Principles of Management

Lecture 6

Change Management and Innovation

: Sonya Omer

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Today’s Agenda

Change and Innovation Types of change Organizational life cycle Change management process Organizational Development Managing resistance to change

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Change and Innovation Change

Any alteration of the status quo Innovation

A new idea applied to initiating or improving a process, product or service.

Change Agent Someone who acts as a catalyst and

assumes the responsibility for managing the change process.

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Four Types of Change Technology

Changes in production process Products and Services

Changes in outputs Strategy and Structure

Administrative changes Culture

Changes in values, attitudes, behaviors

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Forces for Change Environmental Forces

Customers Competitors Technology Economic International arena

Internal Forces New organizational strategy Change in composition of workforce New equipment Changing employee attitudes 5

Need for Change

Performance gap = disparity between existing and desired performance levels. Current procedures are not up to

standard New idea or technology could

improve current performance

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Organizational Life Cycle

Stages of Life Cycle Development

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Organizational Life Cycle Entrepreneurial Stage

New organization created to support an invention or major innovation.

Little planning and coordination entrepreneur makes the decisions

Focus: survival, seeking resources Management style: Entrepreneurial Crisis: Lack of/Need for leadership

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Collectivity Stage: Informal structure with short range planning. Personal rewards aimed at individuals who

contribute to organizational success Innovation from employees and managers Focus: Growth Managers: entrepreneurs and early joiners Crisis: Lack of/need for delegation

Organizational Life Cycle

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Formalization Stage: Formalized structure and long range

planning Impersonal rewards through formalized

systems Innovation from separate innovative groups Goal: efficiency (market stability and

expansion) and coordination Management style: Delegation with control Crisis: Too much red tape

Organizational Life Cycle

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Elaboration Stage: Structure: Decentralization Planning: long range, opportunistic Extensive rewards tailored to product and

department success Focus: restructuring Managers: professional managers, orchestrators Innovation: Renewal Crisis: Lack of/need for revitalization (renewal of

innovative vigor or organization)

Organizational Life Cycle

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Small

Large

Siz

e

Entrepreneurial Collectivity Formalization Elaboration ?????????

Streamlining

Continued maturity

Decline

Creativity

Provision ofClear Direction

Addition ofInternal Systems

Development of Teamwork

Crisis: Need for Leadership

Crisis: Need for delegationwith control

Crisis: Too much

red tape

Crisis: Need forrevitalization

Organizational Life Cycle

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Change Management Process

Reactive Change Change that occurs when one takes

action in response to perceived problems, threats or opportunities.

Planned Change Change that involves actions based on

a carefully thought-out process anticipates future difficulties, threats and

opportunities.

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Change Management Process (8-Step Model)

1. Gain recognition of an opportunity or problem

2. Line-up powerful sponsors3. Develop and communicate a vision4. Empower others to act out the vision5. Prepare to overcome resistance6. Plan for reward visible progress7. Consolidate improvements and facilitate

further change8. Monitor and institutionalize changes

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Organizational Development (OD)

A change effort that is planned, focused on an entire organization or a large subsystem, managed from the top, aimed at enhancing organizational health and effectiveness, and based on planned interventions. Is initiated when someone senses a

performance gap.

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OD Process

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OD Interventions

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OD Interventions

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Implementing Change Outline the Need for Change

Show the performance gap Understand the Resistance to

Change Self-Interest Lack of Understanding and Trust Uncertainty Different Assessments and Goals Low tolerance for change

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Tactics for Overcoming Resistance to Change

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The World’s Most Innovative Companies

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