Download Chapter 8 Strategic Management

Chapter 13 Managing Change and Innovation
ANNOTATED 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.
B.
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
Internal forces creating change usually originate from the internal operations
of the organization or from the impact of external changes. These internal
forces include:
C.
1.
Changes in strategy
2.
Changes in the workforce
3.
New equipment
4.
Changes in employee attitudes
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.
B.
Combining the two approaches.
2.
The next step is to implement the change itself.
3.
The final step is to refreeze the situation.
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:
6.
a.
Education and communication
b.
Participation
c.
Facilitation and support
d.
Negotiation
e.
Manipulation and co-optation
f.
Coercion
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
3.
a.
A dramatic crisis
b.
A change in leadership
c.
A young organization that is small in size
d.
A culture that is weak
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.
7.
Involving every organizational member in the change
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:
3.
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
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.