1 Organizational Theory Innovation and Technological Change There are two types of technological change: Quantum technological change — fundamental shift in technology that revolutionizes products or their production Incremental technological change — refinement of some base technology

2 Organizational Theory Product Life Cycle Stages Embryonic stage: a product has yet to gain widespread acceptance Minimal demand Growth stage: a product has been accepted by customers Demand increases, first-time buyers Mature stage: market demand peaks because most customers have already bought the product Demand plateaus, replacement purchases Decline stage: occurs when demand for a product falls – obsolescence

3 Organizational Theory PERT/CPM/GANTT Chart Flowcharts of a project that can be built with many proprietary software packages These software packages focus on: Modeling the sequence of actions necessary to reach a project’s goal Relating these actions to cost and time criteria Sorting out and defining the optimal path for reaching the goal

4 Organizational Theory There are various ways that managers can control the innovation process: Skunk works — a task force that is created to expedite new product design and promote innovation by coordinating the activities of functional groups.

5 Organizational Theory Creating a Culture for Innovation Organizational structure Size and age impede innovation Organic structures tend to promote innovation. People - organizations need to guard against similarity Property rights – create career paths to show that success is closely linked with future promotion and rewards

6 Organizational Theory IT and Organizational Structure and Culture IT affects the innovation process through its effects on organizational structure. IT gives lower level employees more detailed and current knowledge of consumer and market trends and opportunities. IT can produce information synergies. Facilitates increased communication and coordination between decentralized decision makers and top managers