1. PowerPoint Presentation to Accompany Chapter 18 of Management, 8/e John R. Schermerhorn, Jr. Prepared by:Michael K. McCuddy Valparaiso University Published by: John Wiley & Sons, Inc.

2. Management 8/e - Chapter 182 Planning Ahead — Chapter 18 Study Questions  What are the challenges of strategic leadership and innovation?  What is the nature of organizational change?  How can planned organizational change be managed?  What is organization development?  How can stress be managed in a change environment?

3. Management 8/e - Chapter 183 Study Question 1: What are the challenges of strategic leadership and innovation?  Strategic leadership creates the capacity for ongoing strategic change.  Components of strategic leadership: – Determining the organization’s purpose or vision. – Exploiting and maintaining the organization’s core competencies. – Developing the organization’s human capital. – Sustaining an effective organizational culture. – Emphasizing and displaying ethical practices. – Establishing balanced organizational controls.

4. Management 8/e - Chapter 184 Study Question 1: What are the challenges of strategic leadership and innovation?  Sustainable competitive advantage relies on creativity and innovation.  Creativity is the generation of a novel idea or unique approach to solving problems or crafting opportunities.  Innovation is the process of creating new ideas and putting them into practice.

5. Management 8/e - Chapter 185 Study Question 1: What are the challenges of strategic leadership and innovation?  Two forms of innovation: –Process. Results in better ways of doing things. –Product. Results in the creation of new or improved goods and services.  Innovations require invention and application. – Invention. Act of discovery. Development of new ideas. –Application. Act of use. Implementation of new ideas.

6. Management 8/e - Chapter 186 Study Question 1: What are the challenges of strategic leadership and innovation?  Leadership responsibilities for the innovation process: –Imagining. –Designing. –Experimenting. –Assessing. –Scaling.

7. Management 8/e - Chapter 187 Study Question 1: What are the challenges of strategic leadership and innovation?  Four steps of the product innovation process: –Idea creation. –Initial experimentation. –Feasibility determination. –Final application.

8. Management 8/e - Chapter 188 Study Question 1: What are the challenges of strategic leadership and innovation?  In highly innovative organizations … –Corporate strategy and culture should: Emphasize an entrepreneurial spirit. Expect innovation. Accept failure. Be willing to take risks. –Organization structure should: Be organic. Have lateral communications. Use cross-functional teams and task forces.

9. Management 8/e - Chapter 189 Study Question 1: What are the challenges of strategic leadership and innovation?  In highly innovative organizations … –Top management should: Understand the innovation process. Be tolerant of criticism and differences of opinion. Take all possible steps to keep goals clear. Maintain the pressure to succeed. Break down barriers to innovation. –Staffing should fulfill five critical innovation roles: Idea generators. Information gatekeepers. Product champions. Project managers. Innovation leaders.

10. Management 8/e - Chapter 1810 Study Question 2: What is the nature of organizational change?  Change leader. –A change agent who takes leadership responsibility for changing the existing pattern of behavior of another person or social system.  Change leadership. –Forward-looking. –Proactive. –Embraces new ideas.

11. Management 8/e - Chapter 1811 Study Question 2: What is the nature of organizational change?  Top-down change. –Strategic and comprehensive change that is initiated with the goals of comprehensive impact on the organization and its performance capabilities. –Driven by the organization’s top leadership. –Success depends on support of middle-level and lower-level workers.

12. Management 8/e - Chapter 1812 Study Question 2: What is the nature of organizational change?  Bottom-up change. –The initiatives for change come from any and all parts of the organization, not just top management. –Crucial for organizational innovation. –Made possible by: Employee empowerment. Employee involvement. Employee participation.

13. Management 8/e - Chapter 1813 Study Question 2: What is the nature of organizational change?  Integrated change leadership. –Successful and enduring change combines advantages of top-down and bottom-up approaches. –Top-down: Breaks up traditional patterns. Implements difficult economic adjustments. –Bottom-up: Builds capability for sustainable change. Builds capability for organizational learning.

14. Management 8/e - Chapter 1814 Study Question 2: What is the nature of organizational change?  Transformational and incremental change. –Unplanned change. Response to unanticipated events. Good leaders act on opportunities for reactive change. –Planned change Aligning the organization with anticipated future challenges. Activated by proactive leaders who are sensitive to performance gaps. Transformational change  major and comprehensive redirection. Incremental change  adjusting existing systems and practices.

15. Management 8/e - Chapter 1815 Study Question 2: What is the nature of organizational change?  How to lead transformational change: –Establish a sense of urgency for change. –Form a powerful coalition to lead the change. –Create and communicate a change vision. –Empower others to move change forward. –Celebrate short-term “wins” and recognize those who help. –Build on success; align people and systems with new ways. –Stay with it; keep the message consistent; champion the vision.

16. Management 8/e - Chapter 1816 Study Question 2: What is the nature of organizational change?  External forces for change: –Globalization. –Market competition. –Local economic conditions. –Government laws and regulations. –Technological developments. –Market trends. –Social forces and values.  Internal forces for change: –Arise when change in one part of the system creates the need for change in another part of the system. –May be in response to one or more external forces.

17. Management 8/e - Chapter 1817 Study Question 2: What is the nature of organizational change?  Organizational targets for change : –Tasks –People –Culture –Technology –Structure

18. Management 8/e - Chapter 1818 Study Question 3: How can planned organizational change be managed?  Phases of planned change –Unfreezing The phase in which a situation is prepared for change and felt needs for change are developed. –Changing The phase in which something new takes place in the system, and change is actually implemented. –Refreezing The phase of stabilizing the change and creating the conditions for its long-term continuity.

