Chapter-5 (Change and Innovation)

• Organizational Change

– Any alterations in the people, structure, or technology of an organization

• 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 part

of every manager’s job

Factors Affecting Change-

1.Technological Changes:

when there is a change in technology in the organization’s environment and other organizations adopt the
new technology. When organizations adopt new technology, their work structure stands affected and a new
equilibrium has to establish
 Views of Change
• State of Uncertainty (White-water Rapids Metaphor): the white-water rapids
metaphor represents a state of uncertainty and unpredictability. In this state, individuals and
organizations are constantly faced with new challenges.

o and obstacles that require them to adapt quickly.

o While this can be a difficult and stressful time, Robbins argues that it can also be an opportunity
for growth and development.
o By learning to navigate through turbulent waters, individuals and organizations can become
more resilient and better equipped to handle future challenges.
• State of Certainty (The Calm Waters Metaphor): the calm waters metaphor represents
a state of certainty and stability.
o While this can be a comfortable and reassuring time, Robbins argues that it can also be a time
of complacency and stagnation.
o Without the challenges of change, individuals and organizations may become too comfortable
and resistant to new ideas and innovation.

Forces for Change

Forces for change refer to the factors that drive or restrain change within an organization or society. In other
words, these are the factors that either push an organization towards change or resist change. These forces can
be divided into two categories: driving forces and restraining forces.

1. Driving Forces: Driving forces are the factors that encourage or facilitate change within an organization. These
may include:
• External factors such as changes in the market, new technology, government regulations, and competition.
• Internal factors such as the need for increased efficiency, improved productivity, changes in organizational
structure, or a desire for innovation.
• Cultural factors such as changes in societal values, beliefs, and attitudes.

Driving forces create momentum for change and provide the impetus for organizations to take action. By
recognizing and leveraging these driving forces, organizations can achieve their goals and remain competitive
in a rapidly changing environment.

2. Restraining Forces: Restraining forces are the factors that resist or impede change within an organization.
These may include:
• Resistance from employees who fear change or feel threatened by it.
• Budget constraints, lack of resources or time, and other practical limitations.
• Bureaucratic or political obstacles that make it difficult to implement change.

Restraining forces can slow down or even prevent change from happening. Therefore, it is important to identify
these forces and find ways to overcome them. By addressing restraining forces and finding ways to minimize
their impact, organizations can more effectively implement change and achieve their goals.
 Overall, both driving forces and restraining forces play a crucial role in the change process. By understanding
and managing these forces, organizations can successfully navigate through periods of change and achieve
long-term success.
Force Field Analysis or Three Stages Model

The Three Stages Model, developed by Kurt Lewin, is a widely used change management model that provides a
structured approach to manage the change process. The model consists of three stages: unfreezing, changing,
and refreezing.

1. Unfreezing: The first stage of the model is unfreezing, which involves creating a need for change and
preparing individuals for the change.
• This stage involves breaking down the existing mindset and behaviors that are no longer effective and
creating a sense of urgency for change.
• To accomplish this, organizations must help individuals understand the need for change and the potential
consequences of not changing.
2. Changing: The second stage of the model is changing, which involves implementing the change.
• During this stage, individuals learn new behaviors, values, and attitudes.
• This can involve training programs, coaching, and mentoring to help individuals adapt to the new changes.
• The success of this stage depends on effective communication, strong leadership, and support from
management.
3. Refreezing: The third and final stage of the model is refreezing, which involves making the changes a
permanent part of the organization's culture.
• During this stage, new behaviors, values, and attitudes become the norm, and individuals are reinforced
to continue practicing them.
• The goal of this stage is to embed the new practices and values within the organization and ensure that
they continue to be effective in the long term.

Overall, the Three Stages Model is a valuable framework that helps organizations manage the change process
effectively, minimize resistance, and achieve long-term success.

The Manager as Change Agent

Change Agent: Organizational changes often need someone to act as a catalyst and assume the responsibility for
managing the change process—that is, a change agent.

Types of Change Agent:

– Managers: internal managers may be more thoughtful, but possibly over cautious, because they must live
with the consequences of their decisions.

– Nonmanagers: change specialists

 – Outside consultants: change implementation experts (For major changes, an organization often
hires outside consultants to provide advice and assistance. But outside consultants have a limited understanding
of the organization’s history, culture, operating procedures, and people)

Types of Change:
Managers face three main types of change: structure, technology, and people (see Exhibit 6-3).

Changing structure includes any change in structural variables such as reporting relationships, coordination mechanisms,
employee empowerment, or job redesign.

• Changes in the external environment or in organizational strategies often lead to changes in the organizational
structure.
• An organization’s structure is defined by how work gets done and who does it, managers can alter one or both of
these structural components.
• Another option would be to make major changes in the actual structural design. Structural design changes also
might include, for instance, a shift from a functional to a product structure or the creation of a project structure
design
• Work specialization, departmentalization, chain of command, span of control, centralization, decentralization,
rules and procedures.

Changing technology encompasses modifications in the way work is performed or the methods and equipment that are
used.

