Organizational Design, Change, Leadership and Culture | Dana Yembergenova | Skillshare

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Organizational Design, Change, Leadership and Culture

teacher avatar Dana Yembergenova

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Taught by industry leaders & working professionals
Topics include illustration, design, photography, and more

Lessons in This Class

9 Lessons (59m)
    • 1. Introduction

    • 2. Human rationality

    • 3. Organizational Boundaries

    • 4. Organizational Design

    • 5. Organizational Change

    • 6. Organizational Change II

    • 7. Design Enabler

    • 8. Leadership

    • 9. Culture

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About This Class

***Are you ready to be exposed to the fundamentals of organizational design, change, leadership and culture?

If you are an aspiring change manager or leader, you should first learn fundamentals to obtain a fairly high level of intellectuality, before worrying very much about things like business cases.

*** In this course, you will learn everything you need to know from deeper underlying properties of individuals to fundamentals of organizational design, change, leadership and culture.

One should always know that, understanding of these fundamentals is imperative while conceiving change or initiating innovative projects, to properly explore behind the scene interplay of values and practices.

Meet Your Teacher

Hello. I am Dana. I am a PhD holder in organizational studies at the University of Geneva, Switzerland. I have been teaching organizational design, change and innovation for the last 5 years and currently I am a change management analyst at the multinational corporation. I hope you will enjoy this course. Since this topic is very dear to me, look forward to your feedbacks.

