Strategizing combines a number of critical processes in relation to knowledge, learning and change. Critically discuss this statement and using examples from organizations illustrate how different aspects of strategy as a process entails aspects of learning, knowledge and change across levels of analysis (individual, group, organization).
Strategy is a highly complex subject with controversial theories and ideas on the most effective way to produce viable business strategies to cope with the ever challenging and competitive business environment today. However, in recent years, it can be observed that scholars have been increasingly perceive that strategizing as a dynamic process which encompass different aspects, such as about knowledge management, organizational learning, and organizational change across an organization. In this paper, the three important but different aspects of strategizing, namely, knowledge management, organizational learning, and organizational change will be discussed across different levels of analysis – individual, group and organization.
Knowledge, as defined by Davenport and Prusack (1998), is a ‘fluid mix of framed experience, values, contextual information, and expert insights that provide a framework for evaluating and incorporating new experiences and information’. In the context of strategizing, knowledge is simply too important to be ignored – as it will ultimately affect both the formation and implementation process of a particular strategy. Indeed, the success of any strategy, undeniably, will be dependent on the truth and practicality of the knowledge possessed by individual group or in an organization.
The importance and roles of knowledge in any organization will be particularly evident when strategy is viewed as a process. When formulation and implementation of strategy is subjected to the complexities and dynamic of the internal and external environment, knowledge is increasingly important in affecting the strategizing process as well as the outcomes corresponds to the strategy.
On the individual level, knowledge is crucial in affecting how a strategy can be formulated, shaped, altered and implemented (Nonaka, 1997). For example, in drafting a strategy, individual opinions may be gathered. Thus, based on the level of knowledge of the individual, different types of strategy will be perceived as the most viable and effective strategy to be formed. This is because the understanding of that individual on the situations, the specific perceptions and the knowledge of him, as well as his prediction, will greatly affect all stages in strategizing. This is true also in a group. In any group of people, the collective knowledge as well as the ways the people in the group interact will affect the outcomes of various stages regarding formation and implementation of strategy. In both cases, the knowledge available to people will greatly affects the strategizing process and final outcomes.
Similarly, knowledge will affect how strategy is formed, planned, implemented, and adjusted in an organization. This is inevitable because the knowledge possessed by the entire organization, will ultimately determine the growth possibilities within the organization (Nonaka et. al., 1995). Besides, the knowledge pertaining to the organization will also determine the capabilities of an organization to recognize or to capitalize on the opportunities available in the external environment. For example, knowledge on the US market had been affecting the marketing strategy implemented by Honda in the early days the company promoted motorcycle products to the country. At first, the management planned to sell the motorcycle of bigger size in US, but somehow, the front line employees discovered that people in US apparently were moiré interested with the smaller scale motorcycle, which is eventually named as the motor-cup by Honda (Nonaka et. al., 1995). This strongly suggests that the availability of practical knowledge and truthful insights will greatly affect the strategizing process of a company.
A closely related concept to knowledge is learning. Indeed, in a fast moving and competitive society, learning is required for any individual or organizational to stay relevant, competitive and up-to-date. Human beings have been making huge transition from the industrial economy to information economy, and probably to knowledge economy in the future. When the economic environment changes, to a faster pace, it is unavoidable for people to learn fast and adapt accordingly to the new environment (Eijkman, 2010). As predicted earlier by Drucker (1954), human beings are indeed entering into knowledge society today.
In the context of strategizing, learning is an important aspect, and it has been becoming more important in the recent years, due to a faster pace, globalized and competitive business landscape (Staats et. al., 2011). Today, product life cycles are shortened significantly, and creativity and innovation are becoming more important in growing any business successfully (Sánchez et. al., 2011). Not only is that, consumers are also becoming more demanding and consumer tastes and preferences can shift dramatically in few months. Under such a dynamic situations, it is imperative for any business, management and individual to learn and adapt accordingly – or to be left out from the competition.
In the context of strategizing, the individual learning capabilities and the ability to apply the learned knowledge will ultimately affect the behaviors, understandings, attitudes and thus, the strategizing process pertaining to that particular individual (López-Cabrales et. al., 2011). This is similar to a group. The collective learning speed, capabilities, and assimilation of knowledge in a group will definitely affect the performance of the group in the fast changing business environment. The learning process of a group of people can be more complicated, however, because the ability of the member to apply and translate his learning to the group performance will be dependent on the team work and group dynamics process in a group. The ways the team work together can be influential towards capitalizing on learning process to enhance the strategizing process. For example, brainstorming, discussions and sharing of knowledge is crucial in the learning process of a group. The success of Google has been closely associated with the capability of the team members to work together and formation of creative and innovative team work (Goss, 2010). The group learning process in Google is enhanced by encouraging people to share idea freely, to embrace contradicting and different perceptions among the team members. This effectively enhances and enables the team members to become more creative in crafting and delivering new innovation to the marketplace. The constantly adaptation and creative works among the people in Google enable the organization to deliver state of the art value offering to the fast changing information technology industry (Basu, 2007). Effectively, the organization of group work in Google contribute significantly to enabling of a responsible, flexible and creative ways of doing things – which ultimately become one of the success strategies of Google to emerge as one of the powerful leader in the industry.
