Chapter 8 – Managing Change and Innovation

True/False Questions

WHAT IS CHANGE?

1. Change is an organizational reality.

True (easy)

2. Organizational change can be alteration in people, structure, or technology.

True (moderate)

FORCES FOR CHANGE

3. The marketplace is an external force of change.

True (moderate)

4. The change in demand for health care technicians is an example of an economic change.
False (difficult)

5. Economic changes are an internal force of change.

False (moderate)

6. Any manager can be a change agent.

True (moderate)

TWO VIEWS OF THE CHANGE PROCESS

7. The "calm waters" approach to change would be consistent with Lewin's concept of
unfreezing, changing, and refreezing.
True (difficult)

8. In the "white-water rapids" metaphor of change, managers should expect change at any
time, and it may last for unspecified lengths of time.
True (moderate)
 MANAGING CHANGE

9. Change threatens the investment you've already made in the status quo.
True (easy)

10. One reason people resist change is that is substitutes ambiguity for uncertainty.
False (difficult)

11. The manager's options for change essentially fall into three categories: structure,
technology, and product.
False (difficult)

12. Computerization is a technological change that replaces people with machines.

False (moderate)

13. Probably the most visible technology changes in recent years have come through managers’
efforts to expand corporate financing.
False (moderate)

14. Sensitivity training is a method of changing behavior through unstructured group

interaction.
True (easy)

15. Organizational cultures tend to resist change.

True (moderate)

16. Techniques to change people and the quality of interpersonal work relationships are termed
organizational development.
True (moderate)

17. Cultural change is easier when the organizational culture is strong.

False (easy)

18. The first step in accomplishing organizational cultural change is to initiate a reorganization.
False (moderate)
 CONTEMPORARY ISSUES IN MANAGING CHANGE

19. Cooptation refers to covert attempts to influence.

False (moderate)

20. Manipulation is using direct threats.

False (moderate)

21. A major disadvantage of coercion is that it is frequently illegal.

True (moderate)

22. Negotiation refers to covert attempts to influence, twisting and distorting facts or
withholding information.
False (moderate)

23. In cooptation, an organization seeks to "buy off" the leaders of a resistance group by giving
them a key role in the change decision.
True (moderate)

24. Never negotiate with employees as a means of overcoming resistance to change.

False (moderate)

25. The first step in changing organizational culture is to conduct a cultural analysis.
True (easy)

26. In process reengineering, a company drastically changes its structure, technology, and
people by starting from scratch in reexamining the way the organization's work is done.
True (moderate)

27. Stress is a dynamic condition a person faces when confronted with an opportunity,
constraint, or demand related to what he or she desires and for which the outcome is
perceived to be both uncertain and important.
True (moderate)

28. In terms of organizational factors, any attempt to lower stress levels has to begin with
employee selection.
True (moderate)
 MANAGING WORKFORCE DIVERSITY

29. The Paradox of Diversity is described as situations in which limitations are placed upon
diverse individuals by strong organizational cultures.
True (moderate)

STIMULATING INNOVATION

30. Creativity is the process of taking an idea and turning it into a useful product, service, or
method of operation.
False (difficult)

Multiple Choice

A MANAGER’S DILEMMA

31. According to the company profile in “A Manager’s Dilemma,” which of the following
branded products does Panamerican Beverages, Inc sell in Latin America?
a. Pepsi
b. Coca-Cola (moderate)
c. Ocean Spray
d. Gatorade
e. Evian

32. According to the company profile in “A Manager’s Dilemma,” Francisco Sanchez-Loaeza,

Panamco’s Chairman and CEO, attributes all of the following organizational factors as
important to the company’s success EXCEPT:
a. centralized management philosophy (moderate)
b. logistical expertise
c. innovative merchandising strategies
d. excellent financial stewardship
e. decentralized management philosophy

WHAT IS CHANGE?

33. Being a manager, with no environmental uncertainty or threat of competitors' new products,
would be simple without any ______________.
 a. government regulations.
b. unions.
c. diversity.
d. cultural differences.
e. change. (moderate)

FORCES FOR CHANGE

34. Which of the following is not an external force of change?

a. marketplace
b. government laws and regulations
c. technology
d. economic changes
e. work force (moderate)

35. The Americans With Disabilities Act is an example of which of the following forms of
environmental change?
a. internal
b. technology
c. government laws and regulations (moderate)
d. labor markets
e. economic
36. Changing human resource activities to attract and retain health care specialists due to
increased needs for those workers is an example of what kind of environmental change factor?
a. marketplace
b. technology
c. labor markets (difficult)
d. economic
e. government laws and regulations

