Chapter 5. Managing change and innovation


Organizational change

= any alteration or adaption of an organization’s structure, technology, or people

  1. Changing structure

For example: change in authority, job design,…

  1. Changing technology

Modification in the way work is done or the methods or equipment used

  1. Changing people

Refers to changes in employee attitudes, expectations, perceptions or behavior

External forces that create a need to change

  • Technology
  • Government laws and regulations
  • Labor markets
  • Economic changes

Internal forces that create a need to change

  • Composition of an organization’s workforce (age,education,…)
  • Employee attitudes

Change agents

= people who act as catalysts and assume the responsibility for managing the process

  • Who can be a change agent?
    • Any manager – we assume that organizational change is initiated and carried out by a manager within the organization
    • Any non-manager – for example, an internal staff specialist or any outside consultant

(a consultant have an objective perspective BUT they might not know the organization’s history, culture, …)

Calm waters metaphor

envisions the organization as a large ship crossing a calm sea. The ships captain and crew know exactly where they are going because they have made this trip many times before. Change appears as an occasional storm.


3 step change process

  1. Unfreezing – necessary to move from this equilibrium and can be achieved in

1 of 3 ways

  • Increase the driving forces, which direct behavior away from the status quo
  • Decrease the restraining forces, which hinder movement for the existing equilibrium
  • Do both
  1. Changing
  2. Defreezing – needs to be done to keep the change permanent


White-water rapids

Organization is seen as a small raft navigating a raging river with uninterrupted white-water rapids. On board there are people who have never worked together before, who are totally unfamiliar with the river -> change is the status quo and managing change is a continual process


Organization development (OD)

= efforts that assist organizational members with a planned change by focusing on their attitudes and values

  • Fundamental issue of OD is its reliance on employee participation to foster an environment in which open communication and trust exist
  • OD attempts to involve organizational members and seeks their input through:
    • Survey feedback
    • Process consultation
    • Team-building
    • Intergroup development


Why do people resist organizational change?

  • Uncertainty
  • Habit
  • Concern over personal loss
  • Change is not in organization’s best interests



  • Physical: heart problems, raised blood pressure, …
  • Psychological: anxiety, tension, …
  • Behavioral: sleep disorder, change eating habits, …

What causes stress?

  • job-related
    • Task demands 
      • Job design, work place, …
    • Role demands
      • Role conflicts – expectations that may be hard to reconcile or satisfy
      • Role overload – created when employee is expected to do more than time permits
      • Role ambiguity – created when role expectations are not clearly understood
    • Organizational structure
      •  stress due excessive rules; no opportunity to participate in decisions that affect an employee
    • Organizational leadership
      •  stress due to managers’ supervisory style in a culture of tension, fear, anxiety, …
    • Interpersonal demands
      •  stress due to other employees
  • Personal factors
    • Family issues, economic problems, …
      • Employees personalities
        • Type A – chronic sense of time urgency, competitive drive, …
        • Type B – no sense of time urgency

How can stress be managed?

  • General guidelines – stress can never be eliminated
  • Job-related factors
    • Employee selection – realistic job preview
    • On-the-job – improve communications
  • Personal factors
    • Employee assistance programs (EAP’s)
    • Wellness programs


How to deal with resistance to change?

  • Education and communication
  • Participation
  • Facilitation and support
  • Negotiation
  • Manipulation and co-optation
  • Coercion


Creativity vs innovation


= Refers to the ability to combine ideas in a unique way or to make unusual associations between ideas


= the process of taking a creative idea and turning it into a useful product, service, or method of operation


What’s involved in innovation?

  1. Perception – the way you see things
  2. Incubation – some people need to sit on their ideas
  3. Inspiration – the moment where all your efforts come together
  4. Innovation – taking inspiration and turning it into a useful product


How do structural variables affect innovation?

  1. Organic- type = positive influence, the structure is highly adaptable and flexible
  2. Availability of plentiful resources
  3. Frequent communication between organizational units
  4. Time pressure
  5. Support of creativity


How does an organization’s culture affect innovation

  • Accepts ambiguity
  • Tolerates the impractical
  • Keeps external controls minimal
  • Tolerates risk
  • Tolerates conflict
  • Focuses on ends rather than means
  • Uses an open-system focus
  • Provides positive feedback


Idea champion

= individuals who actively and enthusiastically support new ideas, build support for, overcome resistance to , and ensure that innovations are implemented


Disruptive innovation

Innovations that radically change the industry’s rules of the game


Sustaining innovation

Innovations that represent small and incremental changes in established products rather than dramatic breakthroughs


Personal career planning

  • Never get comfortable with a single employer
  • Keep your skills current
  • Remember that you are responsible for your future
  • take a risk while you’re young