L E A R N I N G O U T L I N E Follow this Learning Outline as you read and study this chapter.What Is Change?Define organizational change.Explain how managers are affected by change.Forces for ChangeDiscuss the external and internal forces for change.Contrast internal and external change agents.Two Views of the Change ProcessContrast the calm waters and white-water rapids metaphors of change.Explain Lewins three-step model of the change process.Discuss the environment that managers face today.

L E A R N I N G O U T L I N E (contd) Follow this Learning Outline as you read and study this chapter.Managing ChangeExplain how managers might change structure, technology, and people.Explain why people resist change and how resistance might be managed.Contemporary Issues in Managing ChangeExplain why changing organizational culture is so difficult and how managers can do it.Describe employee stress and how managers can help employees deal with stress.Discuss what it takes to make change happen successfully.

L E A R N I N G O U T L I N E (contd) Follow this Learning Outline as you read and study this chapter.Stimulating InnovationExplain why innovation isnt just creativity.Explain the systems view of innovation.Describe the structural, cultural, and human resource variables that are necessary for innovation.Explain what idea champions are and why theyre important to innovation.

What Is Change?Organizational ChangeAny alterations in the people, structure, or technology of an organizationCharacteristics of ChangeIs constant yet varies in degree and directionProduces uncertainty yet is not completely unpredictableCreates both threats and opportunitiesManaging change is an integral part of every managers job.

Forces for ChangeExternal forcesMarketplaceGovernmental laws and regulationsTechnologyLabor marketEconomic changesInternal ForcesChanges in organizational strategyWorkforce changesNew equipmentEmployee attitudes

The Manager as Change AgentChange AgentsPeople who act as catalysts and assume the responsibility for changing process are called change agents.Types of Change AgentsManagers: internal entrepreneursNonmanagers: change specialistsOutside consultants: change implementation experts

The Change ProcessExhibit 13.1

Change Process ViewpointsThe Calm Waters MetaphorLewins description of the change process as a break in the organizations equilibrium stateUnfreezing the status quoChanging to a new stateRefreezing to make the change permanentWhite-Water Rapids MetaphorThe lack of environmental stability and predictability requires that managers and organizations continually adapt (manage change actively) to survive.

Three Categories of ChangeExhibit 13.2

Types of ChangeStructuralChanging the organizations structure or its structural componentsTechnologicalAdopting new equipment or operating methods that displace old skills and require new onesAutomation: replacing certain tasks done by people with machinesComputerizationWorkforceChanging attitudes, expectations, perceptions, and behaviors of the workforceOrganizationaldevelopment (OD)Techniques or programs to change people and the nature and quality of interpersonal work relationships.

Organizational Development TechniquesExhibit 13.3

Managing Resistance to ChangeWhy People Resist Change?The ambiguity and uncertainty that change introducesThe comfort of old habitsA concern over personal loss of status, money, authority, friendships, and personal convenienceThe perception that change is incompatible with the goals and interest of the organization

Managerial Actions to Reduce Resistance to ChangeEducation and CommunicationParticipationFacilitation and SupportNegotiationManipulation and Co-optationCoercionExhibit 13.4

Issues in Managing Change (contd)Changing Organizational CulturesCultures are naturally resistant to change.Conditions that facilitate cultural change:The occurrence of a dramatic crisisLeadership changing handsA young, flexible, and small organizationA weak organizational culture

The Road to Cultural ChangeConduct a cultural analysis to identify cultural elements needing change.Make it clear to employees that the organizations survival is legitimately threatened if change is not forthcoming.Appoint new leadership with a new vision.Initiate a reorganization.Introduce new stories and rituals to convey the new vision.Change the selection and socialization processes and the evaluation and reward systems to support the new values.Exhibit 13.5

Issues in Managing ChangeHandling Employee Stress due to ChangeStressThe physical and psychological tension an individual feels when confronted with extraordinary demands, constraints, or opportunities and their associated importance and uncertainties.Functional StressStress that has a positive effect on performance.How Potential Stress Becomes Actual StressWhen there is uncertainty over the outcome.When the outcome is important.

Causes of StressExhibit 13.6

Symptoms of StressExhibit 13.7

Issues in Managing ChangeReducing StressEngage in proper employee selectionMatch employees KSAs to jobs TDRsUse realistic job interviews for reduce ambiguityImprove organizational communicationsDevelop a performance planning programUse job redesignProvide a counseling programOffer time planning management assistanceSponsor wellness programs

Issues in Managing ChangeMaking Change Happen SuccessfullyEmbrace changebecome a change-capable organization.Create a simple, compelling message explaining why change is necessary.Communicate constantly and honestly.Foster as much employee participation as possibleget all employees committed.Encourage employees to be flexible.Remove those who resist and cannot be changed.

Characteristics of Change-Capable OrganizationsLink the present and the future.Make learning a way of life.Actively support and encourage day-to-day improvements and changes.Ensure diverse teams.Encourage mavericks.Shelter breakthroughsIntegrate technology.Build and deepen trust.Exhibit 13.8

Stimulating InnovationCreativityThe ability to combine ideas in a unique way or to make an unusual association.InnovationTurning the outcomes of the creative process into useful products, services, or work methods

Systems View of InnovationExhibit 13.9Source: Adapted from R.W. Woodman, J.E. Sawyer, and R.W. Griffin, Toward a Theory of Organizational Creativity, Academy of Management Review, April 1993, p. 309.

Innovation VariablesExhibit 13.10

Creating the Right Environment for InnovationStructural VariablesAdopt an organic structureMake available plentiful resourcesEngage in frequent interunit communicationMinimize extreme time pressures on creative activitiesProvide explicit support for creativity

Creating the Right Environment for Innovation (contd)Cultural VariablesAccept ambiguityTolerate the impracticalHave low external controlsTolerate risk takingTolerate conflictFocus on ends rather than meansDevelop an open-system focusProvide positive feedback

Creating the Right Environment for Innovation (contd)Human Resource VariablesActively promote training and development to keep employees skills current.Offer high job security to encourage risk taking.Encourage individual to be champions of change.