1. PowerPoint Presentation
to Accompany
Management, 10/e
John R. Schermerhorn, Jr.
Chapter 10:
Innovation and Organizational Change
Prepared by: Jim LoPresti
University of Colorado, Boulder
Published by: John Wiley & Sons, Inc.

2. Planning Ahead — Chapter 10 Study Questions
 How do organizations accomplish
innovation?
 What is the nature of organizational
change?
 How can planned organizational
change be managed?
 What is organization development?
Management 10/e - Chapter 2
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3. Study Question 1: How do organizations accomplish
innovation?
 Strategic leadership creates the
capacity for ongoing strategic
change.
 Components of strategic leadership:
 Anticipate, envision, maintain flexibility.
 Think strategically.
 Work with others to initiate change.
 Build learning organizations as change leaders.
 Develop the ability to innovate successfully as
a core competency.
Management 10/e - Chapter 3
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4. Study Question 1: How do organizations accomplish
innovation?
 Sustainable competitive advantage
relies on creativity and innovation.
 Creativity is the generation of a novel
idea or unique approach to solving
problems or crafting opportunities.
 Innovation is the process of creating
new ideas and putting them into
practice.
Management 10/e - Chapter 4
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5. Study Question 1: How do organizations accomplish
innovation?
 Three forms of innovation:
 Process.
 Results in better ways of doing things.
 Product.
 Results in the creation of new or improved goods and
services.
 Business model innovation
 Results in new ways of making money.
 Innovations require invention and
application.
 Invention.
 Act of discovery.
 Development of new ideas.
 Application.
 Act of use.
 Implementation of new ideas.
Management 10/e - Chapter 5
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6. Study Question 1: How do organizations accomplish
innovation?
 Green innovation
 The process of turning ideas into innovations
that reduce the carbon footprint of an
organization or its products.
 Social Entrepreneurship
• Pursues creative and innovative ways to
solve pressing social problems.
Management 10/e - Chapter 6
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7. Study Question 1: How do organizations accomplish
innovation?
 Leadership responsibilities for the
innovation process:
 Imagining.
 Designing.
 Experimenting.
 Assessing.
 Scaling.
 Commercializing innovation
 Process of turning new ideas into products or
processes that increase profits through sales or
cost reductions.
Management 10/e - Chapter 7
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8. Study Question 1: How do organizations accomplish
innovation?
 Four steps of the product innovation
process:
 Idea creation.
 Initial experimentation.
 Feasibility determination.
 Final application.
Management 10/e - Chapter 8
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9. Figure 10.1 Process of commercializing innovation in
organizations: the case of new product development.
Management 10/e - Chapter 9
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10. Study Question 1: How do organizations accomplish
innovation?
 In highly innovative organizations …
 Corporate strategy and culture should:
 Emphasize an entrepreneurial spirit.
 Expect innovation.
 Accept failure.
 Be willing to take risks.
 Organization structure should:
 Be organic.
 Have lateral communications.
 Use cross-functional teams and task forces.
Management 10/e - Chapter 10
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11. Study Question 1: How do organizations accomplish
innovation?
 In highly innovative organizations …
 Top management should:
 Understand the innovation process.
 Be tolerant of criticism and differences of opinion.
 Take all possible steps to keep goals clear.
 Maintain the pressure to succeed.
 Break down barriers to innovation.
 Staffing should fulfill five critical
innovation roles:
 Idea generators.
 Information gatekeepers.
 Product champions.
 Project managers.
 Innovation leaders.
Management 10/e - Chapter 11
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12. Study Question 2: What is the nature of
organizational change?
 Change leader.
A change agent who takes leadership
responsibility for changing the existing
pattern of behavior of another person
or social system.
 Change leadership.
 Forward-looking.
 Proactive.
 Embraces new ideas.
Management 10/e - Chapter 12
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13. Figure 10.2 Change leaders versus status quo
managers.
Management 10/e - Chapter 13
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14. Study Question 2: What is the nature of
organizational change?
 Top-down change.
 Strategic and comprehensive change
that is initiated with the goals of
comprehensive impact on the
organization and its performance
capabilities.
 Driven by the organization’s top
leadership.
 Success depends on support of middle-
level and lower-level workers.
Management 10/e - Chapter 14
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15. Study Question 2: What is the nature of
organizational change?
 Bottom-up change.
 The initiatives for change come from
any and all parts of the organization,
not just top management.
 Crucial for organizational innovation.
 Made possible by:
 Employee empowerment.
 Employee involvement.
 Employee participation.
Management 10/e - Chapter 15
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16. Study Question 2: What is the nature of
organizational change?
 Integrated change leadership.
 Successful and enduring change combines
advantages of top-down and bottom-up
approaches.
 Top-down:
 Breaks up traditional patterns.
 Implements difficult economic adjustments.
 Bottom-up:
 Builds capability for sustainable change.
 Builds capability for organizational learning.
Management 10/e - Chapter 16
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17. Study Question 2: What is the nature of
organizational change?
 Transformational and incremental
change.
 Unplanned change.
 Response to unanticipated events.
 Good leaders act on opportunities for reactive
change.
 Planned change
 Aligning the organization with anticipated future
challenges.
 Activated by proactive leaders who are sensitive to
performance gaps.
 Transformational change  major and
comprehensive redirection.
 Incremental change  adjusting existing systems
and practices.
Management 10/e - Chapter 17
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18. Study Question 2: What is the nature of
organizational change?
 How to lead transformational change:
 Establish a sense of urgency for change.
 Form a powerful coalition to lead the change.
