Management a practical introduction 3rd kinicky chapter 10

Management A Practical Introduction Third Edition Angelo Kinicki & Brian K Williams Kinicki/Williams, Management: A Practical Introduction 3e ©2008, McGraw-Hill/Irwin Chapter 10: Organizational Change & Innovation Lifelong Challenges for the Exceptional Manager The nature of change in organizations Organizational development Promoting innovation Managing employee fear & resistance Kinicki/Williams, Management: A Practical Introduction 3e ©2008, McGraw-Hill/Irwin 10.1 The Nature Of Change In Organizations WHAT DO MANAGERS NEED TO KNOW ABOUT CHANGE? Managers need to be aware of five current trends that will shape the future of business: Customer groups are being segmented into ever smaller groups that demand specialized messages Marketing niches are now more important Speed is becoming a key competitive weapon Kinicki/Williams, Management: A Practical Introduction 3e ©2008, McGraw-Hill/Irwin 10.1 The Nature Of Change In Organizations It can be difficult for traditional companies to take advantage of a massive industry change For these companies, it can be more successful to establish a new division to incorporate change Workers in nations like China and India are willing to work twice as hard for half the pay as American workers Companies that outsource to these countries free up domestic employees to work in other areas Knowledge is becoming the new competitive advantage Kinicki/Williams, Management: A Practical Introduction 3e ©2008, McGraw-Hill/Irwin 10.1 The Nature Of Change In Organizations Managers have to deal with two types of change: Reactive change involves making changes in response to problems or opportunities as they arise Managers have less time to get the information necessary to make decisions when they deal with reactive change Proactive change or planned change involves making carefully thought-out changes in anticipation of possible or expected problems or opportunities Kinicki/Williams, Management: A Practical Introduction 3e ©2008, McGraw-Hill/Irwin 10.1 The Nature Of Change In Organizations HOW DO MANAGERS KNOW THEIR ORGANIZATIONS NEED TO CHANGE? Managers can monitor forces inside and outside the firm to identify areas of change There are four types of external forces: demographics - the U.S workforce is now more diverse market changes - companies are having to change the way they business and build new relationships with employees, suppliers, and competitors; global economy Kinicki/Williams, Management: A Practical Introduction 3e ©2008, McGraw-Hill/Irwin 10.1 The Nature Of Change In Organizations technological advancements - managers must deal with the realities of information technology social & political pressures - social events create new pressures for managers There are two types of internal forces: employee problems - job dissatisfaction can be a signal for change managers’ behavior - excessive conflict between managers and employees can signal the need for change Kinicki/Williams, Management: A Practical Introduction 3e ©2008, McGraw-Hill/Irwin 10.1 The Nature Of Change In Organizations Figure 10.1: Forces For Change Outside And Inside The Organization Kinicki/Williams, Management: A Practical Introduction 3e ©2008, McGraw-Hill/Irwin Chapter 10: Organizational Change & Innovation CLASSROOM PERFORMANCE SYSTEM Which of the following is not an example of outside forces? A) mergers & acquisitions B) office automation C) structural organization D) values Kinicki/Williams, Management: A Practical Introduction 3e ©2008, McGraw-Hill/Irwin 10.1 The Nature Of Change In Organizations Change is most likely to be needed in four areas: changing people - perceptions, attitudes, performance, and skills are all areas where change may be needed changing technology - technology (any machine or process that enables an organization to gain a competitive advantage in changing materials used to produce a finished product) is a major area of change for many organizations changing structure - there is a trend toward flattening the traditional hierarchical structure in firms by eliminating layers of middle managers and creating teams that are linked electronically changing strategy - marketplace changes can cause companies to change their strategies Kinicki/Williams, Management: A Practical Introduction 3e ©2008, McGraw-Hill/Irwin 10 10.2 Organizational Development: What It Is, What It Can Do HOW DOES OD WORK? OD managers: Diagnose problems - surveys, questionnaires, interviews, and meetings are used to identify problems Intervene to make changes - attempts to correct diagnosed problems is intervention Evaluate the results - once a plan has been put into place, it must be evaluated for effectiveness Kinicki/Williams, Management: A Practical Introduction 3e ©2008, McGraw-Hill/Irwin 13 10.2 Organizational Development: What It Is, What It Can Do OD is most successful in the following cases: Multiple interventions - combined interventions work better than single interventions Management support - when there is the commitment of top executives and the proposed changes are realistic Goals geared to both short- & long-term results change should only be implemented if it will produce positive results toward the organization’s goals OD is affected by culture - what works in one country might not work in another Kinicki/Williams, Management: A Practical Introduction 3e ©2008, McGraw-Hill/Irwin 14 10.3 Promoting Innovation Within The Organization HOW CAN MANAGERS PROMOTE INNOVATION? Innovation is important to keeping an organization vital and maintaining a competitive advantage Only four percent of U.S executives surveyed felt their organizations were doing a good job in promoting innovation in their organizations Instead of focusing on what their customers want and then using that information to drive innovation, companies are taking insular approaches to innovation Kinicki/Williams, Management: A Practical Introduction 3e ©2008, McGraw-Hill/Irwin 15 10.3 Promoting Innovation Within The Organization Innovation can occur by design or by accident, and it can come from a profit or non-profit organization Both a country’s culture and an organization’s culture are important to innovation Both types of culture must be conducive to the development