encourage the entire organisation in general and sub units in particular
to put work teams in place to ensure that each sector integrates staff and services into a cohesive,
focused business unit. Consultation and participation should be made part and parcel for the
programme for the successful development and implementation of organisational goals and
objectives.
Each work team should be asked to develop an effective process for discussion of major challenges
and opportunities facing the organisation, if possible, over the next decade. Updated strategic
plans should be then developed. These plans should form the framework for focusing
organisational resources on the most strategic areas by using a staged approach. Updated plans

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