Johns Org-Behaviour 10e PPT Ch15

Chapter 15
Organizational Change,
Development, and Innovation
Copyright © 2017 Pearson Canada Inc.

Chapter 16 / Slide 1
Learning Objectives
LO15.1 Explain the environmental forces that

motivate organizational change and
describe the factors that organizations
can change.
LO15.2 Explain how organizations learn and
what makes an organization a learning
organization.
LO15.3 Describe the basic change process and
the issues that require attention at
various stages of change.

Learning Objectives
LO15.4 Explain how organizations can deal

with resistance to change.
LO15.5 Define organizational development and
discuss its general philosophy.
LO15.6 Discuss team building, survey
feedback, total quality management,
and reengineering as organizational
development efforts.

Learning Objectives
LO15.7 Define innovation and discuss the

factors that contribute to successful
organizational innovation.
LO15.8 Understand the factors that help and
hurt the diffusion of innovations.

The Concept of Organizational
Change
• Organizational change can have a profound

impact on organizational members and
customers.
• The way that changes are implemented and
managed is crucial to both organizational
members and customers.
• Why must organizations change?

Why Organizations Must Change
• All organizations face two basic sources of

pressure to change:
– External sources
– Internal sources
• Environmental changes must be matched by
organizational changes if the organization is to
remain effective.
• Change can also be provoked by forces in the
internal environment of the organization.

(continued)
• Change entails some investment of resources
and almost always requires some modification
of routines and processes.
• The internal and external environments of
various organizations will be more or less
dynamic.
• As a result, organizations will differ in the
amount of change they display.

Change and Organizational
Effectiveness

(continued)
• Organizations in a dynamic environment must
generally show more change to be effective
than those operating in a more stable
environment.
• Change in and of itself is not a good thing, and
organizations can exhibit too much change as
well as too little.
• Most CEOs see their organizations as being
poor at executing change.

What Organizations Can Change
• What can organizations change?

• There are several specific domains in which
modifications can occur.
• The choice of what to change depends on
well-informed analysis of the internal and
external forces signalling that change is
necessary.

(continued)
• Goals and strategies
• Technology
• Job design
• Structure
• Processes
• Culture
• People

Goals and Strategies
• Organizations frequently change their goals

and the strategies they use to reach these
goals.

Technology
• Technological changes can vary from minor to

major.

Job Design
• Companies can redesign individual groups of

jobs to offer more or less variety, autonomy,
identity, significance, and feedback.

Structure
• Organizations can be modified from a

functional to a product structure or vice
versa.
• Formalization and centralization can be
changed as can tallness, spans of control, and
networking with other firms.

Processes
• The basic processes by which work is

accomplished can be changed.

Culture
• One of the most important and difficult

changes that an organization can make is to
change its culture.
• Changing an organization’s culture is
considered to be a fundamental aspect of
organizational change.

People
• The actual content of the membership can be

changed through a revised hiring process.
• The existing membership can be changed in
terms of skills and attitudes by various
training and development programs.

(continued)
• Two important points about the areas that
organizations can introduce change:
– A change in one area very often calls for
changes in other areas.
– A change in most areas will require people
changes.

(continued)
• Any new skills required and favourable
attitudes should be fostered before other
changes are introduced.

The Change Process
• Change involves a sequence of events or a

psychological process that occurs over time.
• Kurt Lewin suggested that this sequence or
process involves three basic stages:
– Unfreezing
– Changing
– Refreezing

Unfreezing
• Unfreezing refers to the recognition that some

current state of affairs is unsatisfactory.
• Crises are especially likely to stimulate
unfreezing.
• Unfreezing can also occur without crises.
• Employee attitude surveys, customer surveys,
and accounting data are often used to
anticipate problems and initiate change
before crises are reached.

Change
• Change refers to the implementation of a

program or plan to move the organization or
its members to a more satisfactory state.
• Change efforts can range from minor (e.g.,
skills training program) to major (e.g., job
enrichment).
• In order for change to occur, people must
have the capability and the opportunity and
the motivation to change.

Refreezing
• Refreezing is the condition that exists when

newly developed behaviours, attitudes, or
structures become an enduring part of the
organization.
• The effectiveness of the change is examined
and the desirability of extending change
further can be considered.
• Refreezing is a relative and temporary state of
affairs.

The Change Process (continued)
• Does Lewin’s simple model of change apply to

firms in hyperturbulent environments, where
constant, unpredictable, non-linear change is
the norm?

