Innovation and Technology Adoption: A Strategic Approach - Prof. Christopher P. Neck, Study notes of Introduction to Business Management

Download Innovation and Technology Adoption: A Strategic Approach - Prof. Christopher P. Neck and more Study notes Introduction to Business Management in PDF only on Docsity! Chapter 14: Innovating & Changing  Innovation- a change in method or technology that is a positive, useful departure from previous ways of doing things; the introduction of new goods and services.  2 Fundamental types of Innovation: 1. Process innovations: changes that affect the way outputs are produced. 2. Product innovations: changes in the actual outputs (goods and services) produced. I. Deciding to adopt new technology o 2 Generic strategies a company can use to position itself in the market: 1. Company has an advantage by maintaining a lower cost than its competitors. 2. Company has advantage by offering unique good or service (Differentiation) for which customers are willing to pay a premium price. o For either strategy, managers must: assess technology needs, decide whether to adopt a new technology, and if they adopt the technology, determine the best method for developing or acquiring it. A. Assess organizational needs for technologies To assess technology needs, managers measure current technologies and look for trends affecting the industry: i. Measuring Current Technologies : a technology audit helps clarify the key technologies on which an organization depends.  Technology audit: process of clarifying the key technologies on which an organization depends. ii. Assessing External Technological Trends : Decisions about technology must balance internal capabilities (strengths and weaknesses) with external opportunities and threats. To understand how technology is changing within an industry, managers can use techniques like: Benchmarking (comparing an organization’s practices and technologies with those of other companies); Environmental Scanning (searching for and sorting through information about the environment). B. Base technology decisions on relevant criteria Considerations in developing a strategy around technological innovation: i. Anticipated market receptiveness : must consider market potential first. In assessing market receptiveness, need to make 2 determinations: (1) In the short run, the new technology should have an immediate, valuable application; (2) In the long run, the technology must be able to satisfy a market need(s). ii. Technological Feasibility : Are technological innovations feasible? Technical obstacles may represent barriers to progress. (e.g. the makers of computer chips face continual hurdles in developing newer and faster models) iii. Economic Viability : Is there good financial incentive to invest in the technological innovation? (e.g. hydrogen-powered fuel-cell technology for automobiles is almost feasible technically, but it’s costs are still too high, and the absence of a supporting infrastructure, like hydrogen refueling stations, represents another barrier to economic viability) iv. Anticipated competency development : Are the organization’s strategies based on their core competencies that apply to the technology and innovation strategies? (e.g. bookstores having to bolster their information technology competencies, which wasn’t always easy for them to do, to regain competitiveness with the rise of Amazon.com) v. Organizational Suitability : Are we considering the culture of the organization, the interests of managers, and the expectations of stakeholders in our decision to adopt technological innovations? Consider 3 broad types of organizations: 1. Prospector firms- “technology-push” innovators having cultures that are outward-looking and opportunistic. (e.g. 3M and Google) 2. Defender firms- companies that adopt a more circumspect posture toward innovation; focus more on deepening their capabilities through technologies that extend rather than replace their current ones (e.g. U.S. supermarkets) 3. Analyzer firms- hybrid organizations that need to stay technologically competitive but tend to let others demonstrate solid demand in new arenas before responding. (e.g. Microsoft’s Xbox game console, Office software, and Zune music player) B. Know where to get new technologies o The essential characteristics these companies possess are strong core values in which they believe deeply, and they express and live the values consistently. B. Replace the “tyranny of the or” with the “genius of the and” o “Tyranny of the or” means that things must be either A or B, but not both, or that multiple objectives cannot be achieved at the same time. This belief that that only one goal can be attained is often invalid. o “Genius of the and” is the alternative to “tyranny of the or”. It means that multiple objectives can be achieved at the same time. B. Organizational development systematically shapes success o Organizational Development (OD): the systemwide application of behavioral science knowledge to develop, improve, and reinforce the strategies, structures, and processes that lead to organizational effectiveness. o 2 Features of OD: 1. To increase organizational effectiveness 2. Has an underlying value orientation: it supports human potential, development, and participation in addition to performance and competitive advantage. o 4 basic types of OD techniques: 1. Strategic interventions 2. Technostructural interventions 3. Human resources management interventions 4. Human process interventions D. Certain management practices make organizations great o Strategy that is focused on customers, continually fine tuned based on marketplace changes, and clearly communicated to employees o Execution by good people, given decision-making authority on the front lines, who are doing quality work and cutting costs o Culture that motivates, empowers people to motivate, and rewards people appropriately o Structure that makes the organization easy to work and with people that are easy to work with IV. Managing Change o The success of most change requires shared leadership o People must not be just supporters but also implementers A. Motivating people to change  Many people don’t like change including execs and employees  Reasons for the resistance of change o Inertia: people don’t want to disturb the status quo o It’s easier to keep doing what you know  Timing: people resist change because of poor timing o Lots of times, change comes that the wrong time and people are angered  Surprise: if a change is sudden, unexpected, or extreme, resistance may be the first reaction o Peer Pressure: groups can easily sway people to disagree with change o Even if people want change, if more people in the group won’t, sometimes the opinions that agree are discarded  Self-interest: most people care more about themselves than the organization, and they will resist change if they think it will negatively change their quality of life  Misunderstanding: even if the change is beneficial, people may resist because they don’t fully understand the change. Managers must work hard to convey the change to everyone so they do understand  Different Assessments: employees don’t hear all the same things management does. Discrepancies in the information can cause people to negatively view change, even if it is beneficial because they don’t know the whole story  Management Tactics: sometimes change works someplace else and management tries to force that change on others. If the change is glorified enough, sometimes employees resent it and resist. B. 3 stage model suggests ways to manage resistance 1. Unfreezing: realizing that current practices are inappropriate and that new behavior must be enacted  performance gap: the difference between actual performance and desired performance 2. Moving: instituting the change  force-field analysis: an approach to implementing Lewin’s unfreezing/moving/unfreezing model involving identifying the forces that prevent people from changing and those that will drive people toward change 3. Refreezing: strengthening the new behaviors that support the change C. Specific approaches can encourage cooperation Effective approaches to managing resistance to change: 1. Education & Communication Advantages: people will often help with the implementation of the change Disadvantages: can be very time-consuming if lots of people are involved 2. Participation & Involvement Advantages: people committed to the implementing and any relevant info they have will be integrated into the change plan. Disadvantages: can be very time-consuming if participators design an inappropriate change. 3. Facilitation & Support Advantages: No other approach works as well with adjustment problems Disadvantages: Can be time-consuming and expensive, and still fail 4. Negotiation & Rewards Advantages: Sometimes it is a relatively easy way to avoid major resistance Disadvantages: Can be too expensive in many cases if it alerts others to negotiate for compliance. 5. Manipulation & Cooperation Advantages: Can be a relatively quick and inexpensive solution to resistance problems. Disadvantages: Can lead to future problems if people feel manipulated 6. Explicit & Implicit Coercion Advantages: Speedy and can overcome any kind of resistance Disadvantages: Can be risky if it leaves people angry at the initiators D. Managers have to harmonize multiple changes o Total organization change involves introducing and sustaining multiple policies, practices, and procedures across multiple units and levels. E. Managers must lead change Essential activities of leading change: 1. Establishing a sense of urgency 2. Creating the guiding coalition 3. Developing a vision and strategy 4. Communicating the change vision 5. Empowering broad-based action 6. Generating short-term wins