MAN Exam 2 Chapter 7

perceptions

A third reason that people resist change is due to different perceptions. A manager may make a decision and recommend a plan for change on the basis of his or her own assessment of a situation.

uncertainty

Perhaps the biggest cause of employee resistance to change is uncertainty. In the face of impending change, employees may become anxious and nervous. They may worry about their ability to meet new job demands, they may think that their job security is threatened, or they may simply dislike ambiguity.

Reactive change: unfreezing

Kurt Lewin, a noted organizational theorist, suggested that every change requires three steps. The first step is unfreezing-individuals who will be affected by the impending change must be led to recognize why the change is necessary.

Reactive change: implementation

The second step is the implementation of the change itself

Reactive change: refreezing

The third step is refreezing, which involves reinforcing and supporting the change so that it becomes a part of the system. For example, one of the changes that Caterpillar faced in response to the recession noted earlier involved a massive workforce reduction. The first step (unfreezing) was convincing the United Auto Workers (UAW) to support the reduction because of its importance to long-term effectiveness. After this unfreezing was accomplished, 30,000 jobs were eliminated (implementation). Then it worked to improve its damaged relationship with its workers (refreezing) by guaranteeing future pay hikes and promising no more cutbacks. As interesting as the Lewin model is, it unfortunately lacks operational specificity. Thus, a more comprehensive perspective is often needed.

Managerial innovations

are changes in the management process by which products and services are conceived, built, and delivered to customers

Reactive change

is a piecemeal response to circumstances as they develop. Because reactive change may be hurried, the potential for poorly conceived and executed change is increased. Planned change is almost always preferable to reactive change.

organization development

is a planned effort that is organization-wide, managed from the top, and intended to increase organizational effectiveness and health through planned interventions in the organization's process, using behavioral science knowledge.

Planned change

is designed and implemented in an orderly and timely fashion in anticipation of future events.

Technical innovations

are changes in the physical appearance or performance of a product or service or of the physical processes through which a product or service is manufactured.

Product innovations

are changes in the physical characteristics or performance of existing products or services or the creation of brand-new products or services.

Process innovations

are changes in the way products or services are manufactured, created, or distributed.

Incremental innovations

are new products, services, or processes that modify existing ones. Firms that implement radical innovations fundamentally shift the nature of competition and the interaction of firms within their environments

Radical innovations

are new products, services, or technologies developed by an organization that completely replace the existing products, services, or technologies in an industry.

Intrapreneurs

are similar to entrepreneurs except that they develop a new business in the context of a large organization

Organization change

is any substantive modification to some part of the organization External forces for change come from the organization's general and task environments. For example, steep increases in oil prices a few years ago caused consumer demand for low gas mileage big cars and trucks to plummet and demand for fuel efficient smaller cars and trucks to increase. A variety of forces inside the organization may cause change. If top management revises the organization's strategy, organization change is likely to result. A decision by an electronics company to enter the home computer market or a decision to increase a ten-year product sales goal by, say, 10 percent would necessitate several related organization changes.

force-field analysis

it can help overcome resistance to change. In almost any change situation, forces are acting for and against the change. To facilitate the change, managers start by listing each set of forces and then trying to tip the balance so that the forces facilitating the change outweigh those hindering the change.

Enterprise Resource Planning (ERP)

link virtually all facets of the business, making it easier for managers to keep abreast of related developments. ERP is a large-scale information system for integrating and synchronizing the many activities in the extended enterprise. In most cases, these systems are purchased from external vendors who then tailor their products to the client's unique needs and requirements. Companywide processes—such as materials management, production planning, order management, and financial reporting—can all be managed through ERP.

innovation

which is the managed effort of an organization to develop new products or services or new uses for existing products or services. Innovation is clearly important because without new products or services an organization will eventually fail. Know all of Figure 7.4 and subsequent sections.

business process change, or reengineering,

which is the radical redesign of all aspects of a business to achieve major gains in cost, service, or time. ERP, as described earlier, is a common platform for changing business processes. However, business process change is a more comprehensive set of changes that goes beyond software and information systems. Know Figure 7.3