Schermerhorn Mgmt9 Ch12

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Management, 9/eJohn R. Schermerhorn, Jr.

Chapter 12:

Prepared by: Jim LoPresti

University of Colorado, Boulder

Published by: John Wiley & Sons, Inc.

Chapter 12: Innovation and Organizational Change

Planning Ahead — Chapter 12 Study Questions

�How do organizations accomplish

innovation?

�What is the nature of organizational

change?

Management 9/e - Chapter 12 2

change?

�How can planned organizational

change be managed?

�What is organization development?

Study Question 1: How do organizations accomplish

innovation?

� Strategic leadership creates the capacity for ongoing strategic change.

� Components of strategic leadership:

� Anticipate, envision, maintain flexibility.


� Anticipate, envision, maintain flexibility.

� Think strategically.

� Work with others to initiate change.

� Build learning organizations as change leaders.

� Develop the ability to innovate successfully as a core competency .


innovation?

� Sustainable competitive advantage

relies on creativity and innovation.

� Creativity is the generation of a novel

idea or unique approach to solving


idea or unique approach to solving

problems or crafting opportunities.

� Innovation is the process of creating

new ideas and putting them into

practice.


innovation?

� Three forms of innovation:� Process.

� Results in better ways of doing things.

� Product.� Results in the creation of new or improved goods and services.


and services.

� Business model innovation� Results in new ways of making money.

� Innovations require invention and application. � Invention.

�Act of discovery.�Development of new ideas.

� Application. � Act of use.� Implementation of new ideas.


innovation?

� Leadership responsibilities for the innovation process:� Imagining.

� Designing.

� Experimenting.


� Experimenting.

� Assessing.

� Scaling.

� Commercializing innovation

� Process of turning new ideas into products or

processes that increase profits through sales or

cost reductions.


innovation?

� Four steps of the product innovation

process:

� Idea creation.


� Idea creation.

� Initial experimentation.

� Feasibility determination.

� Final application.

Figure 12.1 Process of commercializing innovation in

organizations: the case of new product development.



innovation?

� In highly innovative organizations …

� Corporate strategy and culture should:

� Emphasize an entrepreneurial spirit.

� Expect innovation.


� Expect innovation.

� Accept failure.

� Be willing to take risks.

� Organization structure should:

� Be organic.

� Have lateral communications.

� Use cross-functional teams and task forces.


innovation?

� In highly innovative organizations …� Top management should:

� Understand the innovation process. � Be tolerant of criticism and differences of opinion.

� Take all possible steps to keep goals clear.


� Take all possible steps to keep goals clear.� Maintain the pressure to succeed.� Break down barriers to innovation.

� Staffing should fulfill five critical innovation roles:

� Idea generators.� Information gatekeepers.� Product champions.� Project managers.� Innovation leaders.

Study Question 2: What is the nature of organizational change?

� Change leader.

� A change agent who takes leadership responsibility for changing the existing pattern of behavior of another person


pattern of behavior of another person or social system.

� Change leadership.

� Forward-looking.

� Proactive.

� Embraces new ideas.

Figure 12.2 Change leaders versus status quo

managers.


Study Question 2: What is the nature of

organizational change?

� Top-down change.

� Strategic and comprehensive change that is initiated with the goals of comprehensive impact on the


comprehensive impact on the organization and its performance capabilities.

� Driven by the organization’s top leadership.

� Success depends on support of middle-level and lower-level workers.



� Bottom-up change.� The initiatives for change come from any and all parts of the organization, not just top management.

Crucial for organizational innovation.


� Crucial for organizational innovation.

� Made possible by:� Employee empowerment.

� Employee involvement.

� Employee participation.



� Integrated change leadership.

� Successful and enduring change combines

advantages of top-down and bottom-up

approaches.


� Top-down:

� Breaks up traditional patterns.

� Implements difficult economic adjustments.

� Bottom-up:

� Builds capability for sustainable change.

� Builds capability for organizational learning.



� Transformational and incremental change.� Unplanned change.

� Response to unanticipated events.

� Good leaders act on opportunities for reactive change.


change.

� Planned change

� Aligning the organization with anticipated future challenges.

� Activated by proactive leaders who are sensitive to performance gaps.

� Transformational change major and comprehensive redirection.

� Incremental change adjusting existing systems and practices.



� How to lead transformational change:� Establish a sense of urgency for change.

