Fundamentals of Management
Sixth Edition
Robbins and DeCenzo
with contributions from Henry Moon
CHAPTER
7
Part III: Organizing
Managing Change, Stress,
and Innovation
© 2008 Prentice Hall, Inc.
All rights reserved.
PowerPoint Presentation by Charlie Cook
The University of West Alabama
LEARNING OUTCOMES
After reading this chapter, you will be able to:
1. Describe what change variables are within a
manager’s control.
2. Identify external and internal forces for change.
3. Explain how managers can serve as change agents.
4. Contrast the “calm waters” and “white-water rapids”
metaphors for change.
5. Explain why people are likely to resist change.
6. Describe techniques for reducing resistance to
change.
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7–2
L E A R N I N G O U T C O M E S (cont’d)
After reading this chapter, you will be able to:
7. Identify what is meant by the term organization
development (OD) and specify four popular OD
techniques.
8. Explain the causes and symptoms of stress.
9. Differentiate between creativity and innovation.
10. Explain how organizations can stimulate innovation.
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7–3
What Is Change?
• Change
 Is an alteration of an organization’s environment,
structure, technology, or people.
A constant force
 An organizational reality
 An opportunity or a threat

• Change Agent
 Is a person who initiates and assumes the
responsibility for managing a change in an
organization.
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7–4
EXHIBIT 7–1
Three Categories of Change
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7–5
Forces For Change
• External Forces
• Internal Forces
 Marketplace
 Strategy modifications
competition
 Government laws and
regulations
 New technologies
 Labor market shifts
 Cycles in the
economy
 Social change
 New equipment
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 New processes
 Workforce
composition
 Restructured jobs
 Compensation and
benefits
 Labor surpluses and
shortages
 Employee attitudes
7–6
Two Views Of The Change Process
• “Calm Waters” Metaphor
 Describes traditional practices in and theories about
organizations that likens the organization to a large
ship making a predictable trip across a calm sea and
experiencing an occasional storm.
• “White-Water Rapids” Metaphor
 Describes the organization as a small raft navigating
a raging river.
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7–7
Steps in Change-Management
1. Assess the climate for change.
2. Choose an appropriate approach for managing the
resistance to change.
3. During the time the change is being implemented and
after the change is completed, communicate with
employees regarding what support you may be able to
provide.
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7–8
Change in “Calm Waters”
• Kurt Lewin’s Three-Step Process
 Unfreezing

The driving forces, which direct behavior away from the
status quo, can be increased.

The restraining forces, which hinder movement from the
existing equilibrium, can be decreased.

The two approaches can be combined.
 Implementation of change
 Refreezing

Establishing a new equilibrium state.
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7–9
EXHIBIT 7–2
The Change Process
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7–10
Change In “White-Water Rapids”
• Change is constant in a dynamic environment.
• The only certainty is continuing uncertainty.
• Competitive advantages do not last.
• Managers must quickly and properly react to
unexpected events by:
 Being alert to problems and opportunities.
 Becoming change agents in stimulating,
implementing and supporting change in the
organization.
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7–11
EXHIBIT 7–3
Why People Resist Change
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7–12
EXHIBIT 7–4
Techniques for Reducing Resistance to Change
Education and communication
Participation
Facilitation and support
Negotiation
Manipulation and co-optation
Coercion
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7–13
Making Changes in the Organization
Manager’s Options
for Change
Change
Structure
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Change
Technology
Change
People
7–14
Implementing Planned Changes
• Organization Development (OD)
 Is an activity (intervention) designed to facilitate
planned, long-term organization-wide change.

Focuses on the attitudes and values of organizational
members;

Is essentially an effort to change an organization’s culture.
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7–15
Typical OD Techniques
Popular Organizational
Development Techniques
Survey
Feedback
Process
Consultation
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Team-Building
Intergroup
Development
7–16
Stress: The Aftermath Of Organizational
Change
• Stress
 Occurs when individuals confront a situation related
to their desires for which the outcome is perceived to
be both uncertain and important.

Positive stress: when the situation offers an opportunity for
one to gain something

Negative stress: when constraints or demands are placed on
individuals
• Stressor
 Is a factor that causes stress.
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7–17
Sources of Stress
• Constraints
 Are barriers that keep us from doing what we desire.
 Inhibit individuals in ways that take the control of a
situation out of their hands
• Demands
 Cause persons to give up something they desire.
 Can preoccupy your time and force you to shift
priorities.
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7–18
EXHIBIT 7–5
Change, Dilbert Style
Source: Dilbert reprinted United Feature Syndicate, Inc.
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7–19
EXHIBIT 7–6
Major Stressors
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7–20
Organizational Stress Factors
Tasks
Organizational
Leadership
Organization
Structure
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Roles
Interpersonal
Demands
7–21
Organizational Stressors: Role Demands
• Role Conflicts
 Are work expectations that are hard to satisfy.
• Role Overload
 Is the result of having more work to accomplish than
time permits.
• Role Ambiguity
 Occurs when role expectations are not clearly
understood.
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7–22
Personal Factors: Personality Types
• Type A Personality
 People who have a
chronic sense of
urgency and an
excessive competitive
drive.
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• Type B Personality
 People who are
relaxed and
easygoing and accept
change easily.
7–23
Symptoms Of Stress
• Psychological
Symptoms
• Behavior-related
Symptoms
 Increased tension
 Changes in eating
 Anxiety
habits
 Increased smoking
 Substance
consumption
 Rapid speech
 Sleep disorders
 Boredom
 Procrastination
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7–24
Reducing Stress
• Person-Job Fit Concerns
 Match employees to their jobs, clarify expectations,
redesign jobs, and increase employee involvement
and participation.
• Employee Assistance Programs (EAPs)
 Help employees overcome personal and health-
related problems.
• Wellness Programs
 Help employees prevent health problems.
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7–25
Stimulating Innovation
• Creativity
 Is the ability to combine ideas in a unique way or to
make unusual connections.
• Innovation
 Is the process of taking a creative idea and turning it
into a useful product, service, or method of
operation.

Perception

Incubation

Inspiration

Innovation
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7–26
Variables Stimulating Innovation
Organization
Structure
Organizational
Culture
Innovation
Human Resources
Practices
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7–27
Structural Variables Affecting Innovation
• Organic Structure
 Positively influences innovation through less work
specialization, fewer rules and decentralization.
• Easy Availability of Plentiful Resources
 Allow management to purchase innovations, bear
the cost of instituting innovations, and absorb
failures.
• Frequent Interunit Communication
 Helps to break down barriers to innovation by
facilitating interaction across departmental lines.
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7–28
Characteristics of an Innovative Culture
• Acceptance of ambiguity
• Tolerance of the
impractical
• Low external controls
• Tolerance of risk
• Tolerance of conflict
• Focus on ends rather than
on means
• Open systems focus
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7–29
HR Variables Affecting Innovation
• HR Practices that Foster Innovation
 Promoting of training and development so employee
knowledge remains current
 Offering employees high job security to reduce fear
of making mistakes and taking risks
 Encouraging employees to become champions of
change
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7–30