In today’s business world, organizations face many changes that create both opportunities and challenges as well. In my eBook, The Value of Corporate Strategic Management (2014), my research revealed a study conducted for the U.S. Department of Labor by the Rand Corporation, suggested that the nation’s work force is becoming smaller, more diverse, more mobile, and more vulnerable to global competition (Berry, 2014). This trend presents both positive and negative implications for business leaders when it comes to the development of organizational strategies. For example, Hossenlopp (2011) reported that some of the specific challenges organizations are facing include: (a) the pressure of globalization, (b) the need to increase profits while decreasing costs, (c) chaos from mergers and acquisitions, (d) an ongoing need to increase efficiency, (e) downsizing and outsourcing, (f) keeping up with the accelerated rate in technological advances, and (g) policies and legislative changes in banking and financial reporting (Hossenlopp, 2011). These are some of the significant components that have changed the world’s work force, transforming it into an arena with smaller more diverse staff support. As a result of these radical changes companies are creating environments that are virtual and mobile. This is because of their vulnerability to the effects of globalization.
Conditions in the music industry, for instance, are highly competitive and unpredictable. Wilkstrom (2013) suggests that in order to make a profit in the former economy of this industry, the record company’s top goal was to maximize revenue and minimize unauthorized use (Wikstrom, 2013). In addition, they continued to face risks from their dependency to identify, sign and retain artists with long term potential as well as the continued success of their current roster. Furthermore, the growth from digital and online music markets forever changed the music industry as they continued to experience a rapid decline of the physical market.
Success driven companies, however, are able to see trends and anticipate industry changes that will affect them and devise plans quickly to adapt to them to help maintain a competitive advantage. Michael Porter (2011) suggests that it is just as important to identify what actions not to take as well (Porter, 2011). Leaders therefore, must develop efficient methods to adjust to industry changes without creating a new set of challenges. For instance, by evaluating some of these components, managers can develop strategies to adjust to a smaller workforce without creating an economic crisis. This can occur by devising systems to anticipate changes rather than simply create strategies as a response to a crisis or other urgent issues and pressing situations. Because of the rapid changes in the business environment, organizations that are able to cope with uncertainty are more likely to deliver higher performances. On Wednesday we will continue our discussion on effective strategies to cope with industry changes. Until then … stay organized!
Strategy is about making choices, trade-offs; it’s about deliberately choosing to be different. – Michael Porter
********For more information on Media Magic, our digital publications, or to purchase any of our accelerated learning Business Life titles, please visit our website at: Media Magic Publishing. References:
Coulter, M. (2010). Strategic management in action (5th ed.). Upper Saddle River, NJ: Pearson Education, Inc.
Hossenlopp, R. (2011). Organiztional project management: Linking strategy and projects. Vienna, VA: Management Concepts.
Porter, M. (2011). HBR’s 10 must reads on strategy. Boston, MA: Harvard Business Review Press.
Rothaermel, F. (2013). Strategic management. New York, NY: McGraw-Hill.