Chapter 9 - Organizational Cultures, Innovation & Change
Describe how managers practice value-based management.
When managers practice the core values, model them for others, and communicate and reinforce them in all that they do, this is called value-based management. It is managing with a commitment to actively help develop, communicate, and represent shared values within an organization.
Achievement award programs are ________ that contribute to a company's core values.
rites and rituals
Special creative units set free from the normal organizational structure for the purpose of innovation are called ______________.
skunkworks
Explain and understand what is meant by the culture of organizations, how they distinguish organizations from one another, and how they give members a sense of collective identity.
Aspects of the internal environments of organizations are important in management. They help display the organizational culture as a system of shared beliefs and values that develops within an organization and guides the behavior of its members. Whenever someone speaks of "the way we do things here," he or she is talking about the organization's culture. You can think of this as the personality of the organization, the atmosphere within which people work. Sometimes called the corporate culture, it can have a strong impact on an organization's performance and the quality of work experiences of its members.
Explain and provide examples of how disruptive innovation uses new technology to displace existing practices.
At times the innovation process is so successful that disruptive innovation occurs. Harvard Scholar Clay Christensen defines it as the creation of an innovative product or service that starts out small scale and then moves "up market" to where it is so widely used it displaces prior practices and competitors. Historical examples include cellular phones that disrupted traditional landlines
Explain how organizational culture shapes behavior and influences performance of its members.
Based on a model called the competing values framework, it identifies four different culture types. Hierarchical cultures emphasize authority, tradition, and clear roles. Rational cultures emphasize process, efficiency, and slow change. Entrepreneurial cultures emphasize change, growth, creativity, and competition. Team cultures emphasize teamwork, collaboration, and trust. How do these options sound to you? According to a study by LeadershipIQ, employees are likely to give entrepreneurial cultures the highest marks for engagement and motivation, and as good places to work.
What is the difference between process, product, and business model innovation?
First, process innovations result in better ways of doing things. Second, product innovations result in the creation of new or improved goods and services. Third, business model innovations result in new ways of making money for the firm.
Provide examples of how innovating organizations share common characteristics.
In highly innovative organizations the corporate strategy and culture embrace innovation. The strategies of the organization include and highlight innovation; the culture of the organization, as reflected in visions and values, emphasizes an innovation spirit. In highly innovative organizations, organization structures support innovation. Bureaucracy is the enemy of innovation. Innovative organizations take advantage of organic designs and team structures that empower people and eliminate cumbersome bureaucratic ways.
Explain how organizational culture develops within an organization, and how it guides the behavior of its members.
In strong culture organizations, the culture is clear, well defined, performance driven, and widely shared by members. The culture fits the nature of the business and the talents of the employees. It discourages dysfunctional behaviors and encourages helpful ones while keeping a clear performance vision front and center for all to rally around. Strong and positive cultures don't happen by chance. They are created by leaders who set the tone, and they are reinforced through socialization. This is the process of helping new members learn the culture and values of the organization, as well as the behaviors and attitudes that are shared among its members.
The responses most likely to be associated with use of a force-coercion change strategy are best described as __________. (a) internalized commitment (b) temporary compliance (c) passive cooptation (d) active resistance
b
When a change leader tries to deal with resistance by trying to covertly influence others, off ering only selective information and/or structuring events in favor of the desired change, this is an example of __________.
b
A manager using a force-coercion strategy is most likely relying on the power of __________ to bring about planned change. (a) expertise (b) reference (c) legitimacy (d) information
c
Green innovation is most associated with the concept of __________. (a) observable culture (b) core culture (c) sustainability (d) skunkworks
c
Planned and spontaneous ceremonies and Planned and spontaneous ceremonies and celebrations of work achievements illustrate how the use of __________ helps build strong corporate cultures. (a) rewards (b) structures (c) rites and rituals (d) core values
c
The Kindle e-reader by Amazon and the iPad by Apple are examples of __________ innovations. (a) business model (b) social (c) product (d) process
c
You know that you are likely working with a "status quo" manager when they exhibit any of the following traits except: a) appearing threatened by change b) being bothered by uncertainty c) preferring predictability d) supporting the status quo e) typically making things happen
typically making things happen
Distinguish between the three forms of product innovation.
