1. Managing Change, Stress, and Innovation
PART III: Organizing 7
Chapter 7
Managing Change, Stress, and Innovation
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2. Learning Outcomes After reading this chapter, I will be able to:
Describe what change variables are within a manager’s control.
Identify external and internal forces for change.
Explain how managers can serve as change agents.
Contrast the “calm waters” and “white-water rapids” metaphors for change.
Explain why people are likely to resist change.
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3. Learning Outcomes (cont’d) After reading this chapter, I will be able to:
Describe techniques for reducing resistance to change.
Identify what is meant by the term organization development (OD) and specify four popular OD techniques.
Explain the causes and symptoms of stress.
Differentiate between creativity and innovation.
Explain how organization can stimulate innovation.
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4. What Is Change? Change Change agent
An alteration of an organization’s environment, structure, technology, or people
A constant force
An organizational reality
An opportunity or a threat
Change agent
A person who initiates and assumes the responsibility for managing a change in an organization
Change is an alteration of an organization’s environment, structure, technology, or people. Because change is an organizational reality, handling it is an integral part of every manager’s job.
People who are the catalysts for change and manage the change process are change agents. A manager may be a change agent.
However, the change agent can be a nonmanager—for example, an internal staff specialist or outside consultant. Management often uses outside consultants because they can offer a fresh perspective which insiders lack. But, they may not understand the organization’s history, culture, operating procedures, and personnel.
Furthermore, outside change agents often initiate more drastic changes because they do not have to live with the repercussions after the changes have been implemented.
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5. Three Categories of Change
What can a manager change? There are three categories: structure, technology, and people.
Changes in structure consist of altering relationships, redesigning jobs, coordinating mechanisms, and modifying spans of control.
Changes in technology consist of revising work processes, revamping work methods, and acquiring new equipment.
Changes in people consist of altering expectations, attitudes, perceptions, and behavior.
Exhibit 7.1
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6. Forces For Change External forces Internal forces
Marketplace competition
Government laws and regulations
New technologies
Labor market shifts
Cycles in the economy
Social change
Internal forces
Strategy modifications
New equipment
New processes
Workforce composition
Restructured jobs
Compensation and benefits
Labor surpluses and shortages
Employee attitudes
The external forces of change come from various sources. In recent years, the marketplace has affected firms by introducing new competition. Bell Atlantic, for example, is experiencing competition from cable companies to provide local phone service.
Government laws and regulations are also an impetus for change. In 1990 the passage of the Americans with Disabilities Act required businesses to widen doorways, reconfigure restrooms, add ramps, and take other actions to improve accessibility.
Technology causes change. E-commerce and the Internet have changed how we sell products and access information.
Economic changes affect almost all organizations. Dramatic decreases in interest rates in the late 1990s fostered significant growth in the housing market. This meant more jobs, more people working, and more sales for other businesses that support the building industry.
Internal forces originate from the operations of the organization or from the impact of external changes: such as management redefining its strategies, new equipment in workplace, and demographic changes in the organization’s workforce. These forces lead to changes in the policies and practices of management.
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7. Two Views Of The Change Process
“Calm waters” metaphor
A description of traditional practices in and theories about organizations that likens the organization to a large ship making a predictable trip across a calm sea and experiencing an occasional storm
“White-water rapids” metaphor
A description of the organization as a small raft navigating a raging river
Two metaphors exemplify the process of change:
The calm waters metaphor likens the organization to a large ship making a predictable trip across a calm sea and experiencing an occasional storm.
The white water rapids metaphor likens an organization to a group of strangers on a small raft navigating the uninterrupted white water rapids of an unfamiliar river to an unknown destination in the dark of night.
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8. Change in “Calm Waters”
Kurt Lewin’s Three-Step Process
Unfreezing
The driving forces, which direct behavior away from the status quo, can be increased.
The restraining forces, which hinder movement from the existing equilibrium, can be decreased.
The two approaches can be combined.
Implementation of change
Refreezing
Until recently, the calm waters metaphor dominated the thinking of practicing managers and academics. Kurt Lewin’s three-step description of the change process epitomizes this metaphor.
According to Lewin, successful change requires unfreezing the status quo, changing to a new state, and refreezing the change to make it permanent. The status quo represents a state of equilibrium that must be thawed in one of three ways for change to occur:
1. The driving forces which direct behavior away from the status quo can be increased.
2. The restraining forces which hinder movement from equilibrium can be decreased.
3. The two approaches can be combined.
In the relatively calm environment of the 1950s through the early 1970s, Lewin’s model may have been workable. Given chaotic change and the global village, however, this metaphor is outdated.
