1. Chapter Ten
Innovation and Change

2. Why is there a need to change?
What are the major forces influencing changes in organizations?

3. Forces Driving the Need for Major Organizational Change
Global Changes, Competition and Markets
Technological Change
International Economic Integration
Maturation of Markets in Developed Countries
Fall of Communist and Socialist Regimes
More Threats
More domestic competition
Increased Speed
International competition
More Opportunities
Bigger markets
Fewer barriers
More international markets
More Large-Scale Change in Organizations
Structure change Mergers, joint ventures, consortia
Strategic change Horizontal organizing, teams, networks
Culture change New technologies, products
Knowledge management, enterprise New business processes
Resource planning E-commerce
Quality programs Learning organizations
Source: Based on John P. Kotter, The New Rules:
How to Succeed in Today’s Post-Corporate World
(New York: The Free Press, 1995).

4. Incremental vs. Radical Change
Incremental Change
Radical Change
Continuous
progression
Paradigm-breaking
burst
Affect
organizational
part
Transform entire
organization
Through normal
structure and
management
processes
Create new structure
and management
Technology
improvements
Breakthrough
technology
Product
improvement
New products,
new markets
Sources: Based on Alan D. Meyer, James B. Goes, and Geoffrey R.
Brooks, “Organizations in Disequilibrium: Environmental Jolts and
Industry Revolutions,” in George Huber and William H. Glick, eds.,
Organizational Change and Redesign (New York: Oxford University
Press, 1992), ; and Harry S. Dent, Jr., “Growth through New
Product Development,” Small Business Reports (November 1990):

5. Four Types of Change Technology Products and Services
Changes in production process
Products and Services
Changes in outputs
Strategy and Structure
Administrative changes
Culture
Changes in values, attitudes, behaviors

6. Elements for Successful Change
Ideas
Need
Adoption
Implementation
Resources

7. Technology Change Techniques for encouraging technology change
Switching structures
Creative departments
Venture teams
Corporate entrepreneurship

8. Probability of New Product Success
Technical completion
(technical objectives achieved) .57
Commercialization
(full-scale marketing) .31
Market Success
(earns economic returns) .12
Source: Based on Edwin Mansfield, J. Rapaport, J. Schnee,
S. Wagner, and M. Hamburger, Research and Innovation in
Modern Corporations (New York: Norton, 1971), 57.

9. Horizontal Linkage Model for New Product Innovations
Environment
Organization
Environment
General
Manager
Technical
Developments
Customer
Needs
Linkage
R&D
Department
Linkage
Marketing
Department
Linkage
Linkage
Linkage
Production
Department

10. Dual-Core Approach to Organization Change
Type of Innovation Desired
Administrative
Structure
Technology
Administrative
Core
Technical
Core
Direction of Change: Top-Down Bottom-Up
Examples of Change: Strategy Production
Downsizing Techniques
Structure Workflow
Best Organizational
Design for Change: Mechanistic Organic

11. Culture Change Reengineering and Horizontal Organization
Total Quality Management
The Learning Organization

12. OD Culture Change Interventions
Large group intervention
Team building
Interdepartmental activities

13. Stages of Commitment to Change
Preparation
Initial contact
Awareness
Acceptance
Understanding
Decision to implement
Commitment
Installation
Institutionalization

14. Barriers to Change Excessive focus on costs
Failure to perceive benefits
Lack of coordination and cooperation
Uncertainty avoidance
Fear of loss

15. Techniques for Change Implementation
Identify a true need for change.
Find an idea that fits the need.
Obtain top management support.
Design the change for easy implementation (in stages/steps).
Develop plans to overcome resistance.
Create change teams.
Foster idea champions.