Change Management and Innovation

prepared by: Liu Ching Ching OUM PT Academic

What is Change?
Change is an element that all individuals,
groups and organisations must
continuously cope with in order to
survive (Singh, 2005)
Organisation change is defined as the
adoption of a new idea or behaviour by
an organisation (Daft & Margic, 2001)

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Forces of Change
Changes happen due to both internal and external
factors
External factors
1. Political
2. Economical
3. Socio-cultural
4. Technological
5. Competition

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Political Factor
change in government, new policies and sets of rules will
have an impact on an organization
government stability and initiatives, foreign workers and
minimum wage policies, taxation policies
Example: new Pakatan Harapan government took over on
May 9, 2018:
1. GST was replaced with SST
2. All eateries outlets must enforce no smoking effective
January 1, 2019
3. White shoes to be replaced with black shoes for students

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Economical Factor
Healthy economy encourages businesses and attracts
foreign direct investment
This in turn creates more employment opportunities
to the people
Inflation, disposal income, change in currency value,
money supply, gross domestic and national products
and interest rates can impact an organization
The current interest rate cut can boost the economy
i.e. cheaper loan, cheaper cost of doing business

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Socio-cultural Changes
Organizations need to respond to socio-cultural
changes
Adoption of new lifestyle amid COVID-19 lead to
booming ecommerce and delivery services, medical
products and services i.e. gloves, masks, face shields
Population demographics, income distribution, social
mobility, lifestyle changes, educational and vocational
qualifications all affect organizations
Creating a better work condition and compensation
for Gen Y and senior citizen
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Technological Factor
Technological advancement leads to massive changes
i.e. introduction of disruptive technologies
Industrial Revolution: robotics, artificial intelligence
and information technology enhance automation in
manufacturing
The demise of Kodak; overthrown of Nokia by iPhone
and Samsung
Disruptive technology i.e. Grab and Airbnb have
changed the way business is run

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Competition
Businesses are facing intense competition in these
days i.e. new innovative products and services emerge
from market
Organization to improve on its competitive
advantages i.e. competitive workforce, encourage
culture of innovation, forefront R & D team, first hand
market intelligence, cost leadership strategy
Continue to lead and improve, create barriers of
entrance and fight the competition

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Internal Factors
Result of internal operations within the organization
or impact of external changes
When management reorganizes or rearranges
organisational strategies, this will normally bring
about many changes
Employees may face changes in their scope of work,
might need to undergo training i.e. operate new
machine
Changes of compensation and benefits scheme in
order to attract and retain competent staff
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Manager as Change Agent
Every change needs a catalyst to initiate, encourage or
speed up the change process
Change agent is the person entrusted with the
responsibility of managing the change process
External consultants might be appointed to provide
unbiased guidance and advice, as they have no vested
interest in the organization
Internal managers have an advantage over external
consultants in that they tend to be more sensitive and
cautious, in depth internal culture of organization

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Calm Waters Metaphor
Organization as a big ship which is
crossing a calm ocean
The change which occurs is like the
occasional waves, which are only a
temporary disruption
Lewin’s Three-step Model to overcome
changes
Unfreezing Changing Refreezing
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Calm Waters Metaphor
Unfreezing Process: involves the unfreezing of the
status quo (state of equilibrium); shift from the
equilibrium or current stage for change to occur;
increase power to change and reduce resistance
Changing Process: changing to the new situation;
after the unfreezing process is completed, the
changing process can commence
Refreezing Process: assists in stabilising change;
the new situation has to be frozen so that there is
long-term continuity
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White Water Rapids Metaphor
Organizations are likened to a raft sailing on rough
seas
Change is a natural phenomenon and managing
change is a continuous process
This metaphor takes into consideration an uncertain
and fluid environment
Modern businesses exist in a volatile and
competitive environment where change is the only
constant; organizations to be organic and not
mechanistic in handling changes and adaptations
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Resistance to Change
Individuals resist change because of 3 main reasons:
1. Uncertainty: Change replaces certainty with
vagueness and uncertainty, this creates fear of the
unknown i.e. uncertainty of bonus payment and car
price put the plan to get a new car in doubt
2. Worries about individual losses: fear of losing
something already in hand; worry about losing out on
promotions, money, authority, friendship,
personal facilities and other valuable benefits

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Resistance to Change
3. The belief that the change is not for the good of
the organization:
 change is not in line with the goals and interests
of the organization
 will only bring losses to the organization
 from a positive aspect, this kind of resistance will
benefit the organization later when steps to review
the plans are taken

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Techniques to Reduce Resistance to Change
Learning and communication: beneficial if
resistance came about because of inaccurate
information and weak communication
Involvement: invite employees who are directly
affected in the decision making process, increase level
of acceptance
Support: help overcome fear, worry and anxiety as a
result of the change i.e.counselling sessions, training
to enhance skills to face the changes and other
activities
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Techniques to Reduce Resistance to Change
Negotiation: changes the bring about improvement
and mutual win to all parties reduce the resistance to
the change process
Manipulation: Reduce or change the information or
situation to influence people to change, tell only the
good side of change
Pressure: Directly use intimidation, coercion or
threats i.e. accept or leave, demotion for
incompliance etc

