Chapter 9

Managing Change
TABLE OF CONTENTS
• Summary
• What Is Change And How Do Managers Deal With It?
• How Do Managers Manage Resistance To Change?
• What Reaction Do Employees Have To Organizational Change?
• How Can Managers Encourage Innovation In An Organization?
SUMMARY
SUMMARY
• Define organizational change and compare and contrast
views on the change process. Organizational change is any
alteration of an organization’s people, structure, or
technology. The “calm waters” metaphor of change suggests
that change is an occasional disruption in the normal flow of
events and can be planned and managed as it happens using
Lewin’s three-step change process (unfreezing, changing, and
freezing). The “whitewater rapids” view of change suggests
that change is ongoing, and managing it is a continual process.
SUMMARY
• Explain how to manage resistance to change. People resist
change because of uncertainty, habit, concern about personal
loss, and the belief that a change is not in the organization’s
best interests. Techniques for managing resistance to change
include education and communication (educating employees
about and communicating to them the need for the change),
participation (allowing employees to participate in the change
process), facilitation and support (giving employees the
support they need to implement the change), negotiation
(exchanging something of value to reduce resistance),
manipulation and co-optation (using negative actions to
influence), selecting people who are open to and accept
change, and coercion (using direct threats or force).
SUMMARY
• Describe what managers need to know about employee
stress. Stress is the adverse reaction people have to excessive
pressure placed on them from extraordinary demands,
constraints, or opportunities. The symptoms of stress can be
physical, psychological, or behavioral. Stress can be caused by
personal factors and by job-related factors. To help employees
deal with stress, managers can address job-related factors by
making sure an employee’s abilities match the job
requirements, improve organizational communications, use a
performance planning program, or redesign jobs. Addressing
personal stress factors is trickier, but managers could offer
employee counseling, time management programs, and
wellness programs.
SUMMARY
• Discuss techniques for stimulating innovation. Creativity is the
ability to combine ideas in a unique way or to make unusual
associations between ideas. Innovation is turning the outcomes of
the creative process into useful products or work methods. An
innovative environment encompasses structural, cultural, and
human resource variables. Important structural variables include an
organic-type structure, abundant resources, and frequent
communication between organizational units, minimal time
pressure, and support. Important cultural variables include
accepting ambiguity, tolerating the impractical, keeping external
controls minimal, tolerating risk, and tolerating conflict, focusing on
ends not means, using an open-system focus, and providing positive
feedback. Important human resource variables include high
commitment to training and development, high job security, and
encouraging individuals to be idea champions.
LEARNING OBJECTIVES
In this chapter we will address the following questions:
• 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.
Section 1
WHAT IS CHANGE AND HOW DO MANAGERS DEAL WITH IT?
WHAT IS CHANGE?
• Change and change management are
important aspects of the manager’s
job.
• Organizational change is defined as
any alteration of people, structure, or
technology in an organization.
Instead of trying to eliminate change,
managers must realize that change is
always present and that they should
seek ways to manage change
successfully.
WHAT IS CHANGE?
Characteristics of Change
• Is constant yet varies in degree
and direction
• Produces uncertainty yet is not
completely unpredictable
• Creates both threats and
opportunities
THREE CATEGORIES OF CHANGE
CHANGING STRUCTURE
• Changing structure includes any
alteration in any authority
relationships, coordination
mechanisms, degree of
centralization, job design, or
similar organization structure
variables.
• These structural components
give employees the authority and
means to implement process
improvements
CHANGING TECHNOLOGY
Changing technology encompasses
modification in the way work is
processed or the methods and
equipment used.
• The primary focus on technological
change in continuous improvement
initiatives is directed at developing
flexible processes to support better
quality operations.
• Employees are constantly looking for
things to fix.
• Work processes must be adaptable
to continual change and fine tuning.
• This adaptability requires an
extensive commitment to educating
and training workers.
CHANGES IN PEOPLE
Changes in people refer to
changes in employee attitudes,
expectations, perceptions, or
behaviors.
• Requires a work force
committed to the
organization’s objectives of
quality and continuous
improvement.
FORCES FOR CHANGE- EXTERNAL FORCES

