Given the turbulent and unpredictable environment facing many organizations today, critically evaluate the implications of strategy-making as a rational, planned approached versus strategy-making as an adaptive, emergent process. Due to constant changes and unpredictability in a turbulent environment, the traditional way of planning does not seem to work anymore. Rational approach of strategy making which take place in a systematic ways by analyzing the environment and evaluate of choices and is clearly work out in detailed and implemented.
Adaptive strategy making usually take place when organization face political forces and is usually reactive rather than pro-active.
New approaches to the external and internal conditions need to develop in order to cope with the environmental turbulence. Labor turnover can caused much of an alarm to the internal environment if the situation is not handled properly. High turnover in organizations can cause losses that cannot be measured such as low morale, decrease in motivation and low employee’s commitment towards their job.
In long terms, this problem can create communication barrier and gradually it will affect the productivity.
As a result, the cost of man hours lost is unimaginable and the quality of service and products will drop. A rational strategy for hiring processes and orientation program is necessary in order to reduce the turnover rates. This strategy is preferred because there are ample times for the organization to plan and implement the strategy rather than adaptive process. It is important to look into the reasons causing the high turnover by looking at operational effectiveness such as management techniques.
Bi-annually organization climate survey and exit interview can identify the key issues that caused the employees to behave negatively.
The information gather can be use to strategically plan the long terms approach needed to tackle the issues from reoccur. A long terms systematic plan to overcome this matter needed to be consider such as giving the substantial benefits to employee so that the pull factor to stay in the company is greater than the push factor (Robbins et al 1998). Company that is being acquired is also vulnerable to internal turbulent because of the uncertainty incurred when being acquired by other company. Employees will feel unsecured and uncertain will loom about their future when new management took over (Heijden et al 2002).
New leader will implement new management and there bound to be changes to the organization structure. New processes will also be introduced to streamline with the business process in order to embark in a new challenge. This will result into underperformance and low morale if the new management does not address the issue properly. Talented employees may choose to leave the company which in turn will raise the turnover rate. In this situation, rational approach to strategic planning is more suitable than adaptive strategy.
Organization should conduct the acquisition in due diligence and foresee all obstacle that they going to face when acquisition take place. Before introducing a new management, a through analysis of the acquired company is necessary. The management must derive a strategic direction via an analytical and systematic process to retain key personnel. They need to identify talented individual within the company and strategically develop them for future leaders (Graetz et al 2006). New management must also plan how to change the old culture to suite the new organization strategies in order to remain competitive in a turbulent environment.
Knowledge management has been a common agenda in many organizations because the benefits and impact it has in the long run. Keeping track with the knowledge of latest technologies and adapt one selves to the changes of the global environment is essential for the survival of every organization. Therefore it is important for every organization to emphasis on training, re-training and development of their employees. Organization needs to constantly and systematically plan and develop a training program to adapt the ever changing of environment. Hence, both rational and adaptive process is required in this situation.
One of the methods is to have a constructive training need analysis which will bridge the performance gap. Organizations should also constantly review the current training model, design and adapt the right blended of approach as well as engaging employees (Majumda 2005). Having a good training strategy is important in order to enhance the ability of the employees to learn and apply the new knowledge and skills learned to meet changing work requirements. Treating the employees fairly and acknowledge their contribution such as reward management, career progression and empowerment is a very useful method to enhance the approach (Gordon 2002).
Political instability such as changing of leadership in a country will also bring unpredictable environment. The change of leadership in Malaysia from Dr. Mahathir to Abdullah mean political divided between supporters which believe in the idea of former prime minister than the new premier. New premier will reshuffle the cabinet members and this can caused unrest among political members. After the stabilization of the government, the premier will introduce new policy to bring the country to the new phase.
This will bring another wave of uncertainty to the politic and economic of the country. The new policy may attract new investor but may also bring negative impact to the existing organization. For example, if the government signs a free trade agreement and open their market to other foreign countries, current company with monopolizes of the market may face new business competitor. In a certain point of view, this can be seen as advantages to the citizen but it can mean lost of market share to the existing organization which lead to lower profit.
In this situation, organizations have to take adaptive planning measures such as restructure, relocate, or even layout to sustain their business operations (Dessler 2004). It is hard for organization to plan a strategic approach as organization cannot predict the outcome of any political changes which took place instantly. Organizations must always anticipate the constant threat of external environment and tools such as SWOT analysis can be implements to advocate organization changes. Low economic growth and downturn can lead to many negative effects to the country and the organizations in it.
This can lead to high unemployment rates and if this matter is prolonged, it can damage the economics of the country. Inflation and deflation can add the woes of the suffering citizens which in turn can lead to a crisis (Parkin 2005). This will be linked back to the unemployment rates when they are retrenched or when the government cannot create enough jobs to fill the surplus of manpower. Existing workforce will feel unsecured about their job and morale will drop drastically. For example, when war broke out in Middle East in 1990, most of the world economic was affected.
Supply for the oil was disrupted but the demand for it was increasing. Hence, it pushes the price of petrol to an unimaginable figure. In order to prevent any of the sudden economic downturn, the organization should constantly anticipate change, stay relevant and ride on the waves of change and also respond quickly to any external events happen worldwide. Organizations need to change according to circumstances but must have a solid sense of direction and mission to clear the difficult tide. However, organization can also adopt scenario planning when such incident happen and implement it to contain the problem.
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