• Process innovation—Southwest Airlines streamlines operations to fit its lowcost business strategy; IKEA sells furniture and fixtures in assemble-yourself kits; Amazon.com's "one-click" makes online shopping easy; Nike lets customers design their own sneakers. • Product innovation—Geico put insurance underwriting online; Apple introduced the iPod, iPhone, and iPad, and made the "app" a must-have for smart phones and tablets; Amazon brought us the Kindle e-book reader; Facebook and Twitter made social media a part of everyday life. • Business model innovation—Netflix turned movie rental into a subscription business; eBay profits by connecting users of its online marketplace; Google thrives on advertising revenues driven by ever-expanding Web technologies; Zynga made paying for "extras" profitable with free online games; Salesforce.com sold cloud-based software not as a product but as a service.
Explain the steps of how to lead transformational change within an organization.
•Establish a sense of urgency for change. •Form a powerful coalition to lead the change. • Create and communicate a change vision. • Empower others to move change forward. • Celebrate short-term wins, and recognize those who help. • Build on success; align people and systems with new ways. • Stay with it; keep the message consistent; champion the vision.
Honesty, social responsibility, and customer service are examples of __________ that can become foundations for an organization's core culture. (a) rites and rituals (b) values (c) subsystems (d) ideas
b
Product innovations create new goods or services for customers, whereas __________ innovations create new ways of doing things in the organization. (a) content (b) process (c) quality (d) task
b
The basic purpose of a starting a skunkworks is to __________. (a) add more bureaucratic structure to the innovation process (b) provide special space for people to work together and achieve innovation (c) make sure that any innovation occurs according to preset plans (d) give people free time in their jobs to be personally creative
b
The process of turning ideas into products/methods that can increase profits is called:
business model innovation
According to Lewin, the correct order in the steps of change is:
unfreezing, changing, refreezing
Explain how managers use strategies of force-coercion, rational persuasion, and shared power change.
A force-coercion strategy uses the power bases of legitimacy, rewards, and punishments as the primary inducements to change. It comes in at least two types. In a direct forcing strategy, the change agent takes direct and unilateral action to command that change take place. This involves the exercise of formal authority or legitimate power, offering special rewards, and/or threatening punishment. In political maneuvering, the change agent works indirectly to gain special advantage over other persons to force the change. This involves bargaining, obtaining control of important resources, forming alliances, or granting favors. An alternative to force-coercion is the rational persuasion strategy, attempting to bring about change through persuasion backed by special knowledge, information, facts, and rational argument. The likely outcome of rational persuasion is compliance with reasonable commitment. A shared power strategy engages people in a collaborative process of identifying values, assumptions, and goals from which support for change will naturally emerge. Although slow, the process is likely to yield high commitment. Sometimes called a normative re-educative strategy, this approach relies on empowerment and participation.
Explain the difference between how organizations pursue transformational and incremental changes.
Changes led from top levels are likely to be large-scale, frame breaking, and strategic. They are repositioning changes focused on big issues that affect the organization as a whole. We call this transformational change. It is supposed to result in a major and comprehensive redirection of the organization—new vision, new strategy, new culture, new structure, and even new people. Let's not forget that there is another more modest and frame-bending side to organizational change. It deals with ongoing adjustments in structures, systems, technologies, products, and staffing to improve performance. This is incremental change that tweaks and nudges people, systems, and practices to better align them with emerging problems and opportunities. The intent isn't to break and remake the system, but to move it forward through continuous improvements.
Define observable culture as part of an organization's daily life.
How do people look, act, and behave? How do they treat one another? How do they treat customers? What's in their conversations? Are they enjoying themselves? When you answer these questions, you are starting to describe the observable culture of the organization.
What are the possible differences in outcomes for managers using force-coercion and shared power change strategies?
In general, managers can expect that others will be more committed and loyal to changes that are brought about through shared power strategies. Rational persuasion strategies can also create enduring effects if they are accepted. Force-coercion strategies tend to have temporary effects only.
Define innovation and how the development of new ideas is put into practice.
Innovation, the process of developing new ideas and putting them into practice. The late management consultant Peter Drucker called innovation "an effort to create purposeful, focused change in an enterprise's economic or social potential." Said a bit differently, it is the act of turning new ideas into usable applications.
How do a manager's responsibilities for change leadership vary among Lewin's three phases of planned change?
Lewin's three phases of planned change are unfreezing, changing, and refreezing. In terms of the change leadership challenges, the major differences in attention would be as follows: unfreezing—preparing a system for change; changing—moving or creating change in a system; and refreezing—stabilizing and reinforcing change once it has occurred.
