Fundamentals of Management Chapter 7 PDF

Fundamentals of Management Chapter Seven: Organization Change...

Fundamentals of Management Chapter Seven: Organization Change and Innovation Griffin, Management, 10e©2021 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 1  Warm Up During the Covid-19 pandemic, most businesses had to change the way they do business. So did most schools and universities, and the students who attend them. Which aspects of change to you feel these entities did well? Why? Where did these entities fail in their response to change? Why? What could have been done better? Griffin, Management, 10e©2021 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 2  Learning Objectives By the end of this chapter you should be able to: 7-1 Describe the nature of organization change, including forces for change and planned versus reactive change. 7-2 Discuss the steps in organization change and how to manage resistance to change. 7-3 Describe the major areas of organization change and the assumptions, techniques, and effectiveness of organization development. 7-4 Discuss the innovation process, forms of innovation, failure to innovate, and how organizations can promote innovation. Griffin, Management, 10e©2021 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 3  7-1a Forces For Change Organization Change Any substantive modification to some part of the organization (e.g., work schedules, machinery, employees) External Forces Come from the organization’s general and task environments; force the organization to alter the way in which it competes Internal Forces Cause the organization to change its structure and strategy; some internal forces are responses to external pressures Griffin, Management, 10e©2021 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 4  7-1b Planned Versus Reactive Change Planned change − Change that is designed and implemented in an orderly and timely fashion in anticipation of future events. For example, increased production to meet holiday sales Reactive change − A piecemeal response to circumstances as they develop − Often hurried and therefore, potentially poorly conceived. For example, shut down during Covid-19 pandemic Griffin, Management, 10e©2021 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 5  Knowledge Check 1 Which of the following is an internal force for change? A. Currency exchange rates B. Competition C. Technology D. Worker’s attitudes Griffin, Management, 10e©2021 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 6  Knowledge Check 1: Answer Which of the following in an internal force for change? D. Worker’s attitudes Internal forces for change may be reflections of external forces. As sociocultural values shift, for example, workers’ attitudes toward their jobs may also shift—and workers may demand a change in working hours or working conditions. During the shelter-in-place mandates in early 2020, many workers who previously were not permitted to work remotely found it necessary to quickly adapt to new ways to get their jobs done. As the economy reopened, some of these same workers resisted the requirement of returning to normal work conditions. Griffin, Management, 10e©2021 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 7  7-2a Steps in the Change Process The Lewin Model: − Unfreezing ▪ Individuals must be shown why the change is necessary − Implementing change ▪ The change itself is implemented − Refreezing ▪ Involves reinforcing and supporting the change so that it becomes a integral part of the system Griffin, Management, 10e©2021 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 8  Figure 7.1 Steps in the Change Process Griffin, Management, 10e©2021 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 9  Discussion #1 Assume that you are the manager of an organization that has a routine way of performing a task and now faces a major change in how it performs that task. For each step in the change process, give specific examples of actions you would take at that step. Griffin, Management, 10e©2021 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 10  7-2b Understanding Resistance to Change People resist change because of: − Uncertainty about the extent and effects of change − Threats to self-interests, power, and influence − Different perceptions of change effects and outcomes − Feelings of loss in disrupted social networks, power, security, and familiarity with existing procedures Griffin, Management, 10e©2021 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 11  Poll 1 Many of us resist change, or know people who do not like change. What to you think creates the most resistance to change for you personally? A. Feelings of loss B. Different perceptions C. Threatened self-interests D. Uncertainty Griffin, Management, 10e©2021 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 12 7-2c Overcoming Resistance to Change Encourage active participation in the change process Provide education and communication about the change process Facilitate the change process by making only necessary changes, announcing changes in advance, and allowing time to adapt to change Use force-field analysis to focus efforts on removing barriers to change Griffin, Management, 10e©2021 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 13 Figure 7.2 Force-Field Analysis for Plant Closing at General Motors Griffin, Management, 10e©2021 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 14  7-3 Areas of Organization Change Changing organization structure and design Changing technology and operations Changing people, attitudes, and behaviors Enterprise resource planning (ERP): − A large-scale information system for integrating and synchronizing the many activities in the extended enterprise − Common platform for changing business processes Griffin, Management, 10e©2021 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 15 Table 7.1 Areas of Organization Change Griffin, Management, 10e©2021 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 16 7-3b Changing Technology and Operations Business process change (Reengineering) − The radical redesign of all aspects of a business to achieve major gains in cost, service, or time The need for business process change − Entropy is a normal process leading to system decline ▪ Results from maintenance of the status quo ▪ Puts the organization out of synch with its environment ▪ Starts the organization to consuming its own resources Griffin, Management, 10e©2021 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 17  Figure 7.3 The Reengineering Process Griffin, Management, 10e©2021 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 