• Marketplace-adapt to change
consumer desires.
• Governmental laws and Governmental
regulations- frequent impetus
for change. Marketplace laws and
• Technology- source of change regulations
in almost industries
• Labor market- HRM activities
must change to attract and Technology Labor market
retain employees in the area
of greatest needs.
• Economic changes-
uncertainties about interest Economic
rate, budget deficits and changes
currency exchange rates.
FORCES FOR CHANGE- INTERNAL FORCES

• Internal forces tend to

originate primarily from the Change internal
internal operations of the operations because
organization or from the of external changes
impact of external changes.
• When management redefines
or modifies its strategy, it
often introduces a host of Management
changes.
modifies company
• Employees may have their strategies
jobs redesigned, need to
undergo training to operate
the new equipment, or be
required to establish new
interaction patterns within
their formal group. Job redesigned
FORCES FOR CHANGE- INTERNAL FORCES

• An organization’s work force

is rarely static; its composition
changes. Work force static
• The compensation and
benefits systems might also
need to be reworked to
reflect the needs of a diverse
work force and market forces Rework on
in which certain skills are in
short supply. compensation and
• Employee attitudes, such as benefits systems
increased job dissatisfaction,
may lead to increased
absenteeism, resignations,
and even strikes. Change of
employee
attitudes
WHO INITIATES ORGANIZATIONAL CHANGE?

• Changes within an organization

need a catalyst.
• People who act as catalysts and
assume the responsibility for
managing the change process are
called change agents.
• Any manager can be a change
agent. A nonmanager can also
be a change agent.
• For major system wide changes,
internal management will often
hire outside consultants to
provide advice and assistance.
• Internal managers who act as
change agents may be more
thoughtful and possibly more
cautious.
HOW DOES ORGANIZATIONAL CHANGE HAPPEN?

• The “calm waters” metaphor

envisions the organization as
a large ship crossing a calm
sea.
• Change surfaces as the
occasional storm, a brief
distraction in an otherwise
calm and predictable trip.
• In the “white-water rapids”
metaphor, the organization is
seen as a small raft navigating
a raging river with
uninterrupted white-water
rapids.
• Change is a natural state and
managing change is a
continual process.
WHAT IS THE “CALM WATERS” METAPHOR?

• The calm waters metaphor

dominated the thinking of
practicing managers and
academics.
• The prevailing model for handling
change in calm waters is
illustrated in Lewin’s three-step
model. According to Lewin,
successful change requires
unfreezing the status quo,
changing to a new state, and
refreezing the new change to
make it permanent.
WHAT IS THE “CALM WATERS” METAPHOR?

• The status quo can be considered an

equilibrium state.
• Unfreezing is necessary to move from
this equilibrium.
• The driving forces can be increased
(direct behavior away from the
status quo).
• The restraining forces can be
decreased (hinder movement from
the existing equilibrium).
• The two approaches can be
combined.
• Once unfreezing has been
accomplished, the change itself can
be implemented.
WHAT IS THE “CALM WATERS” METAPHOR?

• The new situation needs to be

refrozen so that it can be
sustained over time.
• Unless this is done, there is a
strong chance that the change
will be short-lived.
• The objective of refreezing is to
stabilize the new situation by
balancing the driving and
restraining forces.
• Lewin’s three-step process treats
change as a break in the
organization’s equilibrium state.
WHAT IS THE “WHITE-WATER RAPIDS” METAPHOR?

• The white-water metaphor takes

into consideration that
environments are both uncertain
and dynamic.
• For example, variable college
curriculum.
• Currently, the stability and
predictability of the calm waters
do not exist.
• Many of today’s managers face
constant change, bordering on
chaos.
HOW DO ORGANIZATIONS IMPLEMENT
PLANNED CHANGES?
• Organization development (OD)
facilitates long-term
organization-wide changes.
• Its focus is to constructively
change the attitudes and values
of organization members so that
they can more readily adapt to
and be more effective in
achieving the new directions of
the organization.
• Organization’s leaders are, in
essence, attempting to change
the organization’s culture.
• Fundamental to organization
development is its reliance on
employee participation.
HOW DO ORGANIZATIONS IMPLEMENT
PLANNED CHANGES?
• Any organizational activity that assists
with implementing planned change can
be viewed as an OD technique. The
more popular OD efforts rely heavily on
group interactions and cooperation.
• 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 and acthelp managers to
perceive, understand, upon process
events with which they must deal.
HOW DO ORGANIZATIONS IMPLEMENT
PLANNED CHANGES?
• These might include workflow, informal
relationships among unit members, and
formal communications channels.
• Consultants are not there to solve these
problems. Rather, they act as coaches to
help managers diagnose which
interpersonal processes need
improvement.
• 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.
• Intergroup development attempts to
achieve the same results among
different work groups.
• Attempts to change attitudes,
stereotypes, and perceptions that one
group may have toward another group
to achieve better coordination among
the various groups.
WHAT IS CHANGE AND HOW DO MANAGERS DEAL WITH IT?
Kurt Lewin change theory and three step model -Questions