37. Falling interest rates would most stimulate what change factor for a manager?
a. marketplace
b. government laws and regulations
c. labor markets
d. economic (easy)
e. technology

38. Which of the following is not an internal force of change?

 a. technology (moderate)
b. strategy
c. work force
d. employee attitudes
e. equipment

39. What change factor did Harley-Davidson motorcycles react to in its turnaround of production
quality control and modernization?
a. technology
b. external
c. work force
d. equipment
e. strategy (difficult)

40. Increasing the numbers of employed women and minorities forces managers to pay attention
to what change factor?
a. strategy
b. work force (moderate)
c. equipment
d. technology
e. employee attitudes

41. Labor strikes are an example of what change factor that may encourage a change in
management thinking and practices?
a. work force
b. equipment
c. employee attitudes (easy)
d. strategy
e. government laws and regulations

42. In organizations, people who act as catalysts and assume responsibility for managing the
change process, are called ______________.
a. change masters.
b. change agents. (moderate)
c. operations managers.
d. charismatic leaders.
e. transformational leaders.
43. In an organization, who is usually the change agent?
 a. CEO
b. executive vice-president
c. any manager or nonmanager (difficult)
d. any competitor
e. union leaders

44. In spurring organizational change, outside consultants are usually more ______________,
while internal managers may be more ______________.
a. drastic; thoughtful (moderate)
b. highly paid; risky
c. resistant; bold
d. cautious; friendly
e. interested; scared

TWO VIEWS OF THE CHANGE PROCESS

45. Lewin's theory is consistent with which view of organizational change?

a. continuous
b. contemporary
c. Mayo's
d. "calm waters" (moderate)
e. change in the 1990s

46. Who theorized the change process involving unfreezing, changing, and refreezing?
a. Drucker
b. Robbins
c. Lewin (easy)
d. Mayo
e. Lawler

47. According to Kurt Lewin, which of the following is not a stage in the change process?
a. unfreezing
b. changing
c. refreezing
d. restraining (moderate)

48. According to Kurt Lewin, increasing the driving forces, which direct behavior away from the
status quo, is a means of doing which of the following?
 a. unfreezing (moderate)
b. changing
c. restraining forces
d. refreezing
e. melting

49. Which of the following terms best describes the two primary views of the change process?
a. problematic, encouraged
b. occasional, continuous (difficult)
c. costly, conservative
d. optimistic, pessimistic
e. reactive, proactive
50. Which of the following is the objective of refreezing, according to Lewin?
a. directs behavior away from the status quo
b. hinders movement away from existing equilibrium
c. changes to a new environment
d. eliminates the need for future change
e. stabilize the new situation (moderate)

51. According to the text, the ______________ is consistent with uncertain and dynamic
environments.
a. calm-waters metaphor
b. white-water rapids metaphor (moderate)
c. contemporary metaphor
d. continuous metaphor
e. cultural metaphor

52. A manager who comes to work every morning expecting that today will definitely bring new
challenges from competitors, the work force, etc., views organizational change in what way?
a. pragmatic
b. continuous (moderate)
c. pessimistic
d. reactive
e. occasional

53. According to the text, managers in such businesses as wireless telecommunications,

computer software, and women’s high-fashion clothing have long confronted the
______________.
 a. calm-waters metaphor
b. white-water rapids metaphor (moderate)
c. contemporary metaphor
d. continuous metaphor
e. cultural metaphor

MANAGING CHANGE

54. As ______________, managers should be motivated to initiate change because they are
committed to improving their organization's effectiveness.
a. change agents (difficult)
b. efficiency experts
c. manipulators
d. process consultants
e. reengineering specialists.

55. Managers' options for change essentially fall into what three categories?
a. environment, technology, and mission
b. structure, technology, and people (difficult)
c. mission, structure, and people
d. mission, environment, and process
e. environment, attitudes, and processes

56. According to the text, “changing structure” includes alteration in any of the following
EXCEPT:
a. authority relations.
b. coordination mechanisms.
c. degree of centralization.
d. job redesign.
e. technology (moderate)
57. Which of the following is not a part of organizational structure?
a. work specialization
b. departmentalization
c. chain of command
d. formalization
e. work processes (difficult)
58. If an organization increases the span of control, what factor is being focused on in an
organizational change?
a. structure (difficult)
b. people
c. technology
d. strategy
e. human resources

59. A company that decides to decentralize its sales procedures is managing what change
category?
a. technology
b. people
c. equipment
d. competitors
e. structure (moderate)

60. According to the text, competitive factors or new innovations within an industry often require
managers to introduce all of the following EXCEPT:
a. new equipment.
b. new tools.
c. new operating methods.
d. new employees (moderate)

