CHAPTER 10 MANAGING CHANGE AND INNOVATION
LECTURE NOTES
1. Organizational change is defined as the adoption of a new idea or behavior by an
organization. Forces for change exist in both the external environment and within the
organization. External forces originate in all environmental sectors including customers,
competitors, technology, economic, and international events. Internal forces for change
arise from internal activities and decisions. Demands by employees, labor unions, and
production inefficiencies can all generate a force to which management must respond
with change. Rapidly increasing competition in all areas is driving the need for
innovation. One vital area for innovation is introducing new products and technologies.
These new products and technologies, in turn, require substantial changes in virtually
every aspect of organizations pp. 277-279, slides 4-9.
2. Exploration involves designing the organization to encourage creativity and the
initiation of new ideas. Cooperation refers to creating conditions and systems to
facilitate internal and external coordination and knowledge sharing. Entrepreneurship
means that managers put in place processes and structures to ensure that new ideas are
carried forward for acceptance and implementation, pp. 279-287.
3. Creativity is the development of novel solutions to perceived problems. Creative
individuals develop ideas that can be adopted by the organization. An idea champion is a
person who sees the need for and champions productive change within the organization.
4. People change pertains to just a few employees, such as sending a handful of middle
managers to a training course to improve their leadership skills. Culture change pertains
to the organization as a whole, such as shifting the basic organizational mind-set from a
focused on rules and policies to one focused on doing whatever is necessary to ensure
customer satisfaction, pp. 287, slides 11-15.
5. Organization development (OD) is a planned, systematic process of change that uses
behavioral science knowledge and techniques to improve an organization’s health and
effectiveness through its ability to adapt to the environment, improve internal
relationships, and increase learning and problem-solving capabilities. It focuses on the
human and social aspects of the organization and works to change attitudes and
relationships among employees, helping to strengthen the organization’s capacity for
adaptation and renewal, pp. 287-291.
a. Organizational development steps, p. 290.
6. Employees appear to resist change for several reasons, and understanding them helps
managers implement change more effectively, pp. 291-296, slide 16.
A. What are barriers to change? Kotter describes this in his “Leading Change”
book. Familiarize yourself with a change model.