Robbins, Bergman, Stagg, Coulter: Management 4e © 2006 Pearson Education Australia

Week 9

Managing Changes

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L E A R N I N G O U T L I N E

What is change?

• Define organisational change.

• Explain why handling change is an integral part of every manager’s job.

Forces for change• Identify the external and internal forces for change.• Contrast using internal and external change agents.

Two views of the change process

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

• Explain Lewin’s three-step model of the change process.

• Discuss the environment that managers face today.

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L E A R N I N G O U T L I N E (cont’d)

Managing change

• Describe the options managers have for changing an organisation’s structure.

• Discuss how changing technology influences organisational change.

• Identify the different organisational development techniques.

Managing resistance to change

• Explain why people are likely to resist change.

• Describe how the force – field analysis can be used to identify options to deal with resistance.

• Identify the six techniques for dealing with resistance to change.

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L E A R N I N G O U T L I N E (cont’d)

Contemporary issues in managing change• Explain why changing organisational culture is so difficult and

how managers can do it.• Identify what is involved in managing a downsized workplace.• Describe employee stress and how managers can help

employees deal with stress.• Discuss what it takes to make change happen successfully.

Stimulating innovation• Explain why innovation is not just creativity.• Explain the systems view of innovation.• Describe the structural, cultural, and human resource variables

that are necessary for innovation.• Explain what idea champions are and why they’re important to

innovation.

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What is change?

Organisational change Any alterations in the people, structure, or

technology of an organisation Characteristics of change

Is constant yet varies in degree and direction Produces uncertainty yet is not completely

unpredictable Creates both threats and opportunities

Managing change is an integral partof every manager’s job.

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Forces for change

External forces

Marketplace

Governmental laws and regulations

Technology

Labor market

Economic changes

Internal forces

Changes in organisational strategy

Workforce changes

New equipment

Employee attitudes

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The manager as change agent

Change agents People who act as catalysts and assume the

responsibility for changing process are called change agents.

Types of change agents Managers: internal entrepreneurs Non-managers: change specialists Outside consultants: change implementation

experts

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Change process viewpoints

The calm waters metaphor Lewin’s description of the change process as a

break in the organisation’s equilibrium state Unfreezing the status quo Changing to a new state Refreezing to make the change permanent

White-water rapids metaphor The lack of environmental stability and predictability

requires that managers and organisations continually adapt (manage change actively) to survive.

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The change process

Figure 12.1

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Managing change

Three categories of change

Figure 12.2

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Organisational development techniques

Figure 12.3

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Managing resistance to change

Why do people resist change?

The ambiguity and uncertainty that change introduces

The comfort of old habits

A concern over personal loss of status, money, authority, friendships, and personal convenience

The perception that change is incompatible with the goals and interest of the organisation

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Using force field analysis

Kurt Lewin proposed that two sets of forces operate in any system.

Driving forces (encourage change) Resisting forces (discourage change) Equilibrium is when the forces are balanced against

each other. To make change managers may need to maximise

driving forces and minimise resisting forces.

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Techniques to reduce resistance to change

1. Education and communication

2. Participation

3. Facilitation and support

4. Negotiation

5. Manipulation and co-optation

6. Coercion

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Contemporary issues in managing change

Changing organisational cultures Cultures are naturally resistant to change. Conditions that facilitate cultural change:

The occurrence of a dramatic crisis Leadership changing hands A young, flexible, and small organisation A weak organisational culture

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How can cultural change be accomplished?

Conduct a cultural analysis to identify cultural elements needing change.

Make it clear to employees that the organisation’s survival is legitimately threatened if change is not forthcoming.

Appoint new leadership with a new vision.

Initiate a reorganisation.

Introduce new stories and rituals to convey the new vision.

Change the selection and socialization processes and the evaluation and reward systems to support the new values.

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Managing the downsized workplace

Help for survivors of downsizingHelp for survivors of downsizing

Open and honest communicationOpen and honest communication

Managing thedownsized workplace

Managing thedownsized workplace

Assistance to ‘downsized’ workersAssistance to ‘downsized’ workers

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Handling employee stress

What is stress? Stress

The physical and psychological tension an individual feels when confronted with extraordinary demands, constraints, or opportunities and their associated importance and uncertainties.

Functional Stress Stress that has a positive effect on performance.

How potential stress becomes actual stress When there is uncertainty over the outcome. When the outcome is important.

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Causes of stress

Figure 12.7

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Symptoms of stress

Figure 12.8

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Issues in managing change

Reducing stress Engage in proper employee selection Match employees’ KSA’s to jobs’ TDR’s Use realistic job interviews for reduce ambiguity Improve organisational communications Develop a performance planning program Use job redesign Provide a counseling program Offer time planning management assistance Sponsor wellness programs

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Issues in managing change

Making change happen successfully Embrace change—become a change-capable

organisation. Create a simple, compelling message explaining

why change is necessary. Communicate constantly and honestly. Foster as much employee participation as possible

—get all employees committed. Encourage employees to be flexible. Remove those who resist and cannot be changed.

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Characteristics of change-capable organisations

Link the present and the future.

Make learning a way of life.

Actively support and encourage day-to-day improvements and changes.

Ensure diverse teams.

Encourage mavericks.

Shelter breakthroughs

Integrate technology.

Build and deepen trust.

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Stimulating innovation

Creativity The ability to combine ideas in a unique way or to

make an unusual association. Innovation

Turning the outcomes of the creative process into useful products, services, or work methods

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Systems view of innovation

Source: Adapted from R.W. Woodman, J.E. Sawyer, and R.W. Griffin, “Toward a Theory of organisational Creativity,” Academy of Management Review, April 1993, p. 309.

Figure 12.9

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Innovation variables

Figure 12.10

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Stimulating and nurturing innovation

Structural variables Adopt an organic structure Make available plentiful resources Engage in frequent inter-unit communication Minimize extreme time pressures on creative

activities Provide explicit support for creativity

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Stimulating and nurturing innovation (cont’d)

Cultural variables Accept ambiguity Tolerate the impractical Have low external controls Tolerate risk taking Tolerate conflict Focus on ends rather than means Develop an open-system focus Provide positive feedback

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Stimulating and nurturing innovation (cont’d)

Human resource variables Actively promote training and development to keep

employees’ skills current. Offer high job security to encourage risk taking. Encourage individual to be “champions” of change.