© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter Eleven Innovation and Change

© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 2 The Strategic Role of Change Today’s organization must poise themselves to innovate and change –Innovate or perish Powerful forces: –Technology –International economic integration –Maturing domestic markets –Globalization To manage threats and opportunities, organizations must change

© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 3 Forces Driving the Need for Major Organizational Change

© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 4 Strategic Types of Change

© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 5 Elements of Successful Change

© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 6 Technology Change To be both an organic and mechanistic, managers implement an ambidextrous approach –Structures and management processes that push innovation

© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 7 Techniques for Encouraging Technology Change Switching Structures – create an organic structure Creative Departments – department for innovation Venture Teams – a small company within the organization Corporate Entrepreneurship – promote entrepreneurial spirit Collaborative Teams – collaboration for innovation

© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 8 New Products and Services Reasons for success: –Innovating companies understand customers –Innovating companies successfully use technology –Top management supports innovation Horizontal Coordination Model: –Specialization –Boundary Spanning –Horizontal Coordination

© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 9 New Product Success Rates

© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 10 Horizontal Coordination for Innovation

© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 11 Achieving Competitive Advantage: The Need for Speed Rapid development of new products and services is becoming a strategic weapon Time-based competition means delivering products and services faster than competitors, giving companies a competitive edge

© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 12 Dual-Core Approach to Organization Change

© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 13 Forces for Culture Change  Reengineering and Horizontal Organization  Diversity  The Learning Organization

© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 14 OD Culture Change Interventions Large Group Intervention Team Building Interdepartmental Activities

© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 15 Stages of Commitment to Change

© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 16 Barriers to Change Excessive focus on costs Failure to perceive benefits Lack of coordination and cooperation Uncertainty avoidance Fear of loss Leadership for Change: 80% of successful innovative companies have top leaders who reinforce the value and importance of innovation.

© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 17 Techniques for Change Implementation 1.Establish a sense of urgency for change. 2.Establish a coalition to guide the change. 3.Create a vision and strategy for change. 4.Find an idea that fits the need. 5.Develop plans to overcome resistance. 6.Create change teams. 7.Foster idea champions.

© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 18 Design Essentials Change, not stability is the challenge for managers There are four types of change Organic structures foster innovation A top-down approach is best for change and strategy Top managers must foster culture change The implementation of change can be difficult