Innovation & Change

The calm water metaphor is always related to Lewin’s three step change process – unfreeze, change and refreeze. The calm water metaphor views changes as a response to some occasional disruption in an otherwise calm and stable world. But the 3-step change process is not appropriate for the white-water rapids metaphor because the changes are continual and chaotic. It is not just a simple 3-step process, instead it requires flexible, adaptable change management techniques and organization should react and anticipate with the change.

Organizational change defined as any alteration of people, structure or technology in an organization. The best way to manage the continual and constant change is by being alert to what is happening both inside and outside the organization. We will never be able to eliminate change so the best solution is learning how to deal with it.

But organization always faces difficulties while making changes in an organization because employees will not tolerate with the changes. They don’t like it. Employees fight change because they are comfortable with the status quo. They are familiar with the way things are now (the way they do their work now) and they uncertain about what the change will do to them. They might even realize that change is needed but still fight it because they don’t like the uncertainties associated with changing.

We know that organizational culture is made up of relatively stable and permanent values, myths, symbols, practises, beliefs and rituals. There are 3 reasons organization needs to change the culture, that is:

(1) The was no longer appropriate and weak
(2) Dramatic crisis – for example unplanned drop in revenues or a major customer decided to go with another supplier
(3) Change in organization’s top leadership – normally goes hand-in-hand with dramatic crisis.

Stress will happened when the members of an organization is not agreed with the change. But not all stress are bad, there are times when stress is positive and good. Stress is the adverse reaction people have to excessive pressure placed on them from extraordinary demands, constraints or opportunities. Stress is good when it stimulates a person on to high levels of effort and performance. Stress can be bad when it involves uncontrollable constraints and demands, and we normally get easily distracted.

Success in business today demands innovation. For most organization, with today’s rapidly changing and complex environment, innovation is important. There may be some organization that doesn’t need to be innovating, but the number is decreasing. Innovation is going to continue to be a key competency for successful organizations.

For an organization to be creative and innovative, first thing to have is having an innovative and creative members / employees. Creativity is the ability to combine ideas in a unique way or to make unusual associations between ideas. Innovation is taking creative ideas and turning them into useful product or work methods. But how do you get people to be creative and innovative? There are 3 sets of variables that are absolutely required. They are:

(1) Structure – creative and innovative organization must have flexible, open, adaptable structure where flow of ideas and resources is much easier because few structural mechanisms that acts as a barrier to creativity and innovative process.
(2) Culture – the culture needs to encourage risk taking, focus on goals and emphasize the realities of the organization as an open system.
(3) Human resources practises – organizations must promote the training and development of employees so that their knowledge is “cutting edge”. Organizations also need to give support, embrace, celebrate and reward the idea champions.

All three of these variables contribute to an organization’s ability to be creative and innovative.

Strategic Management

Strategic management is closely related to planning function because it is one specific type of planning. Managers will use the strategic management process to create plans and strategies that will enable the organization to achieve its short-run and long-run goals. There are six processes in strategic management process, they are;

1. Identified organization’s mission
2. External analysis
3. Internal analysis
4. Formulate the strategy
5. Implementation of strategy
6. Evaluate the strategy

Company’s mission is a statement of the purpose of an organization. Once the organization identified the mission, it must be communicated to the organizational members and must be understood. Having the mission writing is the simplest way of making employees know and understood it.

External analysis is the second process in strategic management processes. The easiest way of getting the external information is from the internet or World Wide Web, trade association publications, government publications, competitor intelligence, business periodicals, and general news periodicals.

Doing internal analysis you must know the difference between core competencies and competitive advantage. An organization’s core competencies are its major value those things that it has or it does particularly well, such as skills, capabilities and resources. But not all the core competencies are going to be significant sources of competitive advantage. If the organization is not good enough of doing something, so it is not a competitive advantage. Whereas competitive advantage is something that sets us apart from our competitors; something that makes customers go for our product and not the competitor’s product.

In internal analysis, organization’s culture plays an important role in its strategy. The culture will affect what strategies are formulated and how they’re formulated. It is also affected how the chosen strategy is implemented.

