Chapter 13 MANAGING CHANGE AND INNOVATION 2003 Pearson

Chapter 13 MANAGING CHANGE AND INNOVATION © 2003 Pearson Education Canada Inc. 13. 1

LEARNING OBJECTIVES • You should be able to: – Contrast the calm waters and white-water rapids metaphors of change – Describe what managers can change in organizations – Explain why people are likely to resist change – List techniques for reducing resistance to change – Describe the situational factors that facilitate cultural change © 2003 Pearson Education Canada Inc. 13. 2

LEARNING OBJECTIVES (continued) • You should be able to: – Explain how process reengineering is related to change – Describe techniques for reducing employee stress – Differentiate between creativity and innovation – Explain how organizations can stimulate and nurture innovation © 2003 Pearson Education Canada Inc. 13. 3

WHAT IS CHANGE? • Organizational Change – Alterations in people, structure, or technology – Change is an organizational reality – Managing change is an integral part of every manager’s job © 2003 Pearson Education Canada Inc. 13. 4

FORCES FOR CHANGE • External Forces – Marketplace - adapt to changing consumer desires – Governmental laws and regulations - frequent impetus for change – Technology - source of change in almost all industries – Labour markets - ability to attract and retain skilled employees in the areas of greatest need – Economic - uncertainties about interest rates, budget deficits, and currency exchange rates © 2003 Pearson Education Canada Inc. 13. 5

FORCES FOR CHANGE (continued) • Internal Forces – – Originate from the operations of the organization Forces may include strategy, workforce, new equipment, or employee attitudes • Manager as change agent – Change agents - act as catalysts and assume responsibility for change © 2003 Pearson Education Canada Inc. 13. 6

TWO VIEWS OF THE CHANGE PROCESS • The Calm Waters Metaphor – Unfreezing - preparing for the needed change by: • increasing the driving forces that direct behaviour away from the status quo • decreasing the restraining forces that push behaviour towards the status quo – – – Changing - move to another equilibrium level Refreezing - make change permanent Change is a break in the organization’s equilibrium state © 2003 Pearson Education Canada Inc. 13. 7

THE CHANGE PROCESS (Exhibit 13. 1) © 2003 Pearson Education Canada Inc. 13. 8

TWO VIEWS OF THE CHANGE PROCESS (continued) • White-Water Rapids Metaphor – Consistent with uncertain and dynamic environments – Consistent with a world increasingly dominated by information, ideas, and knowledge – Managers must continually maneuver in uninterrupted rapids – Today, managers must be ready to efficiently and effectively manage the changes facing their organizations or their work areas © 2003 Pearson Education Canada Inc. 13. 9

CATEGORIES OF CHANGE (Exhibit 13. 2) Structure Work specialization, departmentalization, chain of command, span of control, centralization, formalization, job redesign, or actual design Technology Work processes, methods, and equipment People © 2003 Pearson Education Canada Inc. Attitudes, expectations, perceptions, and behavior 13. 10

MANAGING CHANGE • Initiating Change: – Identifying what organizational areas might need to be changed – Putting the change process in motion – Managing employee resistance to change • Types of Change – Changing structure - organization’s formal design, centralization, degree of formalization, and work specialization © 2003 Pearson Education Canada Inc. 13. 11

MANAGING CHANGE (continued) • Types of Change (continued) – Changing technology - modifications in the way work is performed – Changing people - changes in employee attitudes, expectations, perceptions, and behaviour • organizational development (OD) techniques or programs to change people and the nature and quality of interpersonal work relationships © 2003 Pearson Education Canada Inc. 13. 12

ORGANIZATIONAL DEVELOPMENT TECHNIQUES (Exhibit 13. 3) Sensitivity Training Survey Feedback MORE EFFECTIVE INTERPERSONAL WORK ENVIRONMENT Process Consultation © 2003 Pearson Education Canada Inc. Team Building Intergroup Development 13. 13

MANAGING CHANGE (continued) • Dealing with Resistance to Change – Why people resist change • change replaces the known with ambiguity and uncertainty • change threatens investments in the status quo • belief that change is incompatible with the goals and interests of the organization – Techniques for reducing resistance • a variety of actions available to managers to deal with dysfunctional resistance © 2003 Pearson Education Canada Inc. 13. 14

WAYS TO REDUCE RESISTANCE TO CHANGE (Exhibit 13. 4) © 2003 Pearson Education Canada Inc. 13. 15

