Ch13 - Organisation theory design and change gareth jones
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Ch13 - Organisation theory design and change gareth jones Presentation Transcript

  • 1. Organizational Theory, Design, and Change Sixth Edition Gareth R. Jones Chapter 13 Innovation, Intrapreneurship, and Creativity
  • 2. Learning Objectives
    • Describe how innovation and technological change affect each other
    • Discuss the relationship among innovation, intrapreneurship, and creativity
    • Understand the many steps involved in creating an organizational setting that fosters innovation and creativity
  • 3. Learning Objectives (cont.)
    • Identify the ways in which information technology can be used to foster creativity and speed innovation and new product development
  • 4. Innovation and Technological Change
    • Innovation: process by which new goods and services or new production and operating systems are developed
      • Enables better response to customer needs
  • 5. Types of Innovation
    • Quantum technological change: a rare, fundamental shift in technology that revolutionizes products or the way they are produced
      • Quantum innovation: new products or operating systems that incorporate quantum technological improvement
      • These can cause major changes in the environment
  • 6. Types of Innovation (cont.)
    • Incremental technological change: technological change that represents a continual refinement of some base technology
      • Incremental innovations: products or operating systems that incorporate refinements of some base technology
  • 7. Types of Innovation (cont.)
    • Technology cycle
      • Quantum innovations occur rarely
        • Technological discontinuity
      • Dominant design emerges
      • Era of incremental change and innovation during which competition is based on technology
      • Technological discontinuity may occur again and the process starts all over
  • 8. Figure 13.1: The Technology Cycle
  • 9. Property Rights
    • Innovation is expensive and needs to be protected
      • Patents
      • Copyrights
      • Trademarks
  • 10. Innovation, Entrepreneurship, and Creativity
    • Intrapreneurs : leaders of innovation and new product development in established organizations
      • Notice opportunities
      • Manage product development
      • May leave organization if their ideas are not supported
        • Become entrepreneurs
  • 11. Innovation, Entrepreneurship, and Creativity (cont.)
    • Creativity: ideas going beyond the current boundaries, whether those boundaries are based on technology, knowledge, social norms, or beliefs
      • Most people are creative at some time
      • May involve combining and synthesizing new things
    • Knowledge-creating organization: an organization where innovation is going on at all levels and in all areas
  • 12. Entrepreneurship as Creative Destruction
      • “ Creative destruction”: new companies use new global and technological opportunities to make better products that drive old, inefficient companies out of business
      • Old inefficient companies are driven out of business
      • Emergence of new industries
  • 13. Innovation and the Product Life Cycle
    • Product life cycle: the changes in demand for a product that occur over time
      • Demand for most successful products passes through four stages:
        • The embryonic stage
        • The growth stage
        • The maturity stage
        • The decline stage
  • 14. Innovation and the Product Life Cycle (cont.)
    • Product life cycle (cont.)
      • Embryonic stage: a product has yet to gain widespread acceptance
        • Minimal demand
      • Growth stage: a product has been accepted by customers
        • Demand increases
      • Mature stage: market demand peaks because most customers have already bought the product
      • Decline stage: occurs if and when demand for a product falls
  • 15. Innovation and the Product Life Cycle (cont.)
    • Determinants of the length of the product life cycle
      • Rate of technological change
        • Faster the rate of change, the shorter the product life cycle
      • Role of fads and fashion
        • Determine the attractiveness of products to customers
  • 16. Figure 13.2: Technological Change and Length of the Product Life Cycle
  • 17. Managing the Innovation Process
    • Project management: the process of leading and controlling a project so that it results in the effective creation of new or improved products
      • Project: a subunit whose goal centers on developing the products or service on time, within budget, and in conformance with predetermined performance specifications
  • 18. Managing the Innovation Process (cont.)
    • Project management (cont.)
      • Effective product management often begins with a clearly articulated plan
        • Takes a product through the concept, initial test, modification, and manufacturing phases
      • Project manager’s tasks are different from regular managers
        • Manage high proportion of highly skilled and educated professionals
        • Plan to deal with top corporate executives
      • Must keep project on track
        • Often quantitative modeling is used
  • 19. Managing the Innovation Process (cont.)
    • Project management (cont.)
    • Quantitative modeling
      • Examples include PERT/CAM network of Gantt Chart
      • Flowcharts of a project that can be built with many proprietary software packages
        • These software packages focus on:
          • Modeling the sequence of actions necessary to reach a project’s goal
          • Relating these actions to cost and time criteria
          • Sorting out and defining the optimal path for reaching the goal
  • 20. Managing the Innovation Process (cont.)
