Managing Organizational Change and Innovation Copyright © Houghton Mifflin Company. All rights reserved. 13–1

Transcript Managing Organizational Change and Innovation Copyright © Houghton Mifflin Company. All rights reserved. 13–1

Managing Organizational Change and Innovation

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The Nature of Organization Change

• Organization Change – Any substantive modification to some part of the organization – Areas of Change • Organizational Structure and Design • Technology and Operations • People • Forces for Change – External forces in the general and task environments that 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.

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Areas of Organization Change

Organization Structure and Design Job design Departmentalization Reporting relationships Authority distribution Coordination mechanisms Line-staff structure Overall design Culture Human resource management Technology and Operations Information technology Equipment Work processes Work sequences Control systems Enterprise resource planning (ERP) People Abilities and skills Performance Perceptions Expectations Attitudes Values

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The Nature of Organization Change

• 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.

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Steps in the Change Process

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Understanding Resistance to Change

• People resist change because of: –

Uncertainty

about the extent and effects of change.

–

Threats to self-interests

and power and influence.

–

Different perceptions

of change effects and outcomes.

–

Feelings of loss

in disrupted social networks, power, security, and familiarity with existing procedures.

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Understanding Resistance to Change (cont’d)

• Techniques for overcoming resistance to change: – Encouraging active

participation

in the change process.

– Providing

education and communication

about the change process.

–

Facilitating

the change process by making only necessary changes, announcing changes in advance, and allowing time to adapt to change.

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Force-field Analysis for Plant Closing at General Motors

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Changing Business Processes

• 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.

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The Reengineering Process

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Organization Development (OD)

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

• 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.

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Organization Development Techniques

• Diagnostic Activities • Technostructural Activities • Team Building • Process Consultation • Survey Feedback • Education • Life and Career Planning • Intergroup Activities • Coaching and Counseling • Third-Party Peacemaking • Planning and Goal Setting Copyright © Houghton Mifflin Company. All rights reserved.

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Forms of Organizational Innovation

• 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.

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Forms of Organizational Innovation (cont’d)

• Technical Versus Managerial Innovations – Technical innovation • A change in the physical appearance or performance of a product or service, or the physical processes through which a product or service is manufactured.

– Managerial innovation • A change in the management process by which products and services are conceived, built, and delivered to customers.

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Forms of Organizational Innovation (cont’d)

• Product Versus Process Innovations – 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.

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Innovation

• Reasons for Failing to Innovate – Lack of resources – Failure to recognize opportunities – Resistance to change • Promoting Innovations in Organizations – Using the reward system – Having a supportive organizational culture – Encouraging intrapreneurship in larger organizations • Inventors • Production champions • Sponsors Copyright © Houghton Mifflin Company. All rights reserved.

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Managing Organizational Change and Innovation Copyright © Houghton Mifflin Company. All rights reserved. 13–1

Transcript Managing Organizational Change and Innovation Copyright © Houghton Mifflin Company. All rights reserved. 13–1