The Change Process (continued)
• Lewin’s model probably applies to firms in

hyperturbulent environments although there
has been some debate about this.
• Organizations in hyperturbulent environments
face special challenges that require them to
be constantly acquiring, assimilating, and
disseminating information.
• Change in these organizations is more likely to
be seamless “morphing” rather than a step-
like process.

The Learning Organization
• Organizational learning refers to the process

through which an organization acquires,
develops, and transfers knowledge throughout
the organization.
• Two primary methods of organizational
learning:
– Knowledge acquisition
– Knowledge development

Knowledge Acquisition
• The acquisition, distribution, and

interpretation of knowledge that already
exists but which is external to the
organization.

Knowledge Development
• The development of new knowledge that

occurs in an organization primarily through
dialogue and experience.

Knowledge Development
(continued)
• Organizational learning occurs when
organizational members interact and share
experiences and knowledge, and through the
distribution of new knowledge and
information throughout the organization.

(continued)
• A learning organization is an organization that
has systems and processes for creating,
acquiring, and transferring knowledge to
modify and change its behaviour to reflect
new knowledge and insights.
• Organizational change is more likely to occur
in a learning organization.

Key Dimensions of a Learning
Organization
• There are four key dimensions that are critical
for a learning organization:
– Vision/support
– Culture
– Learning systems/dynamics
– Knowledge management/infrastructure

Vision/Support
• Leaders communicate a clear vision of the

organization’s strategy and goals, in which
learning is a critical part and key to
organizational success.

Culture
• A learning organization has a culture that

supports learning.
• Continuous learning is considered to be a
regular part of organizational life and the
responsibility of everybody in the
organization.

Learning Systems/Dynamics
• Employees are challenged to think, solve

problems, and make decisions.
• Managers must be active in coaching,
mentoring, and facilitating learning.

Knowledge
Management/Infrastructure
• Established systems and structures to acquire,

code, store, and distribute important
information and knowledge.
• It requires the integration of people,
processes, and technology.

(continued)
• Learning organizations have higher profits and
financial performance, and are better able to
retain essential employees.
• Learning organizations are better able to
change and transform themselves.
• Learning is an important prerequisite for
organizational change and transformation.

Issues in the Change Process
• There are several important issues that

organizations must confront during the change
process.
• These issues represent problems that must be
overcome if the process is to be effective.

Issues in the Change Process
(continued)
• Problems that occur during the change
process:
– Diagnosis
– Resistance
– Evaluation and institutionalization

The Change Process and Change
Problems

Diagnosis
• Diagnosis refers to the systematic collection

of information relevant to impending
organizational change.
• Initial diagnosis can provide information that
contributes to unfreezing by showing that a
problem exists.
• Diagnosis can also clarify the problem and
suggest what changes should be implemented.

Diagnosis (continued)
• For complex, non-routine problems, change

agents are often involved in the diagnosis and
change process.
• Change agents are experts in the application
of behavioural science knowledge to
organizational diagnosis and change.
• Diagnostic information can be obtained from
observations, interviews, questionnaires, and
records.

Diagnosis (continued)
• Attention to the views of customers or clients
is critical.
• The intended targets of the change should be
involved in the diagnostic process.
• Proper diagnosis clarifies the problem and
suggests what should be changed and the
appropriate strategy for implementing change
without resistance.
• Many firms do not do a careful diagnosis and
sometimes confuse symptoms with underlying
problems.

Resistance
• Change is frequently resisted by those at

whom it is targeted.
• People may resist both unfreezing and
change.
• Defence mechanisms might be activated
during the unfreezing stage.
• Even if there is agreement that change is
necessary, any specific plan for change might
be resisted.

Causes of Resistance
• Resistance to change occurs when people

either overtly or covertly fail to support the
change effort.
• What are the causes of resistance?

Causes of Resistance (continued)
• Some common reasons for resistance include:

– Politics and self-interest
– Low individual tolerance for change
– Lack of trust
– Different assessments of the situation
– Strong emotions
– A resistant organizational culture

Politics and Self-Interest
• People might feel that they personally will

lose status, power, or even their jobs with the
advent of change.

Low Individual Tolerance for
Change
• Predispositions in personality make some
people uncomfortable with changes in
established routines.

Lack of Trust
• People might clearly understand the

arguments being made for change but not
trust the motives of those proposing the
change.

