CHAPTER 7: Managing Change and Disruptive Innovation Areas of Organizational Change

Case for Change

Change is an organizational reality. Organizations

face change because external and internal create the need for
change.
Change Process – 2 Metaphors 1. Strategy – modifying the approach to ensuring the
organization’s success
Calm Water
2. Structure – altering how work gets done and who does it
(structural components) and making major changes in the
actual structural design
3. Technology – changing technology used to convert inputs
and outputs, implementing changes that would increase
production efficiency, introducing new equipment, tools,
or operating methods, and replacing certain tasks done
Change is a brief distraction in the normal flow of event. by people with tasks done by machines (automation)
4. People – changing attitudes, expectations, perceptions,
Kurt Lewin’s Three-Step Change Process and behaviors.
1. Unfreezing the status quo Popular OD Techniques
2. Changing to a new state
3. Refreezing to make the change permanent Organizational development (OD) is the term used to
describe change methods that focus on people and the nature
The status quo is considered equilibrium. Unfreezing can and quality of interpersonal work relationships.
be done by increasing the driving forces and/or by decreasing
the restraining forces. Once unfreezing is done, the change
can be implemented. Then, refreezing so that it can be
sustained over time.
White Water

 Change is normal and expected, and managing it is a

continual process.
 This is consistent with a world that is increasingly
dominated by information, ideas, and knowledge.
What is Organizational Change?
Organizational change is any alteration of strategy,
people, structure or technology. It often needs someone to act
as catalyst and assume the responsibility for managing the More Effective Interpersonal Work Relationships
change process – that is, a change agent.
 Sensitivity Training – A method of changing behavior
through unstructured group interactions
 Team Building – Activities that help team members learn Leading Change - Change Capable Organizations
how each member thinks and works.
 Intergroup Development – Changing the attitudes,
stereotypes, and perceptions that work groups have
about each other.
 Process Consultation – An outside consultant helps the
managers understand how interpersonal processes are
affecting the way work is being done.
 Survey Feedback – A technique for assessing attitudes
and perceptions, identifying discrepancies in these, and
resolving the differences by using survey information in
feedback groups.
Managing Change – Reason for Resistance

 Uncertainty
 Habit
 Concern over personal loss
 Belief that change is not in the organization’s best interest
Techniques for Reducing Resistance to Change
Creating a culture for change

Employee Stress
Definition
Stress – the adverse reaction people have to excessive
Contemporary Issues in Managing Change pressures placed on them from extraordinary demands,
constraints, or opportunities
1. Leading change
2. Creating a culture for change Causes
3. Employee stress
Leading Change
How can managers make change happen successfully?

 Make the organization change capable

 Understand their own role in the process
 Give individual employees a role in the change process

Stressors – personal factors and job-related factors that

causes stress
Organizational stressors Stimulating Innovation

 Task demands – factors related to an employee’s job Creativity vs. Innovation

 Role demands – relate to pressures placed on an
Creativity – refers to the ability to combine ideas in a unique
employee as a function of the particular role he or she
way or to make unusual associations between ideas
plays in the organization
 Role conflicts – create expectations that maybe hard Innovation – the outcomes of the creative process need to be
to reconcile or satisfy turned into useful products or work methods
 Role overload – experienced when the employee is
expected to do more than time permits
 Role ambiguity – created when role expectations are
not clearly understood and the employee is not sure
what he or she is to do
 Interpersonal demands – pressures created by other
employees
 Organization structure – excessive rules and employee’s
lack of opportunity
 Organizational leadership – represents the supervisory
style of the organization’s managers
Personal factors

 Family issues and personal economic problems

 Type A personality – characterized by chronic feelings of
a sense of time urgency, an excessive competitive drive,
and difficulty accepting and enjoying leisure time
 Type B personality – opposite of Type A; don’t suffer from
time urgency or impatience
Structural Variables
Employee Stress – Symptoms of Stress
 First, an organic type of structure positively influences
innovation. This structure is low in formalization,
centralization, and work specialization, it facilitates the
flexibility and sharing of ideas that are critical to
innovation.
 Second, the availability of plentiful resources provides a
key building block for innovation. Managers can afford to
purchase innovations, can afford the cost of instituting
innovations, and can absorb failures.
 Third, frequent communications between organizational
units helps break down barriers to innovation. Cross-
functional teams, task forces, and other such
Employee Stress – Reducing Stress
organizational designs facilitate interaction across
departmental lines and are widely used in innovative
organizations.
 Fourth, innovative organizations try to minimize extreme
time pressures on creative activities despite the demands
of white-water rapid environments.
 Fifth, studies have shown that an employee’s creative
performance was enhanced when an organization’s
structure explicitly supported creativity.
Culture Variables
 Accept ambiguity. Too much emphasis on objectivity and
specificity constrains creativity.
 Tolerate the impractical. Individuals who offer impractical,
even foolish, answers to what-if questions are not stifled. CHAPTER 3: Managing The External Environment and The
What at first seems impractical might lead to innovative Organization’s Culture
solutions.
Manager – Omnipotent or Symbolic
 Keep external controls minimal. Rules, regulations,
policies, and similar organizational controls are kept to a Omnipotent view of management
minimum.
 Tolerate risk. Employees are encouraged to experiment  Management are directly responsible for an
without fear of consequences should they fail. organization’s success or failure
 Tolerate conflict. Diversity of opinions is encouraged.  Anticipate change
 Focus on ends rather than means. Goals are made clear,  Exploit opportunities
and individuals are encouraged to consider alternative  Correct poor performance
routes toward meeting the goals.  Lead the organization
 Use an open-system focus. Managers closely monitor the  Get credit/held accountable
environment and respond to changes as they occur.
Symbolic view of management
 Provide positive feedback. Managers provide positive
feedback, encouragement, and support so employees  Much of the organizations’ success or failure is due to
feel their creative ideas receive attention. external forces outside of the manager’s control
 Exhibit empowering leadership. Be a leader who let
Constraints on Managerial Discretion
organizational members know that the work they do is
significant. … Neither all powerful nor helpless … but decisions and
actions are constrained
Human Resource Variables
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; and encourage
individuals to become idea champions, actively and External Environment: Constraints and Challenges
enthusiastically supporting new ideas, building support,
External Environment – refers to factors and forces outside
overcoming resistance, and ensuring that innovations are
the organization that affect its performance
implemented.

