Daft OTAD Ch12.pdf

Chapter 12 Innovation and Change Chapter 12 Organization Theory and Design Thirteenth Edition...

Chapter 12 Innovation and Change Chapter 12 Organization Theory and Design Thirteenth Edition Richard L. Daft Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or part.  Learning Objectives 1. Describe the types of strategic innovation. 2. Explain the necessary elements for successful organizational change. 3. Compare and contrast techniques for encouraging technology innovation with those that encourage product and service innovation. 4. Explain how innovation speed provides a competitive advantage. 5. Describe the dual-core approach to organizational change. 6. Explain how a large group intervention can be used to bring about culture change in an organization. 7. List techniques for overcoming resistance to change. Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or 2 duplicated, or posted to a publicly accessible website, in whole or part.  The Strategic Role of Innovation Today’s organizations must keep themselves open to continuous innovation not only to prosper, but to survive Organizations can respond to environmental shifts with: – Episodic change – Continuous change – Disruptive change and innovation Disruptive innovation refers to (often) small product or service innovations that end up completely replacing an existing product or service technology Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or 3 duplicated, or posted to a publicly accessible website, in whole or part. Stages of Disruptive Innovation Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or 4 duplicated, or posted to a publicly accessible website, in whole or part.  Strategic Types of Innovation Managers can focus on four types of innovation to achieve strategic advantage: – Technology innovations: Changes in the production process that enable distinctive competence – Product and service innovations: Introduction of new product lines or adaptations of established products – Strategy and structure innovations: Changes in structure, strategic management, policies, reward systems, labor relations, coordination devices, management information and control systems, accounting and budgeting systems – Cultural innovations: Changes in the values, attitudes, expectations, beliefs, abilities, and behavior of employees Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or 5 duplicated, or posted to a publicly accessible website, in whole or part. The Four Types of Innovation Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or 6 duplicated, or posted to a publicly accessible website, in whole or part.  Elements for Successful Change Organizational change is the adoption of a new idea or behavior by an organization Organizational innovation is the adoption of an idea or behavior that is new to the organization’s industry, market, or general environment Change process within organizations comes from innovation and new ideas, regardless of timing Successful change includes ideas and creativity, need, decision to adopt, implementation, and resources Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or 7 duplicated, or posted to a publicly accessible website, in whole or part. Sequence of Elements for Successful Change Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or 8 duplicated, or posted to a publicly accessible website, in whole or part.  Technology Innovation Technology is a key driver of organizational change Innovative organizations are flexible, and free- flowing, and without rigid work rules A mechanistic structure stifles innovation and focus on rules and regulations, but it is often the best structure for efficiently producing routine products Managers must create both organic and mechanistic conditions within the organization to achieve both innovation and efficiency Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or 9 duplicated, or posted to a publicly accessible website, in whole or part.  The Ambidextrous Approach An ambidextrous approach incorporates structures and management processes that are appropriate to both the creation and the implementation of innovation Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or 10 duplicated, or posted to a publicly accessible website, in whole or part.  The Bottom-Up Approach Many useful ideas come from the people who do the daily work of serving the customers, fighting off the competition, and figuring out how best to get their jobs done Companies can support innovation by implementing mechanisms, systems, and processes that encourage a bottom-up flow of ideas and by making sure they get heard and acted upon It is just as important to turn ideas into actions as it is to create them Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or 11 duplicated, or posted to a publicly accessible website, in whole or part.  Techniques for Encouraging Technology Change Switching structures create organic structures as needed for idea initiation Creative departments, including creative incubators, create changes for adoption in other departments through research and development, engineering, design, and systems analysis Venture teams, including skunkworks and new-venture funds, are like small companies that are not constrained by organizational procedures and bureaucracy Corporate intrapreneurship develops an internal entrepreneurial spirit, philosophy, and structure that will produce a higher-than-average number of innovations Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or 12 duplicated, or posted to a publicly accessible website, in whole or part.  New Products and Services Product innovation is one of the most important ways companies adapt to changes in markets, technologies, and competition However, developing and producing products that fail is a part of business in all industries Reasons for product innovation success include: – Understanding customers and paying more attention to marketing – Making more effective use of outside technology and outside advice – Having top management support from people who are more senior and have greater authority Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or 13 duplicated, or posted to a publicly accessible website, in whole or part. New Product Success Rate Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or 14 duplicated, or posted to a publicly accessible website, in whole or part.  