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MAKING CHANGES IN THE ORGANISATION
3 things that can be changed:
Structure: structural change is a change to the
relationship authority, coordination
mechanism, degree of power centralisation, work
design, etc.
Technology: technological change comprises
adapting to work methods, work processes and
tools used; continuous initiatives which aim to
develop a more flexible process to better support
operational quality
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MAKING CHANGES IN THE ORGANISATION
People: changing the attitudes, aspirations,
perceptions and behaviour of the employees
Ensuring good commitment from employees to
achieve organizational objectives
Provide full support for employee’s learning and
training
Organizations to re-evaluate their compensation
system so that it supports organizational objectives

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What is Stress ?
Stress is a dynamic state of tension
Individual is faced with opportunities, constraints or
extraordinary demands
Positive effects when it offers opportunities and
individuals can be motivated by healthy amount of
stress
Negative effects when there are constraints and
demands at the same time
Constraints prevent us from doing what we want;
Demands means give up one thing for another
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Causes of Stress
 divided into two: organizational factors and
individual factors
Task demands: work design, work environment,
workflow, work quantum, interdependence among
workers contribute towards potential of stress
Role demands: stress on a worker who has a role
to play in the organization
Interpersonal demands: stress imposed by
colleagues

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Causes of Stress
Organizational structure: Unreasonable
rules and limited opportunities to make
decisions further increase stress
Organizational leadership: leadership styles
which emphasize fear-based motivation and
strict supervision will permeate the whole
organization and cause stress

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Personal Factors
personality of the employee determines his or her
resilience in handling stress
personal factors include family issues, financial
problems and inherent personality
two types of personalities:
type A behavior: person who is punctual or responds
quickly; governed by a competitive spirit and have
limited time to relax
type B behavior: person who does not experience
time-related stress
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Symptoms of Stress
physiological signs: increase heartbeat and
breathing, headaches, increase the risk of heart
disease, require medical attention if serious
psychological signs: tension and worry,
boredom, work delay, affect productivity
adversely
behavioral signs: change in eating habits,
frequent smoking, rapid speech patterns, sleep
disturbances, affect productivity adversely

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How can Stress be Reduced ?
 4 common steps to reduce stress
1. Communication: inform employees exact job to be
done and what is expected reduce vagueness and role
conflict
2. Redesigning tasks: help to reduce stress caused by
work overload, redistribute workload, act fair and just
to all employees
3. Employee Assistance Program: to help employees
with drug or alcohol problem, personal issues which
affect job performance
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How can Stress be Reduced ?
4. Wellness Program:
designed to sustain the well-being of employees
includes anti-smoking campaigns, weight-loss
program, stress management and others
reduce medical costs, reduce absenteeism and
prevent health-related problems

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Stimulating Innovation
Creativity: ability to integrate ideas into a more
unique pattern or interconnect ideas
Organizations stimulate creativity to develop new
approaches and unique solutions to issues and
problems
Creative discovery: the invention of microchip
Innovation: process of taking a creative idea and
converting it into a useful product, service or
operational method
The use of microchips in operating mobile telephones
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Four Processes of Creativity
Perception: the way we perceive things; creativity
means looking at something from an unique angle
Incubation: collect information which is then stored,
reassessed, studied and reformed to create
something new in the end
Inspiration: the time when all efforts are successfully
integrated
Innovation: involves converting inspiration into a
useful product, service or method

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How does a Manager Stimulate Innovation ?
3 sets of factors that stimulate innovation
organizational structure, culture and human resource
practices in an organization
1. Structural factor:
organic structure stimulates innovation positively
low level of job specialization, minimum rules and
empowerment
encourages flexibility, adaptation and expedites the
acceptance of innovation

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Structural factor
abundant resources enable management to purchase
the innovation, bear the expenses of creating
innovation and absorb costs of failure
communication between units will bring down the
wall which impedes innovation; open communication
among the departments will accelerate the innovation
process

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Culture Factor
A culture which encourages experiments and rewards success
and failure
1. Acceptance of uncertainty
2. Tolerance for the impractical
3. Low external control
4. Risk tolerance
5. Mistakes looked upon as learning experiences
6. Conflict tolerance
7. Focus on the outcome and not the means
8. Focus on open systems

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Human Resource Factor
active training and development
provide work security to reduce the risk of dismissal if
mistakes occur
encourages its employees to be champions of change
actively promote the ideas, obtain support, reduce
resistance and ensure the innovation is implemented
high confidence level, is energetic, and is inclined to
take risks
can influence others and they have the ability to
obtain the commitment to support their vision
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 Thank you!

prepared by: Liu Ching Ching OUM PT Academic