Understanding Management First Canadian Edition Slides prepared by Janice Edwards College of the Rockies Copyright © 2009 Nelson Education Ltd.

Chapter Copyright (c) 2009 Nelson Education Ltd. Innovation and Change

Learning Objectives 1. Define organizational change and explain the forces for change. 2. Describe the sequence of four change activities that must be performed for change to be successful. 3. Explain the techniques managers can use to facilitate the initiation of change in organizations, including idea champions, new-venture teams, idea incubators, and open innovation. 4. Define the sources of resistance to change. Copyright (c) 2009 Nelson Education Ltd. 8-3

Learning Objectives (Cont’d) 5. Explain force-field analysis and other implementation tactics that can overcome resistance to change. 6. Discuss the differences among technology, product, structure, and culture/people changes. 7. Explain the change processes – bottom up, top down, horizontal – associated with each type of change. 8. Define organizational development and OD activities that have emerged in recent years. 9. Describe the OD theory that proposes three distinct stages for achieving behavioural and attitudinal change. Copyright (c) 2009 Nelson Education Ltd. 8-4

Two Types of Planned Change Copyright (c) 2009 Nelson Education Ltd. 8-5 Incremental Change: based on efforts to improve basic work and organizational processes. Transformational Change: involves redesign and renewal of the total organization.

Ex. 8.1 Model of Change Sequence of Events Copyright (c) 2009 Nelson Education Ltd. 8-6 Environmental Forces Internal Forces Implement Change Initiate Change Need for Change Monitor global competition, customers, competitors, and other factors. Consider plans, goals, company problems, and needs. Evaluate problems and opportunities, define needed changes in technology, products, structure, and culture. Facilitate search, creativity, idea champions, skunkworks, and idea incubators. Use force-field analysis, tactics for overcoming resistance.

Need for Change External or internal forces translate into a perceived need. Performance gap—a disparity between existing and desired performance levels. Copyright (c) 2009 Nelson Education Ltd. 8-7

Initiating Change Search: The process of learning about current developments inside or outside the organization that can be used to meet a perceived need for change. Creativity: The generation of novel ideas that might meet perceived needs or offer opportunities for the organization. Copyright (c) 2009 Nelson Education Ltd. 8-8

Idea Champions and New-Venture Teams Copyright (c) 2009 Nelson Education Ltd. 8-9 Idea Champion: A person who sees the need for and champions productive change within the organization. New-Venture Team: A unit separate from the mainstream organization and is responsible for developing and initiating innovations.

Promoting Corporate Innovation Skunkworks New-Venture Fund Idea Incubator Copyright (c) 2009 Nelson Education Ltd. 8-10

Ex. 8.3 Four Roles in Organizational Change Copyright (c) 2009 Nelson Education Ltd. 8-11

Reasons for Resistance to Change Copyright (c) 2009 Nelson Education Ltd Managers and employees often seem to prefer the status quo. Self-interest: the fear of personal loss is perhaps the biggest obstacle to organizational change. Lack of understanding and trust: do not understand the intended purpose of a change, or distrust the intentions.

Reasons for Resistance to Change (Cont’d) Uncertainty: the lack of information about future events. Different assessments and goals: people who will be affected by innovation may assess the situation differently. Copyright (c) 2009 Nelson Education Ltd. 8-13

Force Field Analysis The process of determining which forces drive and which forces resist changes. Copyright (c) 2009 Nelson Education Ltd. 8-14

Ex.8.4 Using Force-Field Analysis to Change from Traditional to Just-In-Time Inventory System Copyright (c) 2009 Nelson Education Ltd. 8-15

Ex. 8.6 Types of Organizational Change Copyright (c) 2009 Nelson Education Ltd. 8-16

Technology Changes Related to organization’s production process. Designed to enhance efficiency. Generally “Bottom-up.” Copyright (c) 2009 Nelson Education Ltd. 8-17

Culture/People Changes Copyright (c) 2009 Nelson Education Ltd A change in employees’ values, norms, attitudes, beliefs, and behaviours. Tools for culture/people changes: Training and development programs. Organizational development.

Organizational Development Copyright (c) 2009 Nelson Education Ltd The application of behavioural science techniques to improve an organization’s health and effectiveness through its ability to: cope with environmental changes improve internal relationships increase learning and problem-solving capabilities.

Organizational Development (Cont’d) Can help managers address: mergers/acquisitions. organizational decline/revitalization. conflict management. Copyright (c) 2009 Nelson Education Ltd. 8-20

Three Stages for Achieving Behavioural and Attitudinal Change Copyright (c) 2009 Nelson Education Ltd Unfreezing: diagnosis stage participants are made aware of problems in order to increase their willingness to change their behaviour 2. Changing: intervention stage individuals experiment with new workplace behaviour 3. Refreezing: reinforcement stage individuals acquire a desired new skill or attitude and are rewarded for it by the organization