Managing change andinnovationWeek 6L E A R N I N G O U T L I N E1. What is change?Define organisational change.Explain why handling change is an integral part of a manager’s job 2. Forces for changeIdentify the external and internal forces for change.Contrast using internal and external change agents.3. Two views of the change processContrast the calm waters and white-water rapids metaphors of change.Explain Lewin’s three-step model of the change process.Discuss the environment that managers face today.4. Managing changeDescribe the options managers have for changing anorganisation’s structure.Discuss how changing technology influences organisational change.Identify the different organisational development techniques.L E A R N I N G O U T L I N E5. Managing resistance to changeExplain why people are likely to resist change.Describe how the force –field analysis can be used to identify options to deal with resistance.Identify the six techniques for dealing with resistance to change. 6. Contemporary issues in managing changeExplain why changing organisational culture is so difficult and how managers can do it.Identify what is involved in managing a downsized workplace.Describe employee stress and how managers can help employees deal with stress.Discuss what it takes to make change happen successfully.7. Stimulating innovationExplain why innovation is not 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 they’re important to innovation.1. WHAT IS CHANGE?•Organisational change–Any alterations in the people, structure, or technology of an organisation•Characteristics of change–Is constant yet varies in degree and direction–Produces uncertainty yet is not completely unpredictable–Creates both threats and opportunitiesManaging change is an integral partof every manager’s job.2. FORCES FOR CHANGE•External forces–Marketplace–Governmental laws andregulations–Technology–Labor market–Economic changes •Internal forces–Changes in organisationalstrategy–Workforce changes–New equipment–Employee attitudesThe manager as change agent•Change agents–People who act as catalysts and assume the responsibility for changing process are called change agents.•Types of change agents–Managers: internal entrepreneurs–Non-managers: change specialists–Outside consultants: change implementation experts3. TWO VIEWS OF THE CHANGEPROCESS•The calm waters metaphor–Lewin’s description of the change process as a break in the organisation’s equilibrium state•Unfreezing the status quo•Changing to a new state•Refreezing to make the change permanent•White-water rapids metaphor–The lack of environmental stability and predictability requires that managers and organisations continually adapt (manage changeactively) to survive.Lewin, K. (1951). Field theory in social science. New York: Harper & Row.A comprehensive approach to change4. MANAGING CHANGEThree categories of changeOrganisational Development •Organisational development: An effort that is planned, organisation wide and managed from the top. It isintended to increase organisational effectiveness andhealth through planned interventions in theorganisation’s process using knowledge of behavioural science.•Assumptions:–Employees desire to grow and develop.–Employees have a need to be accepted by others.–Organisational design affects employee behaviour. Organisational development techniques5. MANAGING RESISTANCE TO CHANGE•Why do people resist change?–The ambiguity and uncertainty that change introduces–The comfort of old habits– A concern over personal loss of status, money, authority, friendships, and personal convenience–The perception that change is incompatible with the goals and interest of the organisationUsing force field analysis• 2 sets of forces operate in any system (Kurt Lewin) –Driving forces (encourage change)–Resisting forces (discourage change)•Equilibrium is when the forces are balanced against each other.•To make change managers may need to maximise driving forces and minimise resisting forcesLewin, K. (1951). Field theory in social science: Selected theoretical papers. New York: Harper & Row.Techniques to reduce resistance tochangecation and communication2.Participation3.Facilitation and support4.Negotiation5.Manipulation6.Coercion6. CONTEMPORARY ISSUES INMANAGING CHANGE •Changing organisational cultures–Cultures are naturally resistant to change–Conditions that facilitate cultural change:The occurrence of a dramatic crisisLeadership changing handsA young, flexible, and small organisationA weak organisational cultureDownsizing•The planned elimination of large numbers of personnel designed to enhance organisational effectiveness.–Workforce reductionA type of downsizing strategy, using a cost-cutting approachemphasising short-term results and redundancies–Organisational redesignRestructuring or delayering of the organisation, with elimination offunctions, layers and work processes–Systemic changeA program of organisational cultural change involving all staffDoes downsizing lead to improvedperformance?