Innovation and Change Essay

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Pages: 14

Chapter 11: Innovation and Change

Innovate or Perish: The Strategic Role of Change
Organizations must run fast to keep up with changes taking place all around them
Many organizations are responding to global forces by adopting self-directed teams and horizontal structures that enhance communication and collaboration, streamlining supply and distribution channels, and overcoming barriers of time and place through IT and e-business
Change is the norm today and it is dramatic and constant
Forces driving the need for major organizational change are demonstrated below:

Incremental versus Radical Change
Incremental change is a series of continual progressions that maintain an organization’s general equilibrium and often affect only one organizational part
For example, implementing a sales team in the marketing department
Radical change breaks the frame of reference for the organization, often transforming the entire organization
For example, shifting the entire organization from a vertical to a horizontal structure

4 Strategic Types of Change
Technology changes
Changes in an organization’s production process, including its knowledge and skills base, that enable distinctive competence
They are designed to make production more efficient or to produce greater volume
Involves the techniques for making products or services, like methods, equipment, and workflow
Product and service changes
Changes in an organization’s product or service outputs
Normally designed to increase market share or to develop new markets, customers, or clients
For example, Toyota’s Hilux truck was designed to increase market share, whereas Apple’s iPod was developed to create a new market for the company
Strategy and structure changes
Changes in the administrative domain of an organization, including structure, policies, reward systems, labour relations, coordination devices, management info control systems, and accounting and budgeting
Usually top-down changes
For example, a system change by university management could be a new merit pay plan
Culture changes
Changes in the values, attributes, expectations, believes, abilities, and behaviour of employees
These changes pertain to how employees think, and are the hardest things to change

Elements for Successful Change
Organizational Change: the adoption of a new idea or behaviour by an organization
Organizational Innovation: the adoption of an idea or behaviour that is new to an organization’s industry, market, or general environment
Change Process: the way in which changes occur in an organization

For a change to be successful, each of the following elements must occur:
An idea is a new way of doing things and they come from inside or outside
Creativity is the generation of novel ideas that may meet perceived needs or respond to opportunities
Some techniques for spurring internal creativity are to increase the diversity within the organization, make sure employees have plenty of opportunities to interact with people, given employees time and freedom for experimentation, and support risk taking and making mistakes
Ideas are generally not seriously considered unless there is a perceived need for change
This occurs when managers see a gap between actual performance and desired performance
A crisis can help communicate the need, but when there is no crisis, managers have to communicate the nee to others
Occurs when decision makers choose to go ahead with a proposed idea
Key managers and employees must be in agreement to support change, and the decision may require the signing of a legal document by the BOD if the change is large enough
For a small change, adoption could occur with informal approval by a middle manager
Occurs when organization members actually use a new idea, technique, or behaviour
Materials and equipment may have to be acquired, and workers may have to be trained to use the new idea
Human energy and activity are required to bring about change