CONTEMPORARY ISSUES IN MANAGING CHANGE • Changing Organizational Culture – Culture resistant to change because it is made up of relatively stable and permanent characteristics – Strong cultures are particularly resistant to change – Understanding the situational factors - makes cultural change more likely • • dramatic crisis occurs leadership changes hands organization is young and small culture is weak © 2003 Pearson Education Canada Inc. 13. 16

CONTEMPORARY ISSUES IN MANAGING CHANGE (continued) • Changing Organizational Culture (continued) – How Can Cultural Change Be Accomplished? • requires a comprehensive and coordinated strategy – unfreeze the current culture – implement new “ways of doing things” – reinforce those new values • change, if it comes, is likely to be slow • protect against any return to old, familiar practices and traditions © 2003 Pearson Education Canada Inc. 13. 17

THE ROAD TO CULTURAL CHANGE (Exhibit 13. 5) © 2003 Pearson Education Canada Inc. 13. 18

CONTINUOUS QUALITY IMPROVEMENT VERSUS REENGINEERING (Exhibit 13. 6) Continuous Quality Improvement Reengineering • Continuous, incremental change • Radical change • Fixing and improving • Redesigning - starting over • Mostly “as is” • Mostly “what can be” • Works from bottom up in organization • Initiated by top management © 2003 Pearson Education Canada Inc. 13. 19

CONTEMPORARY ISSUES IN MANAGING CHANGE (continued) • Continuous Quality Improvement Programs – Continuous, small, incremental changes – Fix and improve current work activities – Rely on participative decision making from the bottom levels • Process reengineering – Dramatic shift in the way an organization does its work – Begins with the redesign of work – Requires participation from managers and workers © 2003 Pearson Education Canada Inc. 13. 20

CONTEMPORARY ISSUES IN MANAGING CHANGE (continued) • Handling Employee Stress – What is Stress? • a dynamic condition a person faces when confronted with an opportunity, constraint, or demand related to what s/he desires • stress is not necessarily bad • potential stress becomes actual stress when: – outcome is both uncertain – outcome is important © 2003 Pearson Education Canada Inc. 13. 21

CONTEMPORARY ISSUES IN MANAGING CHANGE (continued) • Handling Employee Stress (continued) – Causes of Stress • found in organizational and personal factors • change of any kind is potentially stressful • uncertainty around important matters © 2003 Pearson Education Canada Inc. 13. 22

CAUSES OF STRESS Personal Factors © 2003 Pearson Education Canada Inc. STRESS Job-Related 13. 23

SYMPTOMS OF STRESS (Exhibit 13. 7) Physiological Psychological Symptoms of Stress Behavioural © 2003 Pearson Education Canada Inc. 13. 24

CONTEMPORARY ISSUES IN MANAGING CHANGE (continued) • Handling Employee Stress (continued) – Reducing stress • controlling certain organizational factors – employee’s abilities should match job requirements – improve organizational communications • reduce ambiguity – performance planning program • clarify job responsibilities • provide performance feedback – job redesign • reduce boredom or work overload © 2003 Pearson Education Canada Inc. 13. 25

CONTEMPORARY ISSUES IN MANAGING CHANGE (continued) • Handling Employee Stress (continued) – Reducing stress (continued) • offering help for personal stress – general considerations – available approaches • employee counseling • time management program • sponsored wellness programs © 2003 Pearson Education Canada Inc. 13. 26

STIMULATING INNOVATION • Creativity versus Innovation – Creativity - ability to combine ideas in a unique way or to make unusual associations between ideas – Innovation - process of transforming creative ideas into a useful product, service, or method of operation © 2003 Pearson Education Canada Inc. 13. 27

SYSTEMS VIEW OF INNOVATION (Exhibit 13. 8) Inputs Transformation Outputs Creative individuals, Creative process Creative product(s) groups, Creative situation organizations © 2003 Pearson Education Canada Inc. 13. 28

STIMULATING INNOVATION (continued) • Stimulating and Nurturing Innovation – Must focus on inputs – Requires appropriate environment • structural variables cultural variables – encourage experimentation – reward success and failures – celebrate mistakes © 2003 Pearson Education Canada Inc. 13. 29

STIMULATING INNOVATION (continued) • Stimulating and Nurturing Innovation (continued) – Appropriate environment (continued) • cultural variables – encourage experimentation – reward success and failures – celebrate mistakes • human resource variables – promote training and development of employees – offer high job security – encourage individuals to become idea champions © 2003 Pearson Education Canada Inc. 13. 30

INNOVATION VARIABLES (Exhibit 13. 9) © 2003 Pearson Education Canada Inc. 13. 31