61. ______________ is a technological change that replaces people with machines.

a. Operations
b. Organizational development
c. Automation (moderate)
d. Robotics
e. Downsizing

62. Probably the most visible technological changes in recent years have come through
managers’ efforts to expand _____________.
a. corporate financing.
b. organizational culture.
c. computerization.
d. employee retention.
63. When grocery stores installed scanners to read the product price, this was an example of
managing what change category?
a. technology (moderate)
b. people
c. competitors
d. structure
e. laws and regulations
64. If Kraft Foods hired a consultant to decrease group friction and enhance cooperative work
relationships, this would be an example of managing what change category?
a. technology
b. people (difficult)
c. competitors
d. structure
e. laws and regulations

65. Techniques to change people and the quality of interpersonal work relationships are termed
______________.
a. operations.
b. organizational development. (moderate)
c. downsizing.
d. robotics.
e. automation.

66. ______________ is a method of changing behavior through unstructured group interaction.

a. Survey feedback
b. Organizational development
c. Sensitivity training (moderate)
d. Process consultation
e. Team building

67. According to the text, an individual is likely to resist change because of all of the following
reasons EXCEPT:
a. uncertainty.
b. increased productivity. (easy)
c. concern over personal loss.
d. belief that the change is not in the organization’s best interest.
68. Which of the following reactions to change is a threat to the investment you have already
made in the status quo?
a. uncertainty
b. freezing
c. change is not good for the organization
d. concern over personal loss (moderate)
e. refreezing

69. Which of the reasons for resistance to change may be beneficial to the organization?
a. uncertainty
b. freezing
c. change is not good for the organization (difficult)
d. refreezing
e. concern over personal loss

70. All of the following are mentioned in the text as actions that managers can use to deal with
resistance to change EXCEPT:
a. education and communication.
b. diversification (moderate)
c. participation.
d. facilitation and support.
e. negotiation.
71. Which of the following techniques for reducing resistance to change is based on the belief
that, if employees receive the full facts and clarifications, they will no longer be resistant?
a. education and communication (easy)
b. participation
c. facilitation and support
d. negotiation
e. manipulation and cooptation

72. If K-mart has employees serving on the committee to decide what color the new uniform
colors should be, this is an example of what tactic for reducing change resistance?
a. education and communication
b. manipulation and cooptation
c. participation (easy)
d. facilitation and support
e. coercion
73. If a bank offers personal and financial counseling to employees prior to an upcoming
downsizing, this is an example of what kind of tactic for reducing change resistance?
a. education and communication
b. coercion
c. manipulation and cooptation
d. negotiation
e. facilitation and support (moderate)

74. If management offers the union guaranteed wage hikes and a no-layoff promise in exchange
for help in implementing a new production process, this would be an example of what kind
of tactic for reducing change resistance?
a. participation
b. facilitation and support
c. coercion
d. negotiation (difficult)
e. manipulation and cooptation

75. If a state legislator purposely misrepresents public employee wages to the citizens in order
to apply downward wage pressure in the collective bargaining process, this would be an
example of what kind of tactic for reducing change resistance?
a. negotiation
b. coercion
c. cooptation
d. education and communication
e. manipulation (difficult)

76. ______________ refers to covert attempts to influence, twisting and distorting facts or
withholding information.
a. Negotiation
b. Coercion
c. Cooptation
d. Education and communication
e. Manipulation (moderate)
77. "Buying off" the leader of a resistance group in order to get his/her endorsement is an
example of what kind of tactic for reducing change resistance?
a. negotiation
b. coercion
c. education and commitment
 d. cooptation (moderate)
e. facilitation and support

78. ______________ is using direct threats or force on those who resist change.
a. Negotiation
b. Coercion (moderate)
c. Cooptation
d. Education and communication
e. Manipulation

79. A manager who threatens to ruin an employee's name in the company if he/she does not
cooperate with an impending organizational change is using what kind of tactic for reducing
change resistance?
a. negotiation
b. coercion (moderate)
c. manipulation and cooptation
d. education and communication
e. facilitation and support

MANAGING YOUR CAREER

80. According to the boxed feature, “Managing Your Career,” all of the following are examples
of means in which individuals can reinvent themselves EXCEPT:
a. take advantage of continuing education or graduate courses at local colleges.
b. sign up for workshops and seminars that can help enhance personal skills.
c. depend on the organization to provide career development and training
opportunities. (moderate)
d. voice concerns in a constructive manner.

