Chapter 8Chapter 8
Managing Change and Managing Change and InnovationInnovation
Forces for ChangeForces for Change
ExternalExternal:: CustomersCustomers CompetitorsCompetitors TechnologyTechnology EconomicEconomic InternationalInternational
InternalInternal:: Production Production
Inefficiencies Inefficiencies Management Management
GoalsGoals Employee Employee
Expectations/ Expectations/ DemandsDemands
Organizational Change:Organizational Change:Two MetaphorsTwo Metaphors Calm Waters (Incremental)Calm Waters (Incremental) White Water Rapids (Radical)White Water Rapids (Radical)
Creative PeopleCreative People
CuriosityCuriosity Open-mindednessOpen-mindedness PersistencePersistence Relaxed and playful attitudeRelaxed and playful attitude
Characteristics of Creative Characteristics of Creative OrganizationsOrganizations Open channels of communicationOpen channels of communication Assignment of nonspecialists to problemsAssignment of nonspecialists to problems Decentralized / Low BureacracyDecentralized / Low Bureacracy Freedom to choose problemsFreedom to choose problems Resources allocated without immediate Resources allocated without immediate
payoff (Long-time orientation)payoff (Long-time orientation) Toleration of FailuresToleration of Failures
Idea ChampionsIdea Champions InventorsInventors Other Other ChampionsChampions of new ideas of new ideas SponsorsSponsors (High-level managers) (High-level managers)
(The same people may fill more than (The same people may fill more than one of the above roles.)one of the above roles.)
CriticsCritics (sometimes are correct) (sometimes are correct)
New-Venture TeamsNew-Venture Teams Separate unit to develop and initiate Separate unit to develop and initiate
innovationsinnovations Small, organicSmall, organic Free from organizational Free from organizational
bureaucracybureaucracy Most effective when placed high in Most effective when placed high in
the organizational structurethe organizational structure
Resistance to ChangeResistance to Change
Self-interest Self-interest Lack of understanding and trustLack of understanding and trust UncertaintyUncertainty Different assessments and goals.Different assessments and goals.
Resistance to Change:Resistance to Change:Self-interestSelf-interest
Job ConditionsJob Conditions Less Interesting Less Interesting
JobJob More/Less More/Less
ResponsibilityResponsibility More/Less More/Less
AutonomyAutonomy Altered Social Altered Social
ContactsContacts
Job OutcomesJob Outcomes Lowered Lowered
PerformancePerformance Less PayLess Pay Less PowerLess Power Less Less
Prestige/StatusPrestige/Status
Resistance to ChangeResistance to Change Lack of understanding and trustLack of understanding and trust
Concerning the present situationConcerning the present situation UncertaintyUncertainty
Fear of the future/unknownFear of the future/unknown Different Assessments and GoalsDifferent Assessments and Goals
Interdepartmental ConflictsInterdepartmental Conflicts
Personality ConflictsPersonality ConflictsCultural ConflictsCultural Conflicts
Force Field AnalysisForce Field Analysis
EQUILIBRIUM
DR I V I NG
FORCES
RESTRAINING
FORCES
Types of ChangesTypes of Changes
TechnologyTechnology ProductProduct StructureStructure People/CulturePeople/Culture
(Usually, change in one impacts others (Usually, change in one impacts others and all impact Strategy)and all impact Strategy)
Technology ChangeTechnology Change
Generally, technology change is Generally, technology change is “bottom-up”“bottom-up”
Lower-level technical experts act as Lower-level technical experts act as idea championsidea champions
Product ChangeProduct Change Product innovation often requires Product innovation often requires
expertise from several departments expertise from several departments simultaneously (e.g., Marketing, simultaneously (e.g., Marketing, R&D, Manufacturing)R&D, Manufacturing)
““Bottom-Up after Horizontal-Bottom-Up after Horizontal-Linkage”Linkage”
Probability of New Product Success:Probability of New Product Success:Technical Completion Technical Completion .57.57CommercializationCommercialization .31.31Market SuccessMarket Success .12.12
Structural ChangeStructural Change
Structural Design, Administrative Structural Design, Administrative Procedures, Management SystemsProcedures, Management Systems
Usually “top-down”Usually “top-down”
Culture/People ChangeCulture/People Change
ValuesValues NormsNorms AttitudesAttitudes BeliefsBeliefs BehaviorBehavior
Organizational DevelopmentOrganizational DevelopmentUse of behavioral science knowledge Use of behavioral science knowledge
to promote people/culture changes to promote people/culture changes such as:such as:
Skill DevelopmentSkill Development Attitude ChangeAttitude Change TeamworkTeamwork A More Organic OrganizationA More Organic Organization
Changes through OD Can Changes through OD Can Help Managers Address--Help Managers Address-- Mergers/AcquisitionsMergers/Acquisitions Organizational decline/revitalizationOrganizational decline/revitalization Conflict management.Conflict management.
OD ActivitiesOD Activities
IndividualIndividual Sensitivity TrainingSensitivity Training Job TrainingJob Training Career PlanningCareer Planning
GroupGroup Role PlayingRole Playing Team-buildingTeam-building
The following can The following can include large include large portions and even portions and even thethe Entire Entire OrganizationOrganization
Survey-feedbackSurvey-feedback Intergroup activitiesIntergroup activities Process-Process-
consultationconsultation
Lewin’s 3-Step Change ModelLewin’s 3-Step Change ModelDescription:Description: UnfreezingUnfreezing
Motivate Change Motivate Change (strengthen driving (strengthen driving and/or weaken and/or weaken restraining forces)restraining forces)
ChangeChange Use Effective Change Use Effective Change MethodMethod
RefreezingRefreezing Solidify the ChangeSolidify the Change
Techniques:Techniques: UnfreezingUnfreezingCommunication/ Communication/
Education Education Negotiation/Promise of Negotiation/Promise of
RewardsRewards ChangeChange Participation/Training/Participation/Training/ CoercionCoercion RefreezingRefreezing Reinforce withReinforce with Resources/RewardsResources/Rewards
Implementing ChangeImplementing Change
Identify True Need for ChangeIdentify True Need for Change Find Idea That Fits NeedFind Idea That Fits Need Get Top Management SupportGet Top Management Support Design Easy Implementation Stages - Design Easy Implementation Stages -
often incrementaloften incremental Develop Plans to Overcome Develop Plans to Overcome
ResistanceResistance Create Change TeamsCreate Change Teams