19. Management 8/e - Chapter 1819 Study Question 3: How can planned organizational change be managed?  Force-coercion strategy of change. –Uses power bases of legitimacy, rewards and punishments to induce change. –Relies on belief that people are motivated by self- interest. –Direct forcing and political maneuvering. –Produces limited and temporary results. –Most useful in the unfreezing phase.

20. Management 8/e - Chapter 1820 Study Question 3: How can planned organizational change be managed?  Rational persuasion strategy of change. –Bringing about change through persuasion backed by special knowledge, empirical data, and rational argument. –Relies on expert power. –Relies on belief that reason guides people’s decisions and actions. –Useful in the unfreezing and refreezing phases. –Produces longer-lasting and internalized change.

21. Management 8/e - Chapter 1821 Study Question 3: How can planned organizational change be managed?  Shared power strategy of change. –Engages people in a collaborative process of identifying values, assumptions, and goals from which support for change will naturally emerge. –Time consuming but likely to yield high commitment. –Involves others in examining sociocultural factors related to the issue at hand. –Relies on referent power and strong interpersonal skills in team situations. –Relies on belief that people respond to sociocultural norms and expectations of others.

22. Management 8/e - Chapter 1822 Study Question 3: How can planned organizational change be managed?  Reasons for people resisting change: –Fear of the unknown –Disrupted habits –Loss of confidence –Loss of control –Poor timing –Work overload –Loss of face –Lack of purpose

23. Management 8/e - Chapter 1823 Study Question 3: How can planned organizational change be managed?  Methods for dealing with resistance to change: – Education and communication – Participation and involvement – Facilitation and support – Facilitation and agreement – Manipulation and co-optation – Explicit and implicit coercion

24. Management 8/e - Chapter 1824 Study Question 4: What is organization development?  Organization development (OD) is a comprehensive approach to planned organizational change that involves the application of behavioral science in a systematic and long-range effort to improve organizational effectiveness.

25. Management 8/e - Chapter 1825 Study Question 4: What is organization development?  Organization development goals: –Outcome goals focus on task accomplishments. –Process goals focus on the way people work together. –OD seeks to develop the organization members’ capacity for self-renewal. –OD is committed to change through freedom of choice, shared power, and self-reliance. –OD takes advantage of knowledge about human behavior in organizations.

26. Management 8/e - Chapter 1826 Study Question 4: What is organization development?  The organization development process: – Establish a working relationship. – Diagnosis. – Intervention. – Evaluation. – Achieve a terminal relationship.

27. Management 8/e - Chapter 1827 Study Question 4: What is organization development?  Action research –The process of systematically collecting data on an organization, feeding it back to the members for action planning, and evaluating results by collecting more data and repeating the process as necessary. –Is initiated when someone senses a performance gap.

28. Management 8/e - Chapter 1828 Study Question 4: What is organization development?  Steps in the action research process: –Problem sensing. –Data gathering. –Data analysis and feedback. –Action planning. –Action implementation. –Evaluation and follow-up.

29. Management 8/e - Chapter 1829 Study Question 4: What is organization development?  Individual OD interventions –Sensitivity training (T-groups) –Management training –Role negotiation –Job redesign –Career planning

30. Management 8/e - Chapter 1830 Study Question 4: What is organization development?  Team OD interventions –Team building –Process consultation –Inter-group team building

31. Management 8/e - Chapter 1831 Study Question 4: What is organization development?  Organization-wide OD interventions –Survey feedback –Confrontation meeting –Structural redesign –Management by objectives (MBO)

32. Management 8/e - Chapter 1832 Study Question 5: How can stress be managed in a change environment?  Stress –A state of tension experienced by individuals facing extraordinary demands, constraints, or opportunities.  Stressors –Things that cause stress –Originate in work, personal, and nonwork situations. –Have the potential to influence work attitudes, behavior, job performance, and health.

33. Management 8/e - Chapter 1833 Study Question 5: How can stress be managed in a change environment?  Work factors as potential stressors: –Includes: Excessively high or low task demands. Role conflicts or ambiguities. Poor interpersonal relationships. Too slow or too fast career progress. –Work-related stress syndromes: Set up to fail. Mistaken identity.

34. Management 8/e - Chapter 1834 Study Question 5: How can stress be managed in a change environment?  Personal factors as potential stressors: –Includes needs, capabilities, and personality. –Stressful behavior patterns of the Type A personality: Always moving, walking, and eating rapidly. Acting impatient, hurrying others, disliking waiting. Doing, or trying to do, several things at once. Feeling guilty when relaxing. Trying to schedule more in less time. Using nervous gestures such as a clenched fist. Hurrying or interrupting the speech of others.

35. Management 8/e - Chapter 1835 Study Question 5: How can stress be managed in a change environment?  Nonwork factors as potential stressors: –Includes: Family events. Economics. Personal affairs. –“Spill-over” effect on the stress an individual experiences at work.

36. Management 8/e - Chapter 1836 Study Question 5: How can stress be managed in a change environment?  Consequences of stress: –Constructive stress. Acts as a positive influence. Can be energizing and performance enhancing. –Destructive stress. Acts as a negative influence. Breaks down a person’s physical and mental systems. Can lead to job burnout and/or workplace rage.

37. Management 8/e - Chapter 1837 Study Question 5: How can stress be managed in a change environment?  Personal wellness: –The pursuit of personal and mental potential though a personal health-promotion program. –A form of preventative stress management. –Enables people to be better prepared to deal with stress.

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