Horizontal Coordination Model The horizontal coordination model is an organization design for achieving new product innovation, and it involves three components: –Specialization –Boundary spanning –Horizontal coordination Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or 15 duplicated, or posted to a publicly accessible website, in whole or part. Horizontal Coordination Model for New Product Innovations Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or 16 duplicated, or posted to a publicly accessible website, in whole or part. Open Innovation and Crowdsourcing Open innovation extends the search for and commercialization of new products beyond the boundaries of the organization and the industry Crowdsourcing is the solicitation of ideas, services, and information from online volunteers rather than from traditional employees Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or 17 duplicated, or posted to a publicly accessible website, in whole or part.  The Need for Speed The rapid development of new products and services can be a major strategic weapon Faster new product development is associated with lower development costs and greater success Firms can quickly address shifting customer demands Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or 18 duplicated, or posted to a publicly accessible website, in whole or part.  Strategy and Structure Change Many organizations are preparing for more change by: – Cutting layers of management – Decentralizing decision making – Shifting toward horizontal structures – Empowering front-line teams and workers to make decisions and solve problems on their own The dual-core approach compares management innovation and technical innovation Examples of management innovation include the implementation of a balanced scorecard and establishment of a joint venture for global expansion Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or 19 duplicated, or posted to a publicly accessible website, in whole or part.  Dual-Core Approach to Organization Change Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or 20 duplicated, or posted to a publicly accessible website, in whole or part. Organization Design for Implementing New Management Processes A mechanistic organization structure is appropriate for frequent management changes The authority for strategy and structure change lies with top management Employee input may be sought, but top managers have the responsibility to direct the change Top-down change does not mean that lower level employees are not educated about the change or allowed to participate in it Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or 21 duplicated, or posted to a publicly accessible website, in whole or part.  Culture Change Changing organizational culture challenges people’s core values and established ways of thinking and doing things Recent trends have contributed to a need for cultural makeovers at many companies, including: – Shifts to horizontal forms of organizing – Diversity of today’s workforce – A growing emphasis on learning and adaptation in organizations Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or 22 duplicated, or posted to a publicly accessible website, in whole or part.  Culture Change Interventions Organization development (OD) emphasizes the values of human development, fairness, openness, freedom from coercion, and individual autonomy that allows workers to perform the job as they see fit, within reasonable organizational constraints OD techniques include: – Large group intervention – Team building – Interdepartmental activities Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or 23 duplicated, or posted to a publicly accessible website, in whole or part.  The Change Curve Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or 24 duplicated, or posted to a publicly accessible website, in whole or part.  Leadership for Change (slide 1 of 2) 80% of successful innovative companies have top leaders who reinforce the value and importance of innovation Transformational leadership is well-suited for leading change, and such leaders must: – Create a compelling vision – Create an environment for exploration, experimentation, risk- taking, and sharing of ideas Managers and employees must devote the time and energy needed to reach new goals, and they also need the coping skills to endure possible stress and hardship Managers can use the curve of change to guide people successfully through the difficulties of change Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or 25 duplicated, or posted to a publicly accessible website, in whole or part.  Leadership for Change (slide 2 of 2) Techniques for Techniques for Implementation Overcoming Resistance Establish a sense of urgency Top management support for change Participation and Establish a coalition to involvement guide the change Alignment with needs and Create a vision and strategy goals of users for change Communication and training Find an idea that fits the An environment with need psychological safety Create change teams Foster idea champions Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or 26 duplicated, or posted to a publicly accessible website, in whole or part. Organizational Design Essentials (slide 1 of 2) Change—not stability—is the natural order of things in today’s global environment. Organizations need to build in change as well as stability, to facilitate innovation as well as efficiency. Managers can encourage the generation of novel ideas by increasing diversity, making sure employees have opportunities to interact with people different from themselves, allowing time for experimentation, and supporting risk-taking and learning. Approaches to technology innovation include ambidextrous design; establishment of a separate department, venture teams or idea incubators; and application of mechanisms, systems, and processes that encourage a bottom-up flow of ideas that get heard and acted upon by top executives. Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or 27 duplicated, or posted to a publicly accessible website, in whole or part. Organizational Design Essentials (slide 2 of 2) New products and services generally require cooperation among several departments, so companies use a horizontal coordination model for new product innovation. Strategy and structure innovations are in the domain of top managers who take responsibility for restructuring, for downsizing, and for changes in policies, goals, and control systems. Culture changes are generally the responsibility of top management, and they require significant shifts in employee and manager attitudes and ways of working together. Strong leadership is needed to guide employees through the turbulence and uncertainty and build organization-wide commitment to change. Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or 28 duplicated, or posted to a publicly accessible website, in whole or part.