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1. Introduction: Hello guys. This is an organizational design, change and innovation course. My name is Diana, and I've been teaching this course for the last five years. And currently I'm a change analysts at a multinational corporation. And the very first thing I want to say is that proper design and management of change at your organization is the number one key to success. Therefore, in this course will cover a set of topics that companies and managers or anyone interested in organizational design, change and innovation might find valuable. Having said that in this course, I represent a series of lessons that employ variations of theoretical knowledge, practical examples, and case studies on organizational design, change and innovation. Before going any further, we have to clarify what is an organization and what constitutes an organization. One introduction lesson. And organization is an entity that links identities, accounts of situations and prescriptive rules and regulations. Organizations create actors and allocate tasks and resources differently among those actors. Depending on the allocation of tasks and resources. Organizations therefore, empower and constrain actors differently. This empowerment or constraint of actors outlines certain structures within organizations where actors are directed to act according to prescribed roles, rules and regulations to achieve a common goal. The goal can be a product, service, or certain output. Organizations furthermore, create meeting places and organize the relations and interactions among actors. And that outlines processes, procedures, and work instructions. Since various organizations create an outline, various structures and processes to reach different goals, organizations can be considered a product or an outcome of their own. Therefore, organizations, just like other products, can be designed by intelligent forethought and appropriate actions. By solving organizational design problems, management can gain a competitive advantage over rival organizations. Organizational design can help managers to better attain a higher performance, a better service or product for their organizations by adopting more effective structures and processes. Organizational design may also be used by managers to bring about organizational change, thereby development. In other words, by solving organizational design problems. While also solving organizational change problems. Management can engineer an evolutionary process and gain a worthwhile performance. 2. Human rationality: Organizations, however, our institutions created to serve human needs. Organizations are there to provide meaningful and secure employment and valuable opportunities for its members. Only by serving the needs of its individual employees. Can an organization gain worthwhile performance? Therefore, before going any further, we must briefly talk about social psychological aspects of individuals in organizations. That is, individual behavior in a social context. However, before talking about social psychological aspects of individuals, let's first focus on human rationality. Rationality is the reasoning behind individual behavior. Rationality connects individuals with organizations as people have to make rational decisions in terms of how much product should be produced, who should be hired or fired. In this regards, classical economics has been the dominant force in defining rationality of subjects. In general, classical economics theory formulates precise economic laws regarding production and consumption through the calculation of cost and benefit. In particular, classical economics states that before producing a product or hiring or firing a person, actors in organizations conduct a cost-benefit analysis to evaluate all the potential costs and benefits that a company might generate from the project. Since the outcome of the analysis will determine whether the project maximizes net revenue. Accordingly. In classical economics, all individuals taking part in this activity are fundamentally rational. And the one basic idea of classical economics is that human behavior is rational in the sense that people seek to maximize utility. Classical economics, man selects the best alternative among all those available. Man also has very precise, consistent, and stable preferences. However, in this course, we present actors in organizations based on the behavioral theory of firms. This means that in this course, we present human rationality from a different perspective. In particular, we present actors as imperfectly rational, whose preferences are somewhat unstable, generally inconsistent, and not very precise. Human beings have limited computational facilities. They cannot deal with complexity very well. Human beings might strive for rationality, but their rationality is restricted within the limits of their own knowledge. Consequently, human beings when making decisions, pursue what they think is appropriate to their identity or logic of appropriateness. As they think, what kind of person am I? What does such a person do? We know all kinds of examples where people intentionally choose the inferior alternative that leads them to bad consequences. As they think I am a man and I do what a man does. Most men doing what a man does, get into trouble from time to time. There is also a competency trap. As you gain experience, your skill gets greater, so you do better with that activity. That complicates making choices among activities because you are more skillful at some than at others. And the joint effect is that you end up preferring to do something that is not the best, optimal activity. Yes, individuals do make decisions. They take actions, but those actions don't necessarily fulfill any notion for consistent rationality. Conversely, in the social psychological context, that is individual behavior in a social context, imperfectly rational individuals tell each other their experiences and share perceived reality of what is appropriate. And they formulate together many worlds or groups in the organization. These worlds have their own order and they're connected to the shared stories that bind these many worlds together. In so far as many worlds build buffers between the various realities and preferences, change and development become surrounded by individual and group constraints. If you believe in the logic of consequences or classical economics, you ought to prefer alternatives that lead you to better consequences. And organizational change and innovation would be easy. But in this course, we demonstrate human morality in ways that celebrate the virtue of doing what they can and are supposed to do, not what is good for them economically or consequentially. In doing so, we'll aim to identify the impact of these behaviors among people on organization change and innovation and predict the ways to overcome them. 3. Organizational Boundaries: Organizational boundaries and design. Before talking about the internal workings of organizations, we must first present organizations within the broader environment that they operate in. In doing so, the first thing we need to discuss is what is called organizational boundaries. It may be impossible to understand organizational behavior without understanding its boundaries. Boundaries therefore, are metaphors for understanding behavior in organizations. Boundaries separate firms and their environments. Environments include factors beyond the organization boundaries. For example, business, political and technological environments. Boundaries regulate the flow across the firm and these heterogeneous spaces, boundaries provide control. Normally power and competencies are derived from this control. For example, control of new technologies, such as the Internet can either enlarge or shrink the firm's competencies through their effects on production. Organizations can also control the political environment and derive certain power since organizations have boundaries and organization would then be logically considered a system. This means that organizations aren't machines with one right way of organizing, like classical management literature states, in contrast, organizations are like organisms that have multiple ways of organizing to achieve various goals. Organizations deal with different environments. In these environments influence the functioning of organizations. In general, organizations can have either easily or less easily permeable boundaries. This permeability determines the openness or closeness of organizations to their environments. Open organizations, just like biological organisms, are normally totally open to their environment. And in order to survive, to remain competitive and innovative, they must align with their environments. And open organizations, there are inputs that come from the external environment, throughputs and produce outputs that are distributed to the external environment. Open organizations therefore, have a rather thin filter and permeable boundaries, allowing many external signals to enter the organization. However, it's wrong to assume that all open organizations are living organisms and closed organizations are non-living organisms like machines that the closed organizations ignore the importance of the environment to their functioning. Closed organizations are not clearly demarcated from their environments like machines, but closed organizations are operationally closed and this closeness is also significantly shaped by the environment. In other words, closed organizations are still interdependent and open for exchange with their environments. But closed