Different Assessment of the
Situation
• The targets of the change might sincerely feel
that the situation does not warrant the
proposed change and that the advocates of
the change have misread the situation.

Strong Emotions
• Change has the capacity to induce strong

emotions in people trying to make sense of
the change, emotions that often make people
feel helpless and resistant.

A Resistant Organizational
Culture
• Some organizational cultures have especially
stressed and rewarded stability and tradition.
• Advocates of change in such cultures are
viewed as misguided deviants or aberrant
outsiders.

• There are two major themes underlying the

reasons for resistance:
– Change is unnecessary because there is
only a small gap between the
organization’s current identity and its ideal
identity.
– Change is unobtainable (and threatening)
because the gap between the current and
ideal identities is too large.

Probability of Acceptance of
Change

• A moderate identity gap is most conducive to

increase acceptance of change because it
unfreezes people while not provoking
maximum resistance.

Major Change Challenges

Dealing with Resistance
• How can organizations deal with resistance to

change?

(continued)
• Various approaches can be used depending on
the reason for the resistance.
• Supportive and patient supervision for dealing
with low tolerance for change.
• Special and desirable roles in the change
process and special incentives for change
when politics and self-interest are at the root
of resistance.

(continued)
• Good communication can be used if
misunderstanding, lack of trust, or different
assessments are provoking resistance.
• Involving the people who are the targets of
the change in the change process often
reduces their resistance.
• Transformational leaders are particularly
adept at overcoming resistance to change.

Unfreezing Practices of
Transformational Leaders
• A study of CEOs who were transformational
leaders noted the following unfreezing
practices:
– An atmosphere is established in which
dissent is not only tolerated but
encouraged.
– The environment is scanned for objective
information about the organization’s true
performance.

(continued)
– Organizational members are sent to other
organizations and even other countries to
see how things are done elsewhere.
– The organization compares itself along a
wide range of criteria against the
competition.

(continued)
• Transformational leaders are skilled at using
the new ideas that stem from these practices
to create a revised vision for followers about
what the organization can do or be.
• A radically reshaped culture is often the
result.

(continued)
• Transformational leaders are good at inspiring
trust and encouraging followers to subordinate
their individual self-interests for the good of
the organization.
• They are also adept at countering employee
cynicism.

Evaluation and
Institutionalization
• Organizations are notorious for doing a weak
job of evaluating “soft” change programs that
involve skills, attitudes, and values.
• It is possible to do a through evaluation by
considering a range of variables:
– Reactions
– Learning
– Behaviour
– Outcomes

Reactions
• Did participants like the change program?

Learning
• What knowledge was acquired in the program?

Behaviour
• What changes in job behaviour occurred?

Outcomes
• What changes in productivity, absence, and so

on occurred?

Evaluation and
Institutionalization (continued)
• Many change programs are not evaluated, and
evaluations often never go beyond the
measurement of reactions.
• Part of the reason for this may be political.
• If the outcome of change is evaluated
favourably, the organization will want to
institutionalize the change.

Evaluation and
Institutionalization (continued)
• When the change is institutionalized, it
becomes a permanent part of the
organizational system.
• A number of factors can inhibit
institutionalization, especially for complex
change programs.

Factors That Can Inhibit
Institutionalization
• Lack of extrinsic rewards.
• Higher expectations that cannot be fulfilled.
• New hires are not carefully socialized.
• Employee turnover.
• Key management supporters of the change
effort resign or are transferred.
• Environmental pressures cause management
to regress to more familiar behaviours and
abandon change.

Organizational Development:
Planned Organizational Change
• Organizational development (OD) is a
planned, ongoing effort to change
organizations to be more effective and more
human.
• It uses the knowledge of behavioural science
to foster a culture of organizational self-
examination and readiness for change.
• A strong emphasis is placed on interpersonal
and group processes.

Organizational Development
(continued)
• OD efforts tend to be ongoing.
• OD seeks to modify cultural norms and roles.
• Organizational change affects members and
their cooperation is necessary to implement
change.
• OD has a joint concern with both people and
performance.

Some Specific Organizational
Development Strategies
• There are a wide variety of techniques that
can be classified as OD efforts such as job
enrichment, management by objectives,
diversity training, self-managed and cross-
functional teams, and empowerment.

