6

Ready Notes

Managing
Organization Change
and Innovation
Prof. Begum Khaleda Khanam

Slide content created by Joseph B. Mosca, Monmouth University.

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The Nature of Organizational Change

What is organizational change?
Any substantive modification to some part
of the organization.

What are the forces for change?

External forces: derive from the
organizations general and task
environments.

What does that mean?

Energy crises, exchange rate fluctuations,
political, technical, and socio-cultural.
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Internal Forces
What are these
forces?
Top management
revises the
organizations
strategy.
Socio-cultural values
shifts.
Attitudes toward
jobs.

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Planned Versus Reactive Change

Planned change:
Change that is
designed and
implemented in an
orderly and timely
fashion in
anticipation of future
events.

Reactive change:
A piecemeal
response to events
as they occur.
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Steps in the Change Process

What are the steps in the change process?

Recognition of the need for change.

Establishment of relevant variables.
Diagnosis of relevant variables.
Selection of appropriate change techniques.
Planning for implementation.
Actual implementation.
Evaluation and follow-up.
(see Figure 13.1 next slide for illustration)

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Figure 13.1:
Steps in the
Change Process

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Understanding Resistance to Change

Uncertainty: employees may
become anxious.
Threatened self-interests:
change may diminish
managerial power.
Different perceptions:
employees may disagree with
managers assessment of the
change.
Feeling of loss: disruption of
existing social network.

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Forced-Field Analysis for Plant

Closing at General Motors
Reason for change

Reason against change

Resistance from unions

Need to cut costs

Excess capacity

Plant
closing

Outmoded facilities

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Concern about worker welfare

Possible future needs

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Areas of Organizational Change

Change can involve any part of an
organization.
Most change interventions involve
organization structure and design,
technology and operations, or people.
(see next slide Table 13.1)

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Overcoming Resistance to Change

Participation:
Allow employees to take
part in the planning and
implementation.

Education and
communication:
Educate the employees
about the need.

Facilitation:
Make only necessary
changes, announce in
advance, and allow
employees to adjust to
the change/s.
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Organization Structure and Design Changes

Job design.
Departmentalization.
Reporting relationships.
Authority distribution.
Coordination
mechanisms.
Line-staff structure.
Overall design.
Culture.
Human resource
management.

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Technological and Operational Changes

Information
technologies.
Equipment.
Work processes.
Work sequences.
Control systems.

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Changes for Employees

Abilities and skills.

Performance.
Perceptions.
Expectations.
Attitudes.
Values.

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Changing Business Process

What does this mean?
Reengineering:
The radical redesign of all aspects of a
business to achieve major gains in cost,
service, or time.

Why reengineer?
Problems occur when management does not
recognize entropy until it is well advanced.

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The Reengineering Process

Develop goals and a strategy for
reengineering effort.
Emphasize top managements commitment to
the reengineering effort.
Create a sense of urgency among members
of the organization.
Start with a clean slate; in effect, re-create the
organization.
Optimize top-down and bottom-up
perspectives. (see next slide Figure 13.3 for
illustration)
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Figure 13.3:
The
Reengineering
Process

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Organizational Development
What is it?
A planned effort that is organization wide
and managed from the top, and is intended
to increase organization effectiveness and
health through planned interventions in the
organizations process using behavioral
science knowledge.

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Organization Development Techniques

Diagnostic activities.
Team building.
Survey feedback.
Education.
Inter-group activities.
Third-party peacemaking.
Techno-structural activities.
Process consultation.
Life and career planning.
Coaching and counseling.
Planning and goal setting.

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The Organizational Innovation Process

Development:
Organization evaluates, modifies, and
improves on a creative idea.

Application:
Organization uses developed idea in
design, manufacturing, or delivery of new
products, services, or processes.

Launch:
Organization introduces new products or
services to the marketplace.
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The Innovation Process (contd)

Growth:
Demand for new product or service grows.

Maturity:
Most competing organizations have access
to the idea.

Decline:
Demand for innovation decreases, and
substitute innovations are developed and
applied.
(see next slide Figure 13.4 for illustration)
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Figure 13.4: The Innovation Process

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Radical Versus Incremental Innovation

Radical innovation:
A new product, service,
or technology developed
by an organization that
completely replaces the
existing product, service,
or technology in an
industry.

Incremental innovation:
A new product, service,
or technology that
modifies an existing one.

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Figure 13.5: Effects of Product and Process

Innovation on Economic Return

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Both Sides of Innovation

The Failure to
Innovate:

Promoting Innovation
in Organizations:

Lack of resources.
Failure to recognize
opportunities.
Resistance to
change.

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The reward system.

Organizational
culture.
Entrepreneurship in
larger organizations

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