    • Quantitative modeling (cont.)
      • Critical path method
        • Goal is to determine:
          • Which particular tasks or activities of the many that have to be performed are critical in their effect on project time and cost
          • How to sequence or schedule critical tasks so that a project can meet a target date at minimum cost
        • Optimal sequencing of tasks is often worked out by a team
          • Analysis is an important learning tool
  • 21. Figure 13.3: CPM Project Design
  • 22. Managing the Innovation Process (cont.)
    • Stage-gate development funnel
      • A structured and coherent innovation process that improves control over the product development effort
      • Forces managers to make choices among competing new product development projects so that resources are not spread thinly over too many projects
  • 23. Managing the Innovation Process (cont.)
    • Stage-gate development funnel (cont.)
      • Stage 1: Funnel has a wide mouth to encourage as many new product ideas as possible from both new and established project managers
      • Stage 2: Specify all of the information required to make a decision about whether to go ahead with a full-blown product development effort
        • Plans are either accepted, revised, or rejected
      • Stage 3: Proceed to development phase
  • 24. Figure 13.4: A Stage-Gate Development Funnel
  • 25. Managing the Innovation Process (cont.)
    • Cross-functional teams
      • Coordinating R&D function with other functions is critical but often difficult
    • New product development teams
      • Marketing, engineering, and manufacturing need to be core members of product teams
      • Core members: refers to a nucleus of three to six people who bear primary responsibility for the product development effort
  • 26. Figure 13.5: Innovation as a Cross-Functional Activity
  • 27. Managing the Innovation Process (cont.)
    • Team leadership
      • Having cross-functional teams is not sufficient for innovation – they have to be managed properly
      • Lightweight team leader: a mid-level functional manager who has lower status than the head of a functional department
      • Heavyweight team leader: a true project manager who has higher status within the organization
  • 28. Managing the Innovation Process (cont.)
    • Skunk works: a temporary task force that is created to expedite new product design and to promote innovation by coordinating the activities of functional groups
      • An island of innovation located away from the organization
      • Dissolved when the product is brought to market
  • 29. Managing the Innovation Process (cont.)
    • New venture divisions: a new division that is allocated a complete set of value-creating functions to manage a project from beginning to end
      • Assumes full responsibility for the commercialization of the product
      • Normally an independent division
      • Balance of control between the division and the corporate center is problematic
  • 30. Managing the Innovation Process (cont.)
    • Joint venture: a strategic alliance among two or more organizations that agree to jointly establish and share the ownership of a new business
      • Allows organizations to combine their skills and technologies and pool their resources to embark on risky projects
      • Partners may disagree over future development plans
  • 31. Managing the Innovation Process (cont.)
    • Creating a culture for innovation
      • Organizational structure
        • Creating the right setting is important to fostering innovation
        • Increasing organization size, age, and complexity may slow innovation
        • Organic structures tend to promote innovation
      • People – organizations need to guard against too much similarity
      • Property rights – create career paths to show that success is closely linked with future promotion and rewards
  • 32. Innovation and Information Technology
    • Information efficiencies: the cost and time savings that occur when IT allows employees to perform current tasks at a higher level
      • Enables employees to assume additional tasks
      • Enables employees to expand their roles in the organization due to advances in the ability to gather and analyze data also allows information efficiencies
  • 33. Innovation and Information Synergies
    • Information synergies: the knowledge building created when individuals or subunits pool their resources and collaborate across boundaries
    • Boundary-spanning activity: the interactions of people/groups across the organizational boundary to obtain valuable information and knowledge from the environment
  • 34. IT and Organizational Structure and Culture
    • IT affects the innovation process through its many effects on organizational structure
    • IT gives lower-level employees more detailed and current knowledge of consumer and market trends and opportunities
    • IT can produce information synergies
      • Facilitates increased communication and coordination between decentralized decision makers and top managers
  • 35. IT and Organizational Structure and Culture (cont.)
    • IT means that fewer levels of managers are needed to handle problem solving and decision making
    • IT provides lower-level employees with more freedom to coordinate their actions
      • Information synergies may emerge as employees experiment and find better ways of performing their tasks
  • 36. IT and Organizational Structure and Culture (cont.)
    • IT facilitates the sharing of beliefs, values, and norms
      • Allows for the quick transmission of rich and detailed information between people and subunits