1. PowerPoint Presentation by Charlie Cook The University of West Alabama Copyright © 2006 Thomson Business and Economics. All rights reserved. Chapter 7 Managing Change: Innovation and Diversity

2. 7–27–2Copyright © 2006 Thomson Business and Economics. All rights reserved. Learning Outcomes 1.Identify the sources of forces for change. 2.List the four types of change. 3.List the reasons people resist change, and suggest ways of overcoming such resistance. 4.State the difference between a fact, a belief, and a value. 5.Explain intrapreneurship, and identify its three roles. 6.Discuss the relationship among diversity, innovation, and quality. 7.Explain the difference between team building and process consultation. After studying this chapter, you should be able to:

3. 7–37–3Copyright © 2006 Thomson Business and Economics. All rights reserved. Learning Outcomes (cont’d) 8.State the difference in the use of forcefield analysis and survey feedback. 9.Define the following key terms: types of change team building information systems (IS) process consultation stages of the change process forcefield analysis organizational development survey feedback (OD) OD interventions large-group intervention

4. 7–47–4Copyright © 2006 Thomson Business and Economics. All rights reserved. Ideas on Management at Hewlett-Packard 1.How did Fiorina reorganize HP, and in what ways did she change its competitive strategy? What company did HP acquire in 2002? 2.How did Fiorina confront resistance to the acquisition? 3.How is HP committed to innovation? 4.What diversity initiatives has HP undertaken? 5.How does HP use organizational development (OD), and how does HP assist other firms with OD?

5. 7–57–5Copyright © 2006 Thomson Business and Economics. All rights reserved. Change Forces for Change –Changes in the business environment creates the necessity for change in a firm’s strategy which requires altering the functions and structure of the firm (technology and people) to support the strategy. –A competitive firm creates an organizational structure that supports its strategy which, in turn, is constantly revised to respond to environmental change.

6. 7–67–6Copyright © 2006 Thomson Business and Economics. All rights reserved. Types of Organizational Change Exhibit 7–1

7. 7–77–7Copyright © 2006 Thomson Business and Economics. All rights reserved.

8. 7–87–8 Forms of Change Incremental Change –Continual improvement that takes place within already accepted frameworks, value systems, or organizational structure that is necessary for survival and success. Radical Change –Rapid change in strategy, structure, technology, or people. –Radical change alters accepted frameworks, value systems, or organizational structure.

9. 7–97–9Copyright © 2006 Thomson Business and Economics. All rights reserved. Stages in the Change Process Exhibit 7–2

10. 7–10Copyright © 2006 Thomson Business and Economics. All rights reserved. Resistance to Change and Ways to Overcome Resistance Exhibit 7–3

11. 7–11Copyright © 2006 Thomson Business and Economics. All rights reserved. Resistance to Change Intensity –People vary in their attitudes towards change. Sources of Resistance to Change –Facts Provable statements that identify reality. –Beliefs Subjective opinions that cannot be proven. –Values What people believe are important and worth pursuing or doing.

12. 7–12Copyright © 2006 Thomson Business and Economics. All rights reserved. Resistance to Change (cont’d) Focuses of Resistance to Change –Self The reaction of individuals who feel their self- interests are threatened by change. –Others The consideration given to how others will be affected by change. –Work Environment Change in the working environment threatens individuals control of the environment.

13. 7–13Copyright © 2006 Thomson Business and Economics. All rights reserved. Exhibit 7–4 Source: Adapted from Ken Hultman, Resistance Matrix: The Path of Least Resistance (Austin, TX: Learning Concepts, 1979). Resistance Matrix

14. 7–14Copyright © 2006 Thomson Business and Economics. All rights reserved. Innovation Innovative Organizational Structures –Flat organizations with limited bureaucracy –Generalist division of labor –Coordinate with cross functional teams –Informal with decentralized authority –Create separate systems for innovative groups –Attract and retain creative employees –Reward innovation and creativity

15. 7–15Copyright © 2006 Thomson Business and Economics. All rights reserved. Innovation (cont’d) Innovative Organizational Cultures –Encourage risk-taking –Foster intrapreneurship –Have open systems –Focus on ends rather than means –Accept ambiguous and impractical ideas –Tolerate conflict

16. 7–16Copyright © 2006 Thomson Business and Economics. All rights reserved. 3M’s Rules for an Innovative Culture Set goals for innovation Commit to research and development Inspire intrapreneurship Facilitate, don’t obstruct Focus on the customer Tolerate failure

17. 7–17Copyright © 2006 Thomson Business and Economics. All rights reserved.