of new ideas The U.S has the type of culture that is essential to innovation Kinicki/Williams, Management: A Practical Introduction 3e ©2008, McGraw-Hill/Irwin 16 10.3 Promoting Innovation Within The Organization There are two types of innovation: A product innovation is a change in the appearance or the performance of a product or a service, or the creation of a new one A process innovation is a change in the way a product or service is conceived, manufactured, or disseminated Innovation that replaces existing products is called radical innovation Innovation that modifies a current product is called incremental innovation Kinicki/Williams, Management: A Practical Introduction 3e ©2008, McGraw-Hill/Irwin 17 10.3 Promoting Innovation Within The Organization Innovation has four characteristics: Innovation is uncertain - progress is difficult to predict, and success is always a question mark People closest to the innovation know the most about it managers who are removed from the innovation process have difficulty understanding it Innovation may be controversial - since innovation requires company resources, it may become controversial since it is not clear that it will be a success Innovation can be complex - because innovation may involve multiple departments, managers need strong communication skills to manage its complexity Kinicki/Williams, Management: A Practical Introduction 3e ©2008, McGraw-Hill/Irwin 19 10.3 Promoting Innovation Within The Organization HOW CAN ORGANIZATIONS ENCOURAGE INNOVATION? Organizations can encourage innovation by providing: the right organizational culture – celebrate failure the appropriate resources – considerable resources should be devoted to the innovation process the correct reward system - experimentation (and failure) are part of the innovation process Kinicki/Williams, Management: A Practical Introduction 3e ©2008, McGraw-Hill/Irwin 20 10.3 Promoting Innovation Within The Organization HOW CAN MANAGERS FOSTER INNOVATION? The three steps to making innovation happen are: recognizing problems that need solving and opportunities that are presented communicating your vision to get support for innovation removing obstacles that might prevent employees from executing a vision Kinicki/Williams, Management: A Practical Introduction 3e ©2008, McGraw-Hill/Irwin 21 10.3 Promoting Innovation Within The Organization Figure 10.3: Three Steps For Fostering Innovation Kinicki/Williams, Management: A Practical Introduction 3e ©2008, McGraw-Hill/Irwin 22 10.4 The Threat Of Change: Managing Employee Fear & Resistance HOW SHOULD ORGANIZATIONAL CHANGE BE MANAGED? The degree to which employees feel threatened by change depends on whether it is adaptive, innovative, or radically innovative The reintroduction of a familiar practice is known as adaptive change Since the change has been experienced in the past by the organization, it is not particularly threatening to employees Kinicki/Williams, Management: A Practical Introduction 3e ©2008, McGraw-Hill/Irwin 23 10.4 The Threat Of Change: Managing Employee Fear & Resistance The introduction of a practice that is new to the organization is called innovative change This type of change tends to create some anxiety in people Introducing a practice that is new to the industry is radically innovative change This type of change is costly, complex, and uncertain, and so triggers considerable anxiety in employees Kinicki/Williams, Management: A Practical Introduction 3e ©2008, McGraw-Hill/Irwin 24 10.4 The Threat Of Change: Managing Employee Fear & Resistance The top ten reasons for resisting change are: -people’s predispositions toward change -surprise and fear of the unknown -climate of mistrust -fear of failure -loss of status or job security -peer pressure -disruption of cultural traditions or group relationships -personality conflicts -lack of tact or poor timing -non-reinforcing reward systems Kinicki/Williams, Management: A Practical Introduction 3e ©2008, McGraw-Hill/Irwin 26 10.4 The Threat Of Change: Managing Employee Fear & Resistance Kurt Lewin developed a three stage model to explain how to initiate, manage, and stabilize planned change Stage 1: unfreezing- managers encourage employees to become more open to innovation – creating the motivation to change Stage 2: changing - learning new ways of doing things - managers convey that change is a learning process that continues, it is not a one-time event Stage 3: refreezing - managers encourage employees to make the new ways part of their normal way of doing things Kinicki/Williams, Management: A Practical Introduction 3e ©2008, McGraw-Hill/Irwin 27 Lewin’s Change Model: Initiate, Manage, and Stabilize Planned Change  Unfreezing Managers try to instill in employees the motivation to change (let go)  Changing Employees need to be given the tools for change Need to be dissatisfied with old ways – “Benchmarking”  Refreezing Employees need to be helped to integrate the changed attitudes and behavior into their normal behavior McGraw-Hill/Irwin Kinicki/Williams, Management: A Practical Introduction 3e ©2008, McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc All rights rese 28 10.4 The Threat Of Change: Managing Employee Fear & Resistance  John Kotter claims that organizational change should follow eights steps: -establishing a sense of urgency -creating the guiding coalition -developing a vision and strategy -communicating the change vision -empowering broad-based action -generating short-term wins -consolidating gains and producing more change -anchoring new approaches in the organization’s culture Kinicki/Williams, Management: A Practical Introduction 3e ©2008, McGraw-Hill/Irwin 29 ... changing strategy - marketplace changes can cause companies to change their strategies Kinicki/Williams, Management: A Practical Introduction 3e ©2008, McGraw-Hill/Irwin 10 10.2 Organizational... competitive advantage Kinicki/Williams, Management: A Practical Introduction 3e ©2008, McGraw-Hill/Irwin 10. 1 The Nature Of Change In Organizations Managers have to deal with two types of change: Reactive... technology (any machine or process that enables an organization to gain a competitive advantage in changing materials used to produce a finished product) is a major area of change for many organizations