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Management ch 11 managing change and innovation

Chapter 11

Managing Change and Innovation


Turbulent Times
The Changing Work Place


Today’s organizations need to continuously adapt to
new situations if they are to survive and prosper



One of the most dramatic elements is the shift to a
technology- driven workplace



Ideas, information, and relationships are becoming
critically important

Manager’s Challenge: Cowley manufacturing plant

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Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved.


Managing Change
and Innovation

Topics
Chapter 11

 How

organizations respond to the environment
through internal change and development


Basic forces for Organizational Change



How managers facilitate two change requirements



Four major types of change



How organizations can be designed to facilitate each


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Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved.


Organizational Change


 The

adoption of a new idea of behavior by an
organization

 New

trends require profound changes in the
organization




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E-business
Supply chain integration
Knowledge management

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Organizational Change
 Today’s

successful organizations
simultaneously embrace two types of
planned change




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Incremental change = efforts to gradually improve
basic operational and work processes in different
parts of the company
Transformational change = redesigning and
renewing the entire organization

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Model of Change
Sequence of Events
Environmental
Forces
Monitor global
competition, and other
factors

Internal
Forces
Consider plans,
goals, company
problems, and
needs

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Need for
change

Initiate
change

Implement
change

Evaluate problems
and opportunities,
define needed
changes in
technology
products,
structure, and
culture

Facilitate search,
creativity, idea
champions, venture
teams, skunk works
and idea incubators

Use force field
analysis, tactics for
overcoming
resistance

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Forces for Change
 Environmental






Customers
Competitors
Technology
Economic
International arena

 Internal

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Forces

Forces – activities and decisions

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Need for Change
Based



8

on external or internal forces

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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Initiating Change
Critical phase of change management

 Stage

where the ideas that solve perceived
needs are developed

 Search

= process of learning about current

developments inside or outside the organization that
can be used to meet the perceived need for change
 Creativity

= generation of novel ideas that might

meet perceived needs or offer opportunities for the
organization
Experiential Exercise: Is Your Company Creative?

9

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Characteristics of Creative People











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Conceptual fluency
Open-minded
Originality
Less authority
Independence Self-confidence
Playfulness
Undisciplined exploration
Curiosity
Persistence
Commitment - Focused approach

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Idea Champion
Change does not occur by itself

A person who sees the need for and
Champions productive change within
the organization

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Four Roles in Organizational Change
Championing an idea successfully requires roles in organizations
Inventor
· Develops and
understands
technical aspects
of ideas
· Does not know
how
to win support for
the idea or make a
business of it

Champion
Sponsor
· Believes in idea
·High-level
· Visualizes benefits manager
· Confronts
who removes
organization
organizational
realities of cost,
barriers
·Approves and
benefits
· Obtains financial & protects idea
political support
within
· Overcomes
organization
obstacles

Critic
· Provides reality
test
· Looks for shortcomings
· Defines hardnosed
criteria that idea
must pass

Sources: Based on Harold L. Angle and Andrew H. Van de Ven, “Suggestions for Managing the Innovation Journey,” in Research in the Management of Innovation: The Minnesota
Studies, ed. A. H. Van de Ven, H. L. Angle, and Marshall Scott Poole (Cambridge, Mass.: Ballinger/Harper & Row, 1989); and Jay R. Galgraith, “Designing the Innovating
Organization,” Organizational Dynamics (winter 1982) 5-25.

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New Venture Teams
 New

Venture Team = Unit separate from the
mainstream of the organization that is
responsible for developing and initiating
innovations
 Skunkworks = separate small, informal,
highly autonomous, and often secretive
group that focuses on breakthrough ideas for
the business
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New Venture Fund
 Fund

providing resources from which
individuals and groups can draw to develop
new ideas, products, or businesses

 Idea

Incubator = in-house program that
provides a safe harbor where ideas from
employees throughout the organization can
be developed without interference from
company bureaucracy or politics

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Open Innovation

15



Extending the search for and commercialization of
new ideas beyond the boundaries of the organization



The boundaries between an organization and its
environment are becoming porous so that ideas flow
back and forth among different companies that
engage in partnerships, joint ventures, licensing
agreements, and other alliances

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Resistance to Change
Self-Interest: fear of personal loss is perhaps the biggest
obstacle to organizational change
 Lack of Understanding and Trust: do not understand the
intended purpose of a change or distrust the intentions
 Uncertainty: lack of information about future events
 Different Assessments and Goals: people who will be
affected by innovation may assess the situation differently.


16

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Force-Field Analysis

Kurt Lewin

 The

process of determining which forces drive
and which resist a proposed change

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Driving Forces

Restraining Forces (Barriers)

•Thought of as problems
or opportunities that
provide motivation for
change

•Lack of resources
•Resistance from middle
managers
•Inadequate employee skills

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Traditional to Just-In-Time
Inventory Systems

18

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Tactics for Overcoming
Resistance to Change
Approach





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Communication
education

Participation

When to Use


Change is technical;
users need accurate
information & analysis



Users need to feel
involved; design
requires information
from others; have
power to resist

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Tactics for Overcoming
Resistance to Change
Approach


20

Negotiation



Coercion



Top management
support

When to use






Group has power over
implementation; will lose
out in the change
Crisis exists; initiators
clearly have power;
other techniques have
failed
Involves multiple
departments or
reallocation of
resources; users doubt
legitimacy of change

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Types of Organizational Change
Structure
Technology

Strategy

Products

Culture/People
SOURCE: Based on Harold J. Leavitt, “Applied Organizational Change in Industry: Structural, Technical, and Human
Approaches,” In New Perspectives in Organization Research, ed.W.W. Cooper, H.J. Leavitt, and Shelly II (New York: Wiley,
1964), 55-74.

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Organizational Change

22



Technology: General rule = change is bottom up



New product:

·

Horizontal linkage model emphasizes shared development of
innovations among several departments

·

Time-based competition is based on the ability to deliver products
and services faster than competitors



Structure: Successful change = through a top-down approach



Culture/people:

·

Training is the most frequently used tool for changing the
organization’s mind-set
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Horizontal Linkage Model
For New Product Innovation

Organization
Manufacturing
Department

New
Technology

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Research
Department

Marketing
Department

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Customers
Market
Conditions


Structural Changes
 Any

change in the way in which the
organization is designed and managed






Hierarchy of authority
Goals
Structural characteristics
Administrative procedures
Management systems
Ethical Dilemma: Research for Sale

24

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Culture-People Changes
 Changes

in structure, technologies, and
products or services do not happen on their
own

 Changes

in any of these areas require
changes in people

25

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