Course Outline

Management of Innovation and Organizational Change

Spring 2015
Wed 6:30pm-8:55pm Classroom: Rm.507, Graduate Student Building

Instructor: Prof. Yan LI

Office: Main building #206
Email: y.li@bit.edu.cn
Phone: 6891-8455
Mobile: 15201023938
Office hours: By appointment

Ⅰ. COURSE OBJECTIVES

This course aims at achieving the following objectives:

1. Understanding why innovation is the major impetus of firm growth and winning
in the future.
2. Learning the major theoretical models of innovation and how innovation occurs in
the individual level and organizational level.
3. Developing entrepreneurial thinking on business and comparing its main focus
and differences with the previous knowledge you have learned in strategic
management, organizational behavior, and human resources management.
4. Developing the awareness of innovation in every sphere of business, no matter in
technology development, customer service, business model, management or social
institution.
5. Understanding the inertia of organization and emotional reaction to innovation
and how to overcome the inertia so as to lead a successful organizational change.
6. For nurturing future excellent managers, you are required to develop skills of team
work by effective communication and to present and report your analytical
thinking and conclusions in written and oral form clearly through in-class
discussion, group presentation, and your personal homework.

Ⅱ. TEXT BOOKS AND READINGS

Text book

Peter Drucker (1985) Innovatioin and Entrepreneurship: Practice and Principles.

Clayton Christensen (2003) The innovator’s Dilemma. NY: HarperCollins Publishers
Other Readings:

Christensen, C. & Overdorf, M. (2000). Meeting the challenge of disruptive Change.

Harvard Business Review, March-April.
Courtney, H., Kirkland, J. & Viguerie, P. (1997). Strategy under Uncertainty, HBR,
November-December.
Bower, J. and Christense, C. (1995). Disruptive Technologies: Catching the wave.
HBR, January-February.
Kotter, J. (2007) Leading Change: Why Transformation Efforts Fail. Harvard
Business Review, January.
Magretta, J. (1998). The power of virtual integration: An interview with Dell
Computer’s Michael Dell. Harvard Business Review, 73-84
Michel, S., Brown, S. & Gallan, A. (2008). Service-Logic Innovations: how to
innovate customers, not products, 50(3), 49-64.
Prahalad, C. & Ramaswamy, V. (2003). The new frontier of experience innovation,
MIT Sloan Management Review, summer, 12-18.
Portor, M. & Kramer, M. (2006). Strategy and Society: The link between Competitive
Advantage and corporate social responsibility. HBR, December.
Reinmoeller, P. & van Baardwijk, N. (2005). The link between diversity and
resilience, MIT Sloan Management Review, 61-65.
Schumpeter, J. (1947). The creative response in economic history, 7 (2), 149-159

Cases:
The Mark News
Nintendo’s Disruptive Strategy: Implications for the Video Game Industry
Innovation at 3M Corporation
BMG entertainment .
Intel: Exploring the future
Herman Miller (A): Innovation by Design
Innovation and Collaboration at Merrill Lynch
AMD: A customer-centric approach to innovation
Danimal in South Africa
Celeritas, Inc.: Leadership Challenges in a Fast-Growth Industry

Ⅲ.GRADING AND REQUIREMENTS

40% Class Participation

25% Case analysis
20% Group Project Term Paper/Final exam
15% Group Presentation

Class participation (40%):

Since this course is designed to develop not only knowledge but also sufficient skills
of effective managers, you are strongly encouraged to take part in the class and
involve the class discussion actively to improve the skills of thinking, listening,
talking, and presenting through in-class discussion and exercise. An effective
participation can
1. Try to be a good listener at first and learn from other’s comments and questions.
2. Make relevant points to other’s comments and to the themes that the class is
exploring together.
3. Add new value for understanding the situation and make them precisive enough.
Try your best to hit to the core of the problem by your comments.
4. Respond to other’s ideas timely and put your efforts into challenging the ideas and
try to present new ways or perspectives to understand the situation.
5. Appropriately use your previous knowledge to interpret the current problems to
reflect accumulated learning over the course.

Case analysis (25%)

In the entire course, you are required to analyze 10 cases individually. You are
expected to submit two-page brief analysis to address the questions that you received
before class. Each case analysis should be typed and double-spaced, 12 point font
with one-inch margins. The two-page limit is for text only, excluding the numerical
calculations or graphs you want to display. As for that part, there are no page limit
requirements.

Note:
1. The case analysis should be handed in before each class. Please write your name
and student ID on your report.
2. The delayed submission will not be fully given credit. This part of homework will
be considered for those whose grade is marginal such as between A and B etc.

