1 PowerPoint Presentation to Accompany Management Third Canadian Edition John R. Schermerhorn, Jr. Barry Wright Prepared by: Jim LoPresti University of

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PowerPoint Presentation to Accompany

ManagementThird Canadian Edition

John R. Schermerhorn, Jr.Barry Wright

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

Ryerson University, Toronto, Ontario

2Management 3e – Chapter 9 2

Chapter 9: Innovation and Organizational

Change

3Management 3e – Chapter 9

• 9.1 Understand how organizations accomplish innovation.

• 9.2 Describe the nature of organizational change.

• 9.3 Explain how to manage planned organizational change.

• 9.4 Explain what is organization development.

Chapter 9 Learning Objectives

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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.

Innovation and Organizations

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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.

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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.

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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.

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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.

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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.

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Management 3e – Chapter 9

Four steps of the product innovation

process:• Idea creation• Initial experimentation• Feasibility determination• Final application

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Management 3e - Chapter 9

Figure 9.4 Process of commercializing innovation in organizations: the case of new product development.

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Disruptive innovation

• Harvard scholar Clay Christensen defines it as ‘the creation of an innovative product or service that starts out small scale and then moves up market to where it becomes so widely used that it displaces prior practices and competitors.’

• Examples include cellular phones and discount retailers

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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

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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.

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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.

Organizational Change

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Figure 9.8 Change leaders versus status quo managers.

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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.

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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.

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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.

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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.

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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.21


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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.

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23Management 3e - Chapter 9

Organizational targets for change:

• Tasks

• People

• Culture

• Technology

• Structure


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Managing Planned Change

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.

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Figure 9.11 Lewin’s three phases of planned organizational change.

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26Management 3e - Chapter 9

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.

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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.

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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.

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Figure 9.12 Alternative change strategies and their leadership implications.

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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

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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

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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.

Organization Development

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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.

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The organization development process:

• Establish a working relationship

• Diagnosis

• Intervention

• Evaluation

• Achieve a terminal relationship

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Figure 9.14 Organization development and the planned change process.

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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.

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Steps in the action research process:

• Data gathering.

• Data analysis and feedback.

• Action planning.

• Action implementation.

• Evaluation and follow-up.

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Individual OD interventions• Sensitivity training (T-groups)• Management training• Role negotiation• Job redesign• Career planning

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

Copyright © 2014 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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1 PowerPoint Presentation to Accompany Management Third Canadian Edition John R. Schermerhorn, Jr. Barry Wright Prepared by: Jim LoPresti University of