MANAGING: A COMPETENCY

BASED APPROACH
11th Edition

Chapter 12: Guiding Organizational

Change and Innovation

Don Hellriegel
Susan E. Jackson
John W. Slocum, Jr. Prepared by
Argie Butler
Texas A&M University
 Learning Goals

1. Describe four types of organizational change

2. Explain the planning process for organizational
change
3. Identify four methods of organizational change

4. Describe how innovation relates to organizational

change

5. Discuss how learning organizations foster change

Chapter 12: PowerPoint 12.1

  Organizational change: any transformation in the
design or functioning of an organization
 Radical change: organizations make major
innovations in the ways they do business
 Stages of Radical Change*

Unfreezing Transitioning

Refreezing

(*Adapted from Figure 12.1)

Chapter 12: PowerPoint 12.2
  Incremental change: ongoing process of evolution over
time, during which many small adjustments occur
routinely

 Tempered radicals: people who strive to create radical

change but do so by prodding an organization to make
many small incremental changes

 Total quality management: relies heavily on continuous

incremental change

Chapter 12: PowerPoint 12.3

 1. Earn credibility first, and then leverage it

2. Gather and accept support from others along the way

3. Develop grass roots initiatives and be willing to share

the stage with supporters

4. Chip away at standard operating procedures little by

little over time until you achieve real success

5. Accept small changes as making progress

6. Develop your ability to compromise as well as persuade

7. Be persistent
Chapter 12: PowerPoint 12.4 (Adapted from Table 12.1)
  Reactive change: occurs when an organization
is forced to adapt or innovate in response to
some event in the external or internal
environment

 Anticipatory change: occurs when managers

make organizational modifications based on
forecasts of upcoming events or early in the
cycle of a new trend

Chapter 12: PowerPoint 12.5

 Incremental Incremental
Degree of Change
Small Anticipatory Reactive
Adjustments Change Change

Radical Radical
Major
Transformation Anticipatory Reactive
Change Change

Timing of Change
Before Major Shifts in After Major Shifts in
the Environment the Environment
Chapter 12: PowerPoint 12.6 (Adapted from Figure 12.2)
 Planning for Organizational Change: Key Steps
Start

1. Assess the 2. Determine

Environment Performance
Gap

3. Diagnose
1. Monitor
Organizational
Changes
Problems

6. Anticipate 4. Articulate and

and Reduce Communicate
Resistance 5. Develop and Vision for the
Implement an Future
Action Plan
Chapter 12: PowerPoint 12.7 (Adapted from Figure 12.3)
 Fear Vested interests

Misunderstandings Cynicism

Chapter 12: PowerPoint 12.8

 Planning for Organizational
Change: Snapshot

“When I need to announce a change,

I go to my top performers first. I give as much
information as I possibly can to help them
understand the reasons behind the change. I
prefer one-on-one communication,
particularly if it is an important change.”

Theresa Robinson, Senior Manager of Best Practices

and Risk Management, Aflac
Chapter 12: PowerPoint 12.9
 Technological Change Organizational Redesign

Job Redesign Organizational

Development

Chapter 12: PowerPoint 12.10 (Adapted from Figure 12.4)

 Technological Change
 Involves incremental adjustments or radical
innovations that affect workflows,
production methods, materials, and
information systems
 Many new forms of information
technology (IT)
 IT is enabling real time and any time links
between suppliers, producers, distributors,
and customers
Chapter 12: PowerPoint 12.11
  Involves incremental adjustments or radical innovations
focused on realigning departments, changing who makes
decisions, and merging or reorganizing departments
that sell the organization’s products
 Two basic approaches
Change organization’s structure, such as from functional
to product departmentalization
Change organization’s processes, such as how customer
complaints are handled
 Restructuring: reconfiguring the distribution of
authority, responsibility, and control in an organization
 Reengineering: radical redesigning of an
organization’s functions and business processes
Chapter 12: PowerPoint 12.12
 Job Redesign
 Modifying specific employee job responsibilities and tasks