What core values might be found in high-performance organizational cultures?
The core values that might be found in high-performance organizational cultures include such things as performance excellence, innovation, social responsibility, integrity, worker involvement, customer service, and teamwork.
Provide examples of a strong and positive organizational culture.
The observable culture is also found in the stories, heroes, rituals, and symbols that are part of daily organizational life. The presence or absence of these observable things, and the ways they are practiced, can say a lot about an organization's culture. They represent, communicate, and carry the culture over time, keeping it visible and clear in all members' eyes. New members learn the organization's culture through them, and all members keep the culture alive by sharing and joining in them.
Explain the main components of organizational culture and how cultures are reinforced through socialization .
The observable culture is what you see in people's behaviors and hear in their conversations. It is reflected in how people dress at work, arrange their offices, speak to and behave toward one another, and talk about and treat their customers.
Stories told about an organization's past accomplishments and heroes such as company founders are all part of what is called the __________ culture. (a) observable (b) underground (c) functional (d) core
a
Provide examples of why people may resist change and explain how change leaders identify and deal positively with that resistance to change.
When people resist change, they are most often defending something important to them and that now appears threatened. It is tempting to view such resistance as something that must be overcome or defeated. But this mindset can easily cause problems. Perhaps a better way is to view resistance as feedback, as a source of information about how people view the change and its impact on them. A change leader can learn a lot by listening to resistance and then using it to develop ideas for improving the change and the change process. Why People Resist Change Fear of the unknown—not understanding what is happening or what comes next Disrupted habits—feeling upset to see the end of the old ways of doing things Loss of confidence—feeling incapable of performing well under the new ways of doing things Loss of control—feeling that things are being done "to" you rather than "by" or "with" you Poor timing—feeling overwhelmed by the situation or feeling that things are moving too fast Work overload—not having the physical or psychic energy to commit to the change Loss of face—feeling inadequate or humiliated because it appears that the old ways weren't good ways Lack of purpose—not seeing a reason for the change and/or not understanding its benefits Change agents deal with resistance to change in a variety of ways, including education, participation, facilitation, negotiation, manipulation, and coercion.
Movie downloads by subscription (Netflix) and advertising revenues from Internet searches (Google) are examples of __________ innovations. (a) business model (b) social (c) product (d) process
a
The innovation process isn't really successful in an organization until a new idea is __________. (a) tested as a prototype (b) proven to be financially feasible (c) put into practice (d) discovered or invented
c
The most participative of the planned change strategies is __________. (a) negotiation and agreement (b) rational persuasion (c) shared power (d) education and communication
c
Explain how commercializing innovation turns new ideas into actual products, services, or processes, or processes - that generate profits through more sales.
commercializing innovation—that turns new ideas—the inventions—into actual products, services, or processes—the applications—that generate profits through more sales or lower costs.
A deeper level of organizational culture that consists of the beliefs and values shared by the organizations members is called a ____________ culture.
core
An organization with a strong culture is most likely to have a __________. (a) tight, bureaucratic structure (b) loose, flexible design (c) small staff size (d) clearly communicated mission
d
__________ change results in a major change of direction for an organization, whereas __________ change makes small adjustments to current ways of doing things. (a) Frame breaking; radical (b) Frame bending; incremental (c) Transformational; frame breaking (d) Transformational; incremental
d
In order to lead transformational change, the leader must: a) establish a sense of urgency b) empower others c) create and communicate a change vision d) celebrate short term wins e) all of the above
e) all of the above
Organizational culture can be thought of as: a) the "way we do things around here" b) a system of shared beliefs and values c) the personality of the organization d) a guide to acceptable behavior in the organization e) all of the above
e) all of the above
The four steps in commercializing innovation are idea generation, initial experimentation, ____________ and final application.
feasibility experimentation
A person who is responsible for providing new insights and discoveries to the company is called a(n) ______________.
idea generator
A person who serves as an innovation information link between both inside and outside sources is called a(n) ______________.
information gatekeeper
A person who is responsible for keeping innovation goals and values visible in the company is called a(n) ______________.
innovation leader
All of the following could be sources of resistance to change except: a) past successful change b) fear of the unknown c) loss of control d) loss of face
past successful change
Sam spends a lot of time attending new product development meetings and reviewing schedules. Sam's role is that of a(n) _____________.
project manager
The "shared power" change strategy is most closely linked to the ____________ power base:
referent power