External and internal analysis also known as SWOT analysis. SWOT – strengths, weaknesses, opportunities and threats. By analysing the organization’s internal functional areas, the managers will be able to identify where the organization has strengths and where it has weaknesses. And, once the external environment has been analyzed, managers can locate the opportunities and the threats facing the organization. In other words, we wouldn’t know what strategies were appropriate unless we had information from SWOT analysis.

We understand how strategies are formulated, but how are they implemented? A strategy has to be implemented depending on the type of strategy and what level the organization in. For corporate level, there 3 types of strategies which are growth, stability and retrenchment. Growth strategy is implemented through internally increasing the levels of business operations, through creating new business, and through merging with or acquiring other businesses. A stability strategy is implemented simply by keeping everything at the current level of operations. Retrenchment strategies are implemented by two methods:

(1) Cutting cost
(2) Restructuring the organization through divesting, liquidating, reengineering, downsizing or filing for bankruptcy.

At the business level, the competitive strategies are implemented through the competencies, skills, and resources found in organization’s various functions: marketing, production/operations, research and development, and so forth.

Changing the organization’s strategy is a compulsory if the organization is not meeting its goals. Corporate strategies unlikely to change its strategies continually and frequently. It will change the strategy if there is a change in external and internal circumstances.

At the business level, changes are common and frequently because the competitors change what they do and the market place change what it values.

Foundation of Planning

Foundation of Planning



Planning is defining the organization’s goals, establishing an overall strategy for achieving those goals, and developing plans for organizational work activities. Managers plan whenever there is need to establish goals and to address how these goals are going to be achieved. You are planning if you have set your goals or objectives and develop a plan for achieving those goals.

Some planning is done daily, weekly, monthly or annually. Most of the organization will have specific time period or requirements for when and what plans need to be completed. The organizational planning depends on what level the manager is on, if he/she at the top level management, the plan is not done very often but comprehensive and more future-oriented.

Sometimes when we spending all our time planning but not seeing that those plans are carried out, we are doing too much planning. Once we’ve planned, the plan has to be implemented. For example, you want to finish you degree within 2½ years and not taking the necessary courses in the right sequences to meet graduation requirements, then you are planning too much.

During planning, the manager has to identify the organization’s goal/objectives to achieve. A for-profit organization has a primary objective which is to increase profit. However, if the manager wants the organization to survive in the long run, they should concentrate on other objectives as well. For instance, increased market share, strong product development, strong employee training and development, or effective planning processes.

Some organizations have their own stated objectives that organizations profess/believes as their intentions. However, these stated objectives are not often agreed by all the stakeholders. For them, it is just a ‘window-dressing’ to make the organizations look responsible and rational. This is happened because there is a conflict between what the organizations say and what they actually do. The content of stated objectives is substantially determined by what those audiences want to hear. But it is not make the information in the stated objectives is wrong. It is just means that what managers were writing the stated objectives, they were responding to what they realized as the demands of certain stakeholders.

Large or small organizations will create rules and procedures whenever they can because they’re efficient. Rules and procedure are standing plan to guide the manager’s decision and actions. This rules and procedures are ready to use whenever the situation arise, and managers don’t have to waste time or resources studying the situation and making plans. This standing plan contributes to doing work efficiently.

Traditional objective setting = objectives that sets up by the upper level of the organization and broken down into sub-goals for each lower level. The objectives sets by upper level because they know what’s best for the organization since only they know what is happening inside and outside the organization. However, the problem with this system is each manager is applying his/her own set of interpretations to the objectives as they pass from level to the next. as they pass this objectives, it often lose clarity and unity as they make their way down from top to the bottom of the organizations.

Management by objectives (MBO) = a process of setting mutually agreed upon goals and using those goals to evaluate employee performance. There 4 problems with MBO;

1. Time consuming – need a long-time period to achieve goals
2. More to quantity – overemphasis on strictly quantitative goals
3. Goals are set too high; or too low and too inflexible
4. Concentrate only on goals
– MBO system is on goals or ends, employees may concentrate on achieving their goals regardless of the means they use to get there – lead to unethically or irresponsible action and decision.

