1. MANAGING: A COMPETENCY BASED APPROACH
11th Edition
Chapter 12: Guiding Organizational Change and Innovation
Don Hellriegel
Susan E. Jackson
John W. Slocum, Jr.
Prepared by
Argie Butler
Texas A&M University

2. Learning Goals Describe four types of organizational change
2. Explain the planning process for organizational change
3. Identify four methods of organizational change
4. Describe how innovation relates to organizational change
5. Discuss how learning organizations foster change
Chapter 12: PowerPoint 12.1

3. Types of Organizational Change:
Degree of Change
Organizational change: any transformation in the design or functioning of an organization
Radical change: organizations make major innovations in the ways they do business
Stages of Radical Change*
Unfreezing
Transitioning
Refreezing
(*Adapted from Figure 12.1)
Chapter 12: PowerPoint 12.2

4. Types of Organizational Change:
Degree of Change
Incremental change: ongoing process of evolution over time, during which many small adjustments occur routinely
Tempered radicals: people who strive to create radical change but do so by prodding an organization to make many small incremental changes
Total quality management: relies heavily on continuous incremental change
Chapter 12: PowerPoint 12.3

5. Advice for Tempered Radicals
Earn credibility first, and then leverage it
Gather and accept support from others along the way
Develop grass roots initiatives and be willing to share the stage with supporters
Chip away at standard operating procedures little by little over time until you achieve real success
Accept small changes as making progress
Develop your ability to compromise as well as persuade
Be persistent
Chapter 12: PowerPoint 12.4 (Adapted from Table 12.1)

6. Types of Organizational Change: Timing
of Change
Reactive change: occurs when an organization is forced to adapt or innovate in response to some event in the external or internal environment
Anticipatory change: occurs when managers make organizational modifications based on forecasts of upcoming events or early in the cycle of a new trend
Chapter 12: PowerPoint 12.5

7. Types of Organizational Change: Integrated Model
Incremental Anticipatory Change
Incremental Reactive Change
Small
Adjustments
Degree of Change
Radical
Anticipatory Change
Radical Reactive Change
Major
Transformation
Timing of Change
Before Major Shifts in the Environment
After Major Shifts in
the Environment
Chapter 12: PowerPoint 12.6 (Adapted from Figure 12.2)

8. Planning for Organizational Change: Key Steps
Start
Assess the Environment
2. Determine Performance Gap
3. Diagnose Organizational Problems
Monitor Changes
6. Anticipate and Reduce Resistance
4. Articulate and Communicate Vision for the Future
5. Develop and Implement an Action Plan
Chapter 12: PowerPoint 12.7 (Adapted from Figure 12.3)

9. Planning for Organizational Change: Common Reasons for Resistance
Fear
Vested interests
Misunderstandings
Cynicism
Chapter 12: PowerPoint 12.8

10. Planning for Organizational Change: Snapshot
“When I need to announce a change, I go to my top performers first. I give as much information as I possibly can to help them understand the reasons behind the change. I prefer one-on-one communication, particularly if it is an important change.”
Theresa Robinson, Senior Manager of Best Practices and Risk Management, Aflac
Chapter 12: PowerPoint 12.9

11. Implementing Change: Common Methods for Creating Change
Technological Change
Organizational Redesign
Job Redesign
Organizational Development
Chapter 12: PowerPoint (Adapted from Figure 12.4)

12. Technological Change
Involves incremental adjustments or radical innovations that affect workflows, production methods, materials, and information systems
Many new forms of information technology (IT)
IT is enabling real time and any time links between suppliers, producers, distributors, and customers
Chapter 12: PowerPoint 12.11

13. Organization Redesign
Involves incremental adjustments or radical innovations focused on realigning departments, changing who makes decisions, and merging or reorganizing departments that sell the organization’s products
Two basic approaches
Change organization’s structure, such as from functional to product departmentalization
Change organization’s processes, such as how customer complaints are handled
Restructuring: reconfiguring the distribution of authority, responsibility, and control in an organization
Reengineering: radical redesigning of an organization’s functions and business processes
Chapter 12: PowerPoint 12.12

