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Organizational Theory

Innovation and Technological Change

There are two types of technological change:

Quantum technological change—fundamentalshift in technology that revolutionizes products or their production

Incremental technological change—refinementof some base technology

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Organizational Theory

Product Life Cycle StagesProduct Life Cycle Stages

Embryonic stageEmbryonic stage: a product has yet to gain : a product has yet to gain widespread acceptancewidespread acceptanceMinimal demandMinimal demand

Growth stageGrowth stage: a product has been accepted by : a product has been accepted by customerscustomersDemand increases, first-time buyersDemand increases, first-time buyers

Mature stageMature stage: market demand peaks because : market demand peaks because most customers have already bought the most customers have already bought the productproductDemand plateaus, replacement purchasesDemand plateaus, replacement purchases

Decline stageDecline stage: occurs when demand for a product : occurs when demand for a product falls – obsolescence falls – obsolescence

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Organizational Theory

PERT/CPM/GANTT ChartPERT/CPM/GANTT Chart

Flowcharts of a project that can be built with Flowcharts of a project that can be built with many proprietary software packagesmany proprietary software packages

These software packages focus on:These software packages focus on:Modeling the sequence of actions necessary to Modeling the sequence of actions necessary to

reach a project’s goalreach a project’s goal

Relating these actions to cost and time criteriaRelating these actions to cost and time criteria

Sorting out and defining the optimal path for Sorting out and defining the optimal path for reaching the goalreaching the goal

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Organizational Theory

There are various ways that managers can control the innovation process:

Skunk works—a task force that is createdto expedite new product design and promote innovation by coordinating theactivities of functional groups.

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Organizational Theory

Creating a Culture for InnovationCreating a Culture for Innovation

Organizational structureOrganizational structureSize and age impede innovationSize and age impede innovation

Organic structures tend to promote innovation.Organic structures tend to promote innovation.

People - organizations need to guard against People - organizations need to guard against similaritysimilarity

Property rights – create career paths to show Property rights – create career paths to show that success is closely linked with future that success is closely linked with future promotion and rewardspromotion and rewards

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Organizational Theory

IT and Organizational Structure and CultureIT and Organizational Structure and Culture

IT affects the innovation process through its effects IT affects the innovation process through its effects on organizational structure.on organizational structure.

IT gives lower level employees more detailed and IT gives lower level employees more detailed and current knowledge of consumer and market current knowledge of consumer and market trends and opportunities.trends and opportunities.

IT can produce information synergies. IT can produce information synergies. Facilitates increased communication and coordination Facilitates increased communication and coordination

between decentralized decision makers and top between decentralized decision makers and top managersmanagers