Strategic change

Planning and implementing strategic change is an important aspect to the management role. strategic
change is about having a strategy to manage change. Strategy is derived from the Greek wood
“strategos”, meaning: stratos (army) and ago (ancient Greek for leading).

Strategic changes realized by companies are meant to move toward a future desired condition such as
reinforcing competitive advantages. This process is very complex and only a few successfully manage it
by launching new strategies and new structures to obtain an effective and renewed value proposition. It
is important to recognize the sharp difference between strategic and organizational change.
Strategic change refers to the realization of new strategies that lead to a substantial modification of the
normal business activity of the firm, whereas organizational change is the normal consequence of
redefining the business strategy. In conclusion, a strategic change always includes an organizational
change, especially when it is suddenly implemented without relevant resistance.

strategic changes that includes the reengineering, reorganization, and innovation processes:

1.Reengineering—Sweeping change in the company's costs, production cycle, services, and quality with
the implementation of different techniques and tools that consider the firm as a complex system of
customer-oriented processes instead of just a cluster of organizational functions. The emergence of
aggressive new competitors in the market can force the company to find new strategies to recover their
loss of competitiveness. The company's management team has to focus its attention first on critical
business processes such as product design, inventory, and order management and then on customer
needs, constantly monitoring how to improve the quality of the value proposition with a lower price.
Implementing quality methodologies such as total quality management to improve process efficiency
should also be a focus of management.

2.Reorganization—This is the second way management can launch a change, and it is composed of two
main phases. In the first phase the company reduces, in terms of number and dimension, business units,
divisions, departments, and the levels of hierarchy. The second phase begins downsizing to reduce the
number of employees to decrease the operational costs. A company decides to implement a
reorganization because of the external environment; for example, a technology revolution that makes
their product obsolete, a recession that depresses demand, or a law deregulation that changes the rules.

A firm usually reorganizes because it has not renewed its strategies and management to align with the
environmental changes. Reorganization represents the only way to survive and regain the lost
competitiveness.

3.Innovation—A strategic change promoted by new technologies that impact the production process
and lead to a new configuration of the company service and product. To anticipate competitors, a
company has to introduce a new production process or technology with a redefinition of its strategy and
follow the innovation wave of the industry.