Chapter 13 Managing Change and Innovation

ANNOTATED OUTLINE 1. INTRODUCTION Change and change management are important aspects of the managers job. Chapter Thirteen focuses on ways to manage change effectively and to promote innovation in an organization. 2. WHAT IS CHANGE? Organizational change is defined as any alteration of people, structure, or technology in an organization. Instead of trying to eliminate change, managers must realize that change is always present and that they should seek ways to manage change successfully. 3. FORCES FOR CHANGE Both external and internal forces create the need for change. A. External forces creating the need for change come from various sources: 1. 2. 3. 4. 5. B. The marketplace Government laws and regulations Technology Labor markets The economy

Internal forces creating change usually originate from the internal operations of the organization or from the impact of external changes. These internal forces include: 1. 2. 3. 4. Changes in strategy Changes in the workforce New equipment Changes in employee attitudes The manager may act as a

C.

The Manager as Change Agent Change requires a catalyst. change agent someone who acts as a catalyst and assumes the responsibility for managing the change process.

4.

TWO VIEWS OF THE CHANGE PROCESS Two very different metaphors can be used to describe the change process. A. The calm waters metaphor characterizes the process of

change as being like a ship crossing a calm sea. The calm waters metaphor can be illustrated by Lewins three-step process for change. (See Exhibit 13-1 and PowerPoint slide 13-8.) 1. Unfreezing the equilibrium is the first step. Unfreezing the equilibrium can be accomplished in one of three ways. a. b. Increasing driving forces, which are forces that direct behavior away from the status quo. Decreasing restraining forces, which are forces that c. 2. 3. B. C. hinder movement from the existing equilibrium. Combining the two approaches. The next step is to implement the change itself. The final step is to refreeze the situation.

The white-water rapids metaphor describes change that takes place in uncertain and dynamic environments. To put the two views into perspective, it is helpful to note that not every manager constantly faces a world of chaotic change. However, the number of managers who do not face this type of environment is rapidly dwindling!

5.

MANAGING CHANGE Managers A. are motivated to initiate change when they are committed to improving organizational performance. Types of Change What can a manager change? A manager may make changes in three categories: structure, technology, and people. (See Exhibit 13-2 and PowerPoint slide 13-10.) 1. Changing Structure a. Managers can alter one or more structural components of the organization, such as work specialization, departmentalization, chain of command, span of control, centralization and decentralization, and formalization. b. Frequently, the design of the organizations structure is changed in order to meet new demands. 2. Changing Technology

a.

Competitive factors or new innovations often require introduction of new equipment, tools, or operating methods.

b.

Automation machines.

is a

technological

change

that

replaces certain tasks done by people with c. 3. Computerization has probably been the most visible technological change in recent years. Changing a. People (Their Attitudes, Expectations, (OD) is Perceptions, and/or Behaviors) Organizational development techniques or programs to change people and the nature and quality of interpersonal work relationships. b. Exhibit 13-3 and PowerPoint slide 13-13 provide descriptions of the most popular OD approaches. 4. Global OD a. Although some similarities can be found in the OD practices used in organizations around the world, some techniques that are successfully used in U.S. for organizations companies may based not in be appropriate countries. b. Managers should be sure to consider cultural characteristics before using the same techniques to implement behavioral changes across different countries. B. Managing Resistance to Change Organizations can build up inertia that actually motivates employees to resist change. 1. Some Reasons Why People Resist Change: a. b. c. 2. Uncertainty Concern over personal loss Belief that the change is not in the best interest of the organization Techniques for Reducing Resistance (See Exhibit 13-4 and PowerPoint slide 13-15) other

Six actions have been proposed for use by managers in dealing with resistance to change: a. b. c. d. e. f. 6. Contemporary action. A. Changing Organizational Culture 1. Culture is resistant to change because: a. b. c. 2. Culture consists of relatively stable and permanent characteristics. Culture is formed over a long period of time. Strong cultures have highly committed people. Education and communication Participation Facilitation and support Negotiation Manipulation and co-optation Coercion issues related to managing change include

CONTEMPORARY ISSUES IN MANAGING CHANGE organizational culture, employee stress, and successful change

Understanding the Situational Factors Some situations can facilitate culture change, including a. b. c. d. A dramatic crisis A change in leadership A young organization that is small in size A culture that is weak 13-5 demonstrates the need for a

3.

How Can Cultural Change Be Accomplished? Exhibit comprehensive, coordinated strategy for managing cultural change.

B.

Handling Employee Stress 1. Stress is the adverse reaction people have to excessive pressure placed on them from extraordinary demands, constraints, or opportunities. 2. Causes of Stress Exhibit 13-6 and PowerPoint slide 13-19 show that stress may be related to the organization or to personal factors.

3.

Symptoms of Stress Stress may be exhibited in a number of ways. For

example, an employee who is experiencing a high degree of stress may become depressed, accident prone, or argumentative and may be easily distracted. Exhibit 13-7 and PowerPoint slide 13-20 group stress symptoms into three categories: slide 13-20.) C. Making Change Happen Successfully Managers can increase the likelihood that change will be successful in their organization by: physical, psychological, and behavioral. (Refer to PowerPoint

1.

Focusing on preparing the organization for change (See Exhibit 13-8 for characteristics of a changecapable organization.)

2. 3.
7.

Recognizing the important role they themselves play in the change process Involving every organizational member in the change

STIMULATING INNOVATION Innovation is essential to organizational success in a dynamic marketplace. A. Creativity Versus Innovation. 1. 2. B. Creativity is the ability to combine ideas in a unique way or to make unusual associations between ideas. Innovation is taking creative ideas and turning them into useful products or work methods. Stimulating and Nurturing Innovation How can managers foster innovation? The systems model shows how to foster innovation. (See Exhibit 13-10 and PowerPoint slide 13-26.) Three sets of variables have been found to stimulate innovation. (Refer to Exhibit 13-11 and PowerPoint slide 13-27.) 1. Structural variables can be summarized as follows: a. b. c. 2. Organic innovation. The easy availability of organizational resources provides a critical building block for innovation. Frequent communication among work units helps to break down barriers to innovation. Cultural variables show that an innovative culture is structures positively influence

likely to have the following characteristics: a. b. c. d. e. f. g. 3. Acceptance of ambiguity Tolerance of the impractical Low external controls Tolerance of risk Tolerance of conflict Focus on ends rather than means An open systems focus

Human resource variables indicate the important role that people play in innovative organizations. a. Innovative organizations actively promote the training and development of their employees so that their knowledge will be current. b. Innovative organizations offer employees high job security.

c.

Innovative organizations encourage individuals to become idea championsthat is, individuals who actively and enthusiastically support new ideas, build support, overcome resistance, and ensure that the innovations are implemented.