1. MANAGEMENT Part Four: The Organizing Process
TWELFTH EDITION
MANAGEMENT
Ricky W. Griffin
Part Four: The Organizing Process
Chapter Twelve: Managing Organization Change and Innovation
© 2017 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

2. Learning Outcomes
Describe the nature of organization change, including forces for change and planned versus reactive change.
Discuss the steps in organization change and how to manage resistance to change.
Identify and describe major areas of organization change and discuss the assumptions, techniques, and effectiveness of organization development.
Describe the innovation process, forms of innovation, failure to innovate, and how organizations can promote innovation.
© 2017 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

3. Nature of Organization Change
is any substantive modification to some part of the organization.
Forces for change
External forces derive from the organization’s general and task environments.
Internal forces (i.e. strategy) can cause change.
Other internal forces may be a reflection of external forces, such as sociocultural forces.
© 2017 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

4. Nature of Organization Change
Planned change
Designed and implemented in an orderly and timely fashion in anticipation of future events.
Reactive change
A piecemeal response to circumstances as they develop.
The frequency of organization change reinforces the importance of a planned approach.
© 2017 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

5. Managing Change in Organizations
Steps in the change process
Kurt Lewin provides a model suggesting every change requires three steps:
The first step is unfreezing people affected by impending change.
Next, comes implementation of the change itself.
Finally, refreezing people involved by reinforcing and supporting the change.
Lewin’s model lacks specificity, a more comprehensive model is needed.
© 2017 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

6. Managing Change in Organizations
Comprehensive approach
This approach to change takes a systems view and delineates a series of specific steps that often lead to successful change.
© 2017 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

7. Steps in the Change Process
Figure 12.1
Steps in the Change Process
Managers must understand how and why to implement change.
© 2017 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

8. Understanding Resistance to Change
Uncertainty
Threatened self-interests
Different perceptions
Feelings of loss
Managers need to know why people resist change and how to counter resistance.
© 2017 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

9. Overcoming Resistance to Change
Participation is often an effective technique.
Provide education and communication throughout the change process.
Facilitate the change process by:
making only necessary changes,
announcing those changes well in advance, and
allowing time for people to adjust.
© 2017 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

10. Use this analysis to remove or at least minimize forces of resistance.
Figure 12.2
Force-Field Analysis for Plant Closing at General Motors
Use this analysis to remove or at least minimize forces of resistance.
© 2017 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

11. Areas of Organization Change
Table 12.1
Areas of Organization Change
© 2017 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

12. Areas of Organization Change
Business process change or reengineering
is a radical redesign of all aspects of a business to achieve major gains in cost, service, or time.
Goes beyond ERP.
The need for business process change
allows managers to avoid entropy, or system-wide decline.
© 2017 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

13. Business process reengineering has five steps.
Figure 12.3
The Reengineering Process
Business process reengineering has five steps.
© 2017 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

14. Areas of Organization Change
Organization development (OD)
is a planned, organization-wide effort, managed from the top, intended to increase organizational effectiveness and health through planned interventions in the organization’s process, using behavioral science knowledge.
Based on the assumptions that:
employees desire to grow and develop,
they have a need for acceptance, and
organization design influences employee behavior.
© 2017 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

15. Organizational Development Techniques
Diagnostic activities.
Team building.
Survey feedback.
Education.
Intergroup activities.
Third-party peacemaking.
Effectiveness varies.
Technostructural activities.
Process consultation.
Life and career planning.
Coaching and counseling.
Planning and goal setting.
© 2017 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

16. Organizational Innovation
The managed effort of an organization to develop new products or services or new uses for existing products for services.
Without innovation, organizations fall behind competitors.
© 2017 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

17. The Innovation Process
Figure 12.4
The Innovation Process
© 2017 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

18. Incremental innovation
Forms of Innovation
Is a new product, service, or technology that completely replaces an existing one.
Radical innovation
Is a new product, service, or technology that modifies an existing one.
Incremental innovation
Radical versus incremental innovations
© 2017 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

19. Managerial innovation
Forms of Innovation
Technical innovation
Is a change in the appearance or performance of products or services, or of the physical processes through which a product or service passes.
Managerial innovation
Is a change in the management process by which products and services are conceived, built, and delivered to customers.
Technical versus managerial innovations
© 2017 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

20. Product versus process innovations
Forms of Innovation
Product innovation
Is a change in the physical characteristics or performance of existing products or services, or the creation of new ones.
Process innovation
Is a change in the way products or services are manufactured, created, or distributed.
Product versus process innovations
© 2017 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

21. Effects of Product and Process Innovation on Economic Return
Figure 12.5
Effects of Product and Process Innovation on Economic Return
© 2017 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

22. Failure to Innovate
If a firm lacks resources it may lag behind in innovation.
If an organization is unskilled in recognizing and evaluating opportunities, they may fail to invest in an innovation.
Innovation means giving up old products, which means change.
Many resist change, therefore, innovation.
© 2017 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

23. Promoting Innovation in Organizations
Provide financial and nonfinancial rewards.
Avoid punishing workers for innovation.
Organization culture should support creative and innovative activities.
Intrapreneurs develop new businesses in the context of a large organization.
Successful programs need someone to fill the roles of the inventor, a product champion, and a sponsor.
© 2017 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

24. Summary
Chapter twelve examined the nature of organization change and identified the basic issues of managing change.
Major areas of change were identified and described.
Including business process change.
Organization development was examined.
The chapter concluded by discussing innovation as a vital form of change.
© 2017 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.