Some Specific Organizational
Development Strategies
(continued)
• Team building
• Survey feedback
• Total quality management
• Reengineering

Team Building
• An effort to increase the effectiveness of work

teams by improving interpersonal processes,
goal clarification, and role clarification.
• It can facilitate communication and
coordination.
• Team building usually begins with a diagnostic
session in which the team explores its current
level of functioning.

Team Building (continued)
• The goal at this stage is to paint a picture of

the current strengths and weaknesses of the
team.
• The ideal outcome of the diagnostic session is
a list of needed changes to improve team
functioning.
• Subsequent sessions focus on how to
implement the changes.
• A change agent acts as a catalyst and resource
person throughout the process.

Survey Feedback
• Survey feedback involves the collection of

data from organizational members and the
provision of feedback about the results.
• Meetings are held to explore and discuss the
data and to suggest changes.
• Data generally consist of questionnaires
completed by organizational members.

Survey Feedback (continued)
• Before data are collected, a number of

critical decisions must be made:
– Who should participate in the survey?
– What questions should the survey ask?
• Most survey feedback efforts attempt to cover
the entire organization.
• All members of a target group should be
surveyed.

• What questions should the survey ask?

• Two approaches are available:
– Pre-packaged standardized surveys
– Custom-tailored surveys

• Feedback is most effective when it is

presented to natural working units in face-to-
face meetings.
• Many change agents prefer that the manager
of the working unit conduct the feedback
meeting.
• Surveys have the most beneficial effects when
the results are reviewed with employees and
when action is taken in response to the
survey.

Total Quality Management
(TQM)
• Total quality management is a systematic

attempt to achieve continuous improvement
in the quality of an organization’s products or
services.
• TQM programs tend to have a number of
typical characteristics.

Characteristics of TQM Programs
• Obsession with customer satisfaction.

• Concern for good relations with suppliers.
• Continuous improvement of work processes.
• Prevention of quality errors.
• Frequent measurement and assessment.
• Extensive training.
• High employee involvement and teamwork.

(TQM) (continued)
• TQM is concerned with using teamwork to

achieve continuous improvement to please
customers.
• The key principles of customer focus,
continuous improvement, and teamwork are
associated with certain practices and specific
techniques.

Principles, Practices, and
Techniques of TQM

Continuous Improvement
• A key principle of TQM is continuous

improvement.
• Improvement is viewed as a continuum
ranging from responding to product or service
problems (a reactive strategy) to creating new
products or services that please customers (a
proactive strategy).

(continued)
• Continuous improvement can come from small
gains over time or from more radical
innovation.
• The goal is long-term improvement not a
short-term “fix.”
• TQM is very concerned with measurement and
data collection.

Concept (continued)
• TQM stresses teamwork among employees
with suppliers and customers.
• TQM relies heavily on training to achieve
continuous improvement.

(TQM) (continued)
• TQM involves specialized training in tools that
empower employees to diagnose and solve
quality problems on an ongoing basis.
• Some tools include:
– Flowcharts of work processes
– Pareto analysis
– Fishbone diagrams
– Statistical process control

Flowcharts of Work Processes
• Flowcharts illustrate graphically the

operations and steps in accomplishing some
task, noting who does what, and when.

Pareto Analysis
• Pareto analysis collects frequency data on the

causes of errors and problems, showing where
attention should be directed for maximum
improvement.

Fishbone Diagrams
• Fishbone (cause-and-effect) diagrams

illustrate graphically the factors that could
contribute to a particular quality problem.

Statistical Process Control
• Statistical process control gives employees

hard data about the quality of their own
output that enables them to correct any
deviations from standard performance.
• TQM places particular emphasis on reducing
variation in performance over time.

(TQM) (continued)
• These tools to improve the diagnosis and

correction of quality problems will not have
the desired impact if they fail to improve
quality in the eyes of the customer.
• Organizations with a real commitment to TQM
make heavy use of customer surveys, focus
groups, mystery shoppers, and customer
clinics to stay close to their customers.

(TQM) (continued)
• TQM programs have succeeded in many

organizations.
• They have also had problems, which
ultimately get expressed as resistance.
• TQM is mainly about achieving small gains
over a long period of time.
• This long-term focus can be hard to maintain.

Reengineering
• Reengineering is the radical redesign of

organizational processes to achieve major
improvements in such factors as time, cost,
quality, or service.

Reengineering (continued)
• It uses a “clean slate” approach and asks basic

questions, such as:
– “What business are we really in?”
– “If we were creating this organization
today, what would it look like?”
• Jobs, structure, technology, and policy are
redesigned around the answers to these
questions.

