PowerPoint Presentation to Accompany Management, 10/e John R. Schermerhorn, Jr. Prepared by: Jim LoPresti University of Colorado, Boulder Published by: John Wiley & Sons, Inc. Chapter 10: Innovation and Organizational Change

Management 10/e - Chapter 102 Planning Ahead — Chapter 10 Study Questions  How do organizations accomplish innovation?  What is the nature of organizational change?  How can planned organizational change be managed?  What is organization development?

Management 10/e - Chapter 103 Study Question 1: How do organizations accomplish innovation?  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. Build learning organizations as change leaders. Develop the ability to innovate successfully as a core competency.

Management 10/e - Chapter 104 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 10/e - Chapter 105 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 10/e - Chapter 106 Study Question 1: How do organizations accomplish innovation?  Green innovation The process of turning ideas into innovations that reduce the carbon footprint of an organization or its products.  Social Entrepreneurship Pursues creative and innovative ways to solve pressing social problems.

Management 10/e - Chapter 107 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 10/e - Chapter 108 Study Question 1: How do organizations accomplish innovation?  Four steps of the product innovation process: Idea creation. Initial experimentation. Feasibility determination. Final application.

Management 10/e - Chapter 109 Figure 10.1 Process of commercializing innovation in organizations: the case of new product development.

Management 10/e - Chapter 1010 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 10/e - Chapter 1011 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 10/e - Chapter 1012 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 10/e - Chapter 1013 Figure 10.2 Change leaders versus status quo managers.

Management 10/e - Chapter 1014 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 10/e - Chapter 1015 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 10/e - Chapter 1016 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 10/e - Chapter 1017 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 10/e - Chapter 1018 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 10/e - Chapter 1019 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 10/e - Chapter 1020 Study Question 2: What is the nature of organizational change?  Organizational targets for change : Tasks People Culture Technology Structure

Management 10/e - Chapter 1021 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 10/e - Chapter 1022 Figure 10.3 Lewin’s three phases of planned organizational change.

Management 10/e - Chapter 1023 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 10/e - Chapter 1024 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 10/e - Chapter 1025 Study Question 3: How can planned organizational change be managed?  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.

Management 10/e - Chapter 1026 Figure 10.4 Alternative change strategies and their leadership implications.

Management 10/e - Chapter 1027 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 10/e - Chapter 1028 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 10/e - Chapter 1029 Study Question 3: How can planned organizational change be managed?  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

Management 10/e - Chapter 1030 Study Question 4: What is organization development?  Organization development (OD) 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 10/e - Chapter 1031 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 10/e - Chapter 1032 Study Question 4: What is organization development?  The organization development process: Establish a working relationship. Diagnosis. Intervention. Evaluation. Achieve a terminal relationship.

Management 10/e - Chapter 1033 Figure 10.5 Organization development and the planned change process.

Management 10/e - Chapter 1034 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 10/e - Chapter 1035 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 10/e - Chapter 1036 Figure 10.6 Action research as a foundation of organization development.

Management 10/e - Chapter 1037 Study Question 4: What is organization development?  Individual OD interventions Sensitivity training (T-groups) Management training Role negotiation Job redesign Career planning

Management 10/e - Chapter 1038 Study Question 4: What is organization development?  Team OD interventions Team building Process consultation Inter-group team building

Management 10/e - Chapter 1039 Study Question 4: What is organization development?  Organization-wide OD interventions Survey feedback Confrontation meeting Structural redesign Management by objectives (MBO)

COPYRIGHT Copyright 2009 © John Wiley & Sons, Inc. All rights reserved. Reproduction or translation of this work beyond that named in Section 117 of the United States Copyright Act without the express written permission of the copyright owner is unlawful. Requests for further information should be addressed to the Permissions Department, John Wiley & Sons, Inc. The purchaser may make back-up copies for his/her own use only and not for distribution or resale. The Publisher assumes no responsibility for errors, omissions, or damages, caused by the use of these programs or from the use of the information contained herein.