•Layoffs–Permanent separations initiated by an organisation and implemented either all at once or phased in over time.•Productivity–An economic measure of efficiency that summarises what is produced relative to the inputs used to produce themHR system ProductivityDownsizingManaging the downsized workplace Zatzick, C. D., & Iverson, R. D. (2006). High-commitment management and workforce reduction: competitive advantage or disadvantage? Academy of Management Journal.49,999-1015.Major reasons for the failure of downsizing•Initial cost savings but long-term negative effects•Loss of people who are ‘irreplaceable assets’•‘Survivor syndrome’: loss of motivation, self-absorption, risk-aversion•‘Survivors’seek new employment•Reputational damageGreenhalgh, L., Lawrence, A. T., & Sutton, R. I. (1988). Determinants of work force reduction strategies in declining organizations. Academy of Management Review, 13,241-254.Handling employee stress•What is stress?–StressThe physical and psychological tension an individual feels whenconfronted with extraordinary demands, constraints, or opportunitiesand their associated importance and uncertainties.Functional Stress: Stress that has a positive effect on performance.•How potential stress becomes actual stress–When there is uncertainty over the outcome.–When the outcome is important.Symptoms of stressIssues in managing change•Reducing stress1.Engage in proper employee selection2.Match employees’KSA’s to jobs’TDR’se realistic job interviews for reduce ambiguity4.Improve organisational communications5.Develop a performance planning programe job redesign7.Provide a counseling program8.Offer time planning management assistance9.Sponsor wellness programsIssues in managing change•Making change happen successfully–Embrace change—become a change-capable organisation.–Create a simple, compelling message explaining why change is necessary.–Communicate constantly and honestly.–Foster as much employee participation as possible—get all employees committed.–Encourage employees to be flexible.–Remove those who resist and cannot be changed.How can cultural change beaccomplished?•Conduct a cultural analysis to identify cultural elements needing change•Make it clear to employees that the organisation’s survival is legitimately threatened if change is notforthcoming•Appoint new leadership with a new vision•Initiate a reorganisation•Introduce new stories and rituals to convey the new vision•Change the selection and socialisation processes and the evaluation and reward systems to support the new valuesTypes of Change:(The Dunphy/Stace scale of change)Dunphy, D., & Stace, D. 1990. Under new management: Australian organisations in transition, Sydney: McGraw-Hill.7. STIMULATING INNOVATION•Creativity–The ability to combine ideas in a unique way or to make an unusual association.•Innovation–Turning the outcomes of the creative process into useful products, services, or work methodsAdapted from Woodman, R. W., Sawyer, J. E., & Griffin, R. W. 1993. Toward a theory of organisational creativity. Academy of Management Review, 18,293-321.Forms of Innovation•Radical versus incremental innovation.•Technical versus managerial innovations.•Product versus process variations.The innovation processPromoting innovation in organisations•The reward system•The organisational culture•IntrapreneurshipStimulating and nurturing innovation•Structural variables–Adopt an organic structure–Make available plentiful resources–Engage in frequent inter-unit communication–Minimize extreme time pressures on creative activities–Provide explicit support for creativityStimulating and nurturing innovation (cont’d)•Cultural variables–Accept ambiguity–Tolerate the impractical–Have low external controls–Tolerate risk taking–Tolerate conflict–Focus on ends rather than means–Develop an open-system focus–Provide positive feedbackStimulating and nurturing innovation (cont’d)•Human resource variables–Actively promote training and development to keep employees’skills current.–Offer high job security to encourage risk taking.–Encourage individual to be “champions”of change.The failure to innovate•Lack of resources•Failure to recognise opportunities•Resistance to change•Lock-in through complementary assetsL E A R N I N G R E V I E W1. What is change?Define organisational change and why it’s important to managers.2. Forces for changeExternal and internal forces for change and change agents.3. Two views of the change processMetaphors of change, Lewin’s model, today’s environment.4. Managing changeOrganisation’s structure., technology, development techniques. 5. Managing resistance to changeWhy people resist change, the force –field analysis, resistance to change.6. Contemporary issues in managing changeDifficulty of change, downsizing, employee stress, successful change.7. Stimulating innovationInnovation and creativity, the systems view of innovation, variables that necessary for innovation, idea champions.。