• A key aspect of reengineering is processes.

• Organizational processes are activities or
work that the organization must accomplish to
create outputs that customers value.
• Gains will be greatest when the process is
complex and cuts across a number of jobs and
departments.

• What factors prompt interest in

reengineering?
• Interest in reengineering stems from
“creeping bureaucracy” and disappointment
with the results of new information
technology.

• How does reengineering proceed?

• Reengineering is oriented toward one or both
of the following goals:
– The number of mediating steps in a process
is reduced, making the process more
efficient.
– Collaboration among the people involved in
the process is enhanced.
• Reengineering includes a number of practices.

Reengineering Practices
• Jobs are redesigned and usually enriched.

• A strong emphasis is placed on teamwork.
• Work is performed by the people most
logically suited to the task.
• Unnecessary checks and balances are
removed.
• Advanced technology is exploited.

• Reengineering requires strong CEO support

and transformational leadership qualities.
• Before it begins, it is essential that the
organization first clarify its overall strategy.
• Reengineering must be both broad and deep
to have long-lasting, bottom-line results.
• Half-hearted attempts do not pay off.

Does Organizational
Development Work?
• Does organizational development work?
• Do the benefits of OD outweigh the heavy
investment of time, effort, and money?

Does Organizational
Development Work? (continued)
• Most OD efforts are not carefully evaluated.
• Two reviews of a wide variety of OD
techniques reached a number of conclusions
about the effects of OD.

Does Organizational
• Most OD techniques have a positive impact on
productivity, job satisfaction, or other work
attitudes.
• OD seems to work better for supervisors or
managers than for blue-collar workers.
• Changes that use more than one technique
seem to have more impact.
• There are great differences across sites in the
success of OD interventions.

Does Organizational
• Research has looked at the effects of the
following types of OD interventions:
– Organizing arrangements
– Social Factors
– Technology
– Physical setting
• Many studies have reported positive changes
following an OD effort, however, many also
reported no change.

Organizational Change and
Organizational Development
Efforts

Does Organizational
• Weak methodology has sometimes plagued
research evaluations of the success of OD
interventions.
• There are a number of specific problems with
OD research evaluations.

Problems Evaluating OD
Interventions
• OD efforts involve a complex series of
changes.
• Novelty effects or special treatment of
participants might produce short-term gains.
• Self-reports of changes after OD might involve
unconscious attempts to please the change
agent.
• Organizations may be reluctant to publicize
failures.

The Innovation Process
• Do you recognize the name Arthur Fry?

• Arthur Fry is the inventor of Post-It Notes.
• What is innovation?

What Is Innovation?
• Innovation is the process of developing and

implementing new ideas in an organization.
• The essential point is a degree of creativity.
• We can classify innovations as:
– Product innovations
– Process innovations
– Managerial innovations

Product Innovations
• Product innovations have a direct impact on

the cost, quality, style, or availability of a
product or service.
• They should be obvious to clients or
customers.

Process Innovations
• Process innovations are new ways of designing

products, making products, or delivering
services.
• Process changes are invisible to customers or
clients, although they help the organization to
perform more effectively and efficiently.
• New technology is a process innovation.

Managerial Innovations
• Managerial innovations are new forms of
strategy, structure, human resource systems,
and managerial practices that facilitate
organizational change and adaptation.
• Examples:
– Job enrichment
– Participation
– Reengineering
– Quality programs

The Innovation Process
• Innovation is often conceived of as a stage-

like process:
IDEA IDEA IDEA

GENERATION IMPLEMENTATION DIFFUSION
• There are several interesting themes that

underlie the process of innovation.

Themes of the Innovation
Process
• Much idea generation is serendipity.
• The beginning of innovation can be very
haphazard and chaotic.
• Conditions necessary to create new ideas
might be very different from the conditions
necessary to get them implemented.
• Innovation might be resisted.

Themes of the Innovation
Process (continued)
• Innovation is frequently a highly political
process.
• The generation of good ideas is no guarantee
that they will be implemented and diffused.

Generating and Implementing
Innovative Ideas
• Innovation requires:
– Creative ideas and creative people.
– People who will fight for new ideas.
– Good communication.
– The proper application of resources and
rewards.

