SOCI110 Module 10 - INNOVATION & CHANGE
0. OBJECTIVES
In this module you will learn about
-
the pressures on organizations for change in the
contemporary world
-
the 4 types of strategic change (technology, products/services,
strategy/structure, people/culture) and how they are interrelated
-
the 5 elements of the process of change (ideas,
needs, adoption, implementation, resources)
-
the ambidextrous approach to technology change
and 4 standard techniques to facilitate technological innovation
-
the demography of new products/services and the
horizontal linkages model of new products/services development
-
the dual-core model (bottom-up/top-down) of administrative
change
-
sources of resistance ("barriers") to change and
standard techniques for implementing change
1. TYPES OF CHANGE & GENERAL MODEL OF
CHANGE
1. Contemporary Forces of Organizational
Change
In the contemporary world technological change
and globalization are driving the need for organizational change.
2. Incremental versus Radical Change
Organizational change can be incremental or radical.
Most change in organizations is incremental.
3. Strategic Types of Change
The four strategic types of change are changes
in:
-
technology (the organization's production
process, including techniques and work organization)
-
products & services (the organization's
output)
-
strategy & structure (the administrative
domain, including supervision, policies, reward systems, labor relations,
etc.)
-
people & culture (= human resources
- employees & their characteristics, including their skills, values
& attitudes)
The four types of change are interdependent.
Q - Citizens Bank began offering a "Sweep Account"
in which funds over $500 in a checking account would be "swept" into a
money-market, interest-bearing, account until the checking account reached
$100, at which point funds from the money market account would be "swept"
back into the checking account. This is an example of a ____
change.
Q - The Chuck-It Manufacturing Company is planning
to install Computer-Integrated Manufacturing (CIM) in its plant in Kalamazoo.
Other changes may also be needed to implement this technology change.
The most important change needed will be ____ ?
4. The 5 Elements of Successful Change
One can distinguish change from innovation:
-
organizational change: adoption of new
idea or behavior by the organization
-
organizational innovation: adoption of
idea or behavior that is new to the organization's industry, market, or
general environment
Thus innovation is "bigger" than change.
However, the change process tends to be the
same for change and innovation.
There are 5 identifiable stages/elements in
the change process.
Q - Coming up with a new way of doing things is
the ____ step of the change process.
Q - "In the change process, the need stage
always precedes the idea stage." (TRUE/FALSE?)
2. TECHNOLOGY CHANGE
1. The Ambidextrous Approach
The Basic Dilemma - Structural
characteristics favoring initiation & implementation of change are
incompatible:
-
initiation of change is favored by low
formalization, low centralization, high professionalism (= organic structure)
-
implementation of change is favored by
high formalization, high centralization, low professionalism (= mechanistic
structure)
To resolve this dilemma, the organization must
be
ambidextrous, i.e. achieve the coexistence of the organic and
mechanistic elements necessary for change.
Q - "The ambidextrous approach is based on
the principle of not letting the "left hand" (one department) know what
the "right hand" (another department) is doing." (TRUE/FALSE?)
Q - "A mechanistic structure does not provide
the flexibility associated with the introduction of new ideas." (TRUE/FALSE?)
2. Techniques for Encouraging Technology
Change
There are 4 standard techniques for achieving
ambidextrousness by combining the organic & mechanistic requirements
of technology change:
-
switching structures (EX: yearly brainstorming
sessions, Apple fellows, quality circles)
-
creative departments (EX: R&D department
with an organic structure within a mechanistic organization)
-
venture teams (= small company within larger
company, to escape organizational constraints. EX: IBM PC)
-
corporate entrepreneurship [or: "intrapreneurship"]
(= encouraging idea champions of two types: technical or product
champion developing an idea & management champion acting as
a sponsor; EX: Peter Chaconas & Randy Blevins at Balck & Decker)
Q - "A venture team may increase commitment, but
stifles creativity." (TRUE/FALSE?)
Minicase: Hewlett-Packard
(Daft p. 297). The collaboration between technical champion Chuck
House and management champion Das Howard (House's boss) led to the successful
development of a new type of efficient video monitor, even though the pair
had to break company rules to succeed.
3. NEW PRODUCTS & SERVICES
Products & services changes are similar to
technology changes, but product must also be accepted by the environment
(= customers).
