Fundamentals of Management Ninth Canadian Edition PDF Chapter 7

Fundamentals of Management Ninth Canadian Edition Chapter 7 Managing Innovation and Change Copyright © 2021 Pearson Canada, Inc. 7-1 Learning Objectives 7...

Fundamentals of Management Ninth Canadian Edition Chapter 7 Managing Innovation and Change Copyright © 2021 Pearson Canada, Inc. 7-1 Learning Objectives 7.1 Define organizational change, and compare and contrast views on the change process. 7.2 Explain how to manage resistance to change. 7.3 Describe what managers need to know about employee stress. 7.4 Discuss techniques for stimulating innovation. Copyright © 2021 Pearson Canada, Inc. 7-2 What Is Change and How Do Managers Deal with It? Organizational change is any alteration of people, structure, or technology in an organization. Exhibit 7.1 Categories of Organizational Change Copyright © 2021 Pearson Canada, Inc. 7-3 Why Do Organizations Need to Change? External and internal forces create the need for change. External Forces Internal Forces The marketplace Changes in strategy Government laws and Changes in the workforce regulations Technology Changes in employee attitudes Labour markets Economic changes Copyright © 2021 Pearson Canada, Inc. 7-4 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 nonmanagers, for example an internal staff specialist or an external consultant. Copyright © 2021 Pearson Canada, Inc. 7-5 How Does Organizational Change Happen? (1 of 3) The Calm Waters Metaphor: – The organization is like a large ship crossing calm waters. Successful change can be planned and requires: – unfreezing the status quo – changing to a new state – refreezing to make the change permanent Copyright © 2021 Pearson Canada, Inc. 7-6 How Does Organizational Change Happen? (2 of 3) Exhibit 7.2 The Three-Step Change Process Copyright © 2021 Pearson Canada, Inc. 7-7 How Does Organizational Change Happen? (3 of 3) The White-Water Rapids Metaphor – The organization is a small raft, navigating a raging river with uninterrupted white-water rapids. – Change is constant and managers never get “out of the rapids.” Copyright © 2021 Pearson Canada, Inc. 7-8 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. Popular OD efforts include: – survey feedback – process consultation – team-building – intergroup development Copyright © 2021 Pearson Canada, Inc. 7-9 How Do Managers Manage Resistance to Change? (1 of 2) Reasons people resist change include: – uncertainty – habit – concern over personal loss – belief that change is not in the organization’s best interest. Resistance is likely to be lower if managers: – involve people in the change – offer training when needed – are open to revision after the change is implemented. Copyright © 2021 Pearson Canada, Inc. 7 - 10 How Do Managers Manage Resistance to Change? (2 of 2) Exhibit 7.3 Techniques for Reducing Resistance to Change Technique When Used Advantage Disadvantage Education and When resistance is due Clear up May not work when mutual trust communication to misinformation misunderstandings and credibility are lacking Participation When resisters have the Increase Time-consuming; has potential expertise to make a involvement and for a poor solution contribution acceptance Facilitation and When resisters are Can facilitate Expensive; no guarantee of support fearful and anxiety- needed adjustments success ridden Negotiation When resistance comes Can “buy” Potentially high cost; opens from a powerful group commitment doors for others to apply pressure too Manipulation When a powerful Inexpensive, easy Can backfire, causing change and co-optation group’s endorsement is way to gain support agent to lose credibility needed Coercion When a powerful Inexpensive, easy May be illegal; may undermine group’s endorsement is way to gain support change agent’s credibility needed Copyright © 2021 Pearson Canada, Inc. 7 - 11 Common Approaches to Organizational Change (1 of 2) Action Research: Change is based on changing employee attitudes and behaviours. Exhibit 7.4 The Action Research Process Copyright © 2021 Pearson Canada, Inc. 7 - 12 Common Approaches to Organizational Change (2 of 2) Appreciative Inquiry: Focus on strengths to create a vision about what the organization could become. Exhibit 7.5 The “Four-D” Model of Appreciative Inquiry Copyright © 2021 Pearson Canada, Inc. 7 - 13 Making Change Happen Successfully Exhibit 7.6 Mistakes Managers Make When Leading Change Copyright © 2021 Pearson Canada, Inc. 7 - 14 Communicating Effectively When Undergoing Change (1 of 2) In one study, eight factors were found to be related to effective communication during times of change: 1. CEOs were committed to communication. 