Chapter 7: Managing Change, Stress, and Innovation



Chapter 7: Managing Change, Stress, and Innovation

Section 7.1 – What is Change?

Key Terms

• Change

• Change agents

• “Calm waters” metaphor

• “White-water rapids” metaphor

Summary

More than at any other time, change has become an integral part of every manager’s job. Change, defined as “an alteration of an organization’s environment, structure, technology or people”, is an organizational reality today. If it were not for change, the manager’s job would be easy. The issue of organizational design would be solved because the environment would be free from uncertainty and there would be no need to adapt.

The options for handling change fall into one of three categories: 1) altering structure, 2) technology, or 3) people. Both external and internal forces constrain managers and bring about the need for change. The introduction of new competition, government laws and regulations, technology, the fluctuation of labor markets, and the economy represent external forces that require change within organizations. The impact of these external forces and the internal operation of an organization create the internal forces of change.

Management must redefine or modify its strategy based on the introduction of new employees, the organization’s workforce, composition changes within the workforce, compensation and benefit requirements, and employee attitudes. In order to facilitate necessary changes, a change agent or catalyst is required. A change agent can be a current manager or a non-manager such as an internal staff specialist or outside consultant. People who act as catalysts and assume the responsibility for managing the change process are called change agents. Many organizations hire outside consultants to act as a change agent. These consultants may not have an adequate understanding of the organization’s history, culture, operating procedures, and personnel. They often lean towards initiating more drastic changes than inside change agents would. In contrast, internal managers assigned the tasks associated with change may be more thoughtful and more cautious since they must live with their decisions and actions.

Two metaphors are often used to clarify the change process. “Calm waters” metaphor envisions the organization as a large ship crossing a calm sea and experiencing an occasional storm. This metaphor is best illustrated by Kurt Lewin’s three-step description of the change process. According to Lewin, successful change requires unfreezing the status quo, changing to a new state, and then refreezing the new change to make it permanent.

This three-step process treats change as a break in the organization’s equilibrium state. The status quo has been disturbed, and change is necessary to establish a new equilibrium state. The “calm waters” metaphor is increasingly obsolete as a description of the kind of seas that current managers have to navigate today.

The alternative metaphor is the “white-water rapids” metaphor. In this metaphor the organization is seen as a small raft navigating a raging river with uninterrupted white-water rapids. Thus change is a natural state and managing change is a continual process. It takes into consideration that environments are both uncertain and dynamic. Since managers face constant change, bordering on chaos, the stability and predictability of the calm waters does not exist, disruptions in the status quo are usually continual and permanent rather than occasional and temporary, and there is not a return to calm waters. Most organizations can ill-afford to treat change as an occasional disturbance in a peaceful business world. To do so would put them at great risk as most competitive advantage lasts less than 18 months.

Entrepreneurs must also deal with dynamic change. One of the many duties that an entrepreneur must accept is one of change agent. Since changes are needed in entrepreneurial ventures, the entrepreneur is often the first to identify the need for change and thus must act as the catalyst, coach, cheerleader, and chief change consultant. They also may have to guide the actual change process as changes in strategy, technology, products, structure or people are being implemented.

Section Outline

What is Change?

Forces for Change

A. What external forces create a need for change?

B. What internal forces create a need for change?

C. How can a manager serve as a change agent?

Two Views of the Change Process

A. What is the “calm waters” metaphor?

B. How does the “white-water rapids” metaphor of change function?

C. Does every manager face a world of constant and chaotic change?

D. How do entrepreneurs handle change?

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