81. Which of the following represents the relationship between organizational culture and
change?
a. Culture and change are naturally compatible.
b. Culture tends to be very resistant to change. (moderate)
c. Culture can change in months but not weeks.
d. Culture can never be purposely changed.
e. There is no relationship between culture and change.
82. Which of the following is not a favorable situational condition that may facilitate change in
organizational culture?
a. A dramatic crisis occurs.
b. The culture is weak.
c. Stock price sharply falls. (moderate)
d. The organization is young and small.
e. Leadership changes hands.

83. Which of the following is the first step in accomplishing organizational cultural change?
a. Appoint new leadership with a new vision.
b. Initiate a reorganization.
c. Conduct a cultural analysis. (moderate)
d. Change the selection and socialization process.
e. Introduce new stories and rituals to convey the new mission.

84. Which of the following is the last step in accomplishing organizational cultural change?
a. Make it clear that change is necessary to organizational survival.
b. Introduce new stories and rituals to convey new vision.
c. Appoint new leadership with a new vision.
d. Change the selection, socialization, and reward system to support new values.
(difficult)
e. Initiate a reorganization.

85. All of the following describe Continuous Quality Improvement EXCEPT:

a. continuous, incremental change.
b. fixing and improving.
c. redesigning. (moderate)
d. mostly "as is."
e. works from bottom up in organization.

86. Which of the following statements reflects the relationship between Continuous Quality
Improvement (CQI) and reengineering?
a. They are basically the same.
b. CQI begins with reengineering.
c. They are radically different. (difficult)
d. Reengineering begins with TQM.
e. Both require decentralized participative decision-making.
87. In _____________, a company drastically changes its structure, technology, and people by
starting from scratch in reexamining the way the organization's work is done.
a. process reengineering
b. Continuous Quality Improvement (moderate)
c. team building
d. structural realignment

88. All of the following describe process reengineering EXCEPT:

a. radical change.
b. redesigning or starting over.
c. mostly "what can be."
d. fixing and improving. (moderate)
e. initiated by top management.

89. ______________ is a dynamic condition a person faces when confronted with an

opportunity, constraint, or demand related to what he or she desires and for which the
outcome is perceived to be both uncertain and important.
a. Stereotyping
b. Stress (moderate)
c. A halo effect
d. Creativity

90. Which of the following is true concerning stress?

a. It is a static condition.
b. Stress is a negative reaction to an outside force.
c. Stress is often associated with constraints and demands. (moderate)
d. Stress limits performance.
e. Stress has nothing to do with opportunity.
91. Which of the following must be present for potential stress to become actual stress?
a. uncertainty, importance (moderate)
b. risk, valuation
c. age, uncertainty
d. certainty, risk
e. pain, desire

92. According to the text, stress symptoms can be grouped under any of the following three
general categories EXCEPT:
a. physiological.
 b. cultural (moderate)
c. psychological.
d. behavioral.

93. Which of the following general categories of stress symptoms is least relevant to managers?
a. physiological. (moderate)
b. cultural
c. psychological.
d. behavioral.

94. In terms of organizational factors, any attempt to lower stress levels has to begin with
______________.
a. employee work loads.
b. the reward system.
c. the organizational leader.
d. the organizational culture.
e. employee selection. (difficult)

95. Which of the following is the primary condition to reducing organizational stress?
a. good job/person match (moderate)
b. merit pay system
c. decentralization
d. caring and understanding management
e. fewer government laws and regulations

96. Which of the following is true concerning stress that arises from an employee's personal life?
a. A manager should offer advice.
b. A manager who understands his/her subordinates can help control employee personal
stressors.
c. Management involvement may raise ethical concerns. (moderate)
d. A caring manager can be the most effective counselor.
e. There is nothing the organization should or can do to help relieve personal stressors.

STIMULATING INNOVATION

97. ______________ refers to the ability to combine ideas in a unique way or to make unusual
associations between ideas.
a. Innovation
 b. Imagination
c. Creativity (moderate)
d. Interpretive thinking
e. CQI
98. ______________ is the process of taking a creative idea and turning it into a useful product,
service, or method of operation.
a. Innovation (moderate)
b. Imagination
c. Creativity
d. Interpretive thinking
e. CQI

MANAGING IN AN E-BUSINESS WORLD

99. According to the boxed feature, “Managing in an E-Business World,” which of the
following best describes the metaphor of the E-business world?
a. calm-waters
b. white-water rapids (moderate)
c. contemporary
d. continuous
e. cultural

100. According to the boxed feature, “Managing in an E-Business World,” Tivoli Systems is a
division of which of the following companies?
a. General Motors
b. Microsoft
c. IBM (moderate)
d. Hewlett Packard
e. Gateway

