Chapter Eleven

Innovation and Change

Thomson Learning
2004 11-1
 Forces Driving the Need for Major
Organizational Change
Global Changes, Competition and Markets
Technological Change
International Economic Integration
Maturation of Markets in Developed Countries
Fall of Communist and Socialist Regimes

More Threats More Opportunities

More domestic competition Bigger markets
Increased Speed Fewer barriers
International competition More international markets

More Large-Scale Changes in Organizations

Structure change Mergers, joint ventures, consortia
Strategic change Horizontal organizing, teams, networks
Culture change New technologies, products
Knowledge management, enterprise New business processes
resource planning E-business
Quality programs Learning organizations

Source: Based on John P. Kotter, The New Rules:

How to Succeed in Todays Post-Corporate World Thomson Learning
(New York: The Free Press, 1995).
2004 11-2
 Incremental vs. Radical
Change
Incremental Change Radical Change
Continuous Paradigm-breaking
progression burst
Affect
organizational Transform entire
part organization

Through normal
structure and Create new structure
management and management
processes

Technology Breakthrough
improvements technology

Product New products,

improvement new markets
Sources: Based on Alan D. Meyer, James B. Goes, and Geoffrey R.
Brooks, Organizations in Disequilibrium: Environmental Jolts and
Industry Revolutions, in George Huber and William H. Glick, eds.,
Organizational Change and Redesign (New York: Oxford University
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11-3
Press, 1992), 66-111; and Harry S. Dent, Jr., Growth through New
Product Development, Small Business Reports (November 1990): 30-40.
2004
 Four Types of Change
Technology
Changes in production process
Products and Services
Changes in outputs
Strategy and Structure
Administrative changes
Culture
Changes in values, attitudes, behaviors
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2004 11-4
 Sequence of Elements for
Successful Change
Environment
Internal
Creativity and
Suppliers
Inventions
Professional
Associations
Consultants
Organization
Research
literature
1. Ideas
3. Adoption 4.Implementation
2. Needs
Customers
Competition 5. Resources
Legislation
Regulation
Labor force Perceived
Problems or
Opportunities

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2004 11-5
Division of Labor Between Departments
to Achieve Changes in Technology

General
Manager

Creative Using
Department Department
(Organic Structure) (Mechanistic Structure)

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2004 11-6
 Probability of New Product
Success
PROBABILITY

Technical completion
(technical objectives achieved) .57
Commercialization
(full-scale marketing) .31
Market Success
(earns economic returns) .12
Source: Based on Edwin Mansfield, J. Rapaport, J. Schnee, Thomson Learning
S. Wagner, and M. Hamburger, Research and Innovation in
Modern Corporations (New York: Norton, 1971), 57. 2004 11-7
 Horizontal Linkage Model for New
Product Innovations
Environment Organization Environment

General
Manager

Technical R&D Marketing Customer

Linkage Linkage Linkage
Developments Needs
Department Department

Production
Department

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2004 11-8
 Dual-Core Approach to
Organization Change
Type of Innovation Desired
Administrative
Structure Technology

Administrative Technical
Core Core

Direction of Change: Top-Down Bottom-Up

Examples of Change: Strategy Production
Downsizing techniques
Structure Workflow
Best Organizational
Design for Change: Mechanistic Organic

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2004 11-9
 Culture Change

Reengineering and Horizontal

Organization

Diversity

The Learning Organization

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 OD Culture Change
Interventions

Large Group Intervention

Team Building

Interdepartmental Activities

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2004 11-11
Stages of Commitment to
Change
Preparation
Initial contact
Awareness
Acceptance
Understanding
Decision to implement
Commitment
Installation
Institutionalization

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 Barriers to Change
Excessive focus on costs
Failure to perceive benefits
Lack of coordination and cooperation
Uncertainty avoidance
Fear of loss

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2004 11-13
 Techniques for Change
Implementation
Establish a sense of urgency for change.
Establish a coalition to guide the change.
Create a vision and strategy for change.
Find an idea that fits the need.
Develop plans to overcome resistance.
Create change teams.
Foster idea champions.

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2004 11-14
Workbook
Activity

Innovation Measures
A B C
Measure Your Organization Other Organization Your Ideal
1. Creativity encouraged

2. Diverse problem-solving

3. Time for creative ideas

4. Rewards for innovation

5. Flexible, open to change

6. Follow orders from top

7. Think and act like others

8. Concern for status quo

9. Dont rock the boat

10. New ideas not funded

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2004 11-15