1. Management, 7e Schermerhorn
Prepared by
Michael K.McCuddy
Valparaiso University
John Wiley & Sons, Inc

2. COPYRIGHT
Copyright 2002 © John Wiley & Sons, Inc. All rights reserved. Reproduction or translation of this work beyond that named in Section 117 of the United States Copyright Act without the express written permission of the copyright owner is unlawful. Requests for further information should be addressed to the Permissions Department, John Wiley & Sons, Inc. The purchaser may make back-up copies for his/her own use only and not for distribution or resale. The Publisher assumes no responsibility for errors, omissions, or damages, caused by the use of these programs or from the use of the information contained herein.

3. Chapter 18 Change Leadership
Planning ahead—study questions
What are the challenges of change?
What is the nature of organizational change?
How can planned organizational change be managed?
What is organization development?
How do you build career readiness in a change environment?
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4. What are the challenges of change?
Organizations that survive and prosper the best are learning organizations.
Characteristics of learning organizations:
Everyone sets aside the old ways of thinking.
Everyone becomes self-aware and open to others.
Everyone learns how the whole organization works.
Everyone understands and agrees to a plan of action.
Everyone works together to accomplish the plan.
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5. What are the challenges of change?
Six components of strategic leadership:
Determining the organization’ 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.
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6. What are the challenges of change?
Innovation is the process of creating new ideas and putting them into practice.
Two forms of innovation:
Process
Results in better ways of doing things.
Product
Results in the creation of new or improved goods and services .
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7. What are the challenges of change?
Invention
Act of discovery.
Relates to the development of new ideas.
Application
Act of use.
The utilization of inventions to take the best advantage of ideas.
Innovation = Invention + Application
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8. What are the challenges of change?
Leadership responsibilities for the innovation process:
Imagining
Designing
Experimenting
Assessing
Scaling
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9. What are the challenges of change?
Four steps of the product innovation process:
Idea creation
Initial experimentation
Feasibility determination
Final application
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10. What are the challenges of change?
In highly innovative organizations, corporate strategy and culture should …
Emphasize an entrepreneurial spirit.
Expect innovation.
Accept failure.
Be willing to take risks.
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11. What are the challenges of change?
In highly innovative organizations, organization structure should …
Be organic with lateral communications and cross-functional teams and task forces.
Create numerous smaller divisions to allow creative teams to operate and to encourage intrapreneurial ventures.
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12. What are the challenges of change?
In highly innovative organizations, staffing should fulfill five critical innovation roles:
Idea generators
Information gatekeepers
Product champions
Project managers
Innovation leaders
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13. What are the challenges of change?
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.
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14. What is the nature of organizational change?
Change agent
A person or group 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
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15. 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.
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16. 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 progress and success; align people and systems with new ways.
Stay with it; keep the message consistent; champion the vision.
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17. What is the nature of organizational change?
Theory E change
A version of top-down change.
Based on activities intended to increase shareholder value as soon as possible.
Emphasizes structural and systems changes.
Attempts to gain employee support through financial incentives.
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18. What is the nature of organizational change?
Bottom-up change
The initiatives for change come from persons throughout an organization and are supported by the efforts of lower-level and middle-level managers acting as change agents.
Crucial for organizational innovation.
Made possible by:
Employee empowerment
Employee involvement
Employee participation
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19. What is the nature of organizational change?
Theory O change
A version of bottom-up change.
Based on activities for increasing organizational performance capabilities by:
Improving organizational culture.
Developing human capital.
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20. What is the nature of organizational change?
Planned and unplanned change
Planned change …
Occurs as a result of specific efforts of a change agent.
Direct response to perception of a performance gap.
Unplanned change …
Occurs spontaneously or randomly and without benefit of a change agent’s attention.
Acting immediately is the appropriate response goal.
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21. What is the nature of organizational change?
External forces for change:
Global economy and market competition
Local economic conditions
Government laws and regulations
Technological developments
Market trends
Social forces
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22. What is the nature of organizational change?
Internal forces for change:
Arise when change in one part of the organizational system creates the need for change in another part of the system.
May be in response to one or more external forces.
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23. What is the nature of organizational change?
Organizational targets for change:
Tasks
People
Culture
Technology
Structure
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24. 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.
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25. How can planned organizational change be managed?
Choosing a change strategy
Force-coercion strategy
Uses power bases of legitimacy, rewards and punishment to induce change.
Produces limited and temporary results.
Most useful in the unfreezing phase.
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26. How can planned organizational change be managed?
Choosing a change strategy
Rational persuasion strategy
Bringing about change through persuasion backed by special knowledge, empirical data, and rational argument.
Relies on expert power.
Useful in the unfreezing and refreezing phases.
Produces longer-lasting and internalized change.
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27. How can planned organizational change be managed?
Choosing a change strategy
Shared power strategy
Engages people in a collaborative process of identifying values, assumptions, and goals from which support for change will naturally emerge.
Likely to yield high commitment.
Relies on referent power and strong interpersonal skills in team situations.
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28. 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
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29. 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
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30. 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.
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31. 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 endorses freedom of choice, shared power, and self-reliance.
OD takes advantage of knowledge about human behavior.
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32. What is organization development?
The organization development process:
Establish a working relationship
Diagnosis
Intervention
Evaluation
Achieve a terminal relationship
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33. 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.
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34. 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
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35. What is organization development?
Individual OD interventions
Sensitivity training (T-groups)
Management training
Role negotiation
Job redesign
Career planning
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36. What is organization development?
Team OD interventions
Team building
Process consultation
Inter-group team building
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37. What is organization development?
Organization-wide OD interventions
Survey feedback
Confrontation meeting
Structural redesign
Management by objectives (MBO)
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38. How do you build career readiness in a change environment?
Key lessons for early career success …
There is no substitute for performance.
You must be flexible and stay that way.
You must commit to continuous learning and professional development.
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39. How do you build career readiness in a change environment?
In developing your career …
Behave like an entrepreneur.
Seek feedback on your performance.
Set up your own mentoring systems.
Get comfortable with teamwork.
Take risks to gain experience and learn new skills.
Be a problem solver.
Keep your life in balance.
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40. How do you build career readiness in a change environment?
Create a sustainable career advantage by building a career portfolio that documents skills and capabilities in …
Professionalism
Leadership
Self-management
Communication
Critical thinking
Teamwork
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