© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury. 1 CHAPTER 8 FOSTERING AN INNOVATIVE ORGANISATION

© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury. 2 Lecture outline The nature of change & innovation Organisation life-cycles Promoting innovation Key organisational change components

© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury. 3 Nature of change & innovation Change Any alteration of the status quo. Innovation New idea applied to initiating or improving a process, product or service.

© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury. 4 Nature of change & innovation Forces for change & innovation: External : Response to opportunities and threats from the market, regulators and other elements of the environment External : Response to opportunities and threats from the market, regulators and other elements of the environment Internal : Strategy & plans, employees’ behaviour, change & innovation decisions, cultural change, restructures, technological & leadership change Internal : Strategy & plans, employees’ behaviour, change & innovation decisions, cultural change, restructures, technological & leadership change

© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury. 5 Organisational life cycles Life cycles: Predictable stages of development organisations typically follow.

© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury. 6 Organisational life cycles Intrepreneurial stage Collectivity stage Formalisation and control stage Elaboration of structure stage

© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury. 7 Organisational life cycles Methods of organisational termination: Bankruptcy Liquidation Merger Acquisition Take-over

© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury. 8 Promoting innovation Recognition of opportunity or a problem Recognition of opportunity or a problem Line up powerful sponsors Develop and communicate a vision Develop and communicate a vision Empower others to act out the vision Empower others to act out the vision Prepare to overcome resistance Plan for & reward visible progress Consolidate improvements & facilitate further change Consolidate improvements & facilitate further change Monitor & institutionalise change

© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury. 9 Promoting innovation Organisational development Innovation for competitive advantage Product development Intrepreneurship

© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury. 10 Promoting innovation Organisational development Diagnosis Evaluation Intervention; 4 techniques Process consultation Team building Third party intervention Technostructural activities Intervention; 4 techniques Process consultation Team building Third party intervention Technostructural activities

© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury. 11 Promoting innovation Innovation for competitive advantage: Four factors needed to ensure advantage 1) Hard for competitors to imitate 2) Meeting significant customer needs 3) Fit of innovation to organisation’s time advantages 4) Innovation needs to rely on capabilities accessible to the organisation, but less so to competitors

© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury. 12 Promoting innovation Product development principles: Establish a stage-gate development funnel Establish cross-functional teams Use concurrent engineering Involve both customers & suppliers

© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury. 13 Promoting innovation Intrepreneurship: Encourage the take-up of entrepreneurship roles by organisation members e.g: Idea generator Idea champion Idea sponsor Idea orchestrator.

© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury. 14 Organisational change components Structural Technological Human resource Cultural Component inter-relationship

© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury. 15 Organisational change components Structural component: Job definitions Job groupings Teams Delegation Reporting relationships

© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury. 16 Organisational change components Technological component: Technology may drive change/innovation by: Requiring new work methods. Providing/removing competitive edge.

© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury. 17 Organisational change components Human resources is the vehicle for changing knowledge, skills, perceptions & behaviours needed for a job. It utilises: Recruitment & selection Training Performance appraisal Reward systems.

© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury. 18 Organisational change components Major organisational changes often require concomitant changes to organisational culture. ‘Organisational culture can be defined as a system of shared values, assumptions, beliefs and norms linking an organisation’s members.’

© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury. 19 Organisational change components Inter-relationship amongst components: Change to one component creates tensions on other components until they are adjusted accordingly. Minor change May relate to only one component. Major change May relate to all four components.

© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury. 20 Lecture summary Nature of change & innovation –Distinguishing change from innovation. –External & internal forces for change & innovation. Organisation life cycles –Life cycle stages. –Termination.

© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury. 21 Lecture summary Promoting innovation –Organisational development (OD) –Innovation for competitive advantage –Product development –Entrepreneurship Organisational change –Key components