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9. The Change Process Exhibit 7.2
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10. Change In “White-water Rapids”
Change is constant in a dynamic environment.
The only certainty is continuing uncertainty.
Competitive advantages do not last.
Managers must quickly and properly react to unexpected events.
Be alert to problems and opportunities
Become change agents in stimulating, implementing and supporting change in the organization
The white water rapids metaphor reflects uncertain, dynamic environments. The concepts of stability and predictability are relics of days gone by. Disruptions in the status quo are no longer occasional and temporary, only to be followed by “smooth sailing” and halcyon days.
Many managers today never get out of the rapids. They face constant, wrenching change that boarders on chaos. These managers are playing a game that they have never played before that is governed by rules which are created as the game progresses.
Few organizations today can treat change as the occasional ripple in a still pool. Too much is changing too fast! Complacency is a “luxury” because most competitive advantages last less than eighteen months.
According to Tom Peters, the old saying, “If it ain’t broke, don’t fix it” is no longer relevant. In its place, he suggests “If it ain’t broke, you just haven’t looked hard enough. Fix it anyway.” Peters’ observation is consistent with current reengineering trends. And, the quantum changes required to remain competitive in the global marketplace cannot be overstated.
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11. Why People Resist Change
Managers make changes to increase the effectiveness of their organizations. Change, however, can be a threat to managers and nonmanagers alike. So, organizations resist change, even when it is beneficial.
People resist change for three reasons:
In the first place, change substitutes ambiguity and uncertainty for the known. Even if workers do not like the current system of management, at least they know the ropes.
People also resist change because they fear losing something they already possess. The greater their investment in the status quo, the more they resist change because they fear losing their position, money, friendships, or personal conveniences.
Finally, people will resist any changes they do not believe are in the organization’s best interests.
Exhibit 7.3
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12. Techniques for Reducing Resistance to Change
TECHNIQUE WHEN USED
Education and When resistance is due to misinformation communication
Participation When resisters have the expertise to make a contribution
Facilitation and When resisters are fearful and anxiety-ridden support
Negotiation Necessary when resistance comes from a powerful group
Manipulation When a powerful group’s cooperation and an endorsement is is needed
Coercion When a powerful group’s endorsement is needed
Six tactics can be used by change agents to deal with resistance:
Education and communication can help employees to understand why change is necessary.
Participation encourages individuals to support the changes that they decided upon.
Facilitation and support can be used to reduce resistance.
Negotiation means exchanging something of value for lessening resistance.
Manipulation involves covert influence attempts; cooptation uses participation and manipulation.
Coercion is the application of direct threats or force on the resisters.
Exhibit 7.4
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13. Making Changes In The Organization
Changing structure
Alterations in authority relationships, coordination mechanisms, degree of centralization, job design, or similar organization structure variables.
Changing technology
Modifications in the way work is processed or the methods and equipment used.
Changes in people
Changes in employee attitudes, expectations, perceptions, or behaviors.
Change is an alteration of an organization’s environment, structure, technology, or people. Because change is an organizational reality, handling it is an integral part of every manager’s job.
Changing structure means altering authority relationships, coordination mechanisms, centralization of authority, job design, or similar structural variables.
Changing technology means modifying methods and equipment used to complete work processes.
Changing people involves adjusting employee attitudes, expectations, perceptions, or behaviors.
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14. Implementing Planned Changes
Organization development (OD)
An activity (intervention) designed to facilitate planned, long-term organization-wide change
Focuses on the attitudes and values of organizational members;
Is essentially an effort to change an organization’s culture.
The term organizational development refers to a collection of techniques for understanding, changing, and developing work force effectiveness: process consultation, survey feedback, team building, and intergroup development.
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15. Typical OD Techniques Survey feedback Process consultation
A method of assessing employees’ attitudes toward and perceptions of a change they are encountering by asking specific questions
Process consultation
The use of consultants from outside an organization to help change agents within the organization assess process events such as workflow, informal intraunit relationships, and formal communications channels
Management can use the survey feedback approach to assess the attitudes of organizational members in order to identify and address the discrepancies among their perceptions.
In process consultation, outside consultants help managers to perceive, understand, and act upon events with which they must deal. Consultants are not there to solve problems. Rather, they act as coaches to help managers diagnose which internal processes need improvement.
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16. Typical OD Techniques (cont’d)
Team-building
An activity that helps work groups set goals, develop positive interpersonal relationships, and clarify the roles and responsibilities of each team member
Intergroup development
An activity that attempts to make several work groups become more cohesive
Team building activities promote trust and openness between team members: goal setting, interpersonal development, role analysis, and team process analysis.
