1. Ryerson University, Toronto, Ontario
PowerPoint Presentation to Accompany Management Third Canadian Edition John R. Schermerhorn, Jr. Barry Wright
Prepared by: Jim LoPresti
University of Colorado, Boulder
Revised by: Dr. Shavin Malhotra
Ryerson University, Toronto, Ontario 1

2. Chapter 9: Innovation and Organizational Change
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3. Chapter 9 Learning Objectives
9.1 Understand how organizations accomplish innovation.
9.2 Describe the nature of organizational change.
9.3 Explain how to manage planned organizational change.
9.4 Explain what is organization development.
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4. Innovation and Organizations
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.
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5. Innovation and Organizations
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.
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6. Innovation and Organizations
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.
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7. Innovation and Organizations
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.
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8. Innovation and Organizations
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.
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9. Innovation and Organizations
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.
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10. Innovation and Organizations
Four steps of the product innovation process:
Idea creation
Initial experimentation
Feasibility determination
Final application
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11. Figure 9.4 Process of commercializing innovation in organizations: the case of new product development.
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12. Innovation and Organizations
Disruptive innovation
Harvard scholar Clay Christensen defines it as ‘the creation of an innovative product or service that starts out small scale and then moves up market to where it becomes so widely used that it displaces prior practices and competitors.’
Examples include cellular phones and discount retailers
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13. Innovation and Organizations
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
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14. Innovation and Organizations
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.
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15. Organizational Change
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.
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16. Figure 9.8 Change leaders versus status quo managers.
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17. 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.
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18. 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.
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19. 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.
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20. 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.
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21. 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.
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22. 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.
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23. Organizational Change
Organizational targets for change:
Tasks
People
Culture
Technology
Structure
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24. Managing Planned Change
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.
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25. Figure 9.11 Lewin’s three phases of planned organizational change.
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26. Managing Planned Change
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.
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27. Managing Planned Change
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.
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28. Managing Planned Change
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.
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29. Figure 9.12 Alternative change strategies and their leadership implications.
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30. Managing Planned Change
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
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31. Managing Planned Change
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
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32. Organization Development
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.
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33. 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.
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34. Organization Development
The organization development process:
Establish a working relationship
Diagnosis
Intervention
Evaluation
Achieve a terminal relationship
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35. Figure 9.14 Organization development and the planned change process.
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36. 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.
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37. Organization Development
Steps in the action research process:
Data gathering.
Data analysis and feedback.
Action planning.
Action implementation.
Evaluation and follow-up.
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38. Organization Development
Individual OD interventions
Sensitivity training (T-groups)
Management training
Role negotiation
Job redesign
Career planning
Team OD interventions
Team building
Process consultation
Inter-group team building
Organization-wide OD interventions
Survey feedback
Confrontation meeting
Structural redesign
Management by objectives (MBO)
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39. COPYRIGHT
Copyright © 2014 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. 39