• Managers can also change the technology used to convert inputs into outputs. Most early management studies
dealt with changing technology. For instance, scientific management techniques involved implementing changes
that would increase production efficiency.
• Today, technological changes usually involve the introduction of new equipment, tools, or methods; automation;
or computerization

Changing people refers to changes in attitudes, expectations, perceptions, and behavior of individuals or groups.

Organizational development (OD) is the term used to describe change methods that focus on people and the nature and
quality of interpersonal work relationships.

organizational development (OD) Change methods that focus on people and the nature and quality of interpersonal
work relationships.
Sensitivity Training: A method of Changing behavior through unstructured group interaction.
Team Building: Activities that help team member learn how each member thinks and works.

Intergroup Development: Changing the attitudes stereotypes and perceptions that work groups have about each other.

Process Consultation: An outside consultant helps the manager understand how interpersonal processes are affecting the
way work is being done.

Survey Feedback: A techniques for assessing attitudes and perceptions, identifying discrepancies in these and resolving
the differences by using information feedback groups.

• Why People Resist Change

• The main reasons include uncertainty, habit, concern over personal loss, and the belief that the change is not in
the organization’s best interest.

– 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 interests of the organization

– Face lost due to the lack of competency

– Lack of support from the organization.

Techniques for Reducing Resistance to Change

 Contemporary issues in Managing Changes:
Changing Organizational Culture
• Hierarchical culture in oriental society
• The fact that an organization’s culture is made up of relatively stable and permanent characteristics tends to
make it very resistant to change.
• Strong cultures are particularly resistant to change because employees have become so committed to them.

Understanding the situational factor

What “favorable conditions” facilitate cultural change?

• dramatic crisis occurs, such as an unexpected financial setback, the loss of a major customer, or a dramatic
technological innovation by a competitor.
o Such a shock can weaken the status quo and make people start thinking about the relevance of the
current culture
• leadership changes hands: New top leadership can provide an alternative set of key values and may be
perceived as more capable of responding to the crisis than the old leaders were
• the organization is young and small. The younger the organization, the less entrenched its culture. It’s easier for
managers to communicate new values in a small organization than in a large one
• the culture is weak. Weak cultures are more receptive to change than are strong ones.

Strategies to change a culture

 What is Stress:
• Stress is the adverse reaction people have to excessive pressure placed on them from extraordinary
demands, constraints, or opportunities.
• Stress isn’t always bad. Although it’s often discussed in a negative context, stress can be positive, especially when
it offers a potential gain.
• stress is more often associated with constraints and demands. A constraint prevents you from doing what you
desire; demands refer to the loss of something desired.
• Two conditions are necessary for potential stress to become actual stress. First, there must be uncertainty over
the outcome, and second, the outcome must be important.

Causes of Stress
Stress can be caused by personal factors and by job-related factors called stressors.
• five categories of organizational stressors: task demands, role demands, interpersonal demands, organization
structure, and organizational leadership.
• Task demands are factors related to an employee’s job. They include the design of a person’s job (autonomy,
task variety, degree of automation), working conditions, and the physical work layout.
• Role demands relate to pressures placed on an employee as a function of the particular role he or she plays in
the organization.
• Interpersonal demands are pressures created by other employees. Lack of social support from colleagues and
poor interpersonal relationships can cause considerable stress, especially among employees with a high social
need.
• Organization structure can increase stress. Excessive rules and an employee’s lack of opportunity to participate
in decisions that affect him or her are examples of structural variables that might be potential sources of stress.
• Organizational leadership represents the supervisory style of the organization’s managers. Some managers
create a culture characterized by tension, fear, and anxiety.
• Personal factors that can create stress include family issues, personal economic problems, and inherent
personality characteristics
• Type A personality is characterized by chronic feelings of a sense of time urgency, an excessive competitive
drive, and difficulty accepting and enjoying leisure time. The opposite of Type A is Type B personality. Type Bs
don’t suffer from time urgency or impatience.
 Reducing Stress
• Engage in proper employee selection
• Match employees’ abilities to job requirements
• Use realistic job previews to reduce ambiguity
• Improve organizational communications
• Provide a counseling program
• Offer time planning management assistance
• Sponsor wellness programs

Stimulating Innovation
Creativity Versus Innovation

Creativity and innovation are two related concepts, but there are several key differences between the
two.

1. Focus: Creativity focuses on generating new and original ideas, while innovation focuses on putting
those ideas into action and creating value.
2. Outcome: Creativity can result in a range of outputs, such as art, music, or writing, but not all creative
ideas are necessarily valuable or useful. In contrast, innovation aims to create tangible outcomes that
provide value to the business, such as new products or services, process improvements, or cost
savings.
3. Implementation: Creativity can be a solitary process, while innovation often requires collaboration
and teamwork to implement and bring ideas to fruition. This can involve cross-functional teams and
the integration of multiple perspectives and skill sets.
4. Risk-taking: Creativity often involves risk-taking and experimentation, while innovation requires a
balance of risk-taking and a more structured, strategic approach to implementation.
5. Context: Creativity can happen in any context, and it is often associated with individual expression
and freedom. In contrast, innovation is often driven by business needs and goals, and it requires a
more systematic and disciplined approach.

Stimulating and nurturing variables