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