Leading Strategig Change

1. Leading strategic change

It is important to understand that strategy implementation goes hand in hand with organizational change. It is important to point out that these changes doesn’t happen unexpectedly and without intention. Somewhere somebody had to have had a vision on how he/ she wanted the company to look like and articulated this vision into a workable strategy. This person is called a strategic leader. A strategic leader has the ability to “anticipate, envision, maintain flexibility and to empower others to create strategic change when necessary.”(Hitt, Ireland and Hoskisson,2003:386)

1.1 Types of change

Change does not always take place in the same way. How change takes place depends on the nature and scope of the intended change effort. Four types of changes can be identified:

• Adaptation

It is possible for the current organizational setting to accommodate this type of change and it only requires the realignment of the the way the company operates.

• Reconstruction

The current organizational setting will be able to handle this type of change, which is normally caused by external market forces. Reconstruction of specific policies and procedures will be necessary.

• Evolution

Fundamental changes will have to take place within the organization to make sure that the strategy is aligned with company culture and the organizational setting. The change is normally not disruptive and can be incremental. This is also the type of change that Tesla , as a company, have to deal with to be successful.

• Revolution

Fundamental changes needs to take place because of sudden and disruptive changes in external market conditions.

1.2 Contextual issues of change management

Before any type of change or formulation of change strategies can take place, certain issues need to be taken into account. These issues are related to the context or organizational setting within which the company operates and different issues requires different solutions. The following are strategic issues that need to be managed (Johnson & Scholes, 2002: 536):

• Time

The company needs to determine how quick change needs to take place. Sudden changes in the market environment will require different strategies than would planned future developments.

• Scope

The type of change required needs to be established. Can change take place within the current organizational setting or is a fundamental change of strategic direction needed?

• Diversity

The level of homogeneity needs to be determined