CHAPTER 10 - CHAPTER 10 | Organizational Change Innovation...

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CHAPTER 10 | Organizational Change & Innovation: Lifelong Challenges for the Exceptional Manager 10.1 The Nature of Change in Organizations Small changes cause uneasiness, large changes can cause stress. And as managers you will have to deal with both. Fundamental Change: What will you be called to deal with? Peter Drucker- Identify and prepare for the future that has already happened by looking at the fundamental changes that are happening now 1. The market place is becoming more segmented & moving toward more niche products. We have “demassification” with customer groups becoming segmented into smaller and more specialized groups responded to narrow targeted messages. The future of business is selling less of more, only need to sell a few of each product since you produce so many. 2. There are more competitors offering targeted products, requiring faster speed-to-market, “speed is emerging as the ultimate competitive weapon” 3. Some traditional companies may not survive radically innovative change, Kodak film. .since film is becoming irrelevant it is hard for them to survive 4. China, India, & other offshore suppliers are changing the way we work- globalization, outsourcing. Other countries look to the US for technology and finance 5. Knowledge, not information, is becoming the new competitive advantage. Knowledge work is analytic and involves problem solving and abstract reasoning. Back office systems, like inventory management and A/R are being outsourced. Two Types of Change: Reactive Vs. Proactive 1. Reactive Change: Responding to unanticipated problems and opportunities Reactive change- making changes in response to problems or opportunities as they arise. Respond to surprises with less time because you didn’t know about it 2. Proactive Change: Managing anticipated problems and opportunities Proactive change- or planned change involves making carefully thought-out changes in anticipation of possible or expected problems or opportunities Force for Change: Outside and Inside the Organization Forces Outside (external), 1. Demographic Characteristics- more diverse workforce-age, education, skill level, gender 2. Market Change- mergers, new partnerships with suppliers, employees, and competitors, global economy 3. Technological Advancements- information technology, DVD piracy and counterfitting 4. Social and Political Pressures- social events, greenwashing-making misleading statements about products helping the environment, this is opposite of green Forces Inside (internal) 1. Employee problems- high absenteeism and turnover, unmet needs, job dissastifcation
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This document was uploaded on 11/02/2011 for the course MGT 3304 at Virginia Tech.

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CHAPTER 10 - CHAPTER 10 | Organizational Change Innovation...

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