Strategic Management: Formulation and Implementation

Prescriptions For Change

To manage radical change successfully, business leaders have to do more that just recite vaguely constructed ideas about changing economic and competitive conditions. They must put focused and systematic strategies into place to fit specific change conditions. The real challenge confronting American business over the last several years is not the issue of corporate structure. It is failure of its leaders and managers to understand change and to manage it.

For example, companies like Shearson Lehman, General Motors, IBM, Wang, Unisys, Sears, Westinghouse, and McDonnellDouglas invested heavily in restructuring and downsizing. However, for the most part, their efforts failed.

Clearly, the fundamental change all of these companies beyond downsizing and restructuring required the new missions, new leaders, and renewed business cultures. Some of the prescriptions for these changes are:

Close the gap between business and organization planning
Too many corporate business plans fail because the organization and its culture is not able to support the new strategy. To support new strategies, business leaders have to nurture and support the change process within the cultures of their organizations and look to develop new leadership and managerial capabilities.
Break down bureaucratic business structures
The typical militarystyle command structure of decision making and communications must be replaced by an open system that promotes feedback, innovation, and communication in all directions and at all levels.
Keep innovative ideas and people within the company
Too often, the originator of a new idea or technology in U.S. firms is not provided with enough incentives to remain with the company, or members of a product development team are laid off in a downsizing. Organizationwide strategies for creating, developing, and maintaining innovative products and people must become the foundation of a company's longterm business plan.
Create a quality corporate culture, not just quality products
Providing quality products and services to the customer can only be achieved if they are a natural extension of a corporate culture that values quality at all levels of its operations.

The success that companies like Motorola, Xerox, and Boeing have enjoyed in building quality products occurred because they have consistently supported strong, quality cultures.

Implement change strategies that are appropriate for existing conditions. Business leaders must understand the different types of change that the company is experiencing and tailor individual strategies for these conditions.