101. Which of the following is an example of a variable that can foster innovation?
a. mechanistic structure
b. organic structure (difficult)
c. few organizational resources
d. low ambiguity acceptance
e. low job security

102. Which of the following is not a cultural value that supports innovation?
 a. acceptance of ambiguity
b. tolerance for the impractical
c. high external controls (moderate)
d. focus on ends, not means
e. open-system focus

103. Which of the following human resource variables is supportive of organizational innovation?
a. low commitment to training
b. selection of Type A employees
c. high job security (moderate)
d. unionization
e. long job tenure

104. ______________ actively and enthusiastically support new ideas, build support, overcome
resistance, and ensure that innovations are implemented.
a. Idea champions (moderate)
b. Whistle blowers
c. Idea generators
d. Idea screeners

105. According to the text, all of the following are common personality characteristics of idea
champions EXCEPT:
a. extremely high-self-confidence
b. persistence
c. energy
d. risk averse (moderate)

Scenarios

FORCES FOR CHANGE

Changing The Way (Scenario)

Due to his spouse's accepting a promotion, Colin had recently left his private sector job in Kansas
and accepted a new position in public service with the state of Ohio. The change had been quite a
shock at first. The organizational cultures were quite different and each environment offered a
different set of challenges. One new challenge Colin accepted was implementing changes into a
state government system. Historically, this environment had not seen a lot of changes, and now,
with the changes in Washington and the move toward privatization, change was necessary. Plus, his
agency director was also new and had announced that the agency would be developing a new
strategic plan. Together, Colin had been through many changes recently, and would be involved in
more in the near future.

106. The changes the state government was facing due to pressures put on by Washington could
be referred to as a(n) ______________ force of change.
a. driving
b. external (moderate)
c. technological
d. internal
e. marketplace

107. The changes Colin's agency was facing due to the new strategic plan anticipated from the
new director could be referred to as a(n) ______________ force of change.
a. driving
b. external
c. technological
d. internal (moderate)
e. marketplace

108. If Colin accepts the responsibility and acts as a catalyst for change, he could be referred to
as a(n)
a. change master.
b. director of change.
c. change agent. (each)
d. change manager.
e. enforcer of change.

TWO VIEWS OF THE CHANGE PROCESS

109. The past environment of state government, with very little change, where the status quo is
considered the equilibrium state, would be consistent with all but which of the following
terms?
a. calm waters
b. unfreezing
c. refreezing
d. white-water rapids (easy)
 e. Lewin

MANAGING CHANGE

Making Change Happen (Scenario)

Colin was getting accustomed to his surroundings in state government. His efforts at getting people
to accept change had met with a little resistance due to his and his new director's efforts and the hard
work of his subordinates. But now the hard part really started, actually managing the change. What
techniques could he and his agency's new director employ to most effectively implement changes
that would result in increased productivity in his department? He considered changing three aspects
of his agency: the structure, technology, and people.

110. If the new agency director decided to remove layers in the agency and increase the span of
managerial control, this would be considered changing the
a. structural design.
b. selection process.
c. degree of centralization.
d. structural components. (moderate)
e. technological design.

111. If the agency director decided to shift away from a functional to a product design, this would
be considered changing the
a. structural design. (challenging)
b. selection process.
c. degree of centralization.
d. structural components.
e. technological design.

112. If Colin decided to replace some employee work time with a telephone menu system, this
would be considered changing the
a. organizational structure.
b. technology. (moderate)
c. people.
d. organizational development.
e. attitudes.
113. Finally, Colin decided his people could benefit from ___________, a method of changing
behavior through unstructured group interaction.
a. survey feedback
b. sensitivity training (difficult)
c. team building
d. intergroup development
e. process consultation
CONTEMPORARY ISSUES IN MANAGING CHANGE

Changing Culture (Scenario)

Mandy recently returned from her two-day managerial seminar, How to Totally Change Your
Management and Leadership Style in Two Days. Even though she felt the seminar was worthless
(as she had predicted), it did give her a chance to think about how to change the culture of her
organization. She had been brought in by the new CEO as a change agent, and her position had the
authority to have impact. She felt that the recent hostile takeover by their parent company had
shocked everyone, especially given that the entire organization consisted of only 150 people and
had been in business for only five years. She felt this might be the time to attempt the cultural change
while everyone was still thinking in terms of change. As she tossed her leadership seminar manual
into the wastebasket, she considered what might be her first step and how well the cultural change
would work.