Individual Creativity
• Creative thinking by individuals or small

groups is at the core of the innovation
process.
• Creativity refers to the production of novel
but potentially useful ideas.
• Organizations that have a reputation for
innovation have a talent for selecting,
cultivating, and motivating creative
individuals.

Individual Creativity (continued)
• What makes a person creative?

• Creative people tend to have an excellent
technical understanding of their domain.
• What sets creative people apart are
creativity-relevant skills.

• Creativity-relevant skills include:

– The ability to tolerate ambiguity.
– Withhold early judgment.
– See things in new ways.
– Be open to new and diverse experiences.

• Creative people tend to be socially skilled but
lower than average in need for social
approval.
• Many creativity-related skills can be improved
by training people to think in divergent ways
and to withhold early evaluation of ideas.
• Being creative also requires intrinsic
motivation for generating new ideas.
• Creativity itself is not very susceptible to
extrinsic rewards.

Idea Champions
• Idea champions are people who see the kernel

of an innovative idea and help guide it
through to implementation.
• The role of idea champions is often an
informal and emergent role.
• Champions often have a real sense of mission
about the innovation.

Idea Champions (continued)
• Their function is one of sponsorship and

support.
• For complex and radical innovations, more
than one idea champion might emerge.
• What kind of people are idea champions, and
what are their tactics?

Characteristics of Idea
Champions
• Broad interests. They see their roles as being
broad.
• Active in scouting for new ideas.
• Use a wide variety of media for stimulation.
• Skilled at presenting the innovation as an
opportunity.

Characteristics of Idea
Champions (continued)
• Exhibit clear signs of transformational
leadership.
• Use a wide variety of influence tactics.
• They make people truly want the innovation.

Idea Champions (continued)
• Some idea champions feel compelled to

engage in creative deviance.
• Creative deviance means they defy orders by
management to stop work on a creative idea.
• Many creative successes have been attributed
to creative deviance.

External Communication
• Effective communication with the external

environment and within the organization are
vital for successful innovation.
• Innovative firms recognize the relevance of
new, external information, importing and
assimilating it, and then applying it.
• Technical personnel are likely to be exposed
to new ideas via informal oral communication
networks in which key personnel function as
gatekeepers.

Gatekeepers
• Gatekeepers are people who span the

boundary between the organization and the
environment.
• They import new information, translate it for
local use, and disseminate it to project
members.
• They have well-developed communication
networks with other professionals outside the
organization as well as inside.
• Gatekeeping is an informal, emergent role.

(continued)
• Successful innovative firms also go directly to
users, clients, or customers to obtain ideas for
product or service innovation.
• Information can also be extracted from the
environment by hiring employees with
multicultural experience or providing
opportunities for such experience, which has
been shown to enhance creativity.

(continued)
• Putting R&D activities in several geographic
locations can also lead to higher levels of
imitative innovation.
• Innovative ideas can also be extracted from
the external environment by holding design
competitions and/or using crowdsourcing.
• Such strategies are often termed open
innovation in that they eschew the secrecy
frequently associated with the process and
invite input from a wide variety of external
sources.

Internal Communication
• Organic structures facilitate innovation more

easily than mechanistic structures; they foster
the exchange of information that innovation
requires.
• Interdivision communication is a driver of
innovation.
• Internal communication can be stimulated
with in-house training, cross-functional
transfers, and varied job assignments.

(continued)
• The physical location of gatekeepers is
important for their ability to convey new
information to co-workers.
• Research on the performance of research and
development project groups found that:
– Groups with medium longevity
communicate more and perform better
than groups with short or long longevity.

Group Longevity,
Communication, and
Performance

(continued)
• Organic structures seem best in the idea-
generation and design phases of innovation.
• More mechanistic structures are often better
for actually implementing innovations.
• There are different organizational
requirements for idea generation versus idea
implementation.

Resources and Rewards
• Abundant resources greatly enhance the

chances of successful innovation.
• Resources serve as a strong cultural symbol
that the organization truly supports
innovation.
• Funds for innovation are seen as an
investment, not a cost.
• Time can be an even more crucial factor than
money for some innovations.

(continued)
• Reward systems must match the culture that
is seeded by the resource system.
• Innovators need support and constructive
criticism, not punishment.
• Freedom and opportunity have been found to
be the most cited organizational factors
leading to creativity.
• Many firms now offer dual career ladders for
creative scientists and engineers that enable
them to be extrinsically rewarded.

