Copyright ? 2002 by The McGraw-Hill Companies,Inc,All rights reserved,McGraw-Hill/Irwin
Copyright ? 2002 by The McGraw-Hill Companies,Inc,All rights reserved,McGraw-Hill/Irwin
16 C H
A
P
T
E
R
Managing Organizational
Change and Innovation
?DEFINE what is meant by organizational change management,
?IDENTIFY the major steps in undertaking organizational change
effort,
?DESCRIBE the two major types of change forces,
?DISCUSS the role of problem diagnosis in the organizational
change management,
?IDENTIFY a number of change methods and the relative depth of
intervention each represents,
?RECOGNIZE the impediments and conditions that may limit
change management effectiveness,
?DISCUSS the ethical implications of change management,
?UNDERSTAND how adopting innovation is a natural outcome in
organizations that effectively manage change,
Copyright ? 2002 by The McGraw-Hill Companies,Inc,All rights reserved,McGraw-Hill/Irwin
16-3
Managing Organizational
Change
? Change is an inevitable,pervasive,persistent,and
permanent condition for all organizations,
?Organizations’ futures depend on their ability to
master change,
? Effective managers must view managing planned
change as an integral responsibility,
? Contemporary managers will have to develop
approaches for adopting and implementing
innovation,
Copyright ? 2002 by The McGraw-Hill Companies,Inc,All rights reserved,McGraw-Hill/Irwin
16-4
Organizational Change
Approaches
Managing Change
through Reason
Managing Change
through Power
Managing Change
through Reeducation
Copyright ? 2002 by The McGraw-Hill Companies,Inc,All rights reserved,McGraw-Hill/Irwin
16-5
Learning Principles in
Change Management
Unfreezing old learning
? Requires people who want to learn new ways to think and act,
? Deals directly with resistance to change,
Movement to new learning
? Requires training,demonstration,and empowerment,
? Empower employees to take on new behaviors,
Refreezing the learned behavior
? Occurs through the application of reinforcement and feedback,
? Strategies designed to minimize the loss of new knowledge,
skills,
Copyright ? 2002 by The McGraw-Hill Companies,Inc,All rights reserved,McGraw-Hill/Irwin
16-6
Change Agents
? External Change Agents
? Temporary employees of the organization engaged only for
the duration of the change process,
? Internal Change Agents
? An individuals working for the organization who knows
something about its problems
? External-Internal Change Agents
? Designating an individual or small group within the
organization to serve with the external change agent,
Interveners bring a different perspective
to the situation and challenge the status quo
for the purpose of improving effectiveness,
Copyright ? 2002 by The McGraw-Hill Companies,Inc,All rights reserved,McGraw-Hill/Irwin
16-7
Individual Resistance
to Change
? Threat of a loss of position,power,and authority
? Economic insecurity
? Possible alteration of social friendships and
interactivity
? Fear of the unknown
? Failure to recognize or be informed about the need to
change
? Cognitive dissonance or discomfort created by what
is new or different
Reasons for Resistance Include,
Copyright ? 2002 by The McGraw-Hill Companies,Inc,All rights reserved,McGraw-Hill/Irwin
16-8
Organizational
Resistance to Change
Barriers to Change Include,
?The professional and functional
orientation of the department,unit,
or team,
?Structural inertia
?Possible threat to the
organizational power balance
?Failures at previous change
Copyright ? 2002 by The McGraw-Hill Companies,Inc,All rights reserved,McGraw-Hill/Irwin
16-9
Strategies for Overcoming
Resistance to Change
Key Considerations
? Individuals and organizations must have a reason to change
? Involvement of people at all levels of the hierarchy
? Ongoing communication
? Creation of a learning organization,
Open discussion and accessibility to information
Clear vision expressed at all levels
Strong emphasis on independence,worth and importance of people
Clear goals and performance expectations
Commitment to learning
Concern for measurable results
Curiosity to try new methods
Copyright ? 2002 by The McGraw-Hill Companies,Inc,All rights reserved,McGraw-Hill/Irwin
16-10
A Model For Managing
Organizational Change
? Sorting out the information that reflects the
magnitude of change forces
? Information is the basis for determining when
change is or is not needed
? Diagnosing the problem
? Identifying relevant alternative techniques
? Implementing the change
? Monitoring the change process and change results
See Exhibit 16.1
Key Management Responsibilities,
Copyright ? 2002 by The McGraw-Hill Companies,Inc,All rights reserved,McGraw-Hill/Irwin
16-11
Forces For Change
? Economic Forces
? Technology
? Social and Political
Change
External Forces
Internal Forces
? Process
? Behavioral
Copyright ? 2002 by The McGraw-Hill Companies,Inc,All rights reserved,McGraw-Hill/Irwin
16-12
Diagnosis of a Problem
Diagnostic Questions
? What is the problem as distinct from the
symptoms of the problem?
