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. © 2008 Prentice Hall, Inc. All rights reserved. 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. © 2008 Prentice Hall, Inc. All rights reserved. 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. © 2008 Prentice Hall, Inc. All rights reserved. 7–4 EXHIBIT 7–1 Three Categories of Change © 2008 Prentice Hall, Inc. All rights reserved. 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 © 2008 Prentice Hall, Inc. All rights reserved. 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. © 2008 Prentice Hall, Inc. All rights reserved. 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. © 2008 Prentice Hall, Inc. All rights reserved. 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. © 2008 Prentice Hall, Inc. All rights reserved. 7–9 EXHIBIT 7–2 The Change Process © 2008 Prentice Hall, Inc. All rights reserved. 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. © 2008 Prentice Hall, Inc. All rights reserved. 7–11 EXHIBIT 7–3 Why People Resist Change © 2008 Prentice Hall, Inc. All rights reserved. 7–12 EXHIBIT 7–4 Techniques for Reducing Resistance to Change Education and communication Participation Facilitation and support Negotiation Manipulation and co-optation Coercion © 2008 Prentice Hall, Inc. All rights reserved. 7–13 Making Changes in the Organization Manager’s Options for Change Change Structure © 2008 Prentice Hall, Inc. All rights reserved. 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. © 2008 Prentice Hall, Inc. All rights reserved. 7–15 Typical OD Techniques Popular Organizational Development Techniques Survey Feedback Process Consultation © 2008 Prentice Hall, Inc. All rights reserved. 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. © 2008 Prentice Hall, Inc. All rights reserved. 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. © 2008 Prentice Hall, Inc. All rights reserved. 7–18 EXHIBIT 7–5 Change, Dilbert Style Source: Dilbert reprinted United Feature Syndicate, Inc. © 2008 Prentice Hall, Inc. All rights reserved. 7–19 EXHIBIT 7–6 Major Stressors © 2008 Prentice Hall, Inc. All rights reserved. 7–20 Organizational Stress Factors Tasks Organizational Leadership Organization Structure © 2008 Prentice Hall, Inc. All rights reserved. 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. © 2008 Prentice Hall, Inc. All rights reserved. 7–22 Personal Factors: Personality Types • Type A Personality People who have a chronic sense of urgency and an excessive competitive drive. © 2008 Prentice Hall, Inc. All rights reserved. • 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 © 2008 Prentice Hall, Inc. All rights reserved. 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. © 2008 Prentice Hall, Inc. All rights reserved. 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 © 2008 Prentice Hall, Inc. All rights reserved. 7–26 Variables Stimulating Innovation Organization Structure Organizational Culture Innovation Human Resources Practices © 2008 Prentice Hall, Inc. All rights reserved. 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. © 2008 Prentice Hall, Inc. All rights reserved. 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 © 2008 Prentice Hall, Inc. All rights reserved. 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 © 2008 Prentice Hall, Inc. All rights reserved. 7–30