This document discusses managing change and innovation in organizations. It begins by outlining learning objectives about different views of change, resistance to change, and stimulating innovation. It then defines change and discusses external and internal forces for change. It describes Lewin's three-step model of the change process and contrasts the "calm waters" and "white-water rapids" metaphors for change. It also outlines three categories of change: structure, technology, and people. The document provides techniques for initiating change and reducing resistance to change. It discusses contemporary issues like changing organizational culture, quality improvement programs, process reengineering, and handling employee stress. It ends by differentiating between creativity and innovation and describing how organizations can stimulate and nurture

1. Chapter 13
MANAGING
CHANGE AND
INNOVATION
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2. Learning Objectives
You should learn 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
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3. Learning Objectives (cont.)
You should learn 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
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4. What Is Change?
Change
– alterations in people, structure, or technology
– change is an organizational reality
– managing change is an integral part of every
manager’s job
• complicates the jobs of managers
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5. 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
– labor markets - HRM activities must change to
attract and retain skilled employees in the areas of
greatest need
– economic - uncertainties about interest rates,
budget deficits, and currency exchange rates
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6. Forces For Change (cont.)
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
• manager may serve as change agent
– may be more thoughtful, overcautious
• outside consultant - used for systemwide changes
– produce more drastic changes than insiders
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7. Two Views Of The Change Process
The Calm Waters Metaphor
– Lewin’s three-step model
• unfreezing - preparing for the needed change by:
– increasing the driving forces that direct behavior
away from the status quo
– decreasing the restraining forces that push
behavior towards the status quo
» status quo - conceived to be an equilibrium
• changing - move to another equilibrium level
• refreezing - make change permanent
– objective is to stabilize the new situation
– change is a break in the organization’s equilibrium state
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8. The Change Process
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9. Two Views Of The Change Process (cont.)
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
• managers face constant change
– today, managers must be ready to efficiently and
effectively manage the changes facing their
organizations or their work areas
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10. Three Categories Of Change
Structure
Work specialization,
departmentalization,
chain of command, span of
control, centralization,
formalization, job redesign,
or actual design
Technology
Work processes, methods,
and equipment
People
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Attitudes, expectations,
perceptions, and
behavior
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11. 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
• structural components and structural design
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12. Managing Change (cont.)
Types of Change (cont.)
– changing technology - modifications in the way work is
performed
• alterations in the methods and equipment used
– consequence of competitive factors or innovations
within an industry
– automation - replaces tasks done by people with
machines
– computerization - recent visible changes in
information systems
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13. Managing Change (cont.)
Type of Change (cont.)
– changing people - changes in employee attitudes,
expectations, perceptions, and behavior
• organizational development (OD) - techniques
or programs to change people and the nature
and quality of interpersonal work relationships
– intended to help individuals and groups
work together more effectively
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14. Organizational Development Techniques
Sensitivity
Training
Survey
Feedback
More
Effective
Interpersonal
Work
Environment
Process
Consultation
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Team
Building
Intergroup
Development
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15. Managing Change (cont.)
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
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16. Managerial Actions to Reduce Resistance to Change
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17. 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
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18. Contemporary Issues (cont.)
Changing Organizational Culture (cont.)
– 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
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19. The Road to Cultural Change
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20. Contemporary Issues (cont.)
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
• define customer needs
• design work processes to best meet those needs
– requires participation from managers and workers
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21. Continuous Quality Improvement Versus
Reengineering
Continuous Quality Improvement
• Continuous, incremental change
Reengineering
• 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
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22. Contemporary Issues (cont.)
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
– outcome is perceived to be both uncertain and
important
– typically associated with constraints and demands
• stress is not necessarily bad
• potential stress becomes actual stress when:
– outcome is both uncertain
– outcome is important
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23. Contemporary Issues (cont.)
Handling Employee Stress (cont.)
– Causes of Stress
• found in organizational and personal factors
• change of any kind is potentially stressful
• uncertainty around important matters
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24. Causes Of Stress
Personal Factors
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STRESS
Job-Related
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25. Symptoms Of Stress
Physiological
Psychological
Symptoms
of Stress
Behavioral
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26. Contemporary Issues (cont.)
Handling Employee Stress (cont.)
– 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
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27. Contemporary Issues (cont.)
Handling Employees Stress (cont.)
– Reducing stress (cont.)
• offering help for personal stress
– general considerations
» difficult for manager to control this source of
stress
» ethical considerations
– available approaches
» employee counseling
» time management program
» sponsored wellness programs
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28. 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
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29. Systems View Of Innovation
Inputs
Creative individuals,
groups,
organizations
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Transformation
Outputs
Creative process Creative product(s)
Creative situation
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30. Stimulating Innovation (cont.)
Stimulating and Nurturing Innovation
– must focus on inputs
• creative people and groups within the organization
– requires appropriate environment
• structural variables
– organic design
– plentiful resources
– frequent inter-unit communication
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31. Stimulating Innovation (cont.)
Stimulating and Nurturing Innovation (cont.)
– requires appropriate environment (cont.)
• 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
» self-confident, persistent, risk taking
» energize others with visions of innovation
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32. Innovation Variables
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