Presentation on theme: "Chapter 13: Organizational Innovation and Change"— Presentation transcript:
1 Chapter 13: Organizational Innovation and Change The primary purpose of this chapter is to help you understand how organizations can use innovation and change to survive, and even thrive, in a changing world.“The Firm”David KoppErin AlveyThomas Lafferty
2 InnovationInnovation is simply the process of creating and implementing a new idea or ideas.Three main types of innovation exist:1) Process Innovation2) Technical Innovation3) Administrative Innovation
3 Process InnovationProcess innovation is achieved through the creation of a new means of producing, selling, and/or distributing an existing product or service.Some examples are:- Online Banking, etc.- E-commerce
4 Technical InnovationTechnical innovation is simply the creation of a new product or service.Some examples:- A new line of automobiles- The introduction of cellular telephones
5 Administrative Innovation Administrative innovation is the creation of a new organization design which better supports the creation, production and delivery of services or products.An example is:- Virtual Teams: any task-focused group that meets w/out all members being in the same room or even working at the same time.
6 Learning Organizations Involve all of the employees in the process of identifying and solving problems. This enables the organization to continuously experiment, improve and increase its capacity to deliver its customers new and improved products and services.A learning organization, through continuous innovation and change, creates sustainable competitive advantage in its industry.
7 Characteristics of a Learning Organization 13.2Characteristics of a Learning OrganizationShared LeadershipTheLearningOrganizationCultureEmpowermentContinuous learningSense of communityStrategyCustomer-focusedLong-term perspectiveInternal alignmentOrganization DesignTeam-basedStrategic alliance networkBoundarylessUse of InformationExtensive scanningMeasurement-orientedShared problems and solutionsAdapted from Figure 13.1
8 The Five Building Blocks of a Learning Organization 1) Shared Leadership: All employees share at least some leadership responsibilities. Everyone is encouraged to find ways to improve products and services and to experiment with new methods to better serve the organization.This sharing of decision-making and leadership creates a culture that supports the efforts and goals of the organization.
9 2) CultureThe learning organization encourages these empowered employees to identify and experiment with new methods and approaches.Empowerment provides a way to integrate tasks and allows the employees to buy into an organization’s goals.
10 3) Strategy This aspect addresses three key issues: 1) Customer Focus: reflects a clear understanding of how important customers are to success.2) Long-term Perspectives: the process of learning and change simply take time.3) Internal Alignment: the business strategy drives the design of all systems within the organization.
11 4) Organization DesignIn a learning organization, this emphasizes the use of teams and strategic alliances.- Teams: Team members take responsibility of aspects such as training, purchases, safety and scheduling.- Strategic Alliances: suppliers, competitors and customers collaborate and communicate as a method of learning.
12 5) Use of InformationThis is the “lifeblood” of a learning organization.There are three main aspects involving the use of information in a learning organization.- Extensive scanning- Measurement Oriented- Shared problems and solutions
13 The Process of Organizational Change 13.3The Process of Organizational ChangeDiagnoseorganizationalproblemsAssess environmentDetermine performance gapStartReduceresistanceIdentify sourcesof resistanceSet goalsSearch forapproachesto changeImplementthe changesFollow upthe changeAdapted from Figure 13.2
14 Reasons for Organizational Change New innovationsAdjusting to changing environment and keeping up with competitorsUnsatisfactory performanceConcerns of external stakeholders* Def: Any transformation in the design or functioning of an organization.
15 Assess the Environment Organizations should be aware of the need to scan the environment for info that may signal the need for change/s.Factors:TechnologyCustomersCompetitorsThe workforceUnionsGov’t regulationsGlobalizationShareholders
16 Determine the Performance Gap The difference between what the organization wants to do and what it is actually doing.Where you are performing/Where you want to be.
17 Diagnose Organizational Problems Identify the nature and extent of problems before taking action.Don’t process change prematurely- Organizations often hire outside consultants to assist with problem diagnosis.
18 Identify Source of Resistance Experienced managers understand why people resist change and what can be done to overcome resistance.Change resist can be due to the following:Vested InterestsFearMisunderstandingsDifferent Assessments of SituationInterorganizational Agreements
19 Reduce ResistanceResistance to change will never disappear completely, but it can be managed through:EducationParticipationNegotiationCo-optation - bringing new stakeholders representatives into the strategic decision making process as a means of averting threats to an organization’s stability/existence
20 Set Goals For change to be effective, goals should be set: based on realistic objectivesstated in clear and measurable termsconsistent with the organization’s overall goals and policiesattainablePositive reinforcement for goals obtained. (Rewards)
21 Implement the ChangeSelect and implement a practical approach to achieve the change.Areas for change:technologydesigntaskpeople
22 Follow Up ChangeManagers need to monitor results to ensure that the change process has been successful.Based on:Employee satisfactionProductivityNew-product developmentMarket shareResults take time, don’t judge to soon.
23 Four Approaches to Organizational Change -Technology based approach-Redesign approach-Task based approach-People-oriented approach
24 Approaches to Organizational Change 13.9Approaches to Organizational ChangeTechnology-basedSociotechnical systemsInformation technologyRedesignReengineeringRestructuringOrganizationalChangeTask-basedJob specializationJob enrichmentPeople-orientedODHRM systemsAdapted from Figure 13.3
25 Technology Based Approach Goal is to increase organizational efficiencySociotechnical Systems - works toward satisfying employee needs while simultaneously producing goods efficientlyInformation Technology - networking of computers, telecommunications systems, and remote-controlled devices used to link organizations to its suppliers and its customers
26 Redesign ApproachRedesign approach involves internal structural changesReengineering - creating new ways to get work doneRestructuring - making changes in the distribution of authority, responsibility, and control in the organization
27 Task Based ApproachTask Based Approach - changing employee responsibilities and tasksJob simplification - discovery of procedures that produce maximum output for the minimum inputfast food restaurantsJob enrichment - changing job specifications to add challenge to the tasks required in order to increase productivity
28 People Oriented Approach People Oriented includes activities intended to improve individual competencies and performance levelsOrganizational Developmentplanned long range behavioral science approach for understanding, changing, and developing an organization’s workforce to improve its effectivenessindividual growth, group growth, organizational growthSurvey Feedback