14. Job Redesign Job simplification: the scientific analysis of tasks
Modifying specific employee job responsibilities and tasks
Job simplification: the scientific analysis of tasks
Focus on efficient workflow process for employees in a particular job
Frequent use of time and motion studies
Job enrichment: changing job specifications to broaden and add challenge to the tasks required and to increase productivity
Increases interesting and challenging work
Increases autonomy and personal freedom
Chapter 12: PowerPoint 12.13

15. Organization Development (OD)
A planned, long-range behavioral science strategy for understanding, changing, and developing an organization’s workforce in order to improve its effectiveness
Focus group discussion: a carefully planned discussion among several employees about a specific topic or issue of interest, which is led by a trained facilitator
Facilitator explains the topic to be discussed, the role of the scribe, and how the organization will use the results of the focus group discussion
Participants come prepared to discuss a specific topic. If confidentiality is a concern, participants are chosen from different units of the organization, not the same work group
Scribe: the person who takes notes about what is said, but not who says it
Chapter 12: PowerPoint 12.14

16. Organization Development (OD) (cont’d)
Survey feedback: a process that allows managers and employees to report their thoughts and feelings about the organization and to learn about how others think and feel about their own behaviors
Feedback obtained by means of a questionnaire developed and distributed to employees, who complete it and turn it in anonymously
Content of questionnaire depends on areas of most concern
Questionnaire
Chapter 12: PowerPoint 12.15

17. Organization Development (OD) (cont’d)
Team building: process that develops the ability of team members to collaborate effectively so they can perform the tasks assigned to them
Often emphasizes developing a group climate that is safe
Openness can be risky, but promotes creativity and effective problem solving
Chapter 12: PowerPoint 12.16

18. Combining Methods of Change
Major organizational change is a complex process
Typically involves a combination of methods
Example: purchasing and installing enterprise resource planning [ERP] software
Chapter 12: PowerPoint 12.17

19. Role of Innovation in Organizational
Change
Innovation: the discovery, identification and diagnosis of unusual and ambiguous problems and/or the development of unique or creative solutions
Strategic importance of innovation
Critical in dynamic, changing environments
Organizations can rest on prior success
Complacency is deadly
Chapter 12: PowerPoint 12.18

20. Types of Innovation
Technical innovation: creation of new goods and services
Process innovation: creating a new way of producing, selling, and/or distributing an existing good or service
Administrative innovation: creating a new organization design that better supports the creation, production, and delivery of goods and services
Chapter 12: PowerPoint 12.19

21. Types of Innovation: Snapshot
“Champion was an old-line paper manufacturing company with classic characteristics solidly in place. We had a traditional management structure, an adversarial relationship with unions, and information systems that reflected that type of thinking. [Now] we’ve changed our hierarchy, opened up our information systems, developed cooperative partnering with unions, and established accountability within supervisory groups.”
Mark Childers, Senior VP of Organizational Development, Champion International, a subsidiary of International Paper
Chapter 12: PowerPoint 12.20

22. Architecture for Innovation
Foster
Workforce Resilience
Provide a Support System for Innovation
Develop a Learning Environment and
Learning Orientation among Employees
Chapter 12: PowerPoint (Adapted from Figure 12.6)

23. Learning Organizations
Learning organization: has both the drive and the capabilities to modify or transform itself and improve its performance continuously
Learns from past experiences
Learns from customers
Learns from various parts of the organization
Learns from other organizations
Chapter 12: PowerPoint 12.22

24. Characteristics of a Learning Organization Customer-Focused Strategy
Shared Leadership
Culture of Innovation
Customer-Focused Strategy
The
Learning
Organization
Organic
Organization Design
Intensive
Use of Information
Chapter 12: PowerPoint (Adapated from Figure 12.7)

25. Characteristics of a Learning Organization: Snapshot
“We all make mistakes. It’s not as though at any time, Dell doesn’t have some part of its business that’s not working for us as it should. But we have a culture of continuous improvement. We train employees to constantly ask themselves, ‘How do we grow faster? How do we lower our cost structure? How do we improve service for customers?’”
Michael Dell, Chairman and Cofounder, Dell Computer
Chapter 12: PowerPoint 12.24