114. Of the following, which is an advantage that Mandy has to implement cultural change?
a. her new leadership skills
b. the recent purchase of her company (difficult)
c. previous stable leadership
d. her managerial level
e. her change agent power

115. Which of the following statements is true concerning the leadership of Mandy's company
and its effect on cultural change?
a. New top leadership can be an advantage. (moderate)
b. New top leadership is rarely an advantage.
c. It is important for the cultural change to begin with employees first.
d. Leadership issues have little impact on cultural change.
e. Retaining the old leadership would have been preferable for cultural change.
116. Which of the following statements about her company is most advantageous to Mandy as she
attempts to change the cultural leadership?
a. Change would be easiest with a company that is older and has a small number of
employees.
b. Change would be easiest in an older company with many employees.
c. Small companies that are new are easiest in which to implement change. (difficult)
d. Small companies that are old are easiest in which to implement change.
e. In terms of cultural change, company size and age rarely matter.

117. Of the following, which statement about her company's previous culture would be most
advantageous to her accomplishing a change?
a. A previously strong culture is receptive to change.
b. A previously nonexistent culture is receptive to change.
c. A moderately strong culture is receptive to change.
d. A weak culture is more receptive to change. (difficult)
e. An organization with multiple cultures is receptive to change.
Fred's Stress (Scenario)

Fred was not handling the change in his department well. The company had recently changed hands,
and even though no one had lost his job, people had been changing jobs and were being asked to
move to different locations. The new leadership had a completely different outlook than those
people he had worked under for the past twenty-one years. Fred found that he was unable to
concentrate at work and generally felt like he did not like his job anymore. At home, he was getting
headaches and having trouble sleeping, which only enhanced his feeling that things were not going
to work out well for him. When he thought about it, he had always hated change. He worked in the
job he did partially because it was considered stable (boring to some) and predictable. Fred's new
boss kept trying to convince him that he was a valuable employee and that new opportunities, along
with salary increases, were in his future. Unfortunately, what Fred wanted was to have things the
way they used to be.

118. Fred was obviously feeling stress. Which of the following is not a factor in the definition of
stress?
a. It is a static condition. (moderate)
b. It may involve opportunity or threats.
c. It is related to what a person desires.
d. It is related to a desire that is uncertain.
e. It is related to a desire that is important.
119. Which of the following statements is not true concerning the stress Fred may be feeling.
a. Stress may come from any change in Fred's life.
b. Stress may come from personal factors.
c. Stress is not related to personality differences. (easy)
d. Job-related factors may be part of Fred's stress.
e. The new opportunities Fred may receive are positive and not part of Fred's stress.

120. Which of the following would be a behavioral symptom of Fred's stress?

a. headaches
b. a rise in Fred's blood pressure
c. his job dissatisfaction
d. his lack of concentration at work
e. problems sleeping (moderate)
Essay Questions

FORCES FOR CHANGE

121. In a short essay, describe four external and four internal forces of change and provide
examples of how each force impacts the manager’s job.

Answer
a. The external forces that create the need for change come from various sources. In
recent years, the marketplace has affected firms such as Dell Computer as competition
from Gateway, Apple, and Toshiba intensified in the battle for consumers’ computer
purchases. These companies constantly adapt to changing consumer desires as they
develop new PCs and improve marketing strategies. Governmental laws and
regulations are a frequent impetus for change. For example, the passage of the
Americans With Disabilities Act required thousands of organizations to reconfigure
restrooms, add ramps, widen doorways, and take other actions to improve
accommodations for persons with disabilities. Technology also create the need for
change. For example, technological improvements in expensive diagnostic equipment
have created significant economies of scale for hospitals and medical centers. The
fluctuation in labor markets also forces managers to change. For instance, the demand
for Web page designers and Web site managers has made it necessary for organizations
that need those kinds of employees to change their human resource management
activities to attract and retain skilled employees in the areas of greatest need. Economic
changes affect almost all organizations. For instance, global recessionary pressures
force organizations to become more cost efficient. But even in a strong economy,
 uncertainties about interest rates, federal budget deficits, and currency exchange rates
create conditions that may force organizations to change.
b. In addition to the external forces, internal forces also can stimulate the need for change.
These internal forces tend to originate primarily from the internal operations of the
organization or from the impact of external changes. A redefinition or modification of
an organization’s strategy often introduces a host of changes. For instance, when
Gordon Bethune took over as CEO of bankrupt Continental Airlines, he turned it into a
well-run and profitable company with extremely committed employees by orchestrating
a series of well-planned and dramatic strategic changes. In addition, an organization’s
workforce is rarely static. Its composition changes in terms of age, education, ethnic
background, and sex. The introduction of new equipment represents another internal
force for change. Employees may have their jobs redesigned, need to undergo training
on how to operate the new equipment, or be require to establish new interaction patterns
within their work group. Employee attitudes such as increased job dissatisfaction may
lead to increased absenteeism, more voluntary resignations, and even labor strikes.
Such events will, in turn, of ten lead to changes in management policies and practices.
(difficult)
TWO VIEWS OF THE CHANGE PROCESS

122. In a short essay, describe, compare and contrast the “calm waters” and “white-water rapids”
views of organizational change.