There are issues on planning and it normally happened when you want to implement your plans. Two examples that always arise are;

1. External environment are increasingly dynamic and complex and that make strategic and long-term planning look obsolete – managers can’t really expect to plan effectively when there is so much changes outside the organizations. One other thing to note in relation to strategic and long-term planning is that the time frame of long-term planning has changed considerably. For instance, back in 1970’s, long-term was considered to be anything over 15-20 years. But it is impossible to plan 15 years in the future nowadays! Long-term now are generally considered to be in the range of 2-3 years in the future. However, it still can be difficult to predict and plan for changes in the external environment especially for organizations in rapidly changing industries such as computers or the like. On the other hand, strategic and long-term planning must be considered because it is too valuable and important to do that.

2. Sometimes when plans are determined, we have to change those plans. Plans are created in static time frame. However, once those plans are put into action, it’s no longer a static scenario. Instead, organizational members are doing their work according to the plans. You have to change your plans even though you planned well. This is happens because the organizations are dynamic, and your environment change rapidly. You had to change your plan according to the particular situation that arises during the implementation.

Planning & Decision Making

In decision making, managers (decision makers) will put a weight to the decision criteria. If the relevant criteria aren’t equally important, the decision makers must weight the items in order to give them the correct priority in the decision. You will know what weight to give to a given criteria based on the importance you give to it. Weights reveal your personal values because only you know what weight to give to the criteria. In organizations, a strong culture is likely to influence managerial decision making by shaping the criteria chosen and the weight assigned.
For example, if the organization’s culture is to cut the cost, then the manager’s priority is likely to make a decision that are involving lower costs. If they make any decision without following the culture, he’s likely to have a short career in this organization.

In organizational decision making, politics play a major role especially the major ones. Politics is how to influence (use power to influence) people to agree with your decision. This is happened because there are different individuals or groups in the organization with different values, goals and interests. The differences will create conflict over limited resources such as departmental budget, space allocation, project responsibilities and salary adjustment. The most important factor leading to politics within organizations is the realization that most of the “facts” that are used to allocate the limited resources are open to interpretation. Sometimes when you make a decision, some of your colleagues are not agreed because they think you do it to further your interests. People in the organization will use their influence to taint the facts to support their goals and interests.

There are times when you already made decision and when you want to implement it, you found out that it didn’t solved the problem. This not means that you make a bad decision. All you can do is reassessing the problem and do the decisions process again.

When the decision maker fined a choice that is good enough to solve the problem, they will quit looking at other choices because he’s satisfied with the choice. Others will think that the manager is settling for the second best. Satisfying choice means satisfactory and sufficient. There is nothing wrong with it. Either you are making decision for your life or for the organization; it won’t required the making of optimizing choices. Satisfying model result shows that no significant loss in organizational performance, the manager accept the decisions that are good enough to solve the problem.

Using intuition to make a decision, can improve the decision making. But, by rely on the intuition only will not helping you making a good decision. You need to combine it with your experience. As you increase your experience, your gut-feelings will gain increasing validity. If you want to make a quality decision making, you need to add rational analysis in your decision making process. There is time when you cannot use your intuition, which is when you don’t have the experience or your experience irrelevant to a specific decision.

Decisions made by the manager are guided by the policies. Policy is a guideline for making decision. Its create parameter that limit the managers but don’t make a choices for them. For example, the company policy is to pay competitive wages. If the data shows that the pay range for certain job in your community is $9.50 to $12.00 an hour, offering a new hire $8.00 or $13.00 would be inconsistent with the pay policy. But within the pay range, you have discretion.

In decision making, experience and creativity will interact. Experience is valuable in decision making because it allows you to draw on previous decisions so you can make effective choices quickly. Experience tends to be more helpful for handling routine decisions on structured problems. Meanwhile, creativity is valuable because it helps you to see problem others don’t see and develop new and unique alternatives. You can use creativity when handling non-routine decision on unstructured problems.

