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Chapter Ten

Chapter Ten. Innovation and Change. ©2000 South-Western College Publishing Cincinnati, Ohio Daft, Organizational Theory and Design, 7/e. Forces Driving the Need for Major Organizational Change. Global Changes, Competition and Markets T echnological Change

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Chapter Ten

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  1. Chapter Ten Innovation and Change ©2000 South-Western College Publishing Cincinnati, Ohio Daft, Organizational Theory and Design, 7/e

  2. 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 domestic competition Increased Speed International competition More Opportunities Bigger markets Fewer barriers More international markets More Large-Scale Change in Organizations Structure changeMergers, joint ventures, consortia Strategic change Horizontal organizing, teams, networks Culture change New technologies, products Knowledge management, enterprise New business processes Resource planning E-commerce Quality programs Learning organizations Source: Based on John P. Kotter, The New Rules: How to Succeed in Today’s Post-Corporate World (New York: The Free Press, 1995).

  3. Incremental vs. Radical Change Incremental Change Radical Change Continuous progression Paradigm-breaking burst Affect organizational part Transform entire organization Through normal structure and management processes Create new structure and management Technology improvements Breakthrough technology Product improvement New products, 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 Press, 1992), 66-111; and Harry S. Dent, Jr., “Growth through New Product Development,” Small Business Reports (November 1990): 30-40.

  4. 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

  5. Sequence of Elements for Successful Change Environment Internal Creativity and Inventions Suppliers Professional associations Consultants Research literature Organization 1. Ideas 3. Adoption 4.Implementation 2. Needs Customers Competition Legislation Regulation Labor force 5. Resources Perceived Problems or Opportunities

  6. Division of Labor Between Departments to Achieve Changes in Technology General Manager Creative Department (Organic Structure) Using Department (Mechanistic Structure)

  7. 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, S. Wagner, and M. Hamburger, Research and Innovation in Modern Corporations (New York: Norton, 1971), 57.

  8. Organization Environment Environment Horizontal Linkage Model for New Product Innovations General Manager Technical Developments Customer Needs Linkage R&D Department Linkage Marketing Department Linkage Linkage Linkage Production Department

  9. Dual-Core Approach to Organization Change Type of Innovation Desired Administrative Structure Technology Administrative Core Technical Core Direction of Change: Top-Down Bottom-Up Examples of Change: Strategy Production Downsizing Techniques Structure Workflow Best Organizational Design for Change: Mechanistic Organic

  10. Culture Change • Reengineering and Horizontal Organization • Total Quality Management • The Learning Organization

  11. OD Culture Change Interventions • Large group intervention • Team building • Interdepartmental activities

  12. Stages of Commitment to Change • Preparation • Initial contact • Awareness • Acceptance • Understanding • Decision to implement • Commitment • Installation • Institutionalization

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

  14. Techniques for Change Implementation • Identify a true need for change. • Find an idea that fits the need. • Obtain top management support. • Design the change for easy implementation (in stages/steps). • Develop plans to overcome resistance. • Create change teams. • Foster idea champions.

  15. Innovation Measures Workbook Activity

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