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Chapter
Managing Change and Innovation
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Learning Outcomes
Define organizational change and compare and contrast views on the change process
Explain how to manage resistance to change
Describe what managers need to know about employee stress
Discuss techniques for stimulating innovation
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3. What Is Change and How Do Managers Deal with It?
Organizational Change
Any alteration of an organization’s people, structure, or technology
Change is an organizational reality. Most managers, at one point or another, will have to change some things in their workplace. We classify these changes as organizational change, which is any alteration of an organization’s people, structure or technology.
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Changing structure includes any alteration in authority relationships, coordination mechanisms, degree of centralization, job design, or similar organization structure variables.
Changing technology encompasses modifications in the way work is done or the methods and equipment used
Changes in people refer to changes in employee attitudes, expectations, perceptions, or behaviors
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5. WHAT EXTERNAL FORCES CREATE A NEED TO CHANGE?
The external forces that create the need for organizational change come from various sources:
Marketplace
Technology
Government laws and regulations
Economy
Labor markets
In Chapter 2 we pointed out that both external and internal forces constrain managers. These same forces also bring about the need for change
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7. How Do Organizations Implement Planned Changes?
Organization Development (OD)
Efforts that assist organizational members with a planned change by focusing on their attitudes and values
Popular OD efforts in organizations rely heavily on group interactions and cooperation
Often managers make a concerted effort to alter some aspect of the organization. Whatever happens—in terms of
structure or technology—ultimately affects organizational members. Efforts to assist organizational members with a planned change are referred to as organization development (OD).
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8. Organizational Development Activities
Survey feedback
A method of assessing employees’ attitudes toward and perceptions of a change
Process Consultation
Using outside consultants to assess organizational processes such as workflow, informal intra-unit relationships, and formal communication channels
Survey feedback efforts are designed to assess employee attitudes about and perceptions of the change they are encountering. Employees are generally asked to respond to a set of specific questions regarding how they view such organizational aspects as decision
making, leadership, communication effectiveness, and satisfaction with their jobs, coworkers, and management
In process consultation, outside consultants help managers to perceive, understand, and act on process elements with which they must deal. These elements might include, for example, workflow, informal relationships among unit members, and formal communications
channels.
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OD Activities (cont.)
Team-Building
Using activities to help work groups set goals, develop positive interpersonal relationships, and clarify the roles and responsibilities of each team member
Intergroup Development
Activities that attempt to make several work groups more cohesive
Team-building is generally an activity that helps work groups set goals, develop positive interpersonal relationships, and clarify the roles and responsibilities of each team member.
Whereas team-building focuses on helping a work group become more cohesive, intergroup development attempts to achieve the same results among different work groups. That is, intergroup development attempts to change attitudes, stereotypes, and perceptions
that one group may have toward another group
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10. Why Do People Resist Organizational Change?
Change replaces the known with uncertainty
We do things out of habit
Fear of losing something already possessed
What are the techniques for reducing resistance to change?
Why do people resist organizational change? The main reasons include uncertainty, habit, concern over personal loss, and the belief that
the change is not in the organization’s best interest
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When managers see resistance to change as dysfunctional, what can they do? Several strategies have been suggested in dealing with resistance to change. These approaches include education and communication, participation, facilitation and support, negotiation, manipulation
and co-optation, and coercion. These tactics are summarized here and described in Exhibit 7-3
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What Is Stress?
Stress
The adverse reaction people have to excessive pressure placed on them from extraordinary demands, constraints, or opportunities.
Stress is the adverse reaction people have to excessive pressure placed on them from extraordinary demands, constraints, or opportunities. Stress isn’t always bad. Although it’s often discussed in a negative context, stress can be positive, especially when it offers a
potential gain. For instance, functional stress allow an athlete, stage performer, or employee to perform at his or her highest level at crucial times.
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What Causes Stress?
Stressors
Factors that cause stress
Karoshi
A Japanese term that refers to a sudden death caused by overworking
Role Conflicts
Work expectations that are hard to satisfy
Stress can be caused by personal factors and by job-related factors called stressors. Clearly, change of any kind—personal or job-related—has the potential to cause stress as it can involve demands, constraints, or opportunities
Role demands relate to pressures placed on an employee as a function of the particular role he or she plays in the organization. Role conflicts create expectations that may be hard to reconcile or satisfy.
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Stressors (cont.)
Role Overload
Having more work to accomplish than time permits
Role Ambiguity
When role expectations are not clearly understood
Role overload is experienced when the employee is expected to do more than time permits. Role ambiguity is created when role expectations are not clearly understood and the employee is not sure what he or she is to do.
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Personal Factors
Type A Personality
People who have a chronic sense of urgency and an excessive competitive drive
Type B Personality
People who are relaxed and easygoing and accept change easily
Evidence also indicates that employees’ personalities have an effect on how susceptible they are to stress. The most commonly
used labels for these personality traits are Type A and Type B.
Type A personality is characterized by chronic feelings of a sense of time urgency, an excessive competitive
drive, and difficulty accepting and enjoying leisure time.
The opposite of Type A is Type B personality. Type Bs never suffer from time urgency or impatience. Until quite recently, it
was believed that Type As were more likely to experience stress on and off the job
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As Exhibit 7-4 shows, stress symptoms can be grouped under three general categories: physical, psychological, and
behavioral. All of these can significantly affect an employee’s work.
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17. Sources of Stress Personal Life Job Responsibilities Membership in
Groups
Work-Life Balance
There are five major potential stressors. They are each discussed in the following slides.
Environmental
Uncertainty