But there’s an irony here. Sometimes the senior executive have more experience but making the non-routine decision. Conversely, the lower-level manager tends to have less experience but they are more likely a creative person. Yet the types of problems they most often face are of the structured variety.

When organization wants to hire a manager, during the selection process the organization tend to select a person that fit with the organization’s culture. Decision style is relatively fixed. But if the manager can adjust his/her decision style to fit the organization’s culture, there isn’t likely to be a problem. But if there is a mismatch, don’t expect the person to change.

Last but not least, in decision making there is no “best” decision style. Any style can be effective under certain circumstances.

ETHICS & SOCIAL RESPONSIBILITY

Organizational managers, especially the for-profit business organizations seem to be a favourite target of the news media. Their social responsibility or lack of social responsibility always gets everyone’s attentions. This is because they play an important role in our society. This organization controls almost all the resources and provides the goods and services for the society.

Sometimes we always ask either the organization is being responsible or can they improve their contribution to society. If we feel they are not being responsible, we will ask why and what are they going to do about it. Fortunately, we don’t always dwell on the negatives, but we also commend on the positives.

There are people that argue on organization being socially responsible. For us to understand this argument, we need to understand with whom the organization responsible and how big the responsibility is. For those who argue about this says that organizations do have social responsibility but not to the society or the stakeholders, but to the stockholders. The main reason is because these organizations attend strictly to their economic interests.

Using time frame, we can differentiate between social responsibility and social responsiveness. Social responsibility is an obligation of a firm to pursue long-term goals that are good for society. Being socially responsible, it reflects the desire to do something good because it is the moral and ethical thing to do. An easy example for organizations being socially responsible is by promoting the awareness programme, for instant, the Aspin Skiing Company, built a green building in US in purpose of environmentally sustainable. Social responsiveness, on the other hand, is much more pragmatic. It focuses on medium and short-term goals. Organization’s desire is to respond to changing societal norms and demands. The organization being socially responsive when a firm engages in actions in response to some popular social needs. For example, KFC sell a bookmark to the customers’ to help the hunger society in Africa.

Now, think of a people who work with the alcohol manufacturer, tobacco companies, or food manufacturers whose products have high fat content, can be socially responsible to the society. Some companies produce products that can injure and even kill people. It might be difficult for a person who feels strongly about the social role of business and who is strongly committed to the idea of businesses being socially responsible. However, just because a person working with a company whose products can injure or even can kill people doesn’t make that person is socially irresponsible. He or she still can be responsible to the society by giving strong commitment in educating people about their products and what the misuse of these products can do.

All organizations have shared values as defined by their culture and these values do guide decisions and actions. However, in companies that practice value-based management, these values reflect a broad-based commitment to being socially responsive. The important or value-based management is embrace a social component-a commitment to making decisions and taking actions that are in the best interests of an organization’s broad spectrum of stakeholders.

Most typical business executive are seen as a morally upstanding, ethical and responsible individuals. They don’t have two different sets of ethical standard for business activities and for his personal life. Unfortunately, an organizations can knowingly or unknowingly steer people into making ethically questionable decisions and involve with ethically questionable actions because of the processes, systems and rewards it has in place.

An organizations can shape employee ethics and attitudes toward socially responsible by emphasizing and rewarding those ethical and socially responsible behaviours that are desired. The employees will engage in these behaviours if they see that it is the one that are important and supported. For example, a well-known personal-care product manufacturer, the Tom’s of Maine, have a culture where every managerial decision in light of the ethical value the company espouses. If they follow the culture, they are rewarded and if they don’t, they are subtly encourage to rethink decisions they have made or the actions they have taken.

Every country has different values that have been practice. Some country such as US, bribing the local government officials is norms. For example, Coca-Cola has consistently turned down requests for bribes from Egyptian officials but the company still has managed to gain support and public trust by sponsoring a project to plant fruit trees. Because of the differences, managers need to change their ethical behaviour if they want to market their products in that particular country.