Principles of Management

Lecture 6 Change Management and Innovation

: Sonya Omer

Todays Agenda

Change and Innovation

Types of change Organizational life cycle

Change management process Organizational Development Managing resistance to change

Change and Innovation

Change

Any alteration of the status quo

Innovation

A new idea applied to initiating or improving a process, product or service.

Someone who acts as a catalyst and assumes the responsibility for managing the change process.

Change Agent

Four Types of Change

Technology

Changes in production process Changes in outputs Administrative changes Changes in values, attitudes, behaviors

Products and Services

Strategy and Structure

Culture

Forces for Change

Environmental Forces

Customers Competitors Technology Economic International arena New organizational strategy Change in composition of workforce New equipment Changing employee attitudes

Internal Forces

Need for Change

Performance gap = disparity between existing and desired performance levels.

Current procedures are not up to standard

New idea or technology could improve current performance

Organizational Life Cycle

Stages of Life Cycle Development

Entrepreneurial Stage Collectivity Stage

Formalization Stage

Elaboration Stage
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Organizational Life Cycle

Entrepreneurial Stage

New organization created to support an invention or major innovation.

Little planning and coordination

entrepreneur makes the decisions

Focus: survival, seeking resources

Management style: Entrepreneurial

Crisis: Lack of/Need for leadership
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Organizational Life Cycle

Collectivity Stage:

Informal structure with short range planning.

Personal rewards aimed at individuals who

contribute to organizational success

Innovation from employees and managers

Focus: Growth Managers: entrepreneurs and early joiners Crisis: Lack of/need for delegation
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Organizational Life Cycle

Formalization Stage:

Formalized structure and long range planning

Impersonal rewards through formalized

systems Innovation from separate innovative groups Goal: efficiency (market stability and expansion) and coordination Management style: Delegation with control

Crisis: Too much red tape

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Organizational Life Cycle

Elaboration Stage:

Structure: Decentralization

Planning: long range, opportunistic

Extensive rewards tailored to product and department success Focus: restructuring Managers: professional managers, orchestrators

Innovation: Renewal

Crisis: Lack of/need for revitalization (renewal of innovative vigor or organization) 11

Organizational Life Cycle

Large Development of Teamwork Continued maturity Addition of Internal Systems Provision of Clear Direction Creativity Crisis: Too much red tape Crisis: Need for delegation with control Crisis: Need for Leadership Decline Streamlining

Size

Crisis: Need for revitalization

Small

Entrepreneurial Collectivity Formalization Elaboration

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Change Management Process

Reactive Change

Change that occurs when one takes action in response to perceived problems, threats or opportunities. Change that involves actions based on a carefully thought-out process

Planned Change

anticipates future difficulties, threats and opportunities.

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1. 2.

3.
4. 5. 6. 7. 8.

Gain recognition of an opportunity or problem Line-up powerful sponsors Develop and communicate a vision Empower others to act out the vision Prepare to overcome resistance Plan for reward visible progress Consolidate improvements and facilitate further change Monitor and institutionalize changes 14

Change Management Process (8-Step Model)

Organizational Development (OD)

A change effort that is planned, focused on an entire organization or a large subsystem, managed from the top, aimed at enhancing organizational health and effectiveness, and based on planned interventions.

Is initiated when someone senses a performance gap.

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OD Process

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OD Interventions
Process Consultation Team Building Third-party Intervention
An outside consultant helps the manager understand how interpersonal processes are affecting the way work is being done.

Technique aimed at helping work groups become effective at task accomplishment.

OD consultants help individuals, groups or departments resolve serious conflicts regarding work issues or interpersonal relations.
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OD Interventions
Techno Structural Activities Survey Feedback Sensitivity Training
Activities intended to improve work technology and organization structure.

Assessing attitudes and perceptions, identifying discrepancies, and resolving the differences by using survey information in feedback groups.

A method of changing behavior through unstructured group interaction.

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Implementing Change

Outline the Need for Change

Show the performance gap Self-Interest Lack of Understanding and Trust Uncertainty Different Assessments and Goals Low tolerance for change

Understand the Resistance to Change

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Tactics for Overcoming Resistance to Change

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The Worlds Most Innovative Companies

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