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Principles of Management
Lecture 6
Change Management and Innovation
: Sonya Omer
1
Today’s Agenda
Change and Innovation Types of change Organizational life cycle Change management process Organizational Development Managing resistance to change
2
Change and Innovation Change
Any alteration of the status quo Innovation
A new idea applied to initiating or improving a process, product or service.
Change Agent Someone who acts as a catalyst and
assumes the responsibility for managing the change process.
3
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
4
Forces for Change Environmental Forces
Customers Competitors Technology Economic International arena
Internal Forces New organizational strategy Change in composition of workforce New equipment Changing employee attitudes 5
Need for Change
Performance gap = disparity between existing and desired performance levels. Current procedures are not up to
standard New idea or technology could
improve current performance
6
Organizational Life Cycle
Stages of Life Cycle Development
7
Organizational Life Cycle Entrepreneurial Stage
New organization created to support an invention or major innovation.
Little planning and coordination entrepreneur makes the decisions
Focus: survival, seeking resources Management style: Entrepreneurial Crisis: Lack of/Need for leadership
8
Collectivity Stage: Informal structure with short range planning. Personal rewards aimed at individuals who
contribute to organizational success Innovation from employees and managers Focus: Growth Managers: entrepreneurs and early joiners Crisis: Lack of/need for delegation
Organizational Life Cycle
9
Formalization Stage: Formalized structure and long range
planning Impersonal rewards through formalized
systems Innovation from separate innovative groups Goal: efficiency (market stability and
expansion) and coordination Management style: Delegation with control Crisis: Too much red tape
Organizational Life Cycle
10
Elaboration Stage: Structure: Decentralization Planning: long range, opportunistic Extensive rewards tailored to product and
department success Focus: restructuring Managers: professional managers, orchestrators Innovation: Renewal Crisis: Lack of/need for revitalization (renewal of
innovative vigor or organization)
Organizational Life Cycle
11
Small
Large
Siz
e
Entrepreneurial Collectivity Formalization Elaboration ?????????
Streamlining
Continued maturity
Decline
Creativity
Provision ofClear Direction
Addition ofInternal Systems
Development of Teamwork
Crisis: Need for Leadership
Crisis: Need for delegationwith control
Crisis: Too much
red tape
Crisis: Need forrevitalization
Organizational Life Cycle
12
Change Management Process
Reactive Change Change that occurs when one takes
action in response to perceived problems, threats or opportunities.
Planned Change Change that involves actions based on
a carefully thought-out process anticipates future difficulties, threats and
opportunities.
13
Change Management Process (8-Step Model)
1. Gain recognition of an opportunity or problem
2. Line-up powerful sponsors3. Develop and communicate a vision4. Empower others to act out the vision5. Prepare to overcome resistance6. Plan for reward visible progress7. Consolidate improvements and facilitate
further change8. Monitor and institutionalize changes
14
Organizational Development (OD)
A change effort that is planned, focused on an entire organization or a large subsystem, managed from the top, aimed at enhancing organizational health and effectiveness, and based on planned interventions. Is initiated when someone senses a
performance gap.
15
OD Process
16
OD Interventions
17
OD Interventions
18
Implementing Change Outline the Need for Change
Show the performance gap Understand the Resistance to
Change Self-Interest Lack of Understanding and Trust Uncertainty Different Assessments and Goals Low tolerance for change
19
Tactics for Overcoming Resistance to Change
20
The World’s Most Innovative Companies
21
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