1. The political/legal component looks at federal, state, and

local laws, as well as global laws and laws of other
countries.
2. The demographic component is concerned with trends in
population characteristics such as age, race, gender,
education level, geographic location, income, and family
composition. It also includes a country’s political
conditions and stability.
3. The economic component encompasses factors such as
interest rates, inflation, changes in disposable income,
stock market fluctuations, and business cycle stages.
4. The sociocultural component is concerned with societal
and cultural factors such as values, attitudes, trends,
 traditions, lifestyles, beliefs, tastes, and patterns of
behavior.
5. The technological component is concerned with scientific
or industrial innovations.
6. The global component encompasses those issues
associated with globalization and a world economy.
External Environment Affects Managers
1. Jobs and employment
 One of the most powerful constraints managers face
is the impact of such changes on jobs and
employment – both in poor and in good conditions.
 External conditions affect the types of jobs that are Stakeholders – any constituencies in the organization’s
available, and how those jobs are created and environment that are affected by an organization’s decisions
management. and actions.
2. Environmental uncertainty
 It refers to the degree of change and complexity in Why should managers even care about managing stakeholder
an organization’s environment. relationships?
It can lead to desirable organizational outcomes such as :

 improved predictability of environmental changes

 more successful innovations
 greater degree of trust among stakeholders
 greater organizational flexibility to reduce the impact of
change
Organizational Culture

 It has been described as the shared values, principles,

traditions, and ways of doing things that influence the way
organizational members act.
 The definition of culture implies three things:
 Perception – it’s not something that can be physically
 The first dimension of uncertainty is the degree of touched or seen, but employees perceive it on the
change. If the components in an organization’s basis of what they experience within the organization
environment change frequently, it’s a dynamic  Descriptive – concerned with how members perceive
environment. If change is minimal, it’s a stable one. the culture and describe it, not with whether they like
 The other dimension of uncertainty describes the it
degree of environmental complexity, which looks at  Shared – tendency to describe the organization’s
the number of components in an organization’s culture in similar terms though workers have different
environment and the extent of the knowledge that the backgrounds of work at different organizational levels
organization has about those components.
3. Management of stakeholder relationship
 Establishing and Maintaining Culture

1. The original source of the culture usually reflects the

vision of the founders.
2. Once the culture is in place, however, certain
organizational practices help maintain it. The employee
selection process, managers typically judge job
candidates not only on the job requirements, but also on
how well they might fit into the organization. At the same
time, job candidates find out information about the
organization and determine whether they are comfortable
Organizational Culture with what they see.
3. The actions of top managers also have a major impact on
 Attention to Detail – degree to which employees are the organization’s culture.
expected to exhibit precision, analysis, and attention to 4. Finally, organizations help employees adapt to the culture
detail through socialization, a process that helps new
 Outcome Orientation – degree to which managers focus employees learn the organization’s way of doing things.
on results or outcomes rather than on how these
outcomes are achieved Learning Culture
 People Orientation – degree to which management
 Stories – Organizational “stories” typically contain a
decisions take into account the effects on people in the
narrative of significant events or people including such
organization
things as the organization’s founders, rule breaking,
 Team Orientation – degree to which work is organized
reactions to past mistakes, and so forth.
around teams rather than individuals
 Rituals – shapes what employees believe is important;
 Aggressiveness – degree to which employees are
plays a significant role in establishing desired levels of
aggressive and competitive rather than cooperative
motivation and behavioral expectations.
 Stability – degree to which organizational decisions and
 Material Artifacts and Symbols – demonstrate what type
actions emphasize maintaining the status quo
of work environment the organization has – formal,
 Innovation and Risk Taking – degree to which employees casual, fun, serious, and so forth.
are encouraged to be innovative and to take risks
 Language – a way to identify and unite members of a
Strong Culture vs. Weak Culture culture. By learning so, members attest to their
acceptance of the culture and their willingness to help
Strong cultures – those in which the key values are deeply preserve it.
held and widely shared – have a greater influence on
employees than do weaker cultures. Culture Affects Managers
  Playfulness/humor – Is the workplace spontaneous
and fun?
 Conflict resolution – Do individuals make decisions
and resolve issues based on the good of the
organization versus personal interest?
 Debates – Are employees allowed to express
opinions and put forth ideas for consideration and
review?
 Risk-taking – Do managers tolerate uncertainty and
ambiguity, and are employees rewarded for taking
risks?
 Customer-responsive culture

 Sustainability culture

Current Issues in Organizational Culture

Creating an

 Innovative culture
According to Swedish researcher Goran Ekvall, it would
be characterized by the following:
 Challenge and involvement – Are employees
involved in, motivated by, and committed to long-
term goals and success of the organization?
 Freedom – Can employees independently define
their work, exercise discretion, and take initiative in
their day-to-day activities?
 Trust and openness – Are employees supportive and
respectful to each other?
 Idea time – Do individuals have time to elaborate on
new ideas before taking action?