Managing Organization Managing Organization Change Change

and Innovationand Innovation

Chapter 12Chapter 12

Organization Change

Organization change – any substantive modification to some part of the organization.

Why do organizations find change necessary?

Forces of Change

External forces

Internal forces

Planned vs. Reactive Change Planned change is designed & implemented

in an orderly manner Reactive change is a piecemeal response to

events as they occur

Models of the Change Process

The Lewin Model

1. UnfreezingWhy the change?

2. Implementthe change

3. RefreezingReinforce & support

the change

Models of the Change Process

Comprehensive Approach to change Steps in the Change process

Set goals for change

Diagnose the need for change

Recognize the need for change

Select a change technique

Plan the implementation of change

Implement the change

Evaluate the effectiveness of change

Understanding resistance to Change

UncertaintyUncertainty

Threatened Self-InterestsThreatened

Self-Interests

Different PerceptionsDifferent

Perceptions

Feelings of LossFeelings of Loss

Managing Resistance to Change

Participatio

n

Educatio

n &

Communicatio

n

Facilitatio

nForce

-Field

Analysis

Areas of Organization Change

Structure & Design

Technology & Operations People

Job designDepartmentalizationReporting relationshipsCoordination mechanismsLine-staff structureOverall designCultureH.R. management

EquipmentWork processesWork sequencesInfo systemsControl systems

AbilitiesSkillsPerformancePerceptionExpectationsAttitudesValues

Reengineering ProcessDevelop goals & strategy for reengineering effort

Emphasis top management Commitment for reengineering effort

Create a sense of urgency amongMembers of the organization

Start with a clean slate; in effectRecreate the organization

Optimize top-down & bottom-upperspective

Organization Development Techniques

Technostructuralactivities

Diagnosticactivities

Life &Career

planning

3rd partyPeace makers

Intergroupactivities

Coaching &Counseling

Education

Processconsultation

Planning &Goal setting

OrganizationalDesign

Techniques

OrganizationalDesign

Techniques

Innovation Process

InnovationMaturity

InnovationMaturity

InnovationApplicationInnovationApplication

InnovationDecline

InnovationDecline

Innovation Development

Innovation Development

ApplicationLaunch

ApplicationLaunch

ApplicationGrowth

ApplicationGrowth

Forms of Innovation

Radical Innovation

New product, service or

technology that completely

replaces and existing one.

Radical Innovation

New product, service or

technology that completely

replaces and existing one.

Incremental Innovation

New product, service or

technology that modifies

and existing one.

Incremental Innovation

New product, service or

technology that modifies

and existing one.

vs

Technical Innovation

A change in appearance of performance of

products or services or the physical processes

through which a product or service passes.

Technical Innovation

A change in appearance of performance of

products or services or the physical processes

through which a product or service passes.

Managerial Innovation

Change in management process

in an organization.

Managerial Innovation

Change in management process

in an organization.

vs

Failure to Innovate

Lack ofresourcesLack of

resources

Failure toRecognize

opportunities

Failure toRecognize

opportunities

Resistance tochange

Resistance tochange

Promoting Innovation in Organizations

The Reward System

Organizational Culture

Technology and Competitive Advantage

investments in research and development, with infrastructures to implement new technology

deliver products or services more promptly

quick response manufacturing differences in macroeconomic

conditions, as well as in government trade and technology policies, affect the use of technology and innovation

Value Chain Analysis a system designed to analyze the sources of

competitive advantage designed by Michael E. Porter

activities in the value chain are divided into five primary and four support categories

information systems, planning, motivation, product, and other technologies must be coordinated into a complete system

every activity affects every other activity

Technology and Competitive Advantage

examine external and internal activities for the value they contribute to customers

product or service may be enhanced through the use of advanced technologies

increase competitiveness and customer service

point-of-sale systems value chain must be managed as a

system, not as separate parts

Technology and Competitive Advantage

Differentiation the ability to provide superior value to the buyer

or user in ways that are different from the competitors

availability of the product or service, its special features, its quality, or the after-sale service

Competitive advantage arises from attention being paid to both cost and other aspects of the differentiation concept

this attention is facilitated by value chain analysis

Technology and Competitive Advantage

Creativity and Innovation

Creativity the ability to create new and useful

ideas almost everyone has this capacity

how to unleash creative potential? the task is heuristic, rather than

algorithmic

Creative Individuals flexible, self-motivated, and sensitive to

problems original thinkers and able to concentrate can think in terms of images have little fear of failure nonconformists who enjoy problem solving characteristics help managers pick

employees who might assist the organization creatively

Creativity and Innovation

Managing Creative People creativity must be nurtured,

supported, and rewarded positive reinforcement

assign resources to a creative idea

Creativity and Innovation