Group Presentation (15%)

Every group will be assigned to a 15 minutes group presentation for one case among
the 10 cases. The presentation should display what you have learned from the case
and readings, especially according to the questions for each case. Please do not repeat
the content of the case.

Group Project (Term paper: 20%)

As your assignment, each group is required to interview a firm and to write a report
analyzing the business of the firm and to recommend some innovative suggestions to
improve its performance by using entrepreneurial thinking and the theoretical models
you have learned in this class. The analysis about the potential obstacles of realizing
the innovation and the subsequent methods to impel the innovation are encouraged.
The report should be 15-20 pages long, double spaced with 12 font and one-inch
margin. At the last class, each group should hand in the report and present your report
and findings.

Ⅳ
STUDY GROUPS

You are encouraged to meet your group members regularly to discuss each case
before class. Not only does it provide good opportunities to learn from your group
members, but also a valuable social process to exercise how to be a good group
member to build up group morale and harmony and to inspire thinking and knowledge
sharing. It also is a precious opportunity to listen to your team members’ judgment on
your ideas.

Ⅴ. Professional Conduct
Professional conduct is built upon the idea of mutual respect. It contains (but is not
necessarily limited to):

Attending the Class: Each class provides good opportunities to exercise discussion
and listening, which is crucial for nurturing future managers in a real context. Your
grade will be affected by absences.

Arriving on Time: Late arrivals are distractive to both the lecture and class.

Minimal Disruptions: All cell phones should be turned off during class. Do not leave
class and re-enter the class. It would be more appropriate not to engage in side
conversations after class has begun.

Focusing on Class: You can take notes on laptops with the permission of the
instructor but you are not allowed to use laptop computers or hand-held devices for
other tasks during the class, such as net surfing, trading, and emails.

Well-Prepared for Class: You should be ready to discuss any assigned readings and
to answer any assigned questions for each class.

Respect: Respect others is the very basic requirement for a manager. You are
expected to exercise it in every single discussion and conversation with your
classmates and instructors, and sweepers.

Ⅵ.Study Questions
Session 1: Course introduction
Questions:
1. What is innovation?
2. What are the differences between innovation, invention, and entrepreneurship?
3. Why is innovation important?
4. Why does innovation drive business growth?

Session 2: The Schumpeterian notion of entrepreneurship

Case:The Mark News
Questions:
1. What is Schumpeterian concept of “creative destruction”?
2. Discuss the economics of the legacy newspaper industry.
a) What are the challenges it faces?
b) What is the treat from the entrepreneurial entrants like the Mark?
c) Given the challenges, do legacy newspapers have a future? If not, should we be
concerned?
3. What are the strengths and weakness of the Mark, and what can Anders do to grow
the revenue?

Session 3: Disruptive Innovation

Case: Nintendo’s Disruptive Strategy: Implications for the Video Game Industry
Questions:
1. Discuss the evolution of the video game industry, particularly in terms of
competition and technology.
2. What does “disruptive technology” mean? What are the principles behind it?
3. Analyze Nintendo’s disruptive strategy in detail. What are the main features of this
strategy that have made the Wii such an overwhelming success?
4. Assess the key competition by Nintendo’s Wii. What are the strategies and options
available to competitors to competitors to meet Nintendo’s challenge?

Session 4:　
Case: Innovation at 3M Corporation
Questions:
1. How has 3M’s innovation process evolved since the company was found? Why, if
at all, does 3M, known as a “hothouse” of innovation, need to regain its historic
closeness to the customer?
2. How does the Lead User research process differ from and complement other
traditional market research methods?
3. Has the Medical-Surgical team applied the Lead User research process
successfully? Why or why not?
4. What should the Medical-Surgical Lead User team recommend to Dunlop: the
three new product concepts or a new business strategy? What are the risks to the
new Lead User process at 3M? What are the risks to the Medical-Surgical
 business unit?

Session 5: Organizational capability of disruptive growth---Resource, Process, Value

(RPV) Model
Case: BMG entertainment
Questions:
1. Why have a handful of major record companies dominated the music industry
through most of the last century?
2. How does the advent of the internet change the structure and economics of the
music industry? Will major record companies continue to dominate the business?
3. Does BMG’s approach to the internet make sense?
4. What should Zelnick and Conroy do? Specifically, what should the strategy and
structure of BMG’s digital organization be? Should BMG continue to work with a
wide array of technology partners?