 Job simplification: the scientific analysis of tasks

 Focus on efficient workflow process for employees
in a particular job
 Frequent use of time and motion studies

 Job enrichment: changing job specifications to broaden

and add challenge to the tasks required and to increase
productivity
 Increases interesting and challenging work
 Increases autonomy and personal freedom

Chapter 12: PowerPoint 12.13

  A planned, long-range behavioral science strategy for
understanding, changing, and developing an organization’s
workforce in order to improve its effectiveness
 Focus group discussion: a carefully planned discussion
among several employees about a specific topic or
issue of interest, which is led by a trained facilitator
 Facilitator explains the topic to be discussed, the role of the
scribe, and how the organization will use the results of the
focus group discussion
 Participants come prepared to discuss a specific topic. If
confidentiality is a concern, participants are chosen from
different units of the organization, not the same work group
 Scribe: the person who takes notes about what is said, but
not who says it
Chapter 12: PowerPoint 12.14
 Organization Development (OD) (cont’d)

 Survey feedback: a process that allows managers

and employees to report their thoughts and feelings
about the organization and to learn about how
others think and feel about their own behaviors

 Feedback obtained by means of a questionnaire

developed and distributed to employees, who
complete it and turn it in anonymously
 Content of questionnaire depends on areas of
most concern Questionnaire

Chapter 12: PowerPoint 12.15

 Organization Development (OD) (cont’d)

 Team building: process that develops the ability of

team members to collaborate effectively so they can
perform the tasks assigned to them

 Often emphasizes developing a group

climate that is safe
 Openness can be risky, but promotes
creativity and effective problem solving

Chapter 12: PowerPoint 12.16

  Major organizational change is a complex
process
 Typically involves a combination of
methods
 Example: purchasing and installing
enterprise resource planning [ERP]
software

Chapter 12: PowerPoint 12.17

 Role of Innovation in Organizational
Change

 Innovation: the discovery, identification and

diagnosis of unusual and ambiguous problems
and/or the development of unique or creative
solutions
 Strategic importance of innovation
Critical in dynamic, changing environments
Organizations can rest on prior success
Complacency is deadly

Chapter 12: PowerPoint 12.18

  Technical innovation: creation of new goods
and services
 Process innovation: creating a new way of
producing, selling, and/or distributing an
existing good or service
 Administrative innovation: creating a new
organization design that better supports the
creation, production, and delivery of goods
and services

Chapter 12: PowerPoint 12.19

 Types of Innovation: Snapshot
“Champion was an old-line paper manufacturing
company with classic characteristics solidly in place. We
had a traditional management structure, an adversarial
relationship with unions, and information systems that
reflected that type of thinking. [Now] we’ve changed our
hierarchy, opened up our information systems, developed
cooperative partnering with unions, and established
accountability within supervisory groups.”

Mark Childers, Senior VP of Organizational Development,

Champion International, a subsidiary of International Paper
Chapter 12: PowerPoint 12.20
 Foster
Workforce Resilience

Provide a
Support System for
Innovation

Develop a Learning Environment and

Learning Orientation among Employees

Chapter 12: PowerPoint 12.21 (Adapted from Figure 12.6)

  Learning organization: has both the drive and
the capabilities to modify or transform itself and
improve its performance continuously

 Learns from past experiences

 Learns from customers
 Learns from various parts of the
organization
 Learns from other organizations

Chapter 12: PowerPoint 12.22

 Shared Leadership

The Customer-Focused
Culture of Innovation Learning Strategy
Organization

Organic Intensive
Organization Use of
Design Information

Chapter 12: PowerPoint 12.23 (Adapated from Figure 12.7)

 Characteristics of a Learning Organization: Snapshot

“We all make mistakes. It’s not as though at any time,

Dell doesn’t have some part of its business that’s not
working for us as it should. But we have a culture of
continuous improvement. We train employees to
constantly ask themselves, ‘How do we grow faster?
How do we lower our cost structure? How do we
improve service for customers?’”

Michael Dell, Chairman and Cofounder, Dell Computer

Chapter 12: PowerPoint 12.24