? What must be changed to resolve the
problem?
? What outcomes (objectives) are
expected from the change,and how will
those outcomes be measured?
Copyright ? 2002 by The McGraw-Hill Companies,Inc,All rights reserved,McGraw-Hill/Irwin
16-13
Diagnosis of a Problem
Data Collection Methods
?Questionnaires
?Direct observation
?Key interviews
?Workshops
?Document and record
examination
Copyright ? 2002 by The McGraw-Hill Companies,Inc,All rights reserved,McGraw-Hill/Irwin
16-14
Selection of Appropriate Methods
Structural Approaches
Managerial actions that attempt to improve effectiveness by
introducing change through formal policies and procedures,
Structural Reorganization
?Creating flatter,more organic
organizations
Reengineering
?Streamlining
?Integrating
?Transforming
Management by Objective
(MBO)
?Superiors and subordinates
meet and discuss goals,
?Superiors and subordinates
jointly set attainable goals,
?Superiors and subordinates
meet and evaluate progress,
Copyright ? 2002 by The McGraw-Hill Companies,Inc,All rights reserved,McGraw-Hill/Irwin
16-15
Technological
Approaches
Task Approaches
Selection of Appropriate Methods
?Emphasize job
design changes
? Job enlargement
? Number of tasks
performed
? Job enrichment
? Amount of discretion
and responsibility
?Emphasize changes
in the flow of work
? New physical plant
layouts
? Changes in office
design
? Improved work
methods
Copyright ? 2002 by The McGraw-Hill Companies,Inc,All rights reserved,McGraw-Hill/Irwin
16-16
Human Asset
Approaches
Team Building
Approaches
Selection of Appropriate Methods
? Emphasis on helping
individuals learn and
grow,
? Professionally
? Personally
? Team building
? Managerial grid
? Emphasis on enabling work groups to get work
done more effectively
? Setting goals and priorities
? Analyzing the ways the
group does its work
? Examining group
processes
? Examining interpersonal
relationships
Copyright ? 2002 by The McGraw-Hill Companies,Inc,All rights reserved,McGraw-Hill/Irwin
16-17
Mentorship
Programs
Ethics
Training
Selection of Appropriate Methods
?Emphasis on,
?Developing employee
awareness of business
ethics
?Focusing on specific
ethical issues with
which the employees
may come into contact,
?Emphasis on linking employees with
knowledgeable individuals
committed to providing
support to others
?Provide specific job
instructions
?Socialization
?Career development and
guidance
Copyright ? 2002 by The McGraw-Hill Companies,Inc,All rights reserved,McGraw-Hill/Irwin
16-18
Multifaceted
Approaches
Introspective
Development
Selection of Appropriate Methods
? Emphasis on a close
examination of one’s
own thoughts and
feelings through,
? Specific training
courses
? Periodic sabbatical
leaves
? Emphasis on
combining techniques
from different
categories
? Organizational
Development (OD)
methods
? Total Quality
Management (TQM)
Copyright ? 2002 by The McGraw-Hill Companies,Inc,All rights reserved,McGraw-Hill/Irwin
16-19
Impediments and
Limiting Conditions
Leadership
Climate
Formal
Organization
Organizational Culture
Copyright ? 2002 by The McGraw-Hill Companies,Inc,All rights reserved,McGraw-Hill/Irwin
16-20
Timing
Scope
Implementing the Method
Implementing
Change
Copyright ? 2002 by The McGraw-Hill Companies,Inc,All rights reserved,McGraw-Hill/Irwin
16-21
Evaluating Program
Effectiveness
An Evaluation Model
?Determining the objectives of the program
?Describing the activities undertaken to
achieve the objectives
?Measuring the effects of the program
?Establishing baseline points against which
changes can be compared
?Controlling extraneous factors
?Detecting unanticipated consequences
Copyright ? 2002 by The McGraw-Hill Companies,Inc,All rights reserved,McGraw-Hill/Irwin
16 C H
A
P
T
E
R
Managing Organizational
Change and Innovation
?DEFINE what is meant by organizational change management,
?IDENTIFY the major steps in undertaking organizational change
effort,
?DESCRIBE the two major types of change forces,
?DISCUSS the role of problem diagnosis in the organizational
change management,
?IDENTIFY a number of change methods and the relative depth of
intervention each represents,
?RECOGNIZE the impediments and conditions that may limit
change management effectiveness,
?DISCUSS the ethical implications of change management,