• Contrast the calm waters and white-water rapids metaphors of

change. Which of these would you use to describe your current life?
Why is that one your choice?
• Describe Lewin’s three-step change process. How is it different from
the change process needed in the whitewater rapids metaphor of
change?
WHAT IS CHANGE AND HOW DO MANAGERS DEAL WITH IT?
Kurt Lewin change theory and three step model - Answers

Contrast the calm waters and white-water rapids metaphors of

change. Which of these would you use to describe your current life?
Why is that one your choice?
• As you can imagine, most students will choose the white-water
metaphor to describe their own circumstances. To dig deeper, you
may ask students if they think this will change when they graduate
or if their parents feel like they are in ‘calmer waters.’ In our society,
it may very well be that the white water rapid feeling is fast
becoming the norm.
WHAT IS CHANGE AND HOW DO MANAGERS DEAL WITH IT?
Kurt Lewin change theory and three step model - Answers

Describe Lewin’s three-step change process. How is it different from

the change process needed in the whitewater rapids metaphor of
change?
• The prevailing model for handling change in calm waters is Lewin’s
three-step model.. According to Lewin, successful change requires
unfreezing the status quo, changing to a new state, and refreezing
the new change to make it permanent. The status quo can be
considered an equilibrium state.
• Unfreezing is necessary to move from this equilibrium.
• The driving forces can be increased.
• The restraining forces can be decreased.
• The two approaches can be combined.
• Once unfreezing has been accomplished, the change itself can be
implemented.
WHAT IS CHANGE AND HOW DO MANAGERS DEAL WITH IT?
Kurt Lewin change theory and three step model - Answers

Describe Lewin’s three-step change process. How is it different from the

change process needed in the whitewater rapids metaphor of change?
• The new situation needs to be refrozen so that it can be sustained over
time. Unless this is done, there is a strong chance that the change will
be short-lived.
• The objective of refreezing is to stabilize the new situation by balancing
the driving and restraining forces.
• The calm waters metaphor dominated the thinking of practicing
managers and academics. The prevailing model for handling change in
calm waters is Lewin’s three-step model. Lewin’s three-step process
treats change as a break in the organization’s equilibrium state.
• The white water metaphor takes into consideration that environments
are both uncertain and dynamic. The stability and predictability of the
calm waters do not exist. Many of today’s managers face constant
change, bordering on chaos. Few organizations today can treat change
as the occasional disturbance. Most competitive advantages last less
than eighteen months.
Section 2
HOW DO MANAGERS MANAGE RESISTANCE TO CHANGE?
WHY DO PEOPLE RESIST ORGANIZATIONAL CHANGE?

• An individual is likely to resist change

for three reasons: uncertainty, habit,
concern over personal loss, and the
belief that the change is not in the
organization’s best interest.
• Changes substitute ambiguity and
uncertainty for the known.
• Employees in organizations often
hold a dislike for uncertainty.
• The second is habit. To reduce stress,
we often rely on habit or
programmed decisions.
WHY DO PEOPLE RESIST ORGANIZATIONAL CHANGE?