organizations have a rather thick filter and comparatively rigid boundaries due to external conditions. Therefore, closed organizations are somewhat autonomous and insulated and they're preoccupied with principles of internal design and functioning within their own internal frame of reference. In other words, closed organizations are preoccupied more with, with inputs rather than inputs, throughputs, and outputs. Therefore, it's wrong to assume that open organizations are good and closed organizations are bad. In fact, most social organizations can be partially open and partially closed. Or opening up or entirely closing off can be appropriate under certain conditions. For example, some open organizations may be responsive only to a relatively narrow range of inputs from the environment, which makes them partially open. Also being in the state of closeness might allow an organization to shield itself from excessive turbulence and complexity from its environment and to reduce the insecurity associated with it. Without this kind of shielding, the organization would react to every single impulse. The resulting overload could cause the organization to drift or even to disintegrate. Being in a state of relative closeness might also work well within stable environments. Therefore, in order to define more explicitly certain patterns of relationships between environmental variables and the organizations, we must understand contingency approach. Contingency approach holds a view that there's no one best way to organize. Contingency approach holds a view that the most effective organizational design is the one that fits the contingencies in the environment and the task with which the organization is dealing. For example, market uncertainty might occur and the organization must plan for it. This means that not only do organizations have to be open to their environments and align with their environments in order to survive. But being partially closed or closing off can have advantages as well in these situations. In this view, contingency theory asserts that aperiodic alternation of opening up, being partially closed or closing off may be seen as healthy foreign organization. This is because at the center of contingency theory is the notion of fit and misfit. The best organizational design is the one that fits the contingencies of that certain environment. 4. Organizational Design: Organizational design, consistent with the openness and closeness of organizations, firms can be categorized into two main types, mechanistic and organic organizations. Mechanistic Organizations are generally closed, typically hierarchical, and knowledge is concentrated at the top of the organization. They're characterized by task specialization and functionally differentiated duties with precise definition of rights and obligations. This type of organization is well-suited to stable and predictable conditions. For example, an unchanging technology and a certain market. Organic organizations, on the other hand, are quite open, more fluid in their structures, roles, procedures, and communications. They're characterized by a network structure of control. Knowledge may be located anywhere in the network. This type of organization is said to be better suited for environments characterized by rapid change and high complexity. Organic organizations are capable of radical innovation in a volatile environment. Great many corporations should be characterized by their organic approach to management design. If constant changes in technology and fluctuations in the market. Our existence. However, as we've mentioned earlier, organizations cannot only be opened and closed or organic and mechanic. The best organizational design is the one that accommodates its environment and fits the contingencies of that environment. Therefore, Mintzberg proposed a series of organizational archetypes. Simple structure, machine bureaucracy, professional bureaucracy, divisional lysed form, and add autocracy. In general, organizations can be differentiated along three basic dimensions, such as the key part of the organization, the prime coordinating mechanism, and the type of decentralization used. These three basic dimensions are very important because by using these three basic dimensions of key part of the organization, prime coordinating mechanism, and type of decentralization. Organizations can build different design configurations to fit the contingencies in the environment. The key part of the organization is basically key roles, responsibilities, and key staffing. The prime coordinating mechanism is the key processes that the organization uses to coordinate its reporting and operational activities. And the type of decentralization used is the extent to which the organization involves subordinates in the decision-making process. That is, organizational agility or stability typically accompany leaders might think that changing their organization structure will address their organizational design problems. However, organizations can't redraw lines and set up a new form for the organization all at once. By changing organizational charts, you're laying out a sequence of interventions with The key part of the organization, the prime coordinating mechanism, and the type of decentralization that will lead the company to new structure and new design. Structure is the capstone, not the cornerstone. Thus, while designing organizations, managers have to thank where's the most strategic value and in what roles and responsibilities and in what types of coordinations will bring the most value to help them get through difficult situations or take advantage of new opportunities. For example, organic organizations put the highest strategic value on their maintenance subsystem or support staff. In other words, the maintenance subsystem or support staff in an organic organization is quite large to support the organic approach of the organization to its environment. The maintenance subsystem provides supportive functions to the organization that enable the organization to run smoothly through rapid change and high complexity. Examples are the personnel department and the janitorial staff. In order to cross the boundaries of subsystems and to manage its activities affectively. Organic organizations use mutual adjustment as the prime coordinating mechanism. Mutual adjustment exists when work is coordinated through informal communications to make rapid decisions. Organic organizations are also normally agile organizations. And one of the nine principles of Scaled Agile is decentralization of decision-making. However, to maintain cadence among decentralized teams, organic organisations can be centralized to a certain extent. Therefore, the type of decentralization in organic organizations is selective. The sides, the three basic dimensions mentioned, the type of feedback used in organizations should also be considered a strategic value area. Feedback is used for planning and control and to make decisions regarding inputs, workflow, and outputs to maintain performance. Therefore, we shouldn't lose sight of how important feedback really is for organizations. In general, there are two types of feedback, such as confirmatory and gold changing feedback and closed organizations or mechanical organizations, are normally self-referential or confirmatory. This kind of feedback focuses solely on the functioning of existing procedures and doesn't challenge the appropriateness of the existing procedures. As they ask questions such as, are we doing things right? Could we do what we're currently doing in more productive whites? Do it cheaper using alternative methods or approaches for the same objectives. This kind of feedback scratches at the surface of problems and can improve existing procedures. But it never questions the cause of the problems. Feedback and open organizations or organic organizations, on the other hand, is normally goal changing. Goal changing feedback focuses on the system as a whole and on the interrelationship of the subsystems within this total system. This means that this kind of feedback is not only received from within the organization, but also from the outside environments around it. And the question that may be asked is, are we doing the right things? Ideally, organizations can use automated feedback loops where the outputs of a system are circled back and used as inputs. In this kind of system, planning and control on typical occurrences are not required because the system self-corrects or self-regulate in such a way that the organization automatically comes back into FIT with its environmental contingencies. One simple example is an Italian knit where manufacturer that markets it's clothing in the United States. This company produces most of its sweaters in white, but it has a system that uses computerized inventory information to find out what colors are selling best. And then die sweaters in hot selling colors immediately before shipping them. Appropriate identification and use of the three basic dimensions mentioned and feedback are important for creating appropriate design to fit the contingencies in the environment. Particularly managers who correct misfits in organizational design by correct identification of basic dimensions and feedback can achieve worthwhile performance gains for their organization. Thus, managers will need to revisit organizational design issues in order to avoid misfit and restore performance back to acceptable levels. Particularly successful organizational design should be one of the building blocks of organizational change. This is because even the best change management efforts won't stick without an