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Introduction to

Organizational Change,
Innovation & Transformation
Dr. Kalpana Sahoo

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Implementation of a known new state


management of the interim transition state
over a controlled period of time

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Emergence of a new state, unknown


until it takes shape, out of the remains
of the chaotic death of the old state;
time period hard to control (Ackerman
1997)

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Natural and predictable pressures that build as an


organization grows and that must be addressed if
the organization is to continue to grow.

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Aspirations

Life-Cycle
Forces
Growing
International
Interdependence

Technological
Advances

Introduction
or Removal of
Government
Regulations

Pressure for
Change

Changes in
Demographics
Changes in
Societal Values

Shifting
Political
Dynamics

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Organizations must run fast to keep up with


changes taking place all around them

Todays organizations must keep


themselves open to continuous innovation
to survive

Three types of change:


Episodic change
Continuous change
Disruptive change

Change has become the norm today


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Organizational change is the adoption of


a new idea or behavior by an organization
Organizational innovation is the
adoption of an idea or behavior that is new
to the organizations industry, market, or
general environment
Change process within organizations
comes from innovation and new ideas
regardless of timing
Successful change includes ideas and
creativity, need, decision to adopt,
implementation, and resources

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Technology is a key driver of organizational


change

Change is easily embraced by organizations


with empowered employees

Innovative organizations are flexible and


free-flowing without rigid work rules

Mechanistic structures stifle innovation and


focus on rules and regulations

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Incorporates structures and management


processes that are appropriate for innovation

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Exploitative
Learning

Exploratory
Learning

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Switching Structures create an organic


structure
Creative Departments department for
innovation
Venture Teams a small company within
the organization
Corporate Entrepreneurship promote
entrepreneurial spirit
Bottom-up Approach useful ideas come
from people and daily work

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A process involving deliberate efforts to move


an organization or a unit from its current
undesirable state to a new, more desirable state
Awakening

Energizing

Unfreezing

Mobilizing

Envisioning

Moving

Reinforcing

Enabling

Refreezing

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Kurt Lewin

Unfreezing
Provide rationale
for change

Create minor
levels of
guilt/anxiety about
not changing

Create sense of
psychological
safety concerning
change

Moving
Provide information
that suspects
proposed changes

Bring about actual


shifts in behaviour

Refreezing
Implement new
evaluation systems

Create minor levels


of guilt/anxiety about
not changing

Implement new
hiring and promotion
systems

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Unfreezing
Unfreezing the
the Status
Status Quo
Quo
Desired
State
Restraining
Forces

Status
Quo
Driving
Forces
Time
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Coca-Cola is changing its culture, and


also adapting its product line to better
satisfy the demand of customers.
What are your thoughts about the
Neville Isdell steps they are taking regarding
these changes?

Sandy Douglas

Do you think the new innovations and changes


will have a positive or a negative impact on
their existing brands? Why?
What other changes would you suggest to help
them remain competitive?

Experiencing
Strategic OB

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The Burke-Litwin Model of Organizational Change


(a) First-order change- transactional, evolutionary, adaptive,
incremental, or continuous change
(b) Second-order change- transformational, revolutionary, radical, or
discontinuous change
n.b.. O. D. programs are directed toward both first-order and
second order change with an increasing emphasis on second order
transformational change.
First-Order
Second-Order
1. Structure
1. Mission and Strategy
2. Management Practices
2. Leadership
3. Systems
3. Organizational Culture
(Transactional)
(Transformational)
Distinguishing Organizational Climate and Organizational Culture.
Climate- peoples perceptions and attitudes about the organization
Culture- deep seated assumptions about values and beliefs that are
enduring, often unconscious and difficult to change
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ORGANIZATIONAL DEVELOPMENT( First)


Management
Practices

Systems
Policies &
Procedures

Structure

Work
Unit Climate

Motivation
Task
Requirements &
Individual
Skills/Abilities

Individual &
Organizational

Individual
Individual
Needs
Needs &
&
Values
Values

Performance
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ORGANIZATION DEVELOPMENT(Second)
External
Environment.

Leadership
Mission &
Strategy

Organizational
Culture

Individual &
Organizational
Performance
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The Burke-Litwin Model of Organizational Performance and Change


External
Environment
Mission &
Strategy
Structure

Leadership

Organizational
Culture
Systems
(Policies &
Procedures)

Management
Practices
Work Unit
Climate

Task Requires
& Individual
Skills/ Abilities

Individual
Needs & Values

Motivation
Individual &
Organizational
Performance

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Weisbords 6 box organisational model


7s model
5 whys
Content, context and process model
Soft systems methodology
Process modelling

Process flow
Influence diagrams

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Strategic Intent
Substance
Scale
Scope/Breadth
Speed
Sequence
Style

Style

Scope

Substance

Strategic
Intent
Speed

Scale

Sequence

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The failure rate for new food products is 7080%


Producing products that fail is part of
business
Reasons for success:

Innovating companies understand customers


Innovating companies successfully use technology
Top management supports innovation

Horizontal Coordination Model:

Specialization
Boundary Spanning
Horizontal Coordination
Open Innovation
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The rapid development of new products and


services can be a major strategic weapon

Time-based competition means


delivering products and services faster than
competitors

Many companies use fast cycle teams to


support highly important projects

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Organizations need to change strategies,


structures, processes, and procedures more
often to adapt
Many organizations are preparing for more
change by:

Cutting out layers


Decentralizing decision making
Shift toward horizontal structures
Empowered teams and workers
Virtual network strategies
Incorporating eBusiness
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Change related to restructuring and


downsizing can be painful for employees

Managers should be quick, authoritative,


and humane

Successful change managers are fast and


focused to implement change

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Reengineering

and Horizontal

Organization
Diversity
The

Learning Organization

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Excessive focus on costs

Failure to perceive benefits

Lack of coordination and cooperation

Uncertainty avoidance

Fear of loss

Leadership for Change: 80% of successful innovative companies


have top leaders who reinforce the value and importance of
innovation. Transformational leadership is well-suited for leading
change.
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1.

Establish a sense of urgency for change

2.

Establish a coalition to guide the change

3.

Create a vision and strategy for change

4.

Find an idea that fits the need

5.

Develop plans to overcome resistance

6.

Create change teams

7.

Foster idea champions

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1.
2.
3.
4.
5.

Alignment with needs and goals of users


Communication and training
An environment with psychological safety
Participation and involvement
Forcing and coercion

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Effort to block new


ways of doing things

Four Factors
Lack of
understanding

Self-interest

Different
assessments

Low tolerance
for change
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Denial ignore possible or current change


Anger individuals facing unwanted change
become angry about the change

Depression individuals experience


emotional lows

Acceptance individuals embrace the


reality of the situation and make the best of it

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A planned, organization-wide, continuous process


designed to improve communication, problem
solving, and learning through the application of
behavioral science knowledge

Roots in humanistic psychology


Grounded in values of individual empowerment
and interpersonal cooperation
Fully consistent with the high-involvement
management approach

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Change,

not stability, is the challenge for


managers

There

are four types of change

Organic

structures foster innovation

top-down approach is best for change


and strategy

Top

managers must foster culture change

The

implementation of change can be


difficult
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