Notes on Nature of Change

in Organizations
EM416/EA302
Collin’s Five Stages of Decline
• Stage 1- Hubris Born of Success, a company develops arrogance,
attributing the success of the company to their own superior
performances
• Stage 2- Undisciplined pursuit f more, overreaching into areas where
they do not have expertise
• Stage 3- Denial of Risk and Peril, discounting negative data, over-
amplifying the positives, and putting a positive spin on the
ambiguous
• Stage 4- Grasping for Salvation, begin making desperate leaps
• Stage 5- Death of the company, sold or go bankrupt
Fundamental Change- What you have to deal
with?
• Marketplace is becoming more segmented and moving toward more
niche products
• More competitors- require faster speed to market
• Some traditional companies may not survive radically innovative
change
• Other suppliers especially from China and India are changing the
competition landscape
• Knowledge, not information, is becoming the new competitive
advantage
Two Types of Change
•Reactive- responding to unanticipated problems
and opportunities. Making changes in response
to problems or opportunities a they arise

•Proactive Change- managing anticipated

problems and opportunities. Planned change
involves making carefully thought-out changes in
anticipation of possible or expected problems or
opportunities
The forces of Change-originating from outside
• Demographic characteristics- more diverse workforce
• Market changes- global economy
• Technological advancements- disruptive innovation
• Shareholder & customer demands- more demanding
• Supplier practices- new demand
• Social and political pressures- emerging health issues
Forces from Inside
• Employee problems- job dissatisfaction, work overload
and conflicts

• Manager’s Behavior- Personality conflicts

Areas in which change is often needed
• Changing people- perceptions, attitudes, performance
and skills

• Changing technology- disruptive

• Changing Structure- product-based to matrix

• Changing Strategy- shifts in marketplace

Resistance to Change

• Employee characteristics

• Change-agent characteristics

• Change agent-employee characteristics

 Two Myths of Innovation
• Myth 1: Innovation happens in a Eureka moment-
most of the time innovation is the product of hard
work and dedication. It does not just happen as some
people think

• Myth 2: Innovation can be systemized- innovation

cannot be codified and standardized.
 The Seeds of Innovation
• Hard work in a specific direction- dedication to solve a well-
defined problem, and hard work that can span many years
• Hard work with direction change- innovations frequently occur
when people change their approach to solving a problem
• Curiosity- innovations can begin when people are curious about
something of interest to them
• Wealth and Money- people just to make money and increase their
wealth
• Necessity- grow from a desire to achieve something
• Combination of the above
 Types of Innovation

• Product vs Process

• Incremental vs Radical innovation

 Four Steps to Foster Innovation
• Recognize problems and opportunities and devise
solutions

• Gain allies by communicating your vision

• Overcome employee resistance, and empower and

reward them to achieve progress

• Execute well