Fundamentals of Management Chapter 7

Fundamentals of Management, Chapter 7: Managing Innovation and Change

• Organizational change is any alteration of people, structure, or technology in an organization.
• Categories of organizational change include structure (work specialization, departmentalization, chain of command, span of control, centralization, formalization, job redesign, or actual structural design), technology (work processes, methods, and equipment), and people (attitudes, expectations, perceptions, and behaviour).
• External forces for change include the marketplace, government laws and regulations, technology, labour markets, and economic changes.
• Internal forces for change include changes in strategy, changes in the workforce, and changes in employee attitudes.

Learning Objectives

• Define organizational change and compare and contrast views on the change process.
• Explain how to manage resistance to change.
• Describe what managers need to know about employee stress.
• Discuss techniques for stimulating innovation.

Who Initiates Organizational Change?

• A change agent is someone who acts as a catalyst and assumes responsibility for managing the change process.
• Any manager can initiate and carry out change.
• Change agents can also be non-managers, for example an internal staff specialist or an external consultant.

How Does Organizational Change Happen?

• The Calm Waters Metaphor: The organization is like a large ship crossing calm waters. Successful change in this model is a planned process involving unfreezing, changing, and refreezing.
• The Three-Step Change Process: A model outlining the stages of planned change including unfreezing, changing, and refreezing,
• The White-Water Rapids Metaphor: The organization is like a small raft navigating a raging river with uninterrupted white-water rapids. Constant change and adaptation are key in this model.

How Do Organizations Implement Planned Changes?

• Organizational development (OD) refers to techniques or programs meant to change people and the nature and quality of interpersonal work relationships.
• Common OD efforts include survey feedback, process consultation, team-building, and intergroup development.

How Do Managers Manage Resistance to Change?

• Reasons people resist change include uncertainty, habit, concern over personal loss, and belief that change is not in the organization's best interest.
• Resistance to change is likely to be lower if managers: involve people in the change, offer training when needed, and are open to revision after the change is implemented.

Techniques for Reducing Resistance to Change (Exhibit 7.3)

• Education and communication: used when resistance is due to misinformation, disadvantages may include not working if mutual trust and credibility are lacking, plus time consumption and poor solution options.
• Participation: Used when resisters have expertise, advantages are increased involvement and acceptance, disadvantages may be time consuming.
• Facilitation and support: helpful in anxiety-inducing situations, advantages in the ability to facilitate adjustments, disadvantages may include high costs and no guarantees.
• Negotiation: useful when resistance comes from a powerful group, advantage in ability to "buy" commitment, disadvantage is high costs.
• Manipulation and cooptation: inexpensive and easy to gain support, potential disadvantages include possible backfires.
• Coercion: Used when a powerful group's endorsement is needed. Inexpensive and easy, potential disadvantages include illegality and undermining the change agent.

Common Approaches to Organizational Change (Exhibit 7.4, 7.5):

• Action Research: Change is based on changing employee attitudes and behaviours - includes a preliminary diagnosis, data gathering, feedback of results, intervention stages of Learning process, action planning, action steps, and finally evaluation phases of behaviour changes, measurement, and systems redesign.
• Appreciative Inquiry: Focuses on strengths to create a vision of what the organization could become. The four stages are Discovery, Dreaming, Designing, and Delivering.

What Reaction Do Employees Have to Organizational Change?

• Stress is a response to anxiety over intense demands, constraints, or opportunities; not always bad, can be positive, especially when it involves potential gain.
• Functional stress allows a person to perform at their highest level at crucial times.

What Causes Stress? (Exhibit 7.9)

• Job-related factors: Task demands, role demands (role conflicts, role overload, role ambiguity), interpersonal demands, organizational structure, organizational leadership.

How Can Stress Be Reduced?

• Job-related factors: Job design, working conditions, employment selection.
• Personal factors: Employee Assistance Programs (EAPs), wellness programs.
• Other considerations for reducing stress: Employee selection, matching abilities to job requirements, realistic job previews, improve organizational communication, performance planning program, job redesign, counselling programs, time planning management assistance, and sponsor wellness programs.

How Can Managers Encourage Innovation?

• Organizations must innovate to compete successfully.
• Successful companies create new products and services and adopt state-of-the-art technology.

How Are Creativity and Innovation Related?

• Creativity: producing novel and useful ideas (Perception, Incubation, Inspiration, Innovation).
• Innovation: The process of turning a creative idea into a useful product, service, or method.

What's Involved in Innovation (Exhibit 7.9)?

• Structural Variables: organic structures, abundant resources, high interunit communication, and minimal time pressure.
• Human Resource Variables: high commitment to training and development, high job security, and creative people.
• Cultural Variables: acceptance of ambiguity, tolerance of the impractical, low external controls, tolerance of risks, tolerance of conflict, focus on ends, open-system focus, and positive feedback.

How Does Design Thinking Influence Innovation?

• Provides a process for coming up with novel ideas.
• Emphasizes understanding of customer needs and wants.
• Enables converting customer insights into real products.

This quiz covers the essentials of managing innovation and change as outlined in Chapter 7 of Fundamentals of Management. Explore the various categories of organizational change, external and internal forces that drive change, and strategies to manage resistance. Test your understanding of how to support employees through transitions effectively.