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
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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:
1. Customer groups are being segmented into ever
smaller groups that demand specialized messages

Marketing niches are now more important
2. Speed is becoming a key competitive weapon
Kinicki/Williams, Management: A Practical Introduction 3e ©2008, McGraw-Hill/Irwin
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10.1 The Nature Of Change
In Organizations
3. 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
4. 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
5. Knowledge is becoming the new competitive
advantage
Kinicki/Williams, Management: A Practical Introduction 3e ©2008, McGraw-Hill/Irwin
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10.1 The Nature Of Change
In Organizations
Managers have to deal with two types of change:
1. 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
2. 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
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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:
1. demographics - the U.S. workforce is now more diverse
2. market changes - companies are having to change the way
they do business and build new relationships with employees,
suppliers, and competitors; global economy
Kinicki/Williams, Management: A Practical Introduction 3e ©2008, McGraw-Hill/Irwin
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10.1 The Nature Of Change
In Organizations
3. technological advancements - managers must deal with the
realities of information technology
4. social & political pressures - social events create new
pressures for managers
There are two types of internal forces:

1. employee problems - job dissatisfaction can be a signal for
change
2. 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
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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
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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
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10.1 The Nature Of Change
In Organizations
Change is most likely to be needed in four areas:
1. changing people - perceptions, attitudes, performance, and
skills are all areas where change may be needed
2. 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
3. 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
4. changing strategy - marketplace changes can cause
companies to change their strategies
Kinicki/Williams, Management: A Practical Introduction 3e ©2008, McGraw-Hill/Irwin
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10.2 Organizational Development:
What It Is, What It Can Do
WHAT IS ORGANIZATIONAL DEVELOPMENT?
The set of techniques for implementing planned
change to make people and organizations more
effective is organizational development (OD)
• Focuses on people in the process

A consultant with a background in behavioral
sciences who can be a catalyst in helping
organizations deal with old problems in new ways is

called a change agent
OD is put in place by a change agent
Kinicki/Williams, Management: A Practical Introduction 3e ©2008, McGraw-Hill/Irwin
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10.2 Organizational Development:
What It Is, What It Can Do
OD can be used in three ways:
1. Managing conflict - OD experts can help executives
improve their relationships with other managers to reduce
organizational conflict
2. Revitalizing organizations - OD can help companies
communicate, embrace innovation, and deal with stress
3. Adapting to mergers - OD can help firms integrate two
disparate organizations with different cultures, products, and
procedures

Kinicki/Williams, Management: A Practical Introduction 3e ©2008, McGraw-Hill/Irwin
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10.2 Organizational Development:
What It Is, What It Can Do
HOW DOES OD WORK?
OD managers:
1. Diagnose problems - surveys, questionnaires, interviews,
and meetings are used to identify problems
2. Intervene to make changes - attempts to correct diagnosed
problems is intervention

3. 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
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10.2 Organizational Development:
What It Is, What It Can Do
OD is most successful in the following cases:
1. Multiple interventions - combined interventions
work better than single interventions
2. Management support - when there is the
commitment of top executives and the proposed
changes are realistic
3. Goals geared to both short- & long-term results change should only be implemented if it will produce
positive results toward the organization’s goals
4. 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
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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
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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
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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
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10.3 Promoting Innovation
Within The Organization
Innovation has four characteristics:
1. Innovation is uncertain - progress is difficult to predict, and
success is always a question mark
2. People closest to the innovation know the most about it managers who are removed from the innovation process have
difficulty understanding it
3. Innovation may be controversial - since innovation requires
company resources, it may become controversial since it is
not clear that it will be a success
4. 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
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10.3 Promoting Innovation
Within The Organization
HOW CAN ORGANIZATIONS ENCOURAGE

INNOVATION?
Organizations can encourage innovation by providing:
1. the right organizational culture – celebrate failure
2. the appropriate resources – considerable resources should
be devoted to the innovation process
3. the correct reward system - experimentation (and failure)
are part of the innovation process

Kinicki/Williams, Management: A Practical Introduction 3e ©2008, McGraw-Hill/Irwin
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10.3 Promoting Innovation
Within The Organization
HOW CAN MANAGERS FOSTER INNOVATION?
The three steps to making innovation happen are:
1. recognizing problems that need solving and
opportunities that are presented
2. communicating your vision to get support for
innovation
3. removing obstacles that might prevent employees
from executing a vision
Kinicki/Williams, Management: A Practical Introduction 3e ©2008, McGraw-Hill/Irwin
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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
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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
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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
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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
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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
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