Answer
a. Up until the late 1980’s, the calm waters metaphor was fairly description of the situation
that managers faced. It’s best illustrated by Kurt Lewin’s three-step description of the
change process. According to Lewin, successful change can be planned and requires
unfreezing the status quo, changing to a new state, and refreezing to make the change
permanent. The status quo can be considered an equilibrium state. To move from this
equilibrium, unfreezing is necessary. Unfreezing can be thought of as preparing for the
needed change. It can be achieved by increasing the driving forces, which are forces
that drive change and direct behavior away from the status quo, decreasing the
restraining forces, which are forces that resist change and push behavior towards the
status quo, or combining the two approaches.
b. The white-water rapids metaphor is consistent with the discussion of uncertain and
dynamic environments. It’s also consistent with the dynamics of a world that’s
increasingly dominated by information, ideas, and knowledge. The stability and
predictability of the calm waters metaphor do not exist. Disruptions in the status quo
are not occasional and temporary, and they are not followed by a return to calm waters.
Managers never get out of the rapids. They face constant change, bordering on chaos.
These managers must play a game that they’ve never played before, and the game is
governed by rules that are created as the game progresses.
(easy)

MANAGING CHANGE

123. In a short essay, list and discuss the three categories in which the options for management to
implement change fall.

Answer
The manager’s options for change essentially fall into three categories: structure,
technology, and people. Changing structure includes any alteration in authority relations,
coordination mechanisms, degree of centralization, job redesign, or similar structural
variables. Changing technology encompasses modification in the way work is performed
or the methods and equipment that are used. Changing people refers to changes in employee
attitudes, expectations, perceptions, and behavior.
 (easy)

124. In a short essay, list and discuss the three reasons that describe why people resist change.
Include an example of each reason to support your answer.

Answer
An individual is likely to resist change for three reasons: uncertainty, concern over personal
loss, and the belief that the change is not in the organization’s best interest. Change replaces
the known with ambiguity and uncertainty. For example, when quality control methods
based on sophisticated statistical models are introduced into manufacturing plants, many
quality control inspectors have to learn the new methods. Some inspectors may feat that
they will unable to do so and may, therefore, develop a negative attitude toward the change
or behave poorly if required to use them. The second cause of resistance is the fear of losing
something already possessed. The people that people have invested in the current system,
the more they resist change. This helps explain why older workers tend to resist change
more than younger workers. Older employees have generally invested more in the current
system and thus have more to lose by changing. A final cause of resistance is a person’s
belief that the change is incompatible with the goals and interests of the organization. An
employee who believes that a new job procedure proposed by a change agent will reduce
product quality or productivity can be expected to resist the change. If the employee
expresses his or her resistance positively, this type of resistance can be beneficial to the
organization.
(moderate)
125. In a short essay, list and describe five actions that managers can take to reduce resistance to
change.

Answer
a. Education and communication – communicate with employees to help them see the logic
of change; educate employees through one-on-one discussions, memos, groups
meetings, or reports; works if source of resistance is either poor communication or
misinformation; must be mutual trust and credibility between managers and employees.
b. Participation – allows those who oppose a change to participate in the decision; assumes
that they have expertise to make meaningful contributions; involvement can reduce
resistance, obtain commitment to seeing change succeed, and increase quality of change
decision.
c. Facilitation and support – provide supportive efforts such as employee counseling or
therapy, new skills training, or short paid leave of absence; can be time consuming and
expensive.
 d. Negotiation – exchange something of value to reduce resistance; potentially high costs
and likelihood of having to negotiate with other resisters.
e. Manipulation and cooptation – manipulation is covert attempts to influence such as
twisting or distorting facts, withholding damaging information, or creating false rumors;
cooptation is a form of manipulation and participation; inexpensive and easy ways to
gain support of resisters; can fail miserably if targets feel they’ve been tricked.
f. Coercion – using direct threats or force; inexpensive and easy ways to get support; may
be illegal. even legal coercion can be perceived as bullying.
(difficult)

CONTEMPORARY ISSUES IN MANAGING CHANGE

126. In a short essay, list and discuss the four conditions that are most likely to facilitate cultural
change. Include an example of each condition to support your answer.

