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MGT504 - Organization Theory and Design - Lecture Handout 28

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INNOVATE OR PERISH; THE STRATEGIC ROLE OF CHANGE

If there is one theme or lesson that emerges from previous lectures, it is that organizations must run fast to keep up with changes taking place all around them. Organizations must modify themselves not just from time to time, but all of the manufacturing firms need to reach out for new computer- integrated manufacturing technology and service firms for new information technology. Today’s organizations must poise themselves to innovate and change, not only to prosper but merely to survive in a world of increased competition. Organizations that invest most of their time and resources in maintaining the status quo cannot hop to proper in today’s world of constant change and uncertainty. Number of environmental forces drives this need for major organizational change. Powerful forces associated with advancing technology, international economic integration, the maturing of domestic markets, and the shift to capitalism in formerly communist regions have brought about a globalize economy that impacts every business, from the largest to the smallest, creating more threats as well as more opportunities, to recognize and manage the threats and take advantage of the opportunities, today’s companies are undergoing dramatic changes in all areas of their operation.

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MGT504 - Organization Theory and Design - Lecture Handout 29

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TYPES OF CHANGE

STRATEGIC TYPES OF CHANGE

Managers can focus on four types of change within organizations to achieve strategic advantage; these four types of changes are summarized in examples: products and services, strategy and structure, culture, and technology. These factors provide an overall context within which the four types of change serve as a competitive wedge to achieve an advantage in the international environment. Each company has a unique configuration of products and services, strategy and structure, culture, and technologies that can be focused fro maximum impact upon the company’s chosen markets.

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MGT504 - Organization Theory and Design - Lecture Handout 30

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INNOVATIOAN AND CHANGE

Regardless of the type or scope of change, there are identifiable stages of innovation, which generally occur as a sequence of events, though innovation stages may overlap. In the research literature on innovation, organizational change is considered the adoption of a new idea or behavior by an organization. Organizational innovation, in contrast, is the adoption of an idea or behavior that is new to the organization’s industry, market, or general environment. The first organization to introduce a new product is considered the innovator, and organizations that copy are considered to adopt changes. For purposes of managing change, however, the terms innovation and change will be used interchangeably because the change process within organizations tends to be identical whether a change is early or late with respect to other organizations in the environment.

Innovations typical are assimilated into an organization through a series of steps or elements. Organizations member first become aware of a possible innovation, evaluate its appropriateness, and then evaluate and choose the idea. The required elements of successful change for a change to be successfully implemented; managers must make sure each element occurs in the organization. If one of the elements is missing, the change process will fail.

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MGT504 - Organization Theory and Design - Lecture Handout 31

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REASONS FOR NEW PRODUCT SUCCESS

The next question to be answered by research was, “why are some products more successful than others?” why did a product such as Frappuccino succeed in the marketplace. While those such as Miller Clear Beer an Frito – Lay’s lemonade failed? Further studies indicated that innovation success was related to collaboration between technical and marketing departments. Successful new products and services seemed to be technologically sound and also carefully tailored to customer needs. A study called Project SAPPHO examined seventeen pairs of new product innovations, with one success and one failure in each pair, and concluded the following

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