18. Personal Sources of Stress
Major Life Events
Death of a loved one
Divorce
Serious illness
Getting arrested
Getting married
Buying a house
Having a baby
Minor Life Events
Getting a speeding ticket
Have trouble with your in-laws
Getting caught in traffic
Going on vacation
Getting a new assignment at work
Personal sources of stress can come from major life events or minor life events and may be positive or negative in nature. How stressed a person generally feels appears to depend not only on the extent to which the stressors occur and how significant they are for the person but on how many of them occur simultaneously during any given period.

19. Job-Related Stressors
Role conflict
Role ambiguity
Overload
Underload
Challenging assignments
Economic well-being and job security
This slide presents six job-related stressors.
Role conflict occurs when expected behaviors or tasks are at odds with each other.
Role ambiguity is the uncertainty that occurs when employees are not sure about what is expected of them and how they should perform their jobs. This is especially important for new employees.
Overload is the condition of having too many tasks to perform. According to a recent study, dual-career couples worked, on average, 91 hours per week, compared to an average of 81 hours per week in Overload is particularly prevalent among middle and top managers.
Underload means not having enough work to do and it can also be a source of stress.
Promotions and challenging assignments can be a source of stress for employees with low self-efficacy and/or ability.
Stressors that affect employees’ economic well-being and job security are also powerful sources of stress (e.g., threats of layoffs and downsizing).

20. Group and Organization-Related Stressors
Cultural differences
Uncomfortable working conditions
Unsafe working conditions
Mergers and acquisitions
At the work-group level, misunderstandings, conflicts, and interpersonal disagreements can be sources of negative stress for group members. More organizations are assembling cross-cultural teams whose members come from different countries. Misunderstandings and conflicts due to cultural differences are sometimes sources of stress in these teams.
Uncomfortable working conditions are another source of stress. Examples include excessive noise, temperature extremes, poorly designed office equipment and machinery.
Unsafe working conditions such as working with toxic chemicals, with dangerous machinery, in nuclear power plants, or with people who have communicable diseases like AIDS can cause stress and injuries.
Mergers and acquisitions are often a source of stress, particularly for employees in the acquired firm. They may feel like second-class citizens and fear that they might be laid off.

21. Work-Life Balance Elder care Child care Value conflict
A recent study found that 85% of US employees have responsibilities for family members living at home. This, in conjunction with the fact that employees are working longer hours than they did 20 years ago, suggests that achieving a balance between work and life outside of work can be a real challenge.
Another form of conflict between work and personal life occurs when employees are requested to do things that go against their own personal values or when they work in organizations with ethics different from their own.

22. Environmental Uncertainty
Global instability
Aftermath of war and terrorism
SARS
Corporate scandals
Exposure to toxins
Employees also experience stress from uncertainty and crises in the wider environment in which organizations operate. This slide lists examples of stressors stemming from the wider environment.

