©2000 south-western college publishing cincinnati, ohio daft, organizational theory and design, 7/e...
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©2000South-Western College Publishing
Cincinnati, OhioDaft, Organizational Theory and Design, 7/e
10-1
Chapter TenChapter Ten
Innovation and ChangeInnovation and Change
©2001South-Western College Publishing
Cincinnati, OhioDaft, Organizational Theory and Design, 7/e
©2001
South-Western College PublishingCincinnati, Ohio
Daft, Organizational Theory and Design, 7/e10-2
Forces Driving the Need for Forces Driving the Need for Major Organizational ChangeMajor Organizational Change
More Large-Scale Change in OrganizationsStructure change Mergers, joint ventures, consortiaStrategic change Horizontal organizing, teams, networksCulture change New technologies, productsKnowledge management, enterprise New business processesResource planning E-commerceQuality programs Learning organizations
More ThreatsMore domestic competitionIncreased SpeedInternational competition
Global Changes, Competition and Markets• Technological Change• International Economic Integration• Maturation of Markets in Developed Countries• Fall of Communist and Socialist Regimes
More OpportunitiesBigger marketsFewer barriersMore international markets
Source: Based on John P. Kotter, The New Rules: How to Succeed in Today’s Post-Corporate World(New York: The Free Press, 1995).
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South-Western College PublishingCincinnati, Ohio
Daft, Organizational Theory and Design, 7/e10-3
Incremental vs. Radical Incremental vs. Radical ChangeChange
Continuousprogression
Paradigm-breakingburst
Through normal structure and management
processes
Transform entireorganization
Affect organizational
part
Create new structureand management
Technologyimprovements
Breakthroughtechnology
Productimprovement
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 UniversityPress, 1992), 66-111; and Harry S. Dent, Jr., “Growth through New
Product Development,” Small Business Reports (November 1990): 30-40.
Incremental Change Radical Change
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South-Western College PublishingCincinnati, Ohio
Daft, Organizational Theory and Design, 7/e10-4
Four Types of ChangeFour Types of Change
• TechnologyTechnology– Changes in production processChanges in production process
• Products and ServicesProducts and Services– Changes in outputsChanges in outputs
• Strategy and StructureStrategy and Structure– Administrative changesAdministrative changes
• CultureCulture– Changes in values, attitudes, behaviorsChanges in values, attitudes, behaviors
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South-Western College PublishingCincinnati, Ohio
Daft, Organizational Theory and Design, 7/e10-5
Sequence of Elements for Sequence of Elements for Successful ChangeSuccessful Change
Environment
SuppliersProfessionalassociationsConsultantsResearchliterature
CustomersCompetitionLegislationRegulationLabor force
1. Ideas
2. Needs
3. Adoption 4.Implementation
5. Resources
InternalCreativity and
Inventions
PerceivedProblems or
Opportunities
Organization
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South-Western College PublishingCincinnati, Ohio
Daft, Organizational Theory and Design, 7/e10-6
Division of Labor Between Division of Labor Between Departments to Achieve Changes in Departments to Achieve Changes in
TechnologyTechnology
GeneralManager
CreativeDepartment
(Organic Structure)
Using Department
(Mechanistic Structure)
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South-Western College PublishingCincinnati, Ohio
Daft, Organizational Theory and Design, 7/e10-7
Probability of New Product Probability of New Product SuccessSuccess
PROBABILITYPROBABILITY
• Technical completionTechnical completion– (technical objectives achieved)(technical objectives achieved) .57.57
• CommercializationCommercialization– (full-scale marketing)(full-scale marketing) .31.31
• Market SuccessMarket Success– (earns economic returns)(earns economic returns) .12.12
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.
©2001
South-Western College PublishingCincinnati, Ohio
Daft, Organizational Theory and Design, 7/e10-8
Horizontal Linkage Model for Horizontal Linkage Model for New Product InnovationsNew Product Innovations
Environment
TechnicalDevelopments
Environment
CustomerNeeds
Organization
GeneralManager
R&DDepartment
MarketingDepartment
ProductionDepartment
Linkage
Linkage Linka
ge
Linkage Linkage
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South-Western College PublishingCincinnati, Ohio
Daft, Organizational Theory and Design, 7/e10-9
Dual-Core Approach to Dual-Core Approach to Organization ChangeOrganization Change
Type of Innovation DesiredAdministrative
Structure Technology
Direction of Change: Top-Down Bottom-Up
Examples of Change: Strategy Production Downsizing Techniques Structure WorkflowBest Organizational Design for Change: Mechanistic Organic
AdministrativeCore
TechnicalCore
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South-Western College PublishingCincinnati, Ohio
Daft, Organizational Theory and Design, 7/e10-10
Culture ChangeCulture Change
• Reengineering and Horizontal Reengineering and Horizontal OrganizationOrganization
• Total Quality ManagementTotal Quality Management
• The Learning OrganizationThe Learning Organization
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South-Western College PublishingCincinnati, Ohio
Daft, Organizational Theory and Design, 7/e10-11
OD Culture Change OD Culture Change InterventionsInterventions
• Large group interventionLarge group intervention
• Team buildingTeam building
• Interdepartmental activitiesInterdepartmental activities
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South-Western College PublishingCincinnati, Ohio
Daft, Organizational Theory and Design, 7/e10-12
Stages of Commitment to Stages of Commitment to ChangeChange
• PreparationPreparation– Initial contactInitial contact– AwarenessAwareness
• AcceptanceAcceptance– UnderstandingUnderstanding– Decision to implementDecision to implement
• CommitmentCommitment– InstallationInstallation– InstitutionalizationInstitutionalization
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South-Western College PublishingCincinnati, Ohio
Daft, Organizational Theory and Design, 7/e10-13
Barriers to ChangeBarriers to Change
• Excessive focus on costsExcessive focus on costs• Failure to perceive benefitsFailure to perceive benefits• Lack of coordination and Lack of coordination and
cooperationcooperation• Uncertainty avoidanceUncertainty avoidance• Fear of lossFear of loss
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South-Western College PublishingCincinnati, Ohio
Daft, Organizational Theory and Design, 7/e10-14
Techniques for Change Techniques for Change ImplementationImplementation
• Identify a true need for change.Identify a true need for change.• Find an idea that fits the need.Find an idea that fits the need.• Obtain top management support.Obtain top management support.• Design the change for easy Design the change for easy
implementation (in stages/steps).implementation (in stages/steps).• Develop plans to overcome resistance.Develop plans to overcome resistance.• Create change teams.Create change teams.• Foster idea champions.Foster idea champions.
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South-Western College PublishingCincinnati, Ohio
Daft, Organizational Theory and Design, 7/e10-15
Innovation MeasuresInnovation Measures
MeasureMeasureAA
Your OrganizationYour Organization
BBOther OrganizationOther Organization
CCYour IdealYour Ideal
1. 1. Creativity encouragedCreativity encouraged
2. 2. Diverse problem-solvingDiverse problem-solving
3. 3. Time for creative ideasTime for creative ideas
4. 4. Rewards for innovationRewards for innovation
5. 5. Flexible, open to changeFlexible, open to change
6. 6. Follow orders from topFollow orders from top
7.7. Think and act like others Think and act like others
8.8. Concern for status quo Concern for status quo
9. 9. Don’t rock the boatDon’t rock the boat
10. 10. New ideas not fundedNew ideas not funded
WorkbookActivity