18. 7–18Copyright © 2006 Thomson Business and Economics. All rights reserved. Diversity –The degree of differences among members of a group or an organization. Race/ethnicity, religion, gender, age, ability Diversity in all forms is increasing in the general population and the workforce. –Incorporating diversity opens up a larger labor pool of skilled workers from which to recruit. –Diversity is a legal requirement, an ethical obligation, and a competitive advantage.

19. 7–19Copyright © 2006 Thomson Business and Economics. All rights reserved. Diversity (cont’d) Valuing Diversity –Emphasizes training employees of different races and ethnicities, religions, genders, ages, and abilities to function together effectively. Managing Diversity –Emphasizes fully utilizing human resources through organizational actions that meet all employees’ needs.

20. 7–20Copyright © 2006 Thomson Business and Economics. All rights reserved. Managing Diversity Exhibit 7–5

21. 7–21Copyright © 2006 Thomson Business and Economics. All rights reserved. Gender Diversity Issues: –Disappearance of the “traditional family” –Increase in women as a percentage of the work force –Women’s pay continuing to lag behind men’s –Glass ceiling barring women from upper management –Sexual harassment in the workplace

22. 7–22Copyright © 2006 Thomson Business and Economics. All rights reserved.

23. 7–23Copyright © 2006 Thomson Business and Economics. All rights reserved. Organizational Development Organizational Development (OD) –The ongoing planned process of change used as a means of improving performance through interventions. OD Interventions –Specific actions taken to implement specific changes. Change Agent –The person selected by human resources management to be responsible for the OD program.

24. 7–24Copyright © 2006 Thomson Business and Economics. All rights reserved. Lewin’s Change Model Exhibit 7–6

25. 7–25Copyright © 2006 Thomson Business and Economics. All rights reserved. OD Interventions and Their Focus Exhibit 7–7 OD InterventionIndividual focusGroup focusOrganization focus 1. Training and DevelopmentX 2. Sensitivity TrainingX 3. Team BuildingX 4. Process ConsultationX 5. Forcefield AnalysisX 6. Survey FeedbackX 7. Large-Group InterventionX 8. Work DesignXXX 9. Direct FeedbackXXX

26. 7–26Copyright © 2006 Thomson Business and Economics. All rights reserved. OD Interventions Team Building –Designed to help work groups increase structural and team dynamics performance to get the job done. Process Consultation –Designed to improve team dynamics by focusing on how people interact as they get the job done. Stages in Team Building –Climate building and goals –Evaluation of structure and team dynamics –Problem identification –Problem solving –Training –Closure

27. 7–27Copyright © 2006 Thomson Business and Economics. All rights reserved. OD Interventions (cont’d) Forcefield Analysis –Diagrams the current level of performance, the forces hindering change, and the driving force toward change. Survey Feedback –Use of a questionnaire to gather data to use as the basis for change. Large-Group Intervention –Brings together participants from all parts of the organization, and key outside stakeholders, to solve problems or take advantage of opportunities.

28. 7–28Copyright © 2006 Thomson Business and Economics. All rights reserved. Forcefield Analysis Exhibit 7–9

29. 7–29Copyright © 2006 Thomson Business and Economics. All rights reserved. OD Interventions (cont’d) Work Design –Can be designed as an individual job, as a job for a group to perform, or by departmentalization. –Job enrichment is used to change jobs to make them more interesting and challenging. Direct Feedback –In certain situations, the most efficient intervention is to have a change agent make a direct recommendation about a specific change. –Often such a change agent is an outside consultant.

30. 7–30Copyright © 2006 Thomson Business and Economics. All rights reserved.