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1. CHAPTER 6:
MANAGING CHANGE INNOVATION AND
ENTREPRENEURSHIP
CH 6
© 2015 SAGE Publications

2. Innovation and Change
• Crucial for firms’ performance and survival
• Innovation
• Implementation of a new idea
• Product Innovation
• New goods and services
• Process Innovation
• New way of doing things
• Organizational Change
• Alterations of existing work routines and strategies that affect the
whole organization

3. Forces for Change
• Environment
• Internal and external factors
• Technology Cycles
• Begins with the birth of a new technology and ends when it is replaced
by a newer technology
• Next Generation
• Allows the old technology to still work with the new technology
• The Management Functions
• Managers hire, orient, train and evaluate performance
• New methods or techniques ensure objectives are met

4. Types of Change
• Changes in Strategy: made at the corporate, business and/or
functional level
• Changes in Structure: how the organization is
departmentalized into units
• Changes in Technology: new machines and equipment,
information processing and automation
• Changes in People: employee’s attitudes and behaviors

5. Forms of Change
• Incremental Change
• Continual improvement which takes place within the existing technology
cycle
• Discontinuous Change
• Significant breakthrough in technology that leads to design competition
and a new technology cycle

6. Incremental vs. Discontinuous Change
Incremental Change Discontinuous Change
Approach Compression Experimental
Environment More certain Uncertain
Goals To lower costs and incrementally
improve performance and functions of
the existing dominant design
To make significant improvements in
performance and to establish a new
dominant design creating the next
technology cycle
Strategy To continue to improve the existing
technology as rapidly as possible
moving to the next generation
technology while still allowing the use
of the old technology
To build something new and different, a
substantially better breakthrough in
technology to begin a new technology
cycle that leaves the old technology
obsolete

7. Managing Innovation
• Innovative Structure
• Flat organization with limited bureaucracy
• General division of labor
• Coordinate with cross-functional teams
• Flexible
• Small team structures
• Informal authority

8. Managing Innovation
• Innovative Culture
• Firms tend to have similar cultures
• Managers are asking employees to express opinions
• Encourage and reward employees for taking risk without fear of
punishment
• Failure is viewed as a learning experience

9. Managing Innovation During
Incremental Change
• Compression approach used in more certain environments
• Goal: lower costs and improve performance
• General strategy: continue to improve existing technology as soon as
possible moving to next generation

10. Managing Innovation Discontinuous
Change
• Experimental approach used in more uncertain environment
• Goal: make significant improvement in performance and establish new
dominant design creating the next technology cycle
• General Strategy: build something new and different to begin a new
technology cycle that leaves the old technology obsolete

11. Resistance to Change
• Denial
• changes are often difficult to understand
• Resistance
• people often doubt there really is a need for change
• Exploration
• often through trainings
• Commitment
• necessary to implement changes

12. Resistance to Change
• Reasons employees resist change
• Fear of the unknown
• Learning anxiety
• Self-interest
• Fear of economic loss
• Loss of power, status or security

13. Variety of Resistances
• Intensity
• People have different attitudes toward change
• Source
• Facts
• Beliefs
• Values
• Focus
• Self
• Others
• Work environment

14. Overcoming Resistance
• Establish a positive trust climate
• Set clear objectives
• Explain the need for the change
• Create a win-win situation
• Involve employees
• Provide support and evaluation
• Create urgency

15. Lewin Model of Change

16. Comprehensive Change Model
1. Recognize the need for changes
2. Identify possible resistance and plan how to overcome it
3. Plan the change interventions
4. Implement changes
5. Control changes

17. Organizational Development Interventions
• Specific actions taken to implement specific changes
• Team building
• Process consultation
• Forcefield analysis
• Survey feedback

18. Team Building and Process Consultation
• Most widely used
• Is an OD intervention
• Help to increase structural
and team dynamics
performance
• More narrowly focused
intervention
• Is often part of team building
• Improve team dynamics
• Communication
• Conflict resolution
• Decision making
Team Building Process Consultation

19. • Used by a small group of
people
• Solves specific problem
• Diagrams the current level of
performance, the forces
hindering change, and the
forces driving toward change
• Uses questionnaire
• Gather data
• Identify problems
• Group of people do not work
together
Forcefield Analysis Survey Feedbacks
Forcefield Analysis and Survey Feedbacks