Chapter 7 Managing Change and Disruptive Innovation PDF

Management Fifteenth Edition, Global Edition Chapter 7 Managing Change and Disruptive Innovation MGT 201 – Fundamentals of Management...

Management Fifteenth Edition, Global Edition Chapter 7 Managing Change and Disruptive Innovation MGT 201 – Fundamentals of Management Alaa Hamade Copyright © 2021 Pearson Education Ltd. The Case for Change Organizational change: any alteration of people, structure, strategy, or technology in an organization Change agent: someone who acts as a catalyst and assumes the responsibility for managing the change process Copyright © 2021 Pearson Education Ltd. External Forces for Change Consumer needs and wants New governmental laws Technology The economy Copyright © 2021 Pearson Education Ltd. Internal Forces for Change New organizational strategy Composition of workforce New equipment Employee attitudes Copyright © 2021 Pearson Education Ltd. Calm Waters Versus White-Water Rapids Metaphors Calm waters metaphor: – Unfreezing the status quo – Changing to a new state – Refreezing to make the change permanent White-water rapids metaphor: the lack of environmental stability and predictability requires that managers and organizations continually adapt and manage change actively to survive Copyright © 2021 Pearson Education Ltd. Areas of Change Managers focus on four main areas of change 1. Strategy: Modifying the approach to success 2. Structure: Modifying structure or design 3. Technology: Modifying processes or equipment 4. People: Modifying attitudes, expectations, and other individual or group beliefs or behavior Copyright © 2021 Pearson Education Ltd. Areas of Change: Strategy Failure to change strategy when circumstances dictate could undermine a company’s success. Competition can dictate a change in strategy. Organizations that don’t recognize a need to change strategy may not survive in the long run. Copyright © 2021 Pearson Education Ltd. Areas of Change: Structure Changing structural components Changing structural design Copyright © 2021 Pearson Education Ltd. Areas of Change: Technology New equipment, tools, or methods Automation Computerization Copyright © 2021 Pearson Education Ltd. Areas of Change: People Organizational development: change methods that focus on people and the nature and quality of interpersonal work relationships Copyright © 2021 Pearson Education Ltd. Why Do People Resist Change? Uncertainty Habit Fear of loss Belief change is inconsistent with goals of organization Copyright © 2021 Pearson Education Ltd. Techniques for Reducing Resistance to Change Education and communication helps employees see the logic of the change effort. Participation involves bringing those individuals directly affected by the proposed change into the decision-making process to provide input and increase employee commitment to the final decision. Facilitation and support involve helping employees deal with the fear and anxiety through employee counseling, therapy, or training. Negotiation involves exchanging something of value for an agreement to lessen the resistance to the change effort. Manipulation refers to distorting facts to make the change appear more attractive. Coercion involves the use of direct threats or force against the resisters. Copyright © 2021 Pearson Education Ltd. Creativity Versus Innovation Creativity: the ability to combine ideas in a unique way or to make unusual associations between ideas Innovation: taking creative ideas and turning them into useful products or work methods Copyright © 2021 Pearson Education Ltd. Stimulating and Nurturing Innovation An environment that stimulates innovation includes three variables: the organization’s structure, culture, and human resource practices. Copyright © 2021 Pearson Education Ltd. Structural Variables Organic structures Abundant resources High interunit communication Minimal time pressure Work and nonwork support Copyright © 2021 Pearson Education Ltd. Cultural Variables Acceptance of ambiguity Tolerance of the impractical Low external controls Tolerance of risks Tolerance of conflict Focus on ends Open-system focus Positive feedback Copyright © 2021 Pearson Education Ltd. Human Resource Variables Idea champion: individual who actively and enthusiastically supports new ideas, builds support, overcomes resistance, and ensures that innovations are implemented Job Security Copyright © 2021 Pearson Education Ltd. Disruptive Innovation Definition Disruptive innovation: innovations in products, services, or processes that radically change an industry’s rules of the game Sustaining innovation: small and incremental changes in established products rather than dramatic breakthroughs Copyright © 2021 Pearson Education Ltd. Exhibit 7.9 Examples of Past Disruptive Innovators Established Business Disruptor Established Business Disruptor Compact disc Apple iTunes Traveler’s checks ATMs and Visa Carbon paper Xerox copy machine Encyclopedias Wikipedia Canvas tennis shoes Nike athletic shoes Newspaper classified ads Craigslist Portable radio Sony Walkman AM/FM radio stations Sirius XM Sony Walkman Apple iPod Tax preparation services Intuit’s Turbo Tax Typewriters IBM PC Yellow Pages Google Weekly news CNN Paper maps Garmin’s GPS magazines TV networks Cable and Netflix Paperback books Kindle Local travel agencies Expedia Lawyers Legal Zoom Stockbrokers eTrade Taxis Uber Copyright © 2021 Pearson Education Ltd.