© 2014 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 14 Organization Change and Innovation

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Learning Objectives Discuss the nature of change, including the reasons and need for change, planned organization change, and the steps in change. Explain why people resist change and how to overcome that resistance. Identify strategic, structural, technological, and people-focused approaches to change.

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Learning Objectives Define and discuss the nature and techniques of organization development. Explain why and how organizations may need to undergo revitalization. Discuss the importance of innovation in organizations and describe how it can be facilitated and implemented.

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The Nature of Organization Change Reasons for Change – Stem from one or more forces in organization’s general and/or task environments. Technological Sociocultural Political-legal Natural International Economic

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The Nature of Organization Change Unexpected Change – Organizational resilience: organization’s ability to recover from unexpected change. – Resilient organization has culture that supports flexibility, adaptability, innovation, change. – Environmental scanning and understanding risks important.

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The Nature of Organization Change Planned Organization Change – Anticipation of changes in environment to which organization must respond and consideration of how that response will occur ahead of time. – Reactive change: organization pays little attention to anticipating environmental shifts and must allow its reaction to be dictated by what happens.

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The Nature of Organization Change

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Managing Organization Change Resistance to Change – Breeds uncertainty – Threatens people’s own self-interests – Differing perceptions – Feelings of loss

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Managing Organization Change Overcoming Resistance to Change – Participation – Communication – Facilitation – Force-field analysis Pluses and minuses associated with the change See Table 14.1: Resistance to Change.

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Areas of Organization Change Strategic Change – Organization modifies its strategy or adopts new strategy. – See Table 14.2: Areas of Organization Change. Structural Change – Any change directed at a part of the formal organizational system.

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Areas of Organization Change Technological Change – Related to technology – New equipment – Make unacceptable job more attractive – Affect work processes or sequences – Automation – Information processing system changes

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Areas of Organization Change People-Focused Change – Skills and performance Replace current employees Upgrade selection standards Train existing employees to upgrade their performance-related skills – Attitudes, perceptions, behaviors, expectations

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Organization Development The Nature of Organization Development – Organization development: planned, organization-wide effort to enhance organizational health and effectiveness through systematic application of behavioral science techniques.

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Organization Development Organization Development Techniques – Managerial Grid: assesses current leadership styles in organization; trains leaders to practice ideal style of behavior. – Team building: enhances motivation and satisfaction of people in groups. – Survey feedback: surveying subordinates about perceptions of leader; providing feedback to entire group.

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Organization Revitalization – Planned effort to bring new energy, vitality, strength to organization. Reasons for Revitalization – Organization must undergo major change to get back in proper alignment with its environment.

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Organization Revitalization Stages in Revitalization – Normal momentum – Growth reaches plateau or goes into decline – Planned period of contraction – Can start expanding and growing once again

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Innovation in Organizations Innovation – Managed effort of organization to develop new products or services and/or new uses for existing products or services. Organizational Innovation Process – Developing, applying, launching, growing, and managing maturity and decline of creative idea.

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Innovation in Organizations The Innovation Process – Innovation development – Innovation application – Application launch – Application growth – Innovation maturity – Innovation decline

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Innovation in Organizations Types of Innovation – Radical: new products or technologies that completely replace existing products or technologies in an industry. – Incremental: products or processes that modify existing products or technologies.

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Innovation in Organizations Types of Innovation – Technical: changes in physical appearance or performance of product or service, or physical processes through which product or service manufactured. – Managerial: changes in management process by which products and services conceived, built, delivered.

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Innovation in Organizations Barriers to Innovation – Lack of resources – Failure to recognize opportunities – Resistance to change

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Innovation in Organizations Facilitating Innovation – The reward system – Intrapreneurship Inventor Product champion Sponsor – Organizational culture

© 2014 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 Summary Organization change: forces in general and task environments can prompt need for change. Organizations should plan for change. People resist change for variety of reasons. Methods for overcoming resistance: – Participation – Open communication – Facilitation – Force-field analysis

© 2014 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 Summary Four areas of organization change: – Strategy – Structure – Technology – People Organization development: planned, organization-wide effort to enhance organizational health and effectiveness.

© 2014 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 Summary Organization revitalization: planned effort to infuse new energy, vitality, strength into organization. Innovation: managed effort to develop new products or services or new uses for existing products or services.