PowerPoint Presentation to Accompany Management, 2/e John R. Schermerhorn, Jr. and Barry Wright Prepared by: Jim LoPresti University of Colorado, Boulder Revised by: Dr. Shavin Malhotra Ryerson University, Toronto, Ontario Published by: John Wiley & Sons Canada, Ltd. Chapter 9: Innovation and Organizational Change

 How do organizations accomplish innovation?  What is the nature of organizational change?  How can planned organizational change be managed?  What is organization development? Planning Ahead — Chapter 9 Study Questions Management 2e – Chapter 92

 Strategic leadership creates the capacity for ongoing strategic change.  Components of strategic leadership: Anticipate, envision, maintain flexibility. Think strategically. Work with others to initiate change. Study Question 1: How do organizations accomplish innovation? Management 2e - Chapter 93

 Sustainable competitive advantage relies on creativity and innovation.  Creativity is the generation of a novel idea or unique approach to solving problems or crafting opportunities.  Innovation is the process of creating new ideas and putting them into practice. Study Question 1: How do organizations accomplish innovation? Management 2e - Chapter 94

 Three forms of innovation: Product. Results in the creation of new or improved goods and services. Process. Results in better ways of doing things. Business model innovation. Results in new ways of making money. Study Question 1: How do organizations accomplish innovation? Management 2e - Chapter 95

 Sustainable innovation  creation of new products and processes that have lower environmental impacts than the available alternatives.  Green innovation The process of turning ideas into innovations that reduce the carbon footprint of an organization or its products. Study Question 1: How do organizations accomplish innovation? Management 2e - Chapter 96

 Social Business Innovation Using micro-credit lending to help create small enterprises and fight poverty.  Social Entrepreneurship Pursues creative and innovative ways to solve pressing social problems. Study Question 1: How do organizations accomplish innovation? Management 2e - Chapter 97

 Five steps of the innovation process: Imagining. Designing. Experimenting. Assessing. Scaling.  Commercializing innovation Process of turning new ideas into products or processes that increase profits through sales or cost reductions. Study Question 1: How do organizations accomplish innovation? Management 2e - Chapter 98

 Four steps of the product innovation process: Idea creation. Initial experimentation. Feasibility determination. Final application. Study Question 1: How do organizations accomplish innovation? Management 2e - Chapter 9 9

Figure 9.1 Process of commercializing innovation in organizations: the case of new product development. Management 2e - Chapter 910

 In highly innovative organizations … Corporate strategy and culture should: Emphasize an entrepreneurial spirit. Expect innovation. Accept failure. Be willing to take risks. Organization structure should: Be organic. Have lateral communications. Use cross-functional teams and task forces. Study Question 1: How do organizations accomplish innovation? Management 2e - Chapter 911

 In highly innovative organizations … Top management should: Understand the innovation process. Be tolerant of criticism and differences of opinion. Take all possible steps to keep goals clear. Maintain the pressure to succeed. Break down barriers to innovation. Staffing should fulfill five critical innovation roles: Idea generators. Information gatekeepers. Product champions. Project managers. Innovation leaders. Study Question 1: How do organizations accomplish innovation? Management 2e - Chapter 912

 Change leader. A change agent who takes leadership responsibility for changing the existing pattern of behaviour of another person or social system.  Change leadership. Forward-looking. Proactive. Embraces new ideas. Study Question 2: What is the nature of organizational change? Management 2e - Chapter 913

Figure 9.2 Change leaders versus status quo managers. Management 2e - Chapter 914

 Top-down change. Strategic and comprehensive change that is initiated with the goals of comprehensive impact on the organization and its performance capabilities. Driven by the organization’s top leadership. Success depends on support of middle-level and lower-level workers. Study Question 2: What is the nature of organizational change? Management 2e - Chapter 915

 Bottom-up change. The initiatives for change come from any and all parts of the organization, not just top management. Crucial for organizational innovation. Made possible by: Employee empowerment. Employee involvement. Employee participation. Study Question 2: What is the nature of organizational change? Management 2e - Chapter 916

 Integrated change leadership. Successful and enduring change combines advantages of top- down and bottom-up approaches. Top-down: Breaks up traditional patterns. Implements difficult economic adjustments. Bottom-up: Builds capability for sustainable change. Builds capability for organizational learning. Study Question 2: What is the nature of organizational change? Management 2e - Chapter 917

 Transformational and incremental change. Unplanned change. Response to unanticipated events. Good leaders act on opportunities for reactive change. Planned change Aligning the organization with anticipated future challenges. Activated by proactive leaders who are sensitive to performance gaps. Transformational change  major and comprehensive redirection. Incremental change  adjusting existing systems and practices. Study Question 2: What is the nature of organizational change? Management 2e - Chapter 918

 How to lead transformational change: Establish a sense of urgency for change. Form a powerful coalition to lead the change. Create and communicate a change vision. Empower others to move change forward. Celebrate short-term “wins” and recognize those who help. Build on success; align people and systems with new ways. Stay with it; keep the message consistent; champion the vision. Study Question 2: What is the nature of organizational change? Management 2e - Chapter 919

