Chapter 13 Managing Change and InnovationANNOTATED OUTLINE

1. INTRODUCTION

Change and change management are important aspects of the

manager’s 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. The marketplace

2. Government laws and regulations

3. Technology

4. Labor markets

5. The economy

B. 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. Changes in strategy

2. Changes in the workforce

3. New equipment

4. Changes in employee attitudes

C. The Manager as Change Agent

Change requires a catalyst. The manager may act as a

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 Lewin’s 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. Increasing driving forces, which are forces that

direct behavior away from the status quo.

b. Decreasing restraining forces, which are forces

that hinder movement from the existing

equilibrium.

c. Combining the two approaches.

2. The next step is to implement the change itself.

3. The final step is to refreeze the situation.

B. The white-water rapids metaphor describes change that

takes place in uncertain and dynamic environments.

C. 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 are motivated to initiate change when they are

committed to improving organizational performance.

A. 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 organization’s

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 is a technological change that

replaces certain tasks done by people with

machines.

c. Computerization has probably been the most

visible technological change in recent years.

3. Changing People (Their Attitudes, Expectations,

Perceptions, and/or Behaviors)

a. Organizational development (OD) is

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. organizations may not be

appropriate for companies based in other

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. Uncertainty

b. Concern over personal loss

c. Belief that the change is not in the best interest

of the organization

2. Techniques for Reducing Resistance (See Exhibit 13-4

and PowerPoint slide 13-15)

Six actions have been proposed for use by managers in

dealing with resistance to change:

a. Education and communication

b. Participation

c. Facilitation and support

d. Negotiation

e. Manipulation and co-optation

f. Coercion

6. CONTEMPORARY ISSUES IN MANAGING CHANGE

Contemporary issues related to managing change include

organizational culture, employee stress, and successful change

action.

A.Changing Organizational Culture

1. Culture is resistant to change because:

a. Culture consists of relatively stable and permanent

characteristics.

b. Culture is formed over a long period of time.

c. Strong cultures have highly committed people.

2. Understanding the Situational Factors

Some situations can facilitate culture change, including

a. A dramatic crisis

b. A change in leadership

c. A young organization that is small in size

d. A culture that is weak

3. How Can Cultural Change Be Accomplished?

Exhibit 13-5 demonstrates the need for a

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: physical,

psychological, and behavioral. (Refer to PowerPoint

slide 13-20.)

C. Making Change Happen Successfully

Managers can increase the likelihood that change will be

successful in their organization by:

1. Focusing on preparing the organization for change

(See Exhibit 13-8 for characteristics of a change-

capable organization.)

2. Recognizing the important role they themselves play

in the change process

3. Involving every organizational member in the change

7. STIMULATING INNOVATION

Innovation is essential to organizational success in a dynamic

marketplace.

A. Creativity Versus Innovation.

1. Creativity is the ability to combine ideas in a unique

way or to make unusual associations between ideas.

2. Innovation is taking creative ideas and turning them

into useful products or work methods.

B. 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. Organic structures positively influence

innovation.

b. The easy availability of organizational resources

provides a critical building block for innovation.

c. Frequent communication among work units

helps to break down barriers to innovation.

2. Cultural variables show that an innovative culture is

likely to have the following characteristics:

a. Acceptance of ambiguity

b. Tolerance of the impractical

c. Low external controls

d. Tolerance of risk

e. Tolerance of conflict

f. Focus on ends rather than means

g. An open systems focus

3. 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 champions—that is, individuals who

actively and enthusiastically support new ideas, build

support, overcome resistance, and ensure that the

innovations are implemented.