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Chapter 11

Chapter 11 BU398.docx

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Wilfrid Laurier University
Shawn Komar

BU398 Chapter 11 – Innovation and Change Week 8 Innovate or Perish: The Strategic Role of Change Incremental vs. Radical Change -The changes used to adapt to the environment can be evaluated according to scope – that is, the extent to which changes are incremental or radical for the organization -Incremental change – represents a series of continual progressions that maintain the organization’s general equilibrium and often affect only one organizational part -Radical change – breaks the frame of reference for the organization, often transforming the entire organization -Incremental change occurs mainly through the established structure and management processes, and it may include technology improvements – such as the introduction of flexible manufacturing systems – or product improvements Strategic Types of Change -Four types of change to achieve strategic advantage: changes of products and services, strategy and structure, culture, and technology -Product and service changes – pertain to the product or service outputs of an organization -Strategy and structure changes - pertain to the admin domain in an organization -Culture changes – refer to changes in the values, attitudes, expectations, beliefs, abilities, and behaviour of employees -Technology change – changes in an organization’s production process, including its knowledge and skill base, that enable distinctive competence Elements for Successful Change -Organizational change- the adoption of a new idea or behaviour by an organization -Organizational innovation – the adoption of an idea or behaviour that is new to the organization’s industry, market, or general environment -Required elements of successful change: 1. Ideas -Creativity – the generation of novel ideas that may meet perceived needs or respond to opportunities 2. Needs 3. Adoption 4. Implementation 5. Resources Technology Change -In today’s business world, any company that isn’t continually developing, acquiring, or adapting new technology will likely be out of business in a few years -The flexibility of an organic organization contributes to people’s freedom to be creative and introduce new ideas -Organic organizations encourage a bottom-up innovation process The Ambidextrous Approach -Incorporates structures and management processes that are appropriate to both the creation and the implementation of innovation Techniques for Encouraging Technology Change Switching Structures -Means an organization creates an organic structure when such a structure is needed for the BU398 Chapter 11 – Innovation and Change Week 8 initiation of new ideas Separate Creative Departments -In many large organizations, the initiation of innovation is assigned to separate creative departments – R&D, engineering, design, etc. -Idea incubator – provides a safe harbour where ideas from employees throughout the organization can be developed without interference from company bureaucracy or politics Venture Teams -Like a small company within a large company -Skunkworks – separate, small, informal, highly autonomous, and often secretive group that focuses on breakthrough ideas for the business -New-venture fund – provides financial resources for employees to develop new ideas, products, or businesses Corporate Entrepreneurship -Attempts to develop an internal entrepreneurial spirit, philosophy, and structure that will produce a higher-than-average number of innovations -Idea champions – provide the time and energy to make things happen -Technical champion – the person who generates or adopts and develops an idea for a technological innovation and is devoted to it -Management champion – sees the potential application, and has the prestige and authority to get the idea a fair hearing and to allocate resources to it -Technical and management champions often work together because a technical idea will have a greater chance of success if a manger can be found to sponsor it New Products and Services New Product Success Rate -Research has explored the enormous uncertainty associated with the development and sale of new products -80% of new products fail upon introduction and another 10% disappear within 5 years Reasons for New Product Success 1. Successful innovating companies had a much better understanding of customer needs and paid much more attention to marketing 2. Successful innovating companies made more effective use of outside technology and outside advice, even though they did more work in-house 3. Top management support in the successful innovating companies was from people who were more senior and had greater authority Horizontal Coordination Model -Horizontal coordination model – a model of the three components of organizational design needed to achieve new product innovation: departmental specialization, boundary spanning, and horizontal linkages Specialization -Key departments: R&D, marketing, promotion -The specialization component means that the personnel in all of these departments are highly competent at their own tasks Boundary Spanning -Each department involved wi
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