Intergroup development can change attitudes, stereotypes, and perceptions that groups have of each other. One method emphasizes problem solving. Once problems have been identified, team members can move to the integration phase of working together to develop solutions to improve intergroup relations
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17. Stress: The Aftermath Of Organizational Change
Occurs when individuals confront a situation related to their desires for which the outcome is perceived to be both uncertain and important.
Positive stress: when the situation offers an opportunity for one to gain something
Negative stress: when constraints or demands are placed on individuals
Stressor
A factor that causes stress
Stress is a force or influence that a person feels when facing opportunities, constraints, or demands which are important yet uncertain. Stress can be positive in a situation that offers an opportunity for gain. But, stress is most often associated with constraints (barriers that keep someone from doing what he or she wants) and demands (things that take up someone’s time and require the person to shift priorities). Furthermore, when constraints or demands have an effect on an important event and the outcome is unknown, pressure is added—pressure resulting in stress.
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18. Sources of Stress Constraints Demands
Barriers that keep us from doing what we desire.
Inhibit individuals in ways that take the control of a situation out of their hands
Demands
Cause persons to give up something they desire.
Demands preoccupy your time and force you to shift priorities.
Stress can be positive in a situation that offers an opportunity for gain. But, stress is most often associated with constraints (barriers that keep someone from doing what he or she wants) and demands (things that take up someone’s time and require the person to shift priorities).
Furthermore, when constraints or demands have an effect on an important event and the outcome is unknown, pressure is added—pressure resulting in stress.
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19. Change, Dilbert Style Exhibit 7.5
Source: DILBERT reprinted by permission of United Feature Syndicate, Inc.
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20. Stressors Personal Organizational Family issues
Personal economic problems
Inherent personality characteristics.
Organizational
Task demands
Role demands
Technological advancements
Work process engineering
Downsizing
Restructuring
Factors that create stress can be grouped into two categories: personal and organizational.
Personal stress can be caused by illness, divorce, death in the family, and financial problems. Because employees bring their personal problems to work with them, a manager must take such personal factors into account when trying to manage workplace stress.
Organizational stress can be caused by task demands are related to an employee’s job: for example, the design of the job, working conditions, and physical work layout. Interdependence between an employee’s tasks and the tasks of others creates stress. Autonomy, on the other hand, tends to reduce stress.
Role demands relate to pressure placed on an employee as a function his or her role in the organization.
Workplace stressors can arise from changes in the task, duties, and responsibilities of jobs, downward adjustments in numbers of employees to match current demand for products and services, and rearrangements in the current working relationships to fit organizational structure to changes necessitated by changes in the firm’s strategic direction.
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21. Organizational Stressors: Role Demands
Role conflicts
Work expectations that are hard to satisfy
Role overload
Having more work to accomplish than time permits
Role ambiguity
When role expectations are not clearly understood
Role conflicts create expectations that may be hard to reconcile or satisfy.
Role overload occurs when an employee is expected to do more than time permits.
Role ambiguity occurs when role expectations are not clearly understood, and the employee is not sure what he or she should do
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22. Personality Types Type A personality Type B personality
People who have a chronic sense of urgency and an excessive competitive drive
Type B personality
People who are relaxed and easygoing and accept change easily
Some employees are more prone to stress. Consider the Type A-Type B personality dichotomy.
Type A personalities are characterized by a chronic sense of urgency and an intense drive to compete. These ambitious, achievement oriented workers have difficulty accepting and enjoying leisure time.
On the other hand, type B personalities are more relaxed and easy-going. Managers must recognize that Type A employees are more likely to show symptoms of stress, even if organizational and personal stress factors are low.
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23. Symptoms Of Stress Psychological symptoms Behavior-related symptoms
Increased tension
Anxiety
Boredom
Procrastination
Behavior-related symptoms
Changes in eating habits
Increased smoking
Substance consumption
Rapid speech
Sleep disorders
Stress reveals itself psychological symptoms, such as boredom, anxiety, and procrastination; and behavioral symptoms, such as substance abuse sleep disorders, or excessive absence.
Most of the early interest in stress management focused heavily on health-related or physiological concerns: changes in metabolism, elevated blood pressure, and increased risk of heart attacks.
Many of these physiological concerns require the skills of trained medical personnel, so their immediate and direct relevance to HRM is negligible. Of greater importance to managers are psychological and behavioral symptoms of stress that can be witnessed in the employee.
