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Managing Change and Innovation. Chapter 11. Turbulent Times The Changing Work Place. Today’s organizations need to continuously adapt to new situations if they are to survive and prosper One of the most dramatic elements is the shift to a technology- driven workplace

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turbulent times the changing work place
Turbulent Times The Changing Work Place
  • Today’s organizations need to continuously adapt to new situations if they are to survive and prosper
  • One of the most dramatic elements is the shift to a technology- driven workplace
  • Ideas, information, and relationships are becoming critically important

Manager’s Challenge: Cowley manufacturing plant

managing change and innovation3
Managing Change and Innovation


Chapter 11

  • How organizations respond to the environment through internal change and development
    • Basic forces for Organizational Change
    • How managers facilitate two change requirements
    • Four major types of change
    • How organizations can be designed to facilitate each
organizational change
Organizational Change
  • The adoption of a new idea of behavior by an organization
  • New trends require profound changes in the organization
    • E-business
    • Supply chain integration
    • Knowledge management
organizational change5
Organizational Change
  • Today’s successful organizations simultaneously embrace two types of planned change
    • Incremental change = efforts to gradually improve basic operational and work processes in different parts of the company
    • Transformational change = redesigning and renewing the entire organization
model of change sequence of events
Model of Change Sequence of Events


Monitor global competition, and other factors

Need for change

Initiate change

Implement change

Evaluate problems and opportunities, define needed changes in technology products, structure, and culture

Facilitate search, creativity, idea champions, venture teams, skunk works and idea incubators

Use force field analysis, tactics for overcoming resistance


Consider plans, goals, company problems, and needs

forces for change
Forces for Change
  • Environmental Forces
    • Customers
    • Competitors
    • Technology
    • Economic
    • International arena
  • Internal Forces – activities and decisions
need for change
Need for Change
  • Based on external or internal forces
  • Performance gap = disparity between existing and desired performance levels.
    • Current procedures are not up to standard
    • New idea or technology could improve current performance
initiating change
Initiating Change

Critical phase of change management

  • Stage where the ideas that solve perceived needs are developed
  • Search = process of learning about current developments inside or outside the organization that can be used to meet the perceived need for change
  • Creativity =generation of novel ideas that might meet perceived needs or offer opportunities for the organization

Experiential Exercise: Is Your Company Creative?

characteristics of creative people
Characteristics of Creative People
  • Conceptual fluency
  • Open-minded
  • Originality
  • Less authority
  • Independence Self-confidence
  • Playfulness
  • Undisciplined exploration
  • Curiosity
  • Persistence
  • Commitment - Focused approach
idea champion
Idea Champion

Change does not occur by itself

A person who sees the need for and

Champions productive change within

the organization

four roles in organizational change
Four Roles in Organizational Change

Championing an idea successfully requires roles in organizations

  • Champion
  • Believes in idea
  • Visualizes benefits
  • Confronts
  • organization
  • realities of cost, benefits
  • Obtains financial &
  • political support
  • Overcomes obstacles
  • Sponsor
  • High-level manager
  • who removes
  • organizational
  • barriers
  • Approves and
  • protects idea within
  • organization
  • Critic
  • Provides reality test
  • Looks for short-
  • comings
  • Defines hard-nosed
  • criteria that idea
  • must pass
  • Inventor
  • Develops and
  • understands
  • technical aspects of ideas
  • Does not know how
  • to win support for
  • the idea or make a
  • business of it

Sources: Based on Harold L. Angle and Andrew H. Van de Ven, “Suggestions for Managing the Innovation Journey,” in Research in the Management of Innovation: The Minnesota Studies, ed. A. H. Van de Ven, H. L. Angle, and Marshall Scott Poole (Cambridge, Mass.: Ballinger/Harper & Row, 1989); and Jay R. Galgraith, “Designing the Innovating Organization,” Organizational Dynamics (winter 1982) 5-25.