?UNDERSTAND how adopting innovation is a natural outcome in
organizations that effectively manage change,
Copyright ? 2002 by The McGraw-Hill Companies,Inc,All rights reserved,McGraw-Hill/Irwin
16-3
Managing Organizational
Change
? Change is an inevitable,pervasive,persistent,and
permanent condition for all organizations,
?Organizations’ futures depend on their ability to
master change,
? Effective managers must view managing planned
change as an integral responsibility,
? Contemporary managers will have to develop
approaches for adopting and implementing
innovation,
Copyright ? 2002 by The McGraw-Hill Companies,Inc,All rights reserved,McGraw-Hill/Irwin
16-4
Organizational Change
Approaches
Managing Change
through Reason
Managing Change
through Power
Managing Change
through Reeducation
Copyright ? 2002 by The McGraw-Hill Companies,Inc,All rights reserved,McGraw-Hill/Irwin
16-5
Learning Principles in
Change Management
Unfreezing old learning
? Requires people who want to learn new ways to think and act,
? Deals directly with resistance to change,
Movement to new learning
? Requires training,demonstration,and empowerment,
? Empower employees to take on new behaviors,
Refreezing the learned behavior
? Occurs through the application of reinforcement and feedback,
? Strategies designed to minimize the loss of new knowledge,
skills,
Copyright ? 2002 by The McGraw-Hill Companies,Inc,All rights reserved,McGraw-Hill/Irwin
16-6
Change Agents
? External Change Agents
? Temporary employees of the organization engaged only for
the duration of the change process,
? Internal Change Agents
? An individuals working for the organization who knows
something about its problems
? External-Internal Change Agents
? Designating an individual or small group within the
organization to serve with the external change agent,
Interveners bring a different perspective
to the situation and challenge the status quo
for the purpose of improving effectiveness,
Copyright ? 2002 by The McGraw-Hill Companies,Inc,All rights reserved,McGraw-Hill/Irwin
16-7
Individual Resistance
to Change
? Threat of a loss of position,power,and authority
? Economic insecurity
? Possible alteration of social friendships and
interactivity
? Fear of the unknown
? Failure to recognize or be informed about the need to
change
? Cognitive dissonance or discomfort created by what
is new or different
Reasons for Resistance Include,
Copyright ? 2002 by The McGraw-Hill Companies,Inc,All rights reserved,McGraw-Hill/Irwin
16-8
Organizational
Resistance to Change
Barriers to Change Include,
?The professional and functional
orientation of the department,unit,
or team,
?Structural inertia
?Possible threat to the
organizational power balance
?Failures at previous change
Copyright ? 2002 by The McGraw-Hill Companies,Inc,All rights reserved,McGraw-Hill/Irwin
16-9
Strategies for Overcoming
Resistance to Change
Key Considerations
? Individuals and organizations must have a reason to change
? Involvement of people at all levels of the hierarchy
? Ongoing communication
? Creation of a learning organization,
Open discussion and accessibility to information
Clear vision expressed at all levels
Strong emphasis on independence,worth and importance of people
Clear goals and performance expectations
Commitment to learning
Concern for measurable results
Curiosity to try new methods
Copyright ? 2002 by The McGraw-Hill Companies,Inc,All rights reserved,McGraw-Hill/Irwin
16-10
A Model For Managing
Organizational Change
? Sorting out the information that reflects the
magnitude of change forces
? Information is the basis for determining when
change is or is not needed
? Diagnosing the problem
? Identifying relevant alternative techniques
? Implementing the change
? Monitoring the change process and change results
See Exhibit 16.1
Key Management Responsibilities,
Copyright ? 2002 by The McGraw-Hill Companies,Inc,All rights reserved,McGraw-Hill/Irwin
16-11
Forces For Change
? Economic Forces
? Technology
? Social and Political
Change
External Forces
Internal Forces
? Process
? Behavioral
Copyright ? 2002 by The McGraw-Hill Companies,Inc,All rights reserved,McGraw-Hill/Irwin
16-12
Diagnosis of a Problem
Diagnostic Questions
? What is the problem as distinct from the
symptoms of the problem?