18 7-3e Organization Development (1 of 4) Organization Development A planned effort that is organization-wide, managed from the top, and intended to increase organizational effectiveness and health through planned interventions in the organization’s process, using behavioral science knowledge Griffin, Management, 10e©2021 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 19 7-3e Organization Development (2 of 4) OD Assumptions: Employees desire to grow and develop Employees have a strong need to be accepted by others within the organization Individuals will influence the organization and the organization will influence the attitudes, perceptions, behaviors, and expectations of individuals Griffin, Management, 10e©2021 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 20  7-3e Organization Development (3 of 4) OD Techniques Diagnostic activities: Review current conditions of organization Team building: Enhance effectiveness and satisfaction of groups Survey feedback: Helps managers identify feeling of employees and suggest constructive changes Education: Classroom training, used for technical skills and sensitivity skills Intergroup activities: Improves relationships between two or more groups Griffin, Management, 10e©2021 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 21  7-3e Organization Development (4 of 4) OD Techniques Third-party peacemaking: Used when substantial conflict exists Process consultation: Better to understand communication patterns, decision-making and leadership process, and conflict resolution Life and career planning: Helps in formulating and integrating personal goals Coaching and counseling: Help to learn how others view managers and how to perform better in the future Planning and goal setting: More pragmatic, emphasis falls on individual with focus on planning and goal setting Griffin, Management, 10e©2021 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 22  Knowledge Check 2 There are many ways to pursue organizational development. Which one is most practical for organizations? A. Those designed to improve goal setting B. Those designed for personal growth C. Those designed for organizational growth Griffin, Management, 10e©2021 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 23  Knowledge Check 2: Answer There are many ways to pursue organizational development. Which one is most practical for organizations? Can they be combined? A. Those designed to improve goal setting Several kinds of interventions or activities are generally considered part of organization development. Some OD programs may use only one or a few of these; other programs use several of them at once. More pragmatic than many other interventions are activities designed to help managers improve their planning and goal setting. Emphasis still falls on the individual, however, because the intent is to help individuals and groups integrate themselves into the overall planning process. Griffin, Management, 10e©2021 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 24  7.4 The Innovation Process Innovation: The managed effort of an organization to develop products or services or new uses for existing products or services Griffin, Management, 10e©2021 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 25  7-4b Forms of Innovation (1 of 3) Radical innovation A new product, service, or technology that completely replaces an existing one Radical innovation fundamentally shifts the nature of competition in an industry Incremental innovation A new product, service, or technology that modifies an existing one Incremental innovation does not significantly affect competition in an industry Griffin, Management, 10e©2021 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 26  7-4b Forms of Innovation (2 of 3) Technical versus Managerial Innovations Technical innovation A change in the appearance or performance of a product or service or of the physical processes through which a product or service is manufactured Managerial innovation A change in the management process in an organization Griffin, Management, 10e©2021 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 27  7-4b Forms of Innovation (3 of 3) Produce versus Process Innovations Product innovation A change in the physical characteristics or performance of an existing product or service or the creation of a new one Process innovation A change in the way a product or service is manufactured, created, or distributed Griffin, Management, 10e©2021 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 28  Poll 2 Organizations use a variety of innovations. Which of these has the power to alter, but not fundamentally change, competitive interaction in an industry? A. Radical B. Incremental C. Technical D. Process Griffin, Management, 10e©2021 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 29  7-4c The Failure to Innovate Reasons for failing to innovate: Lack of resources Innovation is expensive in terms of dollars, time, and energy Failure to recognize opportunities Firms cannot pursue all innovation so must select those with greatest potential Resistance to change Can be personally difficult for managers and other members of the organization Griffin, Management, 10e©2021 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 30 7-4d Promoting Innovation in Organizations The reward system Encourages and discourages certain behaviors such as risk taking Organization culture Strong, appropriately focused culture can support innovation Intrapreneurship in larger organizations Intrapreneurs Similar to entrepreneurs except that they develop new businesses in the context of a large organization Griffin, Management, 10e©2021 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 31  Discussion #2 What can management do to create a culture of innovation and change? Have you ever worked for an organization that created radical change? What did that organization do well? Griffin, Management, 10e©2021 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 32  Summary Now that the lesson has ended, you will have learned how to: Describe the nature of organization change, including forces for change and planned versus reactive change. Discuss the steps in organization change and how to manage resistance to change. Describe the major areas of organization change and the assumptions, techniques, and effectiveness of organization development. Discuss the innovation process, forms of innovation, failure to innovate, and how organizations can promote innovation. Griffin, Management, 10e©2021 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 33