2. Management matched their actions to words. 3. Two-way communication between managers and employees was encouraged. 4. The organization emphasized face-to-face communication. Copyright © 2021 Pearson Canada, Inc. 7 - 15 Communicating Effectively When Undergoing Change (2 of 2) In one study, eight factors were found to be related to effective communication during times of change: 5. Managers shared responsibility for employee communication. 6. Positive ways were found to deal with bad news. 7. Messages were shaped for their intended audience. 8. Communication was treated as an ongoing process. Copyright © 2021 Pearson Canada, Inc. 7 - 16 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 there’s potential gain. Functional stress—allows a person to perform at his or her highest level at crucial times. Copyright © 2021 Pearson Canada, Inc. 7 - 17 What Causes Stress? Stressors Job-related factors include: – Task demands – Role demands ▪ Role conflicts ▪ Role overload ▪ Role ambiguity – Interpersonal demands – Organizational structure – Organizational leadership Copyright © 2021 Pearson Canada, Inc. 7 - 18 How Can Stress Be Reduced? Stress can never be totally eliminated, but not all stress is dysfunctional. Job-related factors can be controlled: – employee selection – job design, working conditions, etc. Personal factors are not easy for managers to control, but help can be offered: – employee assistance programs (EAPs) – wellness programs Copyright © 2021 Pearson Canada, Inc. 7 - 19 Other Considerations for Reducing Stress – Engage in proper employee selection – Match employees’ abilities to job requirements – Use realistic job previews to reduce ambiguity – Improve organizational communications – Develop a performance planning program – Use job redesign – Provide a counselling program – Offer time planning management assistance – Sponsor wellness programs Copyright © 2021 Pearson Canada, Inc. 7 - 20 How Can Managers Encourage Innovation in an Organization? Organizations must innovate to compete successfully. Successful companies: – create new products and services – adopt state-of-the-art technology. Copyright © 2021 Pearson Canada, Inc. 7 - 21 How Are Creativity and Innovation Related? Creativity is the ability to produce novel and useful ideas. It is a four-step process: 1. Perception 2. Incubation 3. Inspiration 4. Innovation Innovation is the process of taking a creative idea and turning it into a useful product, service or method of operation. Copyright © 2021 Pearson Canada, Inc. 7 - 22 What’s Involved in Innovation? (1 of 4) Exhibit 7.9 Innovation Variables Copyright © 2021 Pearson Canada, Inc. 7 - 23 What’s Involved in Innovation? (2 of 4) Structural variables affect innovation: – An organic structure positively influences innovation. – Plentiful resources are key. – Frequent communication between organizational units helps break down barriers to innovation. – Extreme time pressures hamper creative activities. – When structure explicitly supports creativity, employees’ creative performance can be enhanced Copyright © 2021 Pearson Canada, Inc. 7 - 24 What’s Involved in Innovation? (3 of 4) Innovative organizations tend to have cultures that: – accept ambiguity – tolerate the impractical – keep external controls minimal – tolerate risk – tolerate conflict – focus on ends rather than means – use an open-system focus – provide positive feedback Copyright © 2021 Pearson Canada, Inc. 7 - 25 What’s Involved in Innovation? (4 of 4) Human Resource practices in innovative organizations: – actively promote the training and development of their members so their knowledge remains current – offer their employees high job security to reduce the fear of getting fired for making mistakes – encourage individuals to become idea champions Copyright © 2021 Pearson Canada, Inc. 7 - 26 How Does Design Thinking Influence Innovation? Design thinking can provide a process for coming up with things that do not exist. Emphasis on getting a deeper understanding of what customers need and want. Entails being able to convert customer insights into real and usable products. Copyright © 2021 Pearson Canada, Inc. 7 - 27