• The third cause of resistance is the

fear of losing what one already
possesses.
• Change threatens the investment in
the status quo.
• The more people have invested in the
current system, the more they resist
change.
• They fear the loss of their position,
money, authority, friendships,
personal convenience, or other
benefits that they value.
• A final cause of resistance is a
person’s belief that the change is
incompatible with the goals and best
interests of the organization.
• If expressed positively, this form of
resistance can be beneficial to the
organization.
WHAT ARE SOME TECHNIQUES FOR REDUCING
RESISTANCE TO ORGANIZATIONAL CHANGE?
REDUCING RESISTANCE TO CHANGE
• Education and communication help
employees see the logic of the change
effort.
• Assumes that much of the resistance
lies in misinformation or poor
communication.
• Participation involves bringing those
individuals directly affected by the
proposed change into the decision-
making process.
• Allows expression of feelings, increases
the quality of the process, and increases
employee commitment to the final
decision.
• Facilitation and support involve helping
employees deal with the fear and
anxiety associated with the change
effort.
• May include employee counseling,
therapy, new skills training, or a short
paid leave of absence.
REDUCING RESISTANCE TO CHANGE
• Negotiation involves a bargain:
exchanging something of value
for an agreement to lessen the
resistance to the change effort.
• This technique may be quite
useful when the resistance
comes from a powerful source.
• Manipulation and co-optation
refers to covert attempts to
influence others about the
change.
• May involve twisting or distorting
facts to make the change appear
more attractive.
• Coercion involves the use of
direct threats or force against the
resisters.
Section 3
WHAT REACTION DO EMPLOYEES HAVE TO ORGANIZATIONAL CHANGE?
WHAT IS STRESS?
• Stress can be the aftermath of
organizational change.
• Stress is the adverse reaction
people have to excessive
pressure placed on them from
extraordinary demands,
constraints, or opportunities.
• Stress can manifest itself in both
a positive and a negative way.
• It is positive when the situation
offers an opportunity for one to
gain something.
• It is when constraints or
demands are placed on us that
stress can become negative.
WHAT IS STRESS?
• Constraints are barriers that keep us
from doing what we desire.
• They inhibit you in ways that take
control of a situation out of your
hands.
• Demands may cause you to give up
something you desire.
• Demands preoccupy your time and
force you to shift priorities.
• Opportunities are the possibility of
something new or something never
done before.
SYMPTOMS OF STRESS
WHAT ARE THE SYMPTOMS OF STRESS?
• There are three general ways that
stress reveals itself: physical,
psychological, and behavioral
symptoms.
• Most of the early discussions of
stress focused heavily on physical
concerns (health-related).
• High stress levels result in
changes in metabolism,
increased heart and breathing
rates, increased blood pressure,
headaches, and increased risk of
heart attacks.
• In Japan, there’s a stress
phenomenon called karoshi
(pronounced kah-roe-she), which
is translated literally as “death
from overwork.”
WHAT CAUSES STRESS?
• 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.
• Role overload is when the employee is
expected to do more than time permits.
• Role ambiguity is created when role
expectations are not clearly understood. o
• Interpersonal demands are pressures
created by other employees.
• Lack of social support from colleagues
and poor interpersonal relationships
can cause considerable stress.
WHAT CAUSES STRESS?
• Organizational leadership represents the
supervisory style of the organization’s
company officials.
• Some managers create a culture
characterized by tension, fear, and anxiety.
• Unrealistic pressures to perform in the
short run, excessively tight controls, and
firing employees who don’t measure up.
• Personal factors that can create stress o
include family issues, personal economic
problems, and inherent personality
characteristics.
• Type A personality is characterized by
feelings of a chronic sense of time urgency,
an excessive competitive drive, and
difficulty accepting and enjoying leisure
time.
• Type B’s never suffer from time urgency or
impatience. Type B’s are just as susceptible
to the same anxiety-producing elements.
HOW CAN STRESS BE REDUCED?
• Some stress in organizations is absolutely
necessary. Without it, people have no
energy.
• Job-related factors. Letting employees
know precisely what is expected of them,
role conflict, and ambiguity can be
reduced.
• Redesigning jobs can also help ease work
overload-related stressors. o
• Personal factors. Employee assistance
programs (EAPs) assist employees in
dealing with difficult issues in order to get
the employee back to work as soon as
possible.
• A wellness program is any type of program
that is designed to keep employees
healthy.
WHAT REACTION DO EMPLOYEES HAVE TO ORGANIZATIONAL CHANGE?
Video Time – “Embracing Change”

 “Jason talks about embracing change”

 The founder of Minds at Work founder,
Jason Clarke, who is also a co-founder
and first follower of CSL’s, is the ultimate
supporter. Bringing The team at Minds
at Worky bring cutting edge problem
identification and solution design to all
alumni of CSL(Centre for Sustainability
Leadership)
 https://www.youtube.com/watch?v=vPh
M8lxibSU
Section 4
HOW CAN MANAGERS ENCOURAGE INNOVATION IN AN ORGANIZATION?
HOW ARE CREATIVITY AND INNOVATION RELATED?