? What must be changed to resolve the
problem?
? What outcomes (objectives) are
expected from the change,and how will
those outcomes be measured?
Copyright ? 2002 by The McGraw-Hill Companies,Inc,All rights reserved,McGraw-Hill/Irwin
16-13
Diagnosis of a Problem
Data Collection Methods
?Questionnaires
?Direct observation
?Key interviews
?Workshops
?Document and record
examination
Copyright ? 2002 by The McGraw-Hill Companies,Inc,All rights reserved,McGraw-Hill/Irwin
16-14
Selection of Appropriate Methods
Structural Approaches
Managerial actions that attempt to improve effectiveness by
introducing change through formal policies and procedures,
Structural Reorganization
?Creating flatter,more organic
organizations
Reengineering
?Streamlining
?Integrating
?Transforming
Management by Objective
(MBO)
?Superiors and subordinates
meet and discuss goals,
?Superiors and subordinates
jointly set attainable goals,
?Superiors and subordinates
meet and evaluate progress,
Copyright ? 2002 by The McGraw-Hill Companies,Inc,All rights reserved,McGraw-Hill/Irwin
16-15
Technological
Approaches
Task Approaches
Selection of Appropriate Methods
?Emphasize job
design changes
? Job enlargement
? Number of tasks
performed
? Job enrichment
? Amount of discretion
and responsibility
?Emphasize changes
in the flow of work
? New physical plant
layouts
? Changes in office
design
? Improved work
methods
Copyright ? 2002 by The McGraw-Hill Companies,Inc,All rights reserved,McGraw-Hill/Irwin
16-16
Human Asset
Approaches
Team Building
Approaches
Selection of Appropriate Methods
? Emphasis on helping
individuals learn and
grow,
? Professionally
? Personally
? Team building
? Managerial grid
? Emphasis on enabling work groups to get work
done more effectively
? Setting goals and priorities
? Analyzing the ways the
group does its work
? Examining group
processes
? Examining interpersonal
relationships
Copyright ? 2002 by The McGraw-Hill Companies,Inc,All rights reserved,McGraw-Hill/Irwin
16-17
Mentorship
Programs
Ethics
Training
Selection of Appropriate Methods
?Emphasis on,
?Developing employee
awareness of business
ethics
?Focusing on specific
ethical issues with
which the employees
may come into contact,
?Emphasis on linking employees with
knowledgeable individuals
committed to providing
support to others
?Provide specific job
instructions
?Socialization
?Career development and
guidance
Copyright ? 2002 by The McGraw-Hill Companies,Inc,All rights reserved,McGraw-Hill/Irwin
16-18
Multifaceted
Approaches
Introspective
Development
Selection of Appropriate Methods
? Emphasis on a close
examination of one’s
own thoughts and
feelings through,
? Specific training
courses
? Periodic sabbatical
leaves
? Emphasis on
combining techniques
from different
categories
? Organizational
Development (OD)
methods
? Total Quality
Management (TQM)
Copyright ? 2002 by The McGraw-Hill Companies,Inc,All rights reserved,McGraw-Hill/Irwin
16-19
Impediments and
Limiting Conditions
Leadership
Climate
Formal
Organization
Organizational Culture
Copyright ? 2002 by The McGraw-Hill Companies,Inc,All rights reserved,McGraw-Hill/Irwin
16-20
Timing
Scope
Implementing the Method
Implementing
Change
Copyright ? 2002 by The McGraw-Hill Companies,Inc,All rights reserved,McGraw-Hill/Irwin
16-21
Evaluating Program
Effectiveness
An Evaluation Model
?Determining the objectives of the program
?Describing the activities undertaken to
achieve the objectives
?Measuring the effects of the program
?Establishing baseline points against which
changes can be compared
?Controlling extraneous factors
?Detecting unanticipated consequences
