Chapter 12: Managing Organization Change and Innovation

Organization Change

Any substantive modification to some part of the organization (e.g., work schedules, machinery, employees).

Forces for Change

- External forces in the general and task environments can

force the organization to alter the way it competes.

- Internal forces inside the organization cause it to change its structure and strategy; some internal forces are responses to external pressures.

Planned Change

Is designed and implemented in an orderly and timely fashion in anticipation of future events

Reactive Change

Is a piecemeal response to events and circumstances as they develop

"Who Moved My Cheese" Book

- Shows individual change

- Cheese: What's Important, Maze: How You Get There

Steps in the Change Process (Lewin Model)

Unfreezing, Implementing Change, Refreezing

Unfreezing

Individuals must be shown why the change is necessary.

Implementing change

The change itself is implemented

Refreezing

Involves reinforcing and supporting the change so that it

becomes a permanent part of the system.

Reasoning for Resisting Change

- Uncertainty about the extent and effects of change.

- Threats to self-interests and power and influence.

- Different perceptions of change effects and outcomes.

- Fear of loss of social networks, power, security, and

familiar procedures.

Overcoming Resistance to Change

- Encourage active participation in the change process.

- Provide education and communication about the change process.

- Facilitate the change process. Includes: Making only necessary changes, Announcing changes in advance, Allowing time to adapt to change

Force-Field Analysis

Help a manager facilitate change. Identifies forces acting both for and against a change. Removing the forces against the change can at least partially overcome resistance.

Reengineering

The radical redesign of all aspects of a business to

achieve major gains in cost, service, or time.

Why Is Reengineering Necessary?

Entropy occurs as the maintenance of status quo puts

an organization out of synch with its environment, and it

starts consuming its own resources.

Approaches to Reengineering

- Recognizing the need for change and acting on it with a sense of urgency.

- Starting with a clean slate helps open up the process.

Organization Development (OD)

A planned, organization-wide effort, managed from the top, that is intended to increase organizational effectiveness and health through interventions in it's processes using behavioral science knowledge.

Organization Development (OD) Assumptions

- Employees desire to grow and develop.

- Employees have a strong need to be accepted.

- Individuals will influence the organization and the organization will influence individuals.

Organization Development Techniques

*Diagnostic Activities (Questionnaires, Surveys), *Team Building, *Survey Feedback, *Education (Role Playing), Intergroup Activities, Third-Party Peacemaking, Technostructural Activities, Process Consultation, *Life and Career Planning, *Coaching and

Counseling (360-degree Feedback), Planning and Goal Setting

360-Degree Feedback

A performance appraisal/rating process in which feedback is obtained from the boss, subordinates, peers and coworkers, and the employees themselves

360-Degree Feedback Advantages

Richer array of info about performance, employee development, increased productivity, increased engagement with stakeholders

360-Degree Feedback Disadvantages

Takes time, can breed fear/mistrust, differences present a challenge, lack of accountability can affect ratings, issues of confidentiality

Organization Development Notes

- The effectiveness of OD varies.

- It focuses on updating employee skills on a continual basis, rather than reaching a point where the obvious need for change exists.

- OD's goal is to minimize the magnitude of future changes by recognizing small changes that can take place over time

Rule of One-Eighth

Half companies see a connection between people and profits.

- 50% of those companies will do multiple things to further connection and 50% of those companies will wait to see the return on investment, making 1/8th

Innovation

The managed effort of an organization to develop new products or services or new uses for existing products or services.

Forms of Innovation

Radical, Incremental, Technical, Managerial, Product, and Process

Radical Innovation

Fundamentally changes the nature of competition in an

industry.

- A new product, service, or technology developed by an

organization that completely replaces the existing product,

service, or technology in an industry

Incremental Innovation

Does not significantly affect competition in an industry.

- A new product, service, or technology that modifies an existing

one.

Technical Innovation

Changing the physical appearance or performance of a product or service, or the physical processes through which a product or service is manufactured.

Managerial Innovation

Changing the management processes by which products and services are conceived, built, and delivered to customers.

Product innovation

A change in the physical characteristics or performance of existing products or service or the creation of brand-new products or services.

Process Innovation

A change in the way a product or service is manufactured,

created, or distributed

Reasons for Failing to Innovate

Lack of resources, failure to recognize opportunities, resistance to change

Promoting Innovation in Organizations

- Use a reward system

- Have a supportive organizational culture

- Encourage intrapreneurship in larger organizations

Investors

Doing work, seeing opportunities -> lower level managers. Conceives of and develops new ideas

Production champions

Middle managers who learns about the project; helps overcome organizational resistance and convinces others to take the innovation seriously

Sponsors

Top level manager who approves of and supports (Think Supports=Sponsors) project. Willing

to fight for project as advocate.