PowerPoint Presentation to Accompany Management, 2/e John R. Schermerhorn, Jr. and Barry Wright...

PowerPoint PresentationPowerPoint Presentation to Accompany to Accompany

Management, 2/eManagement, 2/eJohn R. Schermerhorn, JrJohn R. Schermerhorn, Jr..

and Barry Wrightand Barry Wright

Prepared by: Jim LoPresti University of Colorado, BoulderRevised by: Dr. Shavin Malhotra

Ryerson University, Toronto, OntarioPublished 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 Planning Ahead — Chapter 9 Study Questions— Chapter 9 Study Questions

Management 2e – Chapter 9 2

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 Study Question 1: How do organizations accomplish innovation?innovation?

Management 2e - Chapter 9 3

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 Study Question 1: How do organizations accomplish innovation?accomplish innovation?


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.



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.



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.



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.



Four steps of the product innovation

process:

• Idea creation.

• Initial experimentation.

• Feasibility determination.

• Final application.



Figure 9.1 Process of commercializing Figure 9.1 Process of commercializing innovation in organizations: the case of new innovation in organizations: the case of new product development.product development.


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.



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.



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 Study Question 2: What is the nature of organizational change?organizational change?


Figure 9.2Figure 9.2 Change leaders versus status quo Change leaders versus status quo managers.managers.


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.



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.



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.



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.



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.



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.




Organizational targets for change:

• Tasks

• People

• Culture

• Technology

• Structure


Study Question 3: How can planned Study Question 3: How can planned organizational change be managed?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.


Figure 9.3Figure 9.3 Lewin’s three phases of planned Lewin’s three phases of planned organizational change.organizational change.


Study Question 3: How can planned Study Question 3: How can planned organizational change be managed?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.


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 Study Question 3: How can planned organizational change be managed?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.



Figure 9.4Figure 9.4 Alternative change strategies and their Alternative change strategies and their leadership implications.leadership implications.


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



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



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?Study Question 4: What is organization development?


Study Question 4: What is organization Study Question 4: What is organization development?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.


The organization development

process:

• Establish a working relationship.

• Diagnosis.

• Intervention.

• Evaluation.

• Achieve a terminal relationship.



Figure 9.5Figure 9.5 Organization development and the Organization development and the planned change process.planned change process.


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.



Steps in the action research process:• Data gathering.

• Data analysis and feedback.

• Action planning.

• Action implementation.

• Evaluation and follow-up.



Individual OD interventions

• Sensitivity training (T-groups)

• Management training

• Role negotiation

• Job redesign

• Career planning



Study Question 4: What is organization Study Question 4: What is organization development?development?

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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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.

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