23. Coping Strategies for Individuals
Problem-focused
Time Management
Mentoring
Role Negotiation
Emotion-focused
Exercise
Meditation
Social Support
Clinical Counseling
The extent to which stress is experienced and whether stress is positive or negative depends on how people cope (manage or deal) with stress. There are two basic types of coping: emotion-focused and problem-focused.
Problem-focused coping is the steps people take to deal directly with and act on the source of stress. When problem-focused coping is successful, it helps employees deal with opportunities and threats that are causing stress.
Emotion-focused coping is the steps people take to deal with and control their stressful feelings and emotions.
Research suggests that people tend to engage in both kinds of coping when dealing with a stressor.
Problem-focused coping is directly tailored to the stressor being experienced. Time management is a good strategy for dealing with overload and work-family conflict. Getting help from a mentor can be useful for dealing with role conflict, role ambiguity, overload, and challenging assignments and promotions. Role negotiation is the process through which employees actively try to change their roles in order to reduce role conflict, role ambiguity, overload, or underload. It may mean simply saying no to additional assignments.

24. Time-Management Steps
Make lists of all tasks to accomplish during day
Prioritize tasks
Estimate length of time required to complete each task

25. Nonfunctional Coping Strategies
Entertaining/ Relaxing
Eating
Drinking
Taking drugs
While exercise, meditation, social support of family and friends, and clinical counseling are all functional, emotion-focused coping strategies, there are other emotion-focused ways of coping that are less functional. Some people react to high levels of stress by eating too much, drinking too much, or taking drugs. These ways are never effective in alleviating stressful feelings and emotions in the long run and may create more problems such as being overweight, being addicted to alcohol or drugs, and being unable to function to one’s fullest capacity.

26. How Can Stress Be Reduced?
Employee Assistance Programs (EAPs)
Programs offered by organizations to help employees overcome personal and health related problems
Wellness Programs
Programs offered by organizations to help employees prevent health problems
As mentioned earlier, not all stress is dysfunctional. Since stress can never be totally eliminated from a person’s life, managers want
to reduce the stress that leads to dysfunctional work behavior. How? Through controlling certain organizational factors to reduce
job-related stress, and to a more limited extent, offering help for personal stress
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27. Coping Strategies for Organizations
Problem-focused
Job redesign
Job rotation
Uncertainty reduction
Job security
Company day care
Flextime/job sharing
Telecommuting
Emotion-focused
On-site exercise facilities
Organizational support
Employee assistance programs
Personal days/ Sabbaticals
Managers and organizations can do several things to deal with problems and opportunities that are sources of stress for employees. Some problem-focused coping strategies for organizations are job redesign and rotation, reduction of uncertainty, job security, company day care, flexible work schedules, job sharing, and telecommuting.
Job redesign can reduce negative stress caused by high levels of role conflict, role ambiguity, overload, or underload, or to improve working conditions. The job characteristics model suggests which aspects are especially important to consider – skill variety, task identity, task significance, autonomy, and feedback. When job redesign is not an option, job rotation can sometimes alleviate stress. Increasing employee participation in decision making is one way to reduce uncertainty for employees. Another way is to improve communication. Whenever possible, provide employees with job security.
Organizations can help employees cope effectively with stressful feelings and emotions through such things as on-site exercise facilities, organizational support, employee assistance programs, and personal days and sabbaticals.
Employee assistance programs (EAPs) provide employees with professional help to deal with stressors. Employee health management programs (EHMPs) are a special kind of EAP designed to promote the well-being of employees and encourage healthy lifestyles.

28. How Can Managers Encourage Innovation?
Creativity
The ability to combine ideas in a unique way or to make unusual associations between ideas
Innovation
The process of taking a creative idea and turning it into a useful product, service, or method of operation.
How to stimulate innovation (What are Innovation variables)?
Creativity refers to the ability to combine ideas in a unique way or to make unusual associations between ideas. A creative organization develops unique ways of working or novel solutions to problems. The outcomes of the creative process need to be turned into useful products or work methods, which is defined as innovation
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The transformation process requires having the right environment to turn those inputs into innovative products or work methods. This “right” environment—that is, an environment that stimulates innovation—includes three variables: the organization’s structure, culture, and human resource practices. (See Exhibit 7-5.)
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Fostering Innovation
Idea Champions
Individuals who actively and enthusiastically support new ideas, build support for, overcome resistance to, and ensure that innovations are implemented
Innovative organizations actively promote the training and development of their members so their knowledge remains current; offer their employees high job security to reduce the fear of getting fired for making mistakes; and encourage individuals to become idea champions, actively and enthusiastically supporting new ideas, building support, overcoming resistance, and ensuring that innovations are implemented.
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31. Practice: Stress & Innovation
Make a script for a 5-min-play about stress and how to deal with stress.
Assessment:
Creativity: 50p
Acting skills: 50p
Logic: 50p
Ways to deal with stress: 50p
Total: 200p
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