In the organizational context, organizational learning is a very important aspect in the strategizing process. As discussed by Simon (1996), an organization can learn in two ways. Firstly, an organization can learn when the people inside the organization learn. Secondly, any organization can also learn by recruiting new knowledgeable people or experts pertaining to a field, which the organization does not have initially. Indeed, Argyris and Schon (1978) have a comprehensive definition on organizational learning. Accordingly, organizational learning is defined as ‘a process in which members of an organization detect error or anomaly and correct it by restructuring organizational theory of action, embedding the results of their inquiry in organizational maps and images’. There are many ways in which organizational learning will influence the strategizing process in any organization. In the context of organizational learning, the ways individual learning is encouraged, and the learning process of individual is linked to the degree or speed of organizational learning will be essential. Indeed, the availability of a learning culture, will affect the formation and implementation of strategy in any organization. A learning culture will definitely affect how people in the organization take new input from the external environment, assimilate the relevant knowledge and put the new learned knowledge to practice for better performance. Particularly in today highly dynamic environment and fast changing economy, organization learning is essential towards formulation of responsive, flexible and yet effective strategies. For example, there are many evidences that organizational that able to achieve success in today fast changing economy is those that able to learn fast. This is particularly true for any organization that intends to expand to the international context, whereby best business practices or strategies in the foreign countries may be distinctively different to that in the domestic market. For example, the success of Tesco is partly due to the ability of the company to learn fast in new business environment (Plimmer, 2010). As Tesco expand to new emerging country, whereby the social cultural situations can be remarkably different from the case in the western countries, Tesco has been able to learn fast and act locally to reach and penetrate the local market. Local talents are recruited to cater for the local consumers (Palmer, 2005). The organizational learn through local talents, and successfully expand and establish strong foothold in these new market – which is a good example of organizational learning process leading to successful strategy in new marketplace.
As discussed before, the business environment is becoming more dynamic. Scholars and practitioners have been acknowledged such a trend – to change is constant. In the competitive environment whereby the success of organization is dependent heavily on how people or organization adapt to the changes arises in the environment, the subject of organizational change is becoming a highly critical discussed issue in business management (McShane et. al., 2010). Indeed, organizational change is essential toward strategic management of any organization today, as sensible and alert management will not deny the needs to change accordingly to the situational context, and thus, the strategizing process should also be responsive and adaptive to the upcoming changes in the organizational. In the literature of strategic management, to achieve fit between organizational strategies to the external environment is utmost important because this will ensure the effectiveness of the strategy in the marketplace. Such a perceptions is well recognized, whereby in business management literature and textbook, the availability of feedback loop in the strategizing process suggests the importance and the necessarily of learning process and organizational change process in strategic management of any organization.
In the individual level, change is necessary as the innovation and advancement of technologies and new social structure or forces will affect how any single person able to stay relevant and competitive. For example, the advancement of internet and computer related technologies put significant great pressures towards new generation to master the new technologies to cope with the changes. Not only is that, as the environment change fast, individual should also change accordingly, not from technical skills perspective, but also from behavioral aspects. Thus, to change in order to progress is true within the individual context. Continuous improvement is simply the personal philosophies to be adopted by any successful people in today society. Similarly, in a group, to change is also necessary to stay relevant in the new environment. For example, people today must not only know a single language, as the diversity of workforce, as well as the globalization process demand people to best know more than a single language and to understand cross culture differences to work effectively in a group (Hofstede, 2001). Due to the diverse workforce, as the importance of team work, in the context of strategizing and competing in the new leveled business landscape, the group process should also change accordingly to the demands from the external environment.
In the organizational context, change management is no longer a new topic. In business school, the subject of change management and development is often included in the teaching of organizational behaviors and corporate strategy. Undeniably, change management is often important aspects of strategizing in a complex business environment, whereby many initial plans may no longer stay valid as business environment changes. The receipt of new information, knowledge, or due to the learning process in any organization, will also demand any organization to change accordingly, in line with the new found knowledge or understandings on the competitive landscape. In fact, the actions or reactions, and the strategic moves of competitors, or equally important, the rise of new substitutes products or changes in consumers’ trends will also demand any organization to deviate from any initially planned strategy and change accordingly. As it is largely acknowledged that people tend to have huge resistant to change, and yet, without change being incorporated into formulation and implementation of strategies in any organization, change management should indeed be seriously considered and combined in the strategizing process. Some of the successful incorporation of change into the corporate context includes the transformation of Zegna to a performance oriented company. Prior to the change, Zegna is a family owned company (Colli et. al., 2007). However, the fast changing business environment is pressing the company to be realistic and transformed the organizational culture to focus on performance. Through a successful transformation and organizational change process, Zegna has successfully changed itself from a money losing, low performing organization into a profitable, and performance oriented organization (Anon, 2009; Tyler-Cagni et. al., 2008).
As a concluding remark, it can be seen that strategizing in today dynamic business environment is never something simple. The concepts of knowledge management, organizational learning and change management are something not to be neglected in formation, implementation and the outcome of strategizing process. For any strategy to be viable, effective and relevant in today business landscape, it is critical that best practices on the context of knowledge management, organizational learning and change management to be incorporated into the individual, group and organization level in a company. Indeed, strategizing should be analyzed from these three aspects, and it is shown that for any strategy to be comprehensive and successful, a focus on acquiring the relevant knowledge, engage in continuous learning and improvement, refinement and adaptation of the strategy, adjustment of the business practices towards full blown organization change and development process are something to be consciously considered in management decision making and strategizing process in the new economy today.
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