Concept of Rapid, Volatile, Discontinuous Change and Strategic Management

Concept of Rapid, Volatile, Discontinuous Change and Strategic Management

Organisations operating in the contemporary business environment face an increasingly dynamic environment. For instance, factors such as globalisation and technological advancements may force an entity to embark on unplanned change in order to survive. These factors potentiate the risk inherent in the external environment making it necessary for an entity to build the capacity to respond to changes in the environment. With respect to technology, for example, advancement in technology has implications such as shorter product lifecycles that render new products obsolete within a short period, more informed customers whose preferences change frequently, and faster communication channels that limit an entity’s ability to manage communications about its brands. As such, one of the effects of globalisation and technological changes has been to make organisations more vulnerable to risks in external environment thus necessitating them to build their capacity to adapt to rapid, volatile and discontinuous change more often.

The concept of rapid, volatile and discontinuous change refers to sudden changes whose extent leads to the change in the trajectory of entities and industries in order for them to survive. As observed in various studies, such changes present “cataclysmic upheavals” whose effect has the potential to overwhelm even the most resilient organizations and most seasoned managers (Meyer, Brooks, & Goes, 1990, p. 93; Carver & Kipley, 2010). The changes arise from aspects such as revolutions in technology (Ramanujam, 2003), which make the existing technologies obsolete, and thus eliminate competitive advantages of companies that may have held advantages in the industry due to the technologies that they control. The internet and web-based technologies have for instance brought rapid changes in industries that were a preserve of established entities such as the mail business (advent of e-mail), and brick and mortar establishments (e-commerce businesses). In this respect, for entities to continue their growth in the event of such disruptive changes, they need to build their capability to respond to unforeseen discontinuities (Meyer et al., 1990).

The link of the concept of rapid, disruptive changes to strategic management process arises with the need for entities to develop flexible and progressive strategies that can accommodate needed changes. As Hamel and Valikangas (2004) argue, recent organizational failures in face of turbulent changes suggest a need for resilient organisational strategies. Strategic management has a role to play in this process by building the capability of the entity to change. For instance, in one study, Wu (2010) found out that entities that have built their dynamic capability have the ability to enhance their competitive advantage even under highly volatile environments. In the same study, although having a lower enabling effect than the dynamic-capability construct, firms that use a resource-based view to build unique, inimitable competencies were also found to perform well under such highly dynamic environments. As such, the strategic management process would serve to build the requisite capabilities that facilitate an entity’s ability to adapt to change.

Organisational change theories have provided different models that may be useful in assessing the role, impacts and implications of rapid, volatile, discontinuous change for an organisation. One of these frameworks is the planned versus unplanned change models. Planned change embodies the concepts of planned learning envisaged by Ansoff where organisations build their memory based on their history to be able to manage future crises better (Carver & Kipley, 2010). Although early studies argue that Ansoff’s principles are relevant mainly in the event of planned change (as cited in Moussetis, 2011), Moussetis (2011) observes that Ansoff’s concept of environmental scanning to provide a ‘weak signal’ of risks offers information for organisation to learn. Similarly, the concept of strategic issue management offers a framework to rank issues in the order they need to be addressed (Carver & Kipley, 2010; Moussetis, 2011). As such, Ansoff’s concepts also help in advising management strategy during discontinuous change.

Irrespective the benefits offered by Ansoff principles, the concept of organizational learning has been argued to help entities to perform better under disruptive changes by promoting adaptive rather than planned approaches. For instance, Ghezzi (2013) argues that much of research on strategy has focused on “environmental scanning to anticipate [adverse] events …”, which may render the resultant strategic models deficient for purposes of creating a strategy to address unpredicted, rapid, discontinuous changes (p. 1327). As Hamel and Valikangas (2004) reinforce, a more appropriate strategy at such times may be one that features adaptive or resilience features, which arise through the establishment of a continuous innovative potential. To develop such a potential or culture, assessment of organisational capacity for change (OCC) is necessary. Studies of the concept of OCC have attributed an entity’s ability to adapt to change to the context of change (e.g., resources that enable change), process of change (e.g., principles embodied in implementing change such as leadership approaches), and learning aspects that envisage an entity’s ability to reflect on its experiences to facilitate change (Soparnot, 2011; Judge & Douglas, 2009).

In response to discontinuous change, CEOs should evaluate the entity’s capacity to deal with the issue through constructs such as OCC (Soparnot, 2011; Judge & Douglas, 2009). Once such an evaluation is performed, an assessment of strategic issue management informed on Ansoff’s principles can help rank the issues that need attention first (Carver & Kipley, 2010; Moussetis, 2011). By ranking such issues, the CEOs can then chart a strategy that would enhance the ability of the entity to adapt to each issue, thus enabling the entity to overcome the destructive effect of rapid discontinuous change. Such strategies should have short-term goals that can be used to assess the entity’s progress towards addressing each issue.

Evidence on CEOs ability to respond to volatile discontinuous change indicates inability to chart appropriate responses. Such evidence is exemplified by the many failures that have followed changes such as the bursting of the dot-com and housing market bubbles. In the wake of such events, entities failed to alter their business models to meet the challenges of the new environment. Technological changes coupled with changes in customer preferences provide another example of failure to adapt to change. This is exemplified by entities such as Research In Motion that failed to appreciate the implications of a new era of consumer-targeted devices (Chris, 2011). One reason that may explain the failure to adapt to change may be complacency due to initially successful strategies, which lead to hesitance to change even when change is needed; i.e., the concept of Icarus paradox (Amason, & Mooney, 2008). Another reason may be the absence of an innovative culture within the entity thus depriving the entity of the creativity needed to overcome challenges presented by discontinuous change (Loewe & Dominiquini, 2006).

Contemporary business environments are characterised by rapid dynamic change that may render the existing strategies ineffective. To deal with such changes organizations need to access their change capacity on a continuous business and address areas of weakness. Recent failures following the end of dot-com and housing market booms indicate inability of many CEOs to lead their entities through a volatile environment. Such failures also may attest to the inadequacy of models characterised on environmental scanning to prepare for change. In this respect, research  on the suggested variables to access OCC is necessary to provide theoretical models that are relevant for contemporary practice.


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