Chapter 8 - Strategic Change / Class 10 - Keeping Up with a Changing Enviornmenr

What is strategic change?

A process that renews and realigns an organization’s business and organizational systems with shifts in the external environment.

How is operational change different from strategic change?

Operational change maintains existing systems; strategic change renews them to ensure long-term alignment with the environment.

What is strategic renewal?

Continuous realignment of a firm’s structures, processes, and culture to prevent or correct strategic drift—when internal activities fall out of sync with market or environmental changes.

What are the two main systems affected by strategic renewal?

1️⃣ Business system – how the firm creates value for customers. 2️⃣ Organizational system – how people, roles, and culture coordinate to deliver that value.

What are the key components of the organizational system?

Structure (grouping of tasks and roles), Processes (procedures coordinating people and units), and Culture (shared values and behaviors shaping work norms).

What are the two dimensions of the magnitude of change?

Scope – how many parts of the organization are affected; Amplitude – how deep or large the changes are.

What defines the pace of strategic change?

Timing (when change begins) and Speed (how long it takes to implement).

What are the two main change paths?

Radical change = fast, large-scale transformation (revolutionary); Comprehensive change = gradual accumulation of smaller adjustments (evolutionary).

What is evolutionary change?

Moderate, incremental, and continuous improvements building on the status quo.

What is revolutionary change?

Abrupt, discontinuous transformation that replaces outdated systems when the organization must “break with the past.”

What does the paradox of revolution and evolution describe?

The need for organizations to balance steady adaptation with occasional radical overhaul to stay aligned with their environment.

What is the continuous alignment (continuous renewal) perspective?

Evolution over revolution – ongoing, piecemeal change; organic learning and flexibility; gradual improvement.

What is the discontinuous alignment (discontinuous renewal) perspective?

Revolution over evolution – change is episodic, radical, and triggered by crisis or major disruption; “shock therapy” to break inertia.

According to the book, why does change often require crisis?

Firms become rigid during stable, successful periods; only high pressure or crisis breaks resistance and enables major transformation.

Why isn’t constant change ideal?

Too-frequent change causes confusion, conflict, and inefficiency—some stability is needed for effective operations.

What is organizational path dependency?

The idea that historical structures, routines, and culture constrain future change options—organizations inherit “habits” from the past.

What are ambidextrous organizations?

Firms that manage both evolutionary (incremental) and revolutionary (radical) change simultaneously to stay competitive.

Give an example of ambidexterity.

Companies like HP, Johnson & Johnson, and ABB balance efficiency in mature units with innovation in emerging ones.

What is the ultimate goal of strategic change?

Achieving continuous alignment between a firm’s internal systems and external environment by managing magnitude, pace, and type of renewal.