1. Demography of New Products
In a survey of 200 projects of new products, three
stages of completion were achieved with the following rates of "survival":
Probability of Completion of 3 Development
Stages by 200 New Products (Daft E10.6 p. 366)
| Initial proportion |
1.00 |
| Technical completion (technical objectives
achieved) |
.57 |
| Commercialization (full-scale marketing) |
.31 |
| Market success (earns economic returns) |
.12 |
Thus only 12% of new products achieve market
success!
Q - The proportion of all new products actually
undertaken that eventually earn an economic return and achieve market success
ia about ___ %?
2. Horizontal Linkage Model
Comparison of successful versus unsuccessful new
products suggests a horizontal linkage model based on 3 principles:
-
specialization into 3 key departments (R&D
-- Marketing -- Production)
-
boundary spanning (each department is linked
to relevant outside environment)
-
horizontal linkages (there is adequate
coordination among departments)
Minicase: IBM PC Company (Daft
6e pp. 300-301). To reverse slumping sales, the IBM PC Co in Raleigh
implemented the horizontal linkage model by putting together a cross-functional
team composed of R&D, design, procurement, logistics, and manufacturing
specialists. The team successfully developed the new Think-Pad "Butterfly"
laptop computers.
Q - In the horizontal linkage model, the component
that insures that each department involved with new products has excellent
linkage with relevant sectors in the external environment is called the
____ component?
4. STRATEGY & STRUCTURE CHANGE (aka
ADMINISTRATIVE CHANGE)
Change in the strategy & structure if the
organization is also called administrative change.
Compared to technology & product change,
administrative change:
-
is less frequent
-
originates from different sources
-
corresponds to different internal processes
The Dual-Core Approach
The dual-core approach has been developed to understand
administrative change processes.
The organization is viewed as divided into
an administrative core & a technical core.
Comparing administrative & technology
change:
-
administrative (strategy & structure) change
comes down from the administrative core (top-down) and is facilitated
by a mechanistic structure
-
technology change comes up from the technical
core (bottom-up) and is facilitated by an organic structure
Q - Technical change is produced by a (BOTTOM-UP/TOP-DOWN?)
process and facilitated by a (MECHANISTIC/ORGANIC?) structure.
5. PEOPLE & CULTURE CHANGE
Targets of change are values, attitudes &
skills of employees.
Recent trends that involve substantial people
& culture change include:
-
Reengineering & the Horizontal Organization
(taking a clean-slate approach to redesigning work flows in order to squeeze
out delays and inefficiencies, with a greater emphasis on teamwork, empowerment,
and cooperation)
-
Total Quality Management (TQM )
(retrained workers assume responsability for achieving high quality - through
quality circles to solve problems or benchmarking of other
successful companies)
-
Organizational Development (OD) & OD Intervention
(using behavioral sciences techniques to change employee culture, improve
cooperation, attitudes, etc.; OD is often carried out by specialized consultants
using survey feedback, off-site meetings, team building,
and intergroup activities)
Q - "Touchee Fealy is an OD specialist working
with several companies. She is likely to place high value on encouraging
individual growth and developing interpersonal competence in the programs
she recommends to her client companies." (TRUE/FALSE?)
6. STRATEGIES FOR IMPLEMENTING CHANGE
1. 3 Stages of Change Process
Strategies for implementing change should lead
the organization personnel through 3 stages.
2. Barriers to Change
Organizational sources of resistance to change
("barriers") are:
-
excessive focus on costs (preventing appreciation
of change unrelated to cost reduction - EX: consumer satisfaction)
-
failure to perceive benefits of change
-
lack of coordination & cooperation
-
uncertainty avoidance
-
fear of loss (EX: of job, power, or status)
Note: Barriers to change are a mechanism
of inertia in organizations and are therefore theoretically interesting
as a factor limiting the capacity of an organization for immediate adaptation
to environmental changes.
3. Techniques for Implementing Change
Techniques for the successful implementation of
change include:
-
identifying a true need for change
-
finding an idea that fits the need
-
getting top management support
-
designing the change for incremental implementation
-
developing plans to overcome resistance to change.
Strategies to overcome resistance may include:
-
alignment with needs and goals of users
-
communication & training
-
participation & involvement
-
forcing & coercion as a last resort
-
creating change teams
-
fostering idea champions
Q - Which of the following are techniques for
successful change implementation
-
get top management support (Y/N?)
-
loose your temper and bang on the table
(Y/N?)
-
plan to overcome resistance to change (Y/N?)
-
create change teams (Y/N?)
Last modified 6 Nov 2001