new venture teams
New Venture Teams
  • New Venture Team = Unit separate from the mainstream of the organization that is responsible for developing and initiating innovations
  • Skunkworks = separate small, informal, highly autonomous, and often secretive group that focuses on breakthrough ideas for the business
new venture fund
New Venture Fund
  • Fund providing resources from which individuals and groups can draw to develop new ideas, products, or businesses
  • Idea Incubator = in-house program that provides a safe harbor where ideas from employees throughout the organization can be developed without interference from company bureaucracy or politics
open innovation
Open Innovation
  • Extending the search for and commercialization of new ideas beyondthe boundaries of the organization
  • The boundaries between an organization and its environment are becoming porous so that ideas flow back and forth among different companies that engage in partnerships, joint ventures, licensing agreements, and other alliances
resistance to change
Resistance to Change
  • Self-Interest: fear of personal loss is perhaps the biggest obstacle to organizational change
  • Lack of Understanding and Trust: do not understand the intended purpose of a change or distrust the intentions
  • Uncertainty: lack of information about future events
  • Different Assessments and Goals: people who will be affected by innovation may assess the situation differently.
force field analysis
Force-Field Analysis

Kurt Lewin

  • The process of determining which forces drive and which resist a proposed change
  • Restraining Forces (Barriers)
  • Lack of resources
  • Resistance from middle managers
  • Inadequate employee skills
  • Driving Forces
  • Thought of as problems or opportunities that provide motivation for change
tactics for overcoming resistance to change



Change is technical; users need accurate information & analysis

Users need to feel involved; design requires information from others; have power to resist

Tactics for Overcoming Resistance to Change


When to Use

tactics for overcoming resistance to change20


Top management support

Group has power over implementation; will lose out in the change

Crisis exists; initiators clearly have power; other techniques have failed

Involves multiple departments or reallocation of resources; users doubt legitimacy of change

Tactics for Overcoming Resistance to Change


When to use

types of organizational change
Types of Organizational Change






SOURCE: Based on Harold J. Leavitt, “Applied Organizational Change in Industry: Structural, Technical, and Human Approaches,” In New Perspectives in Organization Research, ed.W.W. Cooper, H.J. Leavitt, and Shelly II (New York: Wiley, 1964), 55-74.

organizational change22
Organizational Change
  • Technology: General rule = change is bottom up
  • New product:
  • Horizontal linkage model emphasizes shared development of innovations among several departments
  • Time-based competition is based on the ability to deliver products and services faster than competitors
  • Structure: Successful change = through a top-down approach
  • Culture/people:
  • Training is the most frequently used tool for changing the organization’s mind-set
horizontal linkage model
Horizontal Linkage Model

For New Product Innovation


Manufacturing Department

Customers Market Conditions

Research Department

Marketing Department

New Technology

structural changes
Structural Changes
  • Any change in the way in which the organization is designed and managed
    • Hierarchy of authority
    • Goals
    • Structural characteristics
    • Administrative procedures
    • Management systems

Ethical Dilemma: Research for Sale

culture people changes
Culture-People Changes
  • Changes in structure, technologies, and products or services do not happen on their own
  • Changes in any of these areas require changes in people
organization development
Organization Development

Problems OD Can Address



Conflict management

Application of behavioral science techniques to improve an organization’s health and effectiveness through its ability to cope with environmental changes, improve internal relationships, and increase learning and problem-solving capabilities

od activities
OD Activities

Team building

Survey feedback

Large group intervention

od approaches to culture change
OD Approaches to Culture Change

Traditional Organizational Development Model

Large-Group Intervention Model

Focus for action:




Time frame:


Specific problem or group




Individual, small group

Entire system

Organization & environment

Widely shared


Whole organization




SOURCE: Adapted from Barbara Benedict Bunker and Billie T. Alban, “Conclusion: What Makes Large Group Interventions Effective,” The Journal of Applied Behavioral Science 28, no 4 (December 1992), 579-591.