• Creativity means the ability to

combine ideas in a unique way or
to make unusual associations
between ideas.
• For example, Mattel.
• Innovation is the process of
taking a creative idea and turning
it into a useful product, service,
or method of operation.
WHAT IS INVOLVED IN INNOVATION?

• Some people believe that creativity is

inborn; others believe that with training
anyone can be creative.
• Creativity can be viewed as a fourfold
process consisting of perception,
incubation, inspiration, and innovation.
• Perception involves the way you see
things. Being creative means seeing
things from a unique perspective.
• go through a process of incubation.
• During this incubation period,
employees should collect massive
amounts of data that are stored,
retrieved, studied, reshaped, and finally
molded into something new.
• During this period, it is common for
years to pass.
WHAT IS INVOLVED IN INNOVATION?

• Inspiration in the creative process is the

moment when all your efforts successfully
come together.
• Creative work requires an innovative
effort.
• Innovation involves taking that inspiration
and turning it into a useful product,
service, or way of doing things.
• Thomas Edison is often credited with
saying, “Creativity is 1 percent inspiration
and 99 percent perspiration.”
• That 99 percent, or the innovation,
involves testing, evaluating, and retesting
what the inspiration found.
ENCOURAGING INNOVATION
HOW CAN A MANAGER FOSTER INNOVATION?

• There are three sets of variables that

have been found to stimulate
innovation. They pertain to the
organization’s structure, culture, and
human resource practices.
• How do structural variables affect
innovation?
• First, organic structures positively
influence innovation. They have less
work specialization and fewer rules and
are more decentralized than
mechanistic structures; they facilitate
the flexibility, adaptation, and cross-
fertilization that make the adoption of
innovations easier.
• Second, easy availability of plentiful
resources is a key building block for
innovation.
HOW CAN A MANAGER FOSTER INNOVATION?

• An abundance of resources allows

management to purchase An abundance of
innovations, bear the cost of resources
instituting innovations, and absorb
failures.
• Frequent inter-unit communication
helps to break down possible barriers
to innovation by facilitating Frequent inter-unit
interaction across departmental lines. communication
• Extreme time pressures on creative
activities are minimized despite the
demands of white-water-rapids-type
environments.
• When an organization’s structure
Creative activities
explicitly supports creativity,
employees’ creative performance can
be enhanced.
HOW CAN A MANAGER FOSTER INNOVATION?

• What human resource variables affect

innovation?
• Innovative organizations actively
promote the training and development
of their members so that 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 champions of change.
• Once a new idea is developed, an idea
champions actively and enthusiastically
promote the idea, build support,
overcome resistance, and ensure that
the innovation is implemented.
• Research finds that champions have
common personality characteristics:
extremely high self-confidence,
persistence, energy, and a tendency to
take risks.
• Champions also display characteristics
associated with dynamic leadership.
HOW CAN A MANAGER FOSTER INNOVATION?

• How does an organization’s culture

affect innovation?
• Innovative organizations tend to have
similar cultures: they encourage
experimentation; they reward both
successes and failures and they
celebrate mistakes.
An innovative culture is likely to have the
following characteristics:
• Acceptance of ambiguity.
• Tolerance of the impractical.
• Low external controls.
• Tolerance of risk.
• Tolerance of conflict.
• Focus on ends rather than on means.
• Open systems focus.
• Provide positive feedback
HOW CAN MANAGERS ENCOURAGE INNOVATION IN AN ORGANIZATION?
Video Time – “Creating a culture of collaborative innovation”

 “What will workplaces look like when

the most material endowed,
technologically literate, formally
educated, and globally connected
generations reach employment age”
 Claire Madden is a social researcher who
effectively bridges the gap between the
emerging generations and the business
leaders and educators of today. She is a
next-gen expert, fluent in the social
media, youth culture, and engagement
styles of these global generations, and a
professional in interpreting what this
means for educators, managers and
marketers.
 https://www.youtube.com/watch?v=va
N6FtJ8inA