Chapter 10 Organizational Change and Innovation PDF

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Instructor Louis Myers...

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Chapter 10: Organizational Change and Innovation Tuesday, April 10, 2018

7:08 PM

Disruptive Innovation - a process by which a product or service takes root initially in simple applications at the bottom of a market and then relentlessly moves up market, eventually displacing established competitors Two Types of Change 1. Reactive change - making changes in response to problems or opportunities as they arise 2. Proactive change - panned change, involves making carefully thought-out changes in anticipation of possible or expected problems or opportunities The forces for change outside and inside the organization: 1. Demographic characteristics a. For example: how the trend of millennials living home longer affects their spending habits 2. Technological Advancements a. Technology - is any machine or process that enables an organization to gain a competitive advantage in changing materials used to produce a finished product. 3. Shareholder, Customer and Market Changes a. Shareholders form a B Corporation (Benefit corporation) - in which the company is legally required to adhere to socially beneficial practices 4. Social and Political Pressures a. Social events can create great pressures 5. Human Resources Concerns a. Job dissatisfaction, high absenteeism, and turnover 6. Managers' Behavior a. Conflict between managers and employees or between a company and its customers

Three kinds of change 1. Least threatening: Adaptive Change a. Reintroduction of a familiar practice b. "We've seen stuff like this before" c. Lowest in complexity, cost, and uncertainty 2. Somewhat threatening: Innovative Change a. The introduction of a practice that is new to the organization b. "this is something new for this company c. Moderate complexity, cost, and uncertainty 3. Very Threatening: Radically Innovative Change a. Involves introducing a practice that is new to the industry b. Most complex, costly, and uncertain c. Employees will feel extremely threatened Lewin's Change Model: Unfreezing, changing, and refreezing 1. Unfreezing stage - managers try to instill in employees the motivation to change, encourage them to let go of attitudes and behaviors that are resistant to innovation 2. Changing Stage - employees are given the tools for change: new information, new perspectives, new models of behavior. Managers can help here by providing benchmarking results, role models, mentors, experts, and training. 3. Refreezing Stage - employees need to be helped to integrate the changed attitudes and behavior into their normal ways of doing things. Managers can assist by encouraging employees to exhibit the new change and then, through additional coaching and modeling, by reinforcing the employees in the desired change A Systems approach to change presupposes that any change, no matter how small, has a rippling effect throughout an organization

has a rippling effect throughout an organization Inputs - the organization's mission/vision statement, strategic plan, analysis of organizations readiness for change - Readiness for change is defined as the beliefs, attitudes, and intentions of the organization’s staff regarding the extent of the changes needed and how willing and able they are to implement them § (1) how strongly the company needs the proposed change, § (2) how much the top managers support the change, § (3) how capable employees are of handling it, and § (4) how pessimistic or optimistic employees are about the consequences of the result. Target Elements of change - what managers use to diagnose problems and identify solutions - People, organizational arrangements, methods, social factors Outputs - represents the desired goals of a change Force-field analysis is a technique to determine which forces could facilitate a proposed change and which forces could act against it ORGANIZATIONAL DEVELOPMENT - A set of techniques for implementing planned change to make people and organizations more effective - Focuses specifically on people in the change process Change agent = a consultant with a background in behavioral sciences who can be a catalyst in helping organizations deal with old problems in new ways What can OD be used for??? 1. Managing conflict a. Improving relationships within the org. 2. Revitalizing organizations a. OD can help by opening communication, fostering innovation, and dealing with stress 3. Adapting to mergers a. OD helps integrate two firms with varying cultures, products, and procedures. How does OD work?

How does OD work? - Like a doctor 1. Diagnosis a. Questionnaires, surveys, interviews, meetings, records, direct observation 2. Intervention a. Intervention is the attempt to correct the diagnosed problems b. For example: communicating survey results to employees, helping group members to function like a team 3. Evaluation a. This is to check in the OD program has worked b. The answers may lie in data about absenteeism, turnover, grievances, and profitability. Or more surveys, interviews… 4. Feedback a. If the evaluation shows that it didn't work, the last two steps are repeated/ rethought THE EFFECTIVENESS OF ORGANIZAITONAL DEVELOPMENT - Researchers have found that od is the most successful under these circumstances… 1. Multiple interventions 2. Management Support 3. Goals geared to both short and long term results 4. OD is affected by culture (what worked in one country, may not work in another) TWO MYTHS ABOUT INNOVATION: 1. Innovation happens in a "Eureka!" Moment a. Many people think tat it comes out of the blue but most of the time it is the product of hard work and dedication. 2. Innovation can be Systematized a. Innovation is unpredictable and there can't be a standardized process for it SEEDS OF INNOVATION (STARTING POINTS for experimentation and inventiveness) 1. Hard works in a specific direction 2. Hard work with direction change 3. Curiosity 4. Wealth and Money 5. Necessity 6. Combination of the seeds

TYPES OF INNOVATION • Product vs. process innovations ○ Products innovation - is a change in the appearance of the performance of a product or a service of the creation of a new one ○ Process Innovation - is a change in the way a product or service is conceived, manufactured, or disseminated • Core vs. Transformational Innovations ○ Core innovations - the optimizing of products or services for existing customers (modifying) ○ Transformational Innovations - the invention of breakthrough products or services that don't exist yet and that are aimed at creating brand new markets and customers How can companies foster innovation??? Innovation system - a coherent set of interdependent processes and structures that dictates how the company searches for novel problems and solutions, synthesizes ideas into a business concept and product designs, and selects which projects get funded Steps: 1. 2. 3. 4. 5. 6. 7.

Create an Innovation Strategy Get Commitment from Top Managers Foster an Innovative Culture and Climate Establish the required structure and processes Obtain the necessary human capital Institute necessary human resource policies, practices, and procedures Obtain the Appropriate Resources

Resistance to change is an emotional/behavioral response to real or imagined threats to an established work routine - It can be passive resignation or deliberate sabotage - Resistance is considers to be the interaction of 3 causes: 1. Employee characteristics 2. Change agent characteristics 3. The change agent-employee relationship

TEN REASONS EMPLOYEES RESIST CHANGE***** 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

Individuals' predisposition toward change Surprise and fear of the Unknown Climate of Mistrust Fear of Failure Loss of status or Job security Peer pressure Disruption of Cultural traditions or group relationships Personality conflicts Lack of Tact of Poor timing Non-reinforcing Reward systems...