OB II Chapter 13 (Final)

Global changes, competition and market factors driving the need for organizational change

- Technological change

- international economic integration

- maturation of markets in developed countries

- fall of communist and socialist regimes

Threats driving organizational Change

- more domestic competition

- increased speed

- international competition

Organizational changes that are a result of Threats

- structure change

- strategic change

- culture change

- knowledge management, enterprise resource planning

- quality programs

Opportunities driving organizational change

- Bigger markets

- fewer barriers

- more international markets

Organizational changes that are a result of Opportunities

- Mergers, joint ventures, consortia

- Horizontal org, teams, networks

- new tech, products

- new business processes

- e-businesses

- learning opportunites

Organizations can respond to environmental shifts with three types of change and innovation:

1. Episodic Change

2. Continuous change

3. Disruptive change and innovation

Episodic Change

Occurs occasionally, with periods of relative stability

Managers can respond with technical, product, or structural innovations as needed

Continuous change

Many organizations face this

Due to rapidly shifting environment

Occurs frequently, with fewer and shorter periods of stability

Disruptive innovation

Innovation in products or services that typically start small and end up completely replacing an existing product or service technology for producers and consumers

Companies that initiate a disruptive innovation typically win big

Incremental change

A series of continual progressions that maintain the organization's general equilibrium and often affect only one organizational part

Radical change

Breaks the frame of reference for the organization

Transforms the entire organization

Four types of change within organizations to achieve strategic advantage:

1. Products and services

2. Strategy and structure

3. Culture

4. Technology

Technology changes

changes in an organization's production process, including its knowledge and skill base, that enable distinctive competence

Organizational change

the adoption of a new idea or behaviour by an organization

Organizational innovation

the adoption of an idea or behaviour that is new to the organization's industry, market, or general environment

Learning Faces of Innovation

Anthropologist - looks at human interactions

Experimenter - prototypes new ideas

Cross-Pollinator - explores other industries and cultures

Organizing Faces of Innovation

Hurdler - Develops ways to deal with roadblocks

Collaborator - brings together an eclectic group

Director - sparks creative talents

Building faces of innovation

Experience Architect - creates experiences that go beyond products/services functionality

Set Designed - creates the right space

Caregiver - delivers special service

Storyteller - builds internal morale and external awareness

Sequence of elements for successful change:

1. Ideas

2. Needs

3. Decision to adopt

4. Implementation

5. Resources

The Ambidextrous Approach

an organization that is designed to both explore new ideas and efficiently implement them. It uses an organic, flexible structure to encourage innovation while maintaining a mechanistic, structured approach to exploit and execute successful ideas, allowing the organization to balance creativity with operational efficiency.

Techniques used by companies to maintain an ambidextrous approach:

1. Switching Structures

2. Separate creative departments

3. Venture teams

4. Corporate intrapreneurship

Switching structures

Organization creates an organic structure when such a structure is needed for the initiation of new ideas

Separate Creative Departments

Departments that initiative change are organically structured to facilitate the generation of new ideas and techniques

Departments that use the innovations tend to have a mechanistic structure more suitable for efficient production

Venture Teams

Technique used to give free rein to creativity within organizations

Given a separate location and facilities

A small company within a large company

Used to free creative people from the bureaucracy of a large corporation

Corporate Intrapreneurship

Attempts to develop an internal entrepreneurial spirit, philosophy, and structure that will produce a higher-than-average number of innovations

Trying to create idea champions

idea champions

they provide the time and energy to make things happen and fight to overcome resistance to change and convince others of the merit of a new idea

Idea incubator

A type of creative department

Provides a safe harbour where ideas from employees throughout the org can be developed without interference from company bureaucracy or politics

Skunkworks

A type of venture team

A separate, small, informal, highly autonomous and often secretive group that focuses on breakthrough ideas for businesses

Highly talented people are given the time and freedom to let creativity reign

Two types of idea champions

1. Technical/Product champion - generates or adopts and develops an idea for a technological innovation

2. Management champion - a supporter and sponsor to shield and promote an idea within the organization. Has the prestige and authority to get the idea a fair hearing

The organizational design for achieving new product innovation involves three components:

1. Departmental specialization - R&D, marketing, and production are highly competent

2. Boundary spanning - each department involved has good linkage with relevant sectors in the external environment

3. Horizontal coordination - technical, marketing, and production people share ideas and information

Open innovation

extending the search for and commercialization of new products beyond the boundaries of the organization and even beyond the boundaries of the industry

Time-based competition

delivering products and services faster than competitors, giving companies a competitive edge

Dual Core Approach

Compares administrative and technical changes

Type of innovation desired - Management Processes

Management core

- top-down change

Ex. Strategy, downsizing, structure

Best for Mechanistic design

Type of innovation desired - Technology

Technical core

- bottom up change

Ex. Production techniques, workflow, product ideas

Best for Organic Design

Primary changes requiring a shift in culture and employee mindset:

1. Re-engineering and the move toward horizontal forms of organizing

2. Greater employee and customer diversity

3. The shift to the learning organization

Organization Development (OD)

focuses on the human and social aspects of the organization as a way to improve the organization's ability to adapt and solve problems. Emphasizes the values of human development, fairness, openness, freedom from coercion, and individual autonomy

Techniques for improving people skills through Organization Development (OD):

1. Large Group Intervention - brings people from all over the org to an off-site setting to discuss problems or opportunities and a plan for change

2. Team building - promotes the idea that people who work together can work as a team

3. Interdepartmental Activities - reps from different departments are brought together to expose problems or conflicts, diagnose the cause, and plan improvements in communication and coordination

Leadership for Change

Leaders must develop the personal qualities, skills, and methods needed to help their companies remain competitive

Leaders must develop the personal qualities, skills, and methods needed to help their companies remain competitive

1. Preparation - employees hear about the change and become aware that it will affect their work

2. Acceptance - leaders help employees understand the full impact of the change

3. Commitment - installation is a trial process for the change and institutionalization is when employees view the change as normal and integral part of organizational operations

Barriers to Change

1. Excessive focus on costs

2. Failure to perceive benefits

3. Lack of coordination and cooperation

4. Uncertainty avoidance

5. Fear of loss

Techniques for Implementation

1. Establish a sense of urgency for change

2. Establish a coalition to guide the change

3. Create a vision and strategy for change

4. Find an idea that fits the need

5. Develop plans to overcome resistance to change

6. Create change teams

7. Foster idea champions

Strategies to overcome the resistance problem:

- Alignment with needs and goals of users

- Communication and training

- An environment that affords psychological safety

- Participation and involvement

- Forcing and coercion (last resort, not advisable)