(continued)
• Extrinsic rewards that are clearly tied to
creativity increase creative behaviour,
especially when accompanied by autonomy
and feedback.
• Incentives can also be used to stimulate
managers to pay attention to new ideas and
get them implemented quickly.

Generating and Implementing
Innovative Ideas (continued)
• We can conclude that innovation depends on:
– Individual factors (creativity).
– Social factors (a dedicated champion and
good communication).
– Organizational factors (resources and
rewards).

Diffusing Innovative Ideas
• If innovations are successful in one section or

division of an organization, it seems logical to
extend them to other parts of the
organization.
• Diffusion is the process by which innovations
move through an organization.
• It is not always as easy as it might seem.

(continued)
• A study of the diffusion of eight major process
innovations found that substantial diffusion
occurred in only one of the observed firms
(Volvo).
• What accounts for this poor record of
diffusion?

Barriers to Diffusion
• Lack of support and commitment from top

management.
• Significant differences between the
technology or setting of the pilot project and
those of other units in the organization.
• Attempts to diffuse particular techniques
rather than goals that could be tailored to
other situations.

Barriers to Diffusion (continued)
• Management reward systems that ignore

success at implementing innovation.
• Union resistance.
• Fears about implementation in unionized
portions of the firm.
• Conflict between the pilot project and the
bureaucratic structures in the rest of the firm.

(continued)
• The “diffuse or die” principle.
• If diffusion does not occur, the pilot project
and its leaders become more and more
isolated from the mainstream of the
organization and less and less able to proceed
alone.
• Innovations are especially difficult to diffuse
in organizations dominated by professionals,
who tend to focus on their own “silos.”

(continued)
• What factors might contribute to the rate of
diffusion?

Critical Determinants of the
Rate of Diffusion
• The following factors have been found to be
critical determinants of the rate of diffusion
of a wide variety of innovations:
– Relative advantage
– Compatibility
– Complexity
– Trialability
– Observability

Relative Advantage
• Diffusion is more likely when the new idea is

perceived as truly better than the one it
replaces

Compatibility
• Diffusion is easier when the innovation is

compatible with the values, beliefs, needs,
and current practices of potential new
adopters.

Complexity
• Complex innovations that are fairly difficult to

comprehend and use are less likely to diffuse.

Trialability
• If an innovation can be given a limited trial

run, its chances of diffusion will be improved.

Observability
• When the consequences of an innovation are

more visible, diffusion will be more likely to
occur.

(continued)
• Adaptability is also important since
innovations often have to be custom-tailored
to diffuse effectively.
• Thinking about how innovations are
“packaged” and “sold” can increase their
chances of more widespread adoption.
• Diffusion requires strong champions to sponsor
the innovation at the new site.

The Knowing-Doing Gap
• Organizations often exhibit considerable

inertia.
• Many managers know what to do, but have
considerable trouble implementing this
knowledge in the form of action.
• This situation has been described as the
knowing-doing gap.
• Why does the knowing-doing gap happen?

(continued)
• The tendency for some organizational cultures
to reward short-term talk rather than longer-
term action.
• Many organizations foster internal competition
that is not conducive to the cooperation
between units that many changes require.

(continued)
• When managers do manage to make changes,
these changes sometimes fail because
techniques are adopted without understanding
their underlying philosophy.


Johns Org-Behaviour 10e PPT Ch15

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Johns Org-Behaviour 10e PPT Ch15

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Chapter 15

Copyright © 2017 Pearson Canada Inc.

LO15.1 Explain the environmental forces that

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LO15.4 Explain how organizations can deal

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LO15.7 Define innovation and discuss the

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• Organizational change can have a profound

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• All organizations face two basic sources of

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• What can organizations change?

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• Organizations frequently change their goals

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• Technological changes can vary from minor to

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• Companies can redesign individual groups of

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• Organizations can be modified from a

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• The basic processes by which work is

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• One of the most important and difficult

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• The actual content of the membership can be

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• Change involves a sequence of events or a

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• Unfreezing refers to the recognition that some

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• Change refers to the implementation of a

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• Refreezing is the condition that exists when

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• Does Lewin’s simple model of change apply to

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• Lewin’s model probably applies to firms in

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• Organizational learning refers to the process

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• The acquisition, distribution, and

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• The development of new knowledge that

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• Leaders communicate a clear vision of the

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• A learning organization has a culture that

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• Employees are challenged to think, solve

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• Established systems and structures to acquire,

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