Managing Organization Change and Innovation Chapter 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.Unfreezing Why the change? 2.Implement the change 3. Refreezing Reinforce & 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 Uncertainty Threatened Self-Interests Threatened Self-Interests Different Perceptions Different Perceptions Feelings of Loss

Managing Resistance to Change Participation Education & Communication Facilitation Force-Field Analysis

Areas of Organization Change Structure & Design Technology & OperationsPeople Job design Departmentalization Reporting relationships Coordination mechanisms Line-staff structure Overall design Culture H.R. management Equipment Work processes Work sequences Info systems Control systems Abilities Skills Performance Perception Expectations Attitudes Values

Reengineering Process Develop goals & strategy for reengineering effort Emphasis top management Commitment for reengineering effort Create a sense of urgency among Members of the organization Start with a clean slate; in effect Recreate the organization Optimize top-down & bottom-up perspective

Organization Development Techniques Technostructural activities Diagnostic activities Life & Career planning 3 rd party Peace makers Intergroup activities Coaching & Counseling Education Process consultation Planning & Goal setting Organizational Design Techniques Organizational Design Techniques

Innovation Process Innovation Maturity Innovation Maturity Innovation Application Innovation Application Innovation Decline Innovation Decline Innovation Development Innovation Development Application Launch Application Launch Application Growth Application Growth

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 of resources Lack of resources Failure to Recognize opportunities Failure to Recognize opportunities Resistance to change Resistance to change

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