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24. Reducing Stress Person-job fit concerns
Match employees to their jobs, clarify expectations, redesign jobs, and increase employee involvement and participation
Employee assistance programs (EAPs)
Programs that help employees overcome personal and health-related problems
Wellness programs
Programs that help employees prevent health problems
Without some stress, people would have no energy. Accordingly, stress reduction programs should target the dysfunctional aspects of stress.
One way to reduce stress is to make sure that employees are properly matched to their jobs and that they know the extent of their “authority.”
Furthermore, by letting employees know precisely what is expected, role conflict and ambiguity can be minimized. On-the-job stress can also be reduced by redesigning jobs and encouraging employee participation.
Many companies have started employee assistance and wellness programs. An extension of substance abuse programs, employee assistance programs (EAPs) have focused on new areas, such as health care. Studies suggest that organizations can save $5 for every EAP dollar spent.
Designed to keep workers healthy, wellness programs focus on weight control, stress management, or physical fitness. Studies show that such programs control health care costs and reduce health related absenteeism.
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25. Stimulating Innovation
Creativity
The ability to combine ideas in a unique way or to make unusual connections
Innovation
The process of taking a creative idea and turning it into a useful product, service, or method of operation
Perception
Incubation
Inspiration
Given the dynamics of the global marketplace, organizations must create new products and adopt new technologies.
Creativity is the ability to combine ideas in a unique way or to make unusual associations between ideas. Creative organizations develop novel approaches or unique solutions to challenges and opportunities.
Innovation is the process of turning a creative idea into a marketable product, service, or operating method. Innovative organizations channel creativity into useful outcomes.
While some believe that creativity is inborn, others believe that creativity can be stimulated by using a fourfold process: perception, incubation, inspiration, and innovation.
Moving from creative perception to reality is not automatic. Instead, ideas go through an incubation process. During incubation, employees collect, store, retrieve, study, and reshape data until they create something new. This process can take years. Inspiration occurs when all of your prior efforts successfully come together. Innovation means turning inspiration into a useful product, service, or methodology.
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26. Structural Variables Affecting Innovation
Organic structures
Positively influence innovation through less work specialization, fewer rules and decentralization
Easy availability of plentiful resources
Allow management to purchase innovations, bear the cost of instituting innovations, and absorb failures.
Frequent interunit communication
Helps to break down barriers to innovation by facilitating interaction across departmental lines.
Three sets of organizational variables stimulate innovation: structure, culture, and human resource practices.
Structural variables affect innovation in three ways: (1) organic structures promote innovation, (2) plentiful resources stimulate innovation, and (3) effective communication overcomes barriers to innovation. All three require the commitment of top management.
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27. Characteristics of an Innovative Culture
Acceptance of ambiguity
Tolerance of the impractical
Low external controls
Tolerance of risk
Tolerance of conflict
Focus on ends rather than on means
Open systems focus
Innovative organizations encourage experimentation and risk-taking behavior by rewarding both successes and failures. Such organizations are likely to have the following seven characteristics:
1. Acceptance of ambiguity
2. Tolerance of the impractical
3. Low external controls
4. Tolerance of risk
5. Tolerance of conflict
6. Focus on ends rather than on means
7. Open systems focus
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28. HR Variables Affecting Innovation
HR practices that foster innovation
Promotion of training and development so employee knowledge remains current
Offer employees high job security to reduce fear of making mistakes and taking risks
Encourage employees to become champions of change
Innovative organizations train and develop their members to keep their knowledge, skills, and abilities current; offer job security rather than the fear of being fired to promote risk-taking; and encourage individuals to become champions of change.
Once a new idea is developed, champions of change promote the idea and build support. Then, they overcome resistance to the idea and ensure that the innovation is completed. These persons are self confident, energetic, persistent, risk-takers. In addition, they have the decision-making discretion to induce and implement innovations.
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29. Web Links Visit the Robbins/DeCenzo companion Website
At for this chapter’s Internet resources, including chapter quiz and student PowerPoints.
Enhancing Your Communication Skills
Go to the employee assistance program provider Interlock’s Web site at Research the following information:
(a) What are the components of an EAP and how does Interlock evaluate an EAP program’s success?
(b) Identify how Interlock recommends implementing an EAP in an organization.
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30. Web Links (cont’d) Diversity Perspectives
Log onto and imagine you are a member of the OD (Organizational Development) team working to reduce resistance to change and lower stress.
Enhancing Your Skill in Ethical Decision Making
An independent panel investigating Boeing’s hiring practices recommended 10 changes to prevent future ethical problems. Now it’s your turn—log onto and build your skill in ethical decision making!
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31. Video Case Application Stress
Insert Video Link Here (Size to this window)
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