Management 12e by w griffin ch12

TWELFTH EDITION

MANAGEMENT
Ricky W. Griffin

Part Four: The Organizing Process

Chapter Twelve: Managing Organization Change and Innovation

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Learning Outcomes

1.
2.
3.
4.

Describe the nature of organization change, including forces for change and
planned versus reactive change.
Discuss the steps in organization change and how to manage resistance to
change.
Identify and describe major areas of organization change and discuss the
assumptions, techniques, and effectiveness of organization development.
Describe the innovation process, forms of innovation, failure to innovate, and how
organizations can promote innovation.

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Nature of Organization Change



Organization change



Forces for change

– is any substantive modification to some part of the organization.
– External forces derive from the organization’s general and task environments.
– Internal forces (i.e. strategy) can cause change.
•

Other internal forces may be a reflection of external forces, such as sociocultural forces.

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Nature of Organization Change

Planned change

Reactive change

•

•

Designed and implemented in an orderly and
timely fashion in anticipation of future events.

A piecemeal response to circumstances as
they develop.

The frequency of organization change reinforces the importance of a planned approach.

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Managing Change in Organizations



Steps in the change process

– Kurt Lewin provides a model suggesting every change requires three steps:

•
•
•

The first step is unfreezing people affected by impending change.
Next, comes implementation of the change itself.
Finally, refreezing people involved by reinforcing and supporting the change.

– Lewin’s model lacks specificity, a more comprehensive model is needed.

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Managing Change in Organizations

This approach
to change takesapproach
a systems view and
Comprehensive
delineates a series of specific steps that often lead to
successful change.

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Figure 12.1

Steps in the Change Process

Managers must understand
how and why to implement
change.

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Understanding Resistance to Change

Uncertainty

Threatened selfinterests

Different perceptions

Feelings of loss

Managers need to know why people resist change and how to counter resistance.

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Overcoming Resistance to Change





Participation is often an effective technique.
Provide education and communication throughout the change process.
Facilitate the change process by:

– making only necessary changes,
– announcing those changes well in advance, and
– allowing time for people to adjust.

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Figure 12.2

Force-Field Analysis for Plant Closing at General Motors

Use this analysis to remove or at least minimize forces of resistance.

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Table 12.1

Areas of Organization Change

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Areas of Organization Change



Business process change or reengineering

– is a radical redesign of all aspects of a business to achieve major gains in cost,
service, or time.

– Goes beyond ERP.



The need for business process change

– allows managers to avoid entropy, or system-wide decline.

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Figure 12.3

The Reengineering
Process

Business process
reengineering has five
steps.

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Areas of Organization Change



Organization development (OD)

– is a planned, organization-wide effort, managed from the top, intended to increase

organizational effectiveness and health through planned interventions in the
organization’s process, using behavioral science knowledge.

– Based on the assumptions that:
•
•
•

employees desire to grow and develop,
they have a need for acceptance, and
organization design influences employee behavior.

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Organizational Development Techniques






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Diagnostic activities.



Effectiveness varies.

Team building.
Survey feedback.
Education.
Intergroup activities.







Technostructural activities.
Process consultation.
Life and career planning.
Coaching and counseling.
Planning and goal setting.

Third-party peacemaking.

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Organizational Innovation

The managed effort of anInnovation
organization to develop new products or
services or new uses for existing products for services.

Without innovation, organizations fall behind competitors.

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Figure 12.4

The Innovation Process

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Forms of Innovation

•
Radical innovation

Incremental

Is a new product, service, or technology that

completely replaces an existing one.

•

Is a new product, service, or technology that
modifies an existing one.

innovation
Radical versus incremental innovations

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Forms of Innovation

Technical innovation

•

Managerial innovation

•

Is a change in the appearance or

Is a change in the management process

performance of products or services, or

by which products and services are

of the physical processes through which

conceived, built, and delivered to

a product or service passes.

customers.

Technical versus managerial innovations
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Forms of Innovation
Product innovation

•

Is a change in the physical characteristics or performance of existing products or services,
or the creation of new ones.

Process innovation

•

Is a change in the way products or services are manufactured, created, or distributed.

Product versus process innovations

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Figure 12.5

Effects of Product and Process Innovation on Economic
Return

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Failure to Innovate




If a firm lacks resources it may lag behind in innovation.
If an organization is unskilled in recognizing and evaluating opportunities,
they may fail to invest in an innovation.



Innovation means giving up old products, which means change.

– Many resist change, therefore, innovation.

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Promoting Innovation in Organizations



Provide financial and nonfinancial rewards.




Organization culture should support creative and innovative activities.

– Avoid punishing workers for innovation.

Intrapreneurs develop new businesses in the context of a large organization.

– Successful programs need someone to fill the roles of the inventor, a product
champion, and a sponsor.

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Summary



Chapter twelve examined the nature of organization change and identified
the basic issues of managing change.



Major areas of change were identified and described.




Organization development was examined.

– Including business process change.

The chapter concluded by discussing innovation as a vital form of change.

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website for classroom use.

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