©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).

©2001

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

©2001

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

©2001

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

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