 External forces for change : Globalization. Market competition. Local economic conditions. Government laws and regulations. Technological developments. Market trends. Social forces and values.  Internal forces for change : Arise when change in one part of the system creates the need for change in another part of the system. May be in response to one or more external forces. Study Question 2: What is the nature of organizational change? Management 2e – Chapter 920

Study Question 2: What is the nature of organizational change?  Organizational targets for change : Tasks People Culture Technology Structure Management 2e - Chapter 921

Study Question 3: How can planned organizational change be managed?  Phases of planned change Unfreezing The phase in which a situation is prepared for change and felt needs for change are developed. Changing The phase in which something new takes place in the system, and change is actually implemented. Refreezing The phase of stabilizing the change and creating the conditions for its long-term continuity. Management 2e - Chapter 922

Figure 9.3 Lewin’s three phases of planned organizational change. Management 2e - Chapter 923

Study Question 3: How can planned organizational change be managed?  Force-coercion strategy of change. Uses power bases of legitimacy, rewards and punishments to induce change. Relies on belief that people are motivated by self-interest. Direct forcing and political maneuvering. Produces limited and temporary results. Most useful in the unfreezing phase. Management 2e - Chapter 924

 Rational persuasion strategy of change. Bringing about change through persuasion backed by special knowledge, empirical data, and rational argument. Relies on expert power. Relies on belief that reason guides people’s decisions and actions. Useful in the unfreezing and refreezing phases. Produces longer-lasting and internalized change. Study Question 3: How can planned organizational change be managed? Management 2e – Chapter 925

 Shared power strategy of change. Engages people in a collaborative process of identifying values, assumptions, and goals from which support for change will naturally emerge. Time consuming but likely to yield high commitment. Involves others in examining sociocultural factors related to the issue at hand. Relies on referent power and strong interpersonal skills in team situations. Relies on belief that people respond to sociocultural norms and expectations of others. Study Question 3: How can planned organizational change be managed? Management 2e - Chapter 926

Figure 9.4 Alternative change strategies and their leadership implications. Management 2e - Chapter 927

 Reasons for people resisting change: Fear of the unknown Disrupted habits Loss of confidence Loss of control Poor timing Work overload Loss of face Lack of purpose Study Question 3: How can planned organizational change be managed? Management 2e - Chapter 928

 Checklist for dealing with resistance to change: Check the benefits – those involved see a clear advantage Check the compatibility – keep change similar to existing values/processes Check the simplicity – make it as easy as possible to understand Check the triability – allow people to slowly try the change adjusting as progression is made Study Question 3: How can planned organizational change be managed? Management 2e - Chapter 929

 Organization development (OD) a comprehensive approach to planned organizational change that involves the application of behavioural science in a systematic and long-range effort to improve organizational effectiveness. Study Question 4: What is organization development? Management 2e - Chapter 930

Study Question 4: What is organization development?  Organization development goals: Outcome goals focus on task accomplishments. Process goals focus on the way people work together. OD seeks to develop the organization members’ capacity for self-renewal. OD is committed to change through freedom of choice, shared power, and self-reliance. OD takes advantage of knowledge about human behaviour in organizations. Management 2e - Chapter 931

 The organization development process: Establish a working relationship. Diagnosis. Intervention. Evaluation. Achieve a terminal relationship. Study Question 4: What is organization development? Management 2e - Chapter 932

Figure 9.5 Organization development and the planned change process. Management 2e - Chapter 933

 Action research The process of systematically collecting data on an organization, feeding it back to the members for action planning, and evaluating results by collecting more data and repeating the process as necessary. Is initiated when someone senses a performance gap. Study Question 4: What is organization development? Management 2e - Chapter 934

 Steps in the action research process: Data gathering. Data analysis and feedback. Action planning. Action implementation. Evaluation and follow-up. Study Question 4: What is organization development? Management 2e - Chapter 935

 Individual OD interventions Sensitivity training (T-groups) Management training Role negotiation Job redesign Career planning Study Question 4: What is organization development? Management 2e - Chapter 936

Study Question 4: What is organization development?  Team OD interventions Team building Process consultation Inter-group team building Management 2e - Chapter 937

 Organization-wide OD interventions Survey feedback Confrontation meeting Structural redesign Management by objectives (MBO) Study Question 4: What is organization development? Management 2e - Chapter 938

COPYRIGHT Copyright © 2011 John Wiley & Sons Canada, Ltd. All rights reserved. Reproduction or translation of this work beyond that permitted by Access Copyright (The Canadian Copyright Licensing Agency) is unlawful. Requests for further information should be addressed to the Permissions Department, John Wiley & Sons Canada, Ltd. The purchaser may make back-up copies for his or her own use only and not for distribution or resale. The author and the publisher assume no responsibility for errors, omissions, or damages caused by the use of these programs or from the use of the information contained herein.