 Create and communicate a change vision.
 Empower others to move change forward.
 Celebrate short-term “wins” and recognize
those who help.
 Build on success; align people and systems
with new ways.
 Stay with it; keep the message consistent;
champion the vision.
Management 10/e - Chapter 18
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19. Study Question 2: What is the nature of
organizational change?
 External forces for change:
 Globalization.
 Market competition.
 Local economic conditions.
 Government laws and regulations.
 Technological developments.
 Market trends.
 Social forces and values.
 Internal forces for change:
 Arise when change in one part of the system
creates the need for change in another part of the
system.
 May be in response to one or more external forces.
Management 10/e - Chapter 19
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20. Study Question 2: What is the nature of
organizational change?
 Organizational targets for
change:
 Tasks
 People
 Culture
 Technology
 Structure
Management 10/e - Chapter 20
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21. Study Question 3: How can planned organizational
change be managed?
 Phases of planned change
 Unfreezing
 The phase in which a situation is prepared for
change and felt needs for change are developed.
 Changing
 The phase in which something new takes place in
the system, and change is actually implemented.
 Refreezing
 The phase of stabilizing the change and creating
the conditions for its long-term continuity.
Management 10/e - Chapter 21
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22. Figure 10.3 Lewin’s three phases of planned
organizational change.
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23. Study Question 3: How can planned organizational
change be managed?
 Force-coercion strategy of change.
 Uses power bases of legitimacy, rewards and
punishments to induce change.
 Relies on belief that people are motivated by self-
interest.
 Direct forcing and political maneuvering.
 Produces limited and temporary results.
 Most useful in the unfreezing phase.
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24. Study Question 3: How can planned organizational
change be managed?
 Rational persuasion strategy of change.
 Bringing about change through persuasion
backed by special knowledge, empirical data,
and rational argument.
 Relies on expert power.
 Relies on belief that reason guides people’s
decisions and actions.
 Useful in the unfreezing and refreezing phases.
 Produces longer-lasting and internalized
change.
Management 10/e - Chapter 24
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25. Study Question 3: How can planned organizational
change be managed?
 Shared power strategy of change.
 Engages people in a collaborative process of
identifying values, assumptions, and goals
from which support for change will naturally
emerge.
 Time consuming but likely to yield high
commitment.
 Involves others in examining sociocultural
factors related to the issue at hand.
 Relies on referent power and strong
interpersonal skills in team situations.
 Relies on belief that people respond to
sociocultural norms and expectations of others.
Management 10/e - Chapter 25
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26. Figure 10.4 Alternative change strategies and their
leadership implications.
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27. Study Question 3: How can planned organizational
change be managed?
 Reasons for people resisting change:
 Fear of the unknown
 Disrupted habits
 Loss of confidence
 Loss of control
 Poor timing
 Work overload
 Loss of face
 Lack of purpose
Management 10/e - Chapter 27
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28. Study Question 3: How can planned organizational
change be managed?
 Methods for dealing with resistance
to change:
 Education and communication
 Participation and involvement
 Facilitation and support
 Facilitation and agreement
 Manipulation and co-optation
 Explicit and implicit coercion
Management 10/e - Chapter 28
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29. Study Question 3: How can planned organizational
change be managed?
 Checklist for dealing with resistance to
change:
 Check the benefits – those involved see a
clear advantage
 Check the compatibility – keep change
similar to existing values/processes
 Check the simplicity – make it as easy as
possible to understand
 Check the triability – allow people to
slowly try the change adjusting as
progression is made
Management 10/e - Chapter 29
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30. Study Question 4: What is organization
development?
 Organization development (OD)
a comprehensive approach to planned
organizational change that involves the
application of behavioral science in a
systematic and long-range effort to
improve organizational effectiveness.
Management 10/e - Chapter 30
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31. Study Question 4: What is organization
development?
 Organization development goals:
 Outcome goals focus on task accomplishments.
 Process goals focus on the way people work
together.
 OD seeks to develop the organization members’
capacity for self-renewal.
 OD is committed to change through freedom of
choice, shared power, and self-reliance.
 OD takes advantage of knowledge about human
behavior in organizations.
Management 10/e - Chapter 31
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32. Study Question 4: What is organization
development?
 The organization development
process:
 Establish a working relationship.
 Diagnosis.
 Intervention.
 Evaluation.
 Achieve a terminal relationship.
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33. Figure 10.5 Organization development and the
planned change process.
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34. Study Question 4: What is organization
development?
 Action research
 The process of systematically collecting
data on an organization, feeding it back
to the members for action planning,
and evaluating results by collecting
more data and repeating the process as
necessary.
 Isinitiated when someone senses a
performance gap.
Management 10/e - Chapter 34
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35. Study Question 4: What is organization
development?
 Steps in the action research
process:
 Problem sensing.
 Data gathering.
 Data analysis and feedback.
 Action planning.
 Action implementation.
 Evaluation and follow-up.
Management 10/e - Chapter 35
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36. Figure 10.6 Action research as a foundation of
organization development.
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37. Study Question 4: What is organization
development?
 Individual OD interventions
 Sensitivity training (T-groups)
 Management training
 Role negotiation
 Job redesign
 Career planning
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38. Study Question 4: What is organization
development?
 Team OD interventions
 Team building
 Process consultation
 Inter-group team building
Management 10/e - Chapter 38
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39. Study Question 4: What is organization
development?
 Organization-wide OD interventions
 Survey feedback
 Confrontation meeting
 Structural redesign
 Management by objectives (MBO)
Management 10/e - Chapter 39
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