INNOVATION

CHAPTER 11
Topic 11: INNOVATION AND CHANGE
LEARNING OUTCOMES

1. Describe the importance of innovation in organisations;

2. Explain the ways to manage innovation effectively;
3. Discuss four factors that cause change and ways to manage the
changes in organisations; and
4. Examine the obstacles to change in organizations and ways to
overcome them.
Topic 11: INNOVATION AND CHANGE
DEFINITION

Organizational innovation means success in the

implementation of creative ideas in the organization.
Creative ideas come from creativity, that is, the creation
of ideas that are useful for the organization.

Organizational change means the modification or

alteration of organizations from one structure, quality or
condition into another form from time to time.
Topic 11: INNOVATION AND CHANGE
Why is Innovation Important?

 Technology Cycle
 technology refers to knowledge, tools and equipment, and also the techniques and
methods used to change inputs into outputs (Williams, 2000)
 Technology cycle begins with the founding of a certain new technology and ends when
the technology achieves certain limits, becomes outdated and is replaced with new
technology that is more sophisticated.
 The S-pattern innovation curve is a curve that represents the life cycle of technology.
Topic 11: INNOVATION AND CHANGE
Technology Cycle
Topic 11: INNOVATION AND CHANGE
Managing Innovation
Innovation begins with creativity. An organization needs to establish a
creative work environment in order to generate creativity.

Managing Innovation Resources

Topic 11: INNOVATION AND CHANGE
Organisational Change
- is the need for an organization to change from one condition to
another to take the opportunity or avoid a threat caused by
environmental changes in order to retain the survival of the
organization.
Topic 11: INNOVATION AND CHANGE
FORCES OF CHANGE EXAMPLES

Workforce conditions • Increase in the number of professionals

• Increase in cost of workforce
Technology • Use of computer and automation
• TQM Programs
Economy • Increase in interest rates
• Crisis in currency value
Competition • Global competition
• Mergers and acquisitions
Social trend chart • Increase in educated groups of people
• Change in preferences
Politics • Downfall of communist countries
• Change to new government
Topic 11: INNOVATION AND CHANGE
Managing Change
Initiating change refers to carrying out something using new ways and methods
compared to before. Making changes in organisations without any planning can
lead to the destruction of a particular organisation. Therefore, organisation must
make planned changes. Planned changes means changing activities that are
necessary and required and these changes have to be goal oriented.
Two goals for changes
(a) To increase the capability of the organisation in order to be able to accept
challenges and changes in the environment; and
(b) To change the behaviour of individuals within the organization
Robbin (1998)
Topic 11: INNOVATION AND CHANGE
Aspects that can be changed by Change Agents
Topic 11: INNOVATION AND CHANGE
Barriers/resistance to Change
Individual Barriers
• Human habits
• Economic fear
• Fear of the unknown
• Employment security
• Selective Nature in Processing
Information.
Organisational Barriers
• Structure inertia
• Restriction of change focus
• Group inertia
• Organizational change
• Allocation of resources
Topic 11: INNOVATION AND CHANGE
Overcoming the Barriers to Change
Communication and Learning

Involvement
Facilities and support

Negotiation

Manipulation and Co-optation

Force
Topic 11: INNOVATION AND CHANGE
Ways to Manage Change
LIQUIDATION
• Sharing thoughts with employees on
why change is needed.
• Exhibits sympathy towards the
difficulties faced by the managers
and employees due to the change
• Communication regarding the
changes in a context that is simple,
clear, widely verbal or written.
Things that need to be Done When Employees form Barriers towards Change
Source: Williams (2000)
CHANGES
• Explaining the benefits that can be
gained from changes.
• Identifying respected individuals in
the organisation to manage the
efforts of changes.
• Allowing individuals to accept the
suitable effect from the changes,
for example while the employees
are busy carrying out their work.
• If possible, ensure that no
employees are being terminated to
reduce fear towards change.
FREEZING
• Upper management needs to
give support by providing
consistent messages and
resources.
• Let everyone know about
where and when changes
had taken place successfully.
• Offer counselling or other
services that can assist the
employees in overcoming
the pressure due to the
Change
 SUMMARY
• Describe the importance of innovation in
organisations;
• Explain the ways to manage innovation effectively;
• Discuss four factors that cause change and ways to
manage the changes in organisations; and
• Examine the obstacles to change in organizations and
ways to overcome them.