Session 6: Uncertainty of Innovation: Threat or Opportunity

Case: Intel: Exploring the future
Questions:
1. Why do firms get blindsided by new technologies? Is Intel more or less prone to
this problem?
2. Evaluate Tennenhouse’s approach to designing an exploratory research
organization? What are its main elements? How do these elements work together?
How could its design be improved?
3. Should Intel fund projects like PlanetLab and Sensor Network? How do they
generate value?
4. How can Tennenhouse measure the performance of his organization? And of the
Berkeley Lablet?

Session 7: Service Logic Innovation

Case: AMD: A customer-centric approach to innovation
Questions:
1. What would it take for AMD to see a significant increase in its market share in
processors used in corporate desktops and notebooks? How can the success of
Opteron in the server segment be leveraged to other segments?
2. What do you make for AMD’s “Power Campaign”? Is the value proposition it
highlights compelling to other segments?
3. How concerned should AMD be about Intel’s imminent new product plans? Will
they hamper AMD’s growth plans?
4. Will AMD’s customer centric approach be a source of advantage over Intel? Will
it yield commercially viable innovations that are dramatically different than those
Intel will develop?
Session 8: The Design of Innovative Systems
Case: Herman Miller （A）： Innovation by Design
Questions:
1. What are the main elements of Herman Miller’s history, design philosophy, and
corporate values? How have they influenced the company’s success?
2. What led Miller SQA to develop a new business model to serve its market? What
is this model and how does it work?
3. What allowed Miller SQA to reduce a 6-8 week order-to-installation process to an
average of 6 days?
4. In what ways is the Miller SQA business model a departure for Herman Miller?
Are there ways in which it is consistent with the past?
5. What would you advise Van Spronsen to do about his new assignment? B
prepared to defend your response?

Session 9: Innovation by Collaboration

Case: Innovation and Collaboration at Merrill Lynch
Questions:
1. How would you describe the research department at Merrill Lynch?
2. Why is Candace Browning trying to encourage collaboration among the research
analysts at Merrill Lynch? What are the biggest obstacles to collaboration in this
context?
3. Which of the collaborations was most successful? Why? Be specific.
4. How confident are you that analysis will participate in collaborative work in the
future? Why?
5. What should Candace Browning do now?

Session 10: Social Innovation

Case: Danimal in South Africa
Questions:
1. How does the Danimal project shed light on and challenge the principles
suggested to manage the base of the pyramid?
2. How would you measure the success of the Danimal project?
3. How does the approach taken by Maria Pretorius in managing the Danimal
product line factor in management innovation opportunities and challenges as
defined by Hamel?

Session 11: Lead Organizational Changes

Case: Celeritas, Inc.: Leadership Challenges in a Fast-Growth Industry
Questions:
1. Is Celeritas an effective company? What problems do you see at Celeritas?
2. How effective was the team-building effect at Celeritas? What worked well? What
didn’t work?
3. Does the team-building meeting make progress toward solving Celeritas’s
 problems? What is missing? Is team building the right strategy in this situation? Is
there an alternative?
4. What and/or who is the problem with the top team?
5. Do you see any organizational (vs. people) issues contributing to the problems?
6. How effective was consultant Carla Reese?

Session 12: Project presentation (15 minutes each group)

 Ⅷ.Schedule
Day Session Topics Readings Cases Project
s s
1 1 Introduction & Grouping Grouping
2 Creative destruction Joseph Group 1:
Schumpeter Mark News
(1947); PD
Ch3-11
3 Technology Innovation CC Group 2:
Ⅰ: Introduction Nintendo
Disruptive Innovation Bower &
Christense
(1995)
2 4 Technology Innovation CC Ch2 Group3:3M
Ⅱ:
Lead User Innovation
5 Technology Innovation Christensen Group 4: Submit
Ⅲ: &Overdorf BMG firm
Organizational (2000) name
Capability (RPV)model CC Ch 8
6 Uncertainty of Hugh CourtneyGroup5:Inte
Innovation l
3 7 Design Innovative Magretta Group 6:
Systems (1998) Herman
Hiller
8 Innovation by Prahalad & Group 7: Interview
Collaboration Ramaswamy Merrill
(2003) Lynch
Reinmoeller &
van Baardwijk
(2005)
9 Service Innovation Michel, Brown, Group
& Gallan 8:AMD
(2008)
4 10 Social Innovation PD conclusion Group 9:
Danimal
11 Lead Innovative Change Kotter (2007) Group 10:
Celeritas
12 Summary and Project Submit
Presentation report
and
present