PowerPoint Presentation to Accompany Management, 9/e John R. Schermerhorn, Jr. Prepared by: Jim LoPresti University of Colorado, Boulder Published by: John Wiley & Sons, Inc. Chapter 12: Innovation and Organizational Change

Management 9/e - Chapter 122 Study Question 1: How do organizations accomplish innovation?  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.

Management 9/e - Chapter 123 Study Question 1: How do organizations accomplish innovation?  Three forms of innovation: Process.  Results in better ways of doing things. Product.  Results in the creation of new or improved goods and services. Business model innovation  Results in new ways of making money.  Innovations require invention and application. Invention.  Act of discovery.  Development of new ideas. Application.  Act of use.  Implementation of new ideas.

Management 9/e - Chapter 124 Study Question 1: How do organizations accomplish innovation?  Leadership responsibilities for 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.

Management 9/e - Chapter 125 Study Question 1: How do organizations accomplish innovation?  Four steps of the product innovation process: Idea creation. Initial experimentation. Feasibility determination. Final application.

Management 9/e - Chapter 126 Figure 12.1 Process of commercializing innovation in organizations: the case of new product development.

Management 9/e - Chapter 127 Study Question 1: How do organizations accomplish innovation?  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.

Management 9/e - Chapter 128 Study Question 1: How do organizations accomplish innovation?  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.

Management 9/e - Chapter 129 Study Question 2: What is the nature of organizational change?  Change leader. A change agent who takes leadership responsibility for changing the existing pattern of behavior of another person or social system.  Change leadership. Forward-looking. Proactive. Embraces new ideas.

Management 9/e - Chapter 1210 Figure 12.2 Change leaders versus status quo managers.

Management 9/e - Chapter 1211 Study Question 2: What is the nature of organizational change?  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.

Management 9/e - Chapter 1212 Study Question 2: What is the nature of organizational change?  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.

Management 9/e - Chapter 1213 Study Question 2: What is the nature of organizational change?  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.

Management 9/e - Chapter 1214 Study Question 2: What is the nature of organizational change?  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.

Management 9/e - Chapter 1215 Study Question 2: What is the nature of organizational change?  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.

Management 9/e - Chapter 1216 Study Question 2: What is the nature of organizational change?  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.

Management 9/e - Chapter 1217 Study Question 2: What is the nature of organizational change?  Organizational targets for change : Tasks People Culture Technology Structure

Management 9/e - Chapter 1218 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 9/e - Chapter 1219 Study Question 3: How can planned organizational change be managed?  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.

Management 9/e - Chapter 1220 Study Question 3: How can planned organizational change be managed?  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

Management 9/e - Chapter 1221 Study Question 3: How can planned organizational change be managed?  Methods for dealing with resistance to change: Education and communication Participation and involvement Facilitation and support Facilitation and agreement Manipulation and co-optation Explicit and implicit coercion

Management 9/e - Chapter 1222 Study Question 4: What is organization development?  Organization development (OD) is a comprehensive approach to planned organizational change that involves the application of behavioral science in a systematic and long-range effort to improve organizational effectiveness.

Management 9/e - Chapter 1223 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 behavior in organizations.

Management 9/e - Chapter 1224 Study Question 4: What is organization development?  The organization development process: Establish a working relationship. Diagnosis. Intervention. Evaluation. Achieve a terminal relationship.

Management 9/e - Chapter 1225 Study Question 4: What is organization development?  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.

Management 9/e - Chapter 1226 Study Question 4: What is organization development?  Steps in the action research process: Problem sensing. Data gathering. Data analysis and feedback. Action planning. Action implementation. Evaluation and follow-up.

Management 9/e - Chapter 1227 Study Question 4: What is organization development?  Individual OD interventions Sensitivity training (T-groups) Management training Role negotiation Job redesign Career planning

Management 9/e - Chapter 1228 Study Question 4: What is organization development?  Team OD interventions Team building Process consultation Inter-group team building

Management 9/e - Chapter 1229 Study Question 4: What is organization development?  Organization-wide OD interventions Survey feedback Confrontation meeting Structural redesign Management by objectives (MBO)