� Form a powerful coalition to lead the change.

� Create and communicate a change vision.

� Empower others to move change forward.


� Empower others to move change forward.

� Celebrate short-term “wins” and recognize those who help.

� Build on success; align people and systems with new ways.

� Stay with it; keep the message consistent; champion the vision.



� External forces for change:� Globalization.

� Market competition.

� Local economic conditions.

� Government laws and regulations.


� Government laws and regulations.

� Technological developments.

� Market trends.

� Social forces and values.

� Internal forces for change:� Arise when change in one part of the system creates the need for change in another part of the system.

� May be in response to one or more external forces.



�Organizational targets for

change:

Tasks


� Tasks

� People

� Culture

� Technology

� Structure

Study Question 3: How can planned organizational

change be managed?

� Phases of planned change� Unfreezing

� The phase in which a situation is prepared for change and felt needs for change are developed.

Changing


� Changing� The phase in which something new takes place in the system, and change is actually implemented.

� Refreezing� The phase of stabilizing the change and creating the conditions for its long-term continuity.

Figure 12.3 Lewin’s three phases of planned

organizational change.



change be managed?

� Force-coercion strategy of change.

� Uses power bases of legitimacy, rewards and

punishments to induce change.

� Relies on belief that people are motivated by self-


� Relies on belief that people are motivated by self-

interest.

� Direct forcing and political maneuvering.

� Produces limited and temporary results.

� Most useful in the unfreezing phase.


change be managed?

� Rational persuasion strategy of change.

� Bringing about change through persuasion

backed by special knowledge, empirical data,

and rational argument.


� Relies on expert power.

� Relies on belief that reason guides people’s

decisions and actions.

� Useful in the unfreezing and refreezing phases.

� Produces longer-lasting and internalized

change.


change be managed?

� Shared power strategy of change.� Engages people in a collaborative process of identifying values, assumptions, and goals from which support for change will naturally emerge.


emerge.

� Time consuming but likely to yield high commitment.

� Involves others in examining sociocultural factors related to the issue at hand.

� Relies on referent power and strong interpersonal skills in team situations.

� Relies on belief that people respond to sociocultural norms and expectations of others.

Figure 12.4 Alternative change strategies and their

leadership implications.



change be managed?

� Reasons for people resisting change:

� Fear of the unknown

� Disrupted habits

� Loss of confidence


� Loss of control

� Poor timing

� Work overload

� Loss of face

� Lack of purpose


change be managed?

�Methods for dealing with resistance to change:� Education and communication

� Participation and involvement


� Participation and involvement

� Facilitation and support

� Facilitation and agreement

�Manipulation and co-optation

� Explicit and implicit coercion

Study Question 4: What is organization

development?

�Organization development (OD) is a

comprehensive approach to planned

organizational change that involves


organizational change that involves

the application of behavioral science

in a systematic and long-range

effort to improve organizational

effectiveness.


development?

� Organization development goals:

� Outcome goals focus on task accomplishments.

� Process goals focus on the way people work

together.


together.

� OD seeks to develop the organization members’

capacity for self-renewal.

� OD is committed to change through freedom of

choice, shared power, and self-reliance.

� OD takes advantage of knowledge about human

behavior in organizations.


development?

� The organization development

process:

� Establish a working relationship.


� Establish a working relationship.

�Diagnosis.

� Intervention.

� Evaluation.

� Achieve a terminal relationship.

Figure 12.5 Organization development and the

planned change process.



development?

� Action research

� The process of systematically collecting

data on an organization, feeding it back

to the members for action planning,


to the members for action planning,

and evaluating results by collecting

more data and repeating the process as

necessary.

� Is initiated when someone senses a

performance gap.


development?

� Steps in the action research

process:

� Problem sensing.

Data gathering.


� Data gathering.

� Data analysis and feedback.

� Action planning.

� Action implementation.

� Evaluation and follow-up.

Figure 12.6 Action research as a foundation of

organization development.



development?

� Individual OD interventions

� Sensitivity training (T-groups)

� Management training


� Management training

� Role negotiation

� Job redesign

� Career planning


development?

� Team OD interventions

� Team building


� Process consultation

� Inter-group team building


development?

�Organization-wide OD interventions

� Survey feedback


� Confrontation meeting

� Structural redesign

� Management by objectives (MBO)

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Schermerhorn Mgmt9 Ch12