Factoring Decision in Global Change Management, Essay Example

Change management decision models within the organizational leadership field are predicated upon the radical shifts in global economy that have forced reconfiguration of business practices, systems and relationships of oversight as companies switch from traditional vertical work relationships to horizontal interactions. Much of the insight built into recommendations toward better change management models within strategic planning has been developed through industry related consultants and advisors whom are well equipped with the kind of breadth to assist executives in the articulation of their organizations as viable entities prepared to compete in the context of change. Risk prevention in this area is circumscribed with rejection toward traditional financial metrics, as fiscal rules within organizations must now be measured according to new accounting practices or ‘slide’ rules that enable incremental allocation to projects, ad hoc and over extensive periods of time (Humphreys and Langford, 2008). This is particularly true in industries where products or technological systems are subject to rapid changes in competitive innovation. The foregoing analysis looks at the distinction between pure ‘rational’ decision making models extrapolated from traditional organizational recommendations on change, and the increasing implementation of ‘incremental’ decision throughout business practice in reflection of the pressures of incremental finance.

Structural response to globalization is perhaps best defined by what have become known as ‘matrix’ organizations; developed to facilitate operational adoption to uncertain environments (Jones, et al., 1994). Early research on the potential of matrix organizations pointed to the preference for retention of rational-analytic models of decision making over incremental, process oriented decisions. More recent organizational approaches, and especially in capital intensive fields such as IT, offer support for the benefit of incremental decision making with the salient distinction between the form and function of decisions. Content in both cases is driven by challenges to productivity, and executive direction is now more than before forced to consider incremental decision making as strategic option, despite the fact that rational choice inevitably overrides constant reinvention.

Andrew Grove, former CEO of Intel once observed that “only paranoid firms survive, primarily because they continuously analyze their external environments and competition, but also because they continuously innovate” (Hitt et al. 1995). Grove’s assertions are echoed by many corporate executives, whom have become sold on the constancy of research and development as the single most viable source of competitive “capital” in companies attempting to do business in a global market. For instance, the equity of ‘value’ is a price statement or ‘proposition,’ as well as a method of translating brand identity within the market through illustrated performance of a product. The two tiers of product analysis: 1) external or environmental analysis; and 2) internal or organizational analysis serve to ground hypotheses in customer insights (e.g., consumer segmentation), and selection of methodological tools for integrated knowledge about those preferences – and by extension the viability of investment in those futures based on product life-cycle and portfolio adaptation. If the decision to craft strategic planning toward those ends is ‘rational’ choice, then the actual method of producing products, and especially in regard to budgetary constraints and allocation to those R+D processes, is ‘incremental.’

The SWOT (Strengths, Weaknesses, Opportunities, Threats) assessment is often proposed by organizational strategists and a key analytical tool for conducting analysis of environmental factors both internal and external to the organization. The methodology is popular for its simplicity and practicality. In addition, SWOT analyses contribute to fiscal analysis derived from market data within an organization, and may further budgetary interpretations of performance based upon correlates to a company’s strengths and weaknesses. Core competencies can be used in comparative analysis with product life-cycle, and redefined through new insights into actual portfolio performance. In spite of the standard hypothesis that strategic planning is “systemic, sequential and rational,” argues Pickton and Wright (1998), the “realities of planning reveal that strategy formulation is more likely to be somewhat incremental, non-rational and irregular” and distinctly ‘organic’ rather than ‘mechanical’ (Pickton and Wright, 1998). Opponents of the SWOT analysis argue that its functionary use ends with traditional or modified vertical organization in that it coincides with a ‘mechanistic’ approach with an emphasis on process values and output. In consideration of the more radical changes since the late 1990s, with the acceleration of capital in certain sectors such as IT software and information sharing system now organized around a world of global project management which are highly detailed in terms of incremental process, we can see the limits of the SWOT as an instrument for capturing the type of logic within that field that almost mirrors processes of abduction within artificial intelligence.

Software project escalation points to the efficacy of flexible decision making within the strategic process, as changes grounded in unexpected interference attemp to apply rational response to situations that challenge preemptive models of chain management. Change management in the project management field has promoted new decision making approaches to escalation errors that might otherwise lead to project failure without “changing the scale of the project, implementing it in incremental stages, abandoning the project, or using the project as a platform for future growth opportunities” (Tiwana, et al., 2006). Project managers are often exposed to a variety of consecutive decisions, as illustrated in the Operationalization of Options in a Conjoint Scenario in Table 1.

Real options represent significant value in a project, yet they may not always be inherent to formal justification from the perspective of a traditional quantitative discounted cash-flow-based decision model. Instead, embedded value is typically understood by project managers as ‘value added’ and the implications toward mediation of decisions to continue on course in a project are likely to depend upon the magnitude of perceived risk as illustrated in Figures 1 and 2.

Consumer satisfaction is an essential element in determination of the strategic research and design/development equation. Resource analysis, crucial in the representation of production, provides additional insights into value chain activities related to quality control, and the facilitation of current ‘rational’ systems of operations in outbound logistics, marketing, sales and services. Inclusive in those strategies of product and systems innovation, are ‘incremental’ portfolio decisions that synthesize cash assets holdings and cash flow by way of strategic business units (SBU) that: 1) can be mobilized for profit and loss accountability in a range of markets (i.e., low to high futures), and 2) as targets for investment of a firm’s capital. As reviewed in the aforementioned discussion, particular sectors reliant upon global project management operations is distinct in terms of the density of incremental decision, as changes to projects might occur at any point in implementation; and especially when existing legacy systems are put into interface with new architectures and software platforms for total IT systems management. Ultimately, the capacity of an organization to compete is largely dependent strategic decision and its ability to define ‘equity’ within SBU toward the promotion of sustainable growth long-term.

Works Cited

Hitt, et al. (1995). Management. Upper Saddle River: Pearson Education, Prentice Hall.

Humphreys, J. and Lanford, H. (2008). Managing a Corporate Culture ‘Slide.’ MIT Sloan Management Review, 49 (3), 25-27.

Jones, R.E., et al. (1994). Strategic decision processes in matrix organizations. European Journal of Operational Research, 78 (2), 192-203.

Pickton, D. W. and Wright, S. (1998). What’s swot in strategic analysis?. Strategic Change, 7 (2), 101-109.

Tiwana, A. et al. (2006). Information Systems Project Continuation in Escalation Situations: A Real Options Model. Decision Sciences, 37 (3), 357-391.