Answer
a. A dramatic crisis occurs – this can be the shock that weakens the status quo and makes
people start thinking about the relevance of the current culture. Examples are a
surprising financial setback, the loss of a major customer, or a dramatic technological
innovation by a competitor.
b. Leadership changes hands – new top leadership, who can provide an alternative set of
key values, may be perceived as more capable of responding to the crisis than the old
leaders were. Top leadership includes the organization’s chief executive but might
include all senior managers.
c. The organization is young and small – the younger the organization, the less entrenched
its culture. Similarly, it is easier for managers to communicate new values in a small
organization than in a large one.
d. The culture is weak – the more widely held the values and the higher the agreement
among members on those values, the more difficult it will be to change. Conversely,
weak cultures are more receptive to change than are strong ones.
(moderate)

127. In a short essay, discuss the concept of process reengineering. Include an examples of this
concept to support your answer.

Answer
Process reengineering is about dramatic and radical shifts in the way an organization performs
its work—that is, its work processes. It’s focused on quantum changes by throwing out the
 old ways of doing things and starting over in redesigning the way work is done. It involves
defining customer needs and then designing work processes to best meet those needs. For
instance, Eaton Corporation reengineered its new-product-development process to help the
company reach aggressive growth goals. The managers’ and workers’ redesign of the
product innovation process led to a doubling of revenues and profits during a five-year period.
Because of the extensive nature of process reengineering, it is initiated by top management.
However, because the process itself requires significant hands-on input from managers and
workers, participative decision making is an important element.
(easy)
128. In a short essay, define stress. Next ,discuss the various causes of stress and explain how
managers can recognize stress in their employees.

Answer
Stress is a dynamic condition a person faces when confronted with an opportunity, constraint,
or demand related to what he or she desires and for which the outcome is perceived to be both
uncertain and important. Stress is highest for individuals who are uncertain whether they
will win or lose and lowest for individuals who think that winning or losing is a certainty.
The importance of the outcome is also a critical factor. If winning or losing is unimportant,
there is no stress. The causes of stress can be found in issues related to the organization or
in personal factors that evolve out of the employee’s private life. Clearly, change of any
kind has the potential to cause stress. Stress symptoms can be grouped under three general
categories: physiological, psychological, and behavioral. Of these, the physiological
symptoms are least relevant to managers. Of greater importance are the psychological and
behavioral symptoms since these directly affect an employee’s work.
(moderate)

STIMULATING INNOVATION

129. In a short essay, define creativity and innovation. Next, discuss the three sets of variables
that have been found to stimulate innovation.

Answer
a. Creativity refers to the ability to combine ideas in a unique way or to make unusual
associations between ideas. An organization that stimulates creativity develops unique
ways to work or novel solutions to problems. Innovation is the process of taking a
creative idea and turning it into a useful product, service, or method of operation. Thus,
the innovative organization is characterized by its ability to channel creativity into useful
 outcomes. When managers talk about changing an organization to make it more
creative, they usually mean they want to stimulate and nurture innovation.
b. The three sets of variables that have been found to stimulate innovation are the
organization’s structure, culture, and human resource practices. Research into the
effect of structural variables on innovation shows three things. First, organic structures
positively influence innovation. Second, the easy availability of plentiful resources
provides a key building block for innovation. Finally, frequent inter-unit
communication helps break down barriers to innovation. Innovative organizations tend
to have similar cultures. They encourage experimentation; reward both successes and
failures; and celebrate mistakes. Within the human resource category, innovative
organizations actively promote the training and development of their members so that
their knowledge remains current; offer their employees high job security to reduce the
fear of getting fired for making mistakes; and encourage individuals to become
“champions” of change.
(difficult)
130. In a short essay, list and discuss six characteristics of an innovative culture.

Answer
a. Acceptance of ambiguity – too much emphasis on objectivity and specificity constrains
creativity.
b. Tolerance of the impractical – individuals who offer impractical, even foolish, answers
to what-if questions are not stifled. What at first seems impractical might lead to
innovative solutions.
c. Low external controls – rules, regulations, policies, and similar organizational controls
are kept to a minimum.
d. Tolerance of risk – employees are encouraged to experiment without fear of
consequences should they fail. Mistakes are treated as learning opportunities.
e. Tolerance of conflict – diversity of opinions is encouraged. Harmony and agreement
between individuals or units are not assumed to be evidence of high performance.
f. Focus on ends rather than means – goals are made clear, and individuals are encouraged
to consider alternative routes toward meeting the goals. Focusing on ends suggests that
there might be several right answers to any given problem.
g. Open-system focus – managers closely monitor the environment and respond to changes
as they occur.
(moderate)