## Strategic Change
### Definition
Strategic change is a complex process involving a corporate strategy focused on:
- New markets
- New products and services
- New ways of doing business
Organizations that fail to embrace change risk being frozen (stagnant) or extinct (eliminated by competition).
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## Three Steps to Initiate Strategic Change
1. Recognise the need for change
- Diagnose which facets of the present corporate culture are strategy-supportive and which are not.
2. Create a shared vision to manage change
- Individual and organizational objectives must coincide — eliminate conflict between them.
- Management must constantly and consistently communicate the vision, not just to inform but to overcome resistance.
3. Institutionalise the change
- Action stage: implement the changed strategy.
- Create and sustain a different attitude toward change.
- Ensure the firm does not slip back into old ways of thinking or doing.
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## Kurt Lewin's Three-Stage Model of Change
### Stage 1 — Unfreezing
- Makes individuals/organizations aware of the necessity for change and prepares them for it.
- Change must not come as a surprise — sudden, unannounced change is socially destructive and morale-lowering.
- Management paves the way through announcements, meetings, and promoting new ideas.
- Breaks down old attitudes, behaviours, customs, and traditions so people start with a clean slate.
### Stage 2 — Changing to a New Situation
Once unfreezing is complete, behaviour patterns are redefined. H.C. Kellman identified three methods:
| Method | Mechanism |
|---|---|
| Compliance | Enforce reward-and-punishment strategy; fear of punishment or actual reward changes behaviour |
| Identification | Members are psychologically impressed to identify with role models whose behaviour they wish to adopt |
| Internalisation | Internal change in thought processes; individuals are given freedom to learn and adopt new behaviour to succeed in new circumstances |
### Stage 3 — Refreezing
- New behaviour becomes a normal way of life.
- New behaviour must completely replace former behaviour for permanent, successful change.
- Achieved through continuous reinforcement of the newly acquired behaviour.
> Important: Change is not a one-time application. It is a continuous process because the environment is dynamic and ever-changing.