16

Managing
Organizational
Changes and
Innovation
 Learning Outcomes

After studying this chapter, you should be able to:

 Define change and innovation
 Explain the challenges, forces and process of
organizational changes
 Discuss why individuals and organizations resist
changes
 Describe an organizational innovation process, and the
characteristics of an innovative organization
 Illustrate the barriers to organizational innovation

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 Introduction

Definition:
Organizational change can be defined as any
alteration in the operations of an organization,
planned or unplanned, which is the result of either
internal or external causes or influences

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 Introduction (cont.)
Categories to characterize change:
 A planned change attempts to explain the process that
brings about change.
 An unplanned change, on the other hand, is a change that
happens at random or spontaneously, without the
intervention of a change agent.
 An emergent approach cites that a change should not be
perceived as a series of linear events within a given period
of time, but as a continuous, open-ended process of
adaptation to changing circumstances and conditions.
 An approach of contingency to change supports a ‘one
best way for each’ organization approach.

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 Challenges of
Organizational Change
 Factors—internal and external
 Nature of Organizational Changes
– Environmental changes
– Product- and/or service-related changes
– Working method changes, how products are made or
delivered and who makes them
– Management and working relationship changes
– Organizational structure, size or growth changes

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 Forces of
Organizational Change
 Internal forces or pressures of change refer to any
factor that affects an organization in carrying out its
activities, such as, employees’ attitudes,
employees’ abilities and knowledge, and leadership
styles.
 External forces or pressures of change focus on
factors in the external environment that interferes
with an organization’s ability to attract human
capital, obtain material resources, and produce and
market its services

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 Process of
Organizational Change

The process of organizational change involves three

stages:
Unfreezing

Changing

Refreezing

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 Kurt Lewin’s
Theory of Change

 This theory involved two forces (the push and pull

forces).
 When the forces are in equilibrium, the organization is
stable and no change takes place.
 A manager in an organization, as a change agent, must
be able to find ways either to increase change, reduce
change, or both.
 The strategies identified must be able to surpass the
inertia and lead to change.

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 Kurt Lewin’s
Theory of Change (cont.)
 According to Lewin, there are three steps involved if
change needs to be implemented:
– Unfreezing: Unfreeze the organization from its present
state
– Movement: Make the desired type of change
– Refreezing: Refreeze the organization in a new, desired
state
 Lewin warns that for any change that organization
wants to make, the refreezing step needs to be taken
seriously and managed effectively.

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 Individual and Organizational
Resistance to Change
Individual Resistance Organizational Resistance
Habits Structural inertia
Security Group influence
Economic factors Threat to expertise and
power relationships
Selective information Threat to established
processing resource allocations

Failure to recognize the

need for change

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 Overcoming Resistance

 Methods of overcoming resistance

– Education and communication
– Participation
– Facilitation and support
– Negotiation
– Manipulation
– Co-option
– Coercion

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 Overcoming Resistance
(cont.)

 In handling resistance there are two levels

involved (individual and group).
 Both levels are interrelated or overlapping due to
the presence of individuals in groups, both formal
and informal.

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 Benefits of Resistance to
Change

Benefits of Resistance
Encourage management to re-examine change proposals
to ensure that changes are more suitable.
Help management to identify specific problem areas, so
that the management can take corrective actions before
problems become serious.
Give management information about the intensity of
employees’ sentiments towards changes, providing
employees an emotional release in the process

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 Stimulating Organizational
Innovation

 Organizational Innovation Processes

– Step 1: Idea generation
– Step 2: Initial experimentation
– Step 3: Feasibility determination
– Step 4: Final application

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 Features of Organizational
Innovation

Highly innovative organizations are those that

embody the following four major characteristics:
•Their organizational strategies and cultures support
innovation processes.
•Their organizational structures support innovation
processes.
•Their employees support innovation processes.
•Their top level management supports innovation
processes.

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 Fostering Organizational
Innovation

The three elements that tend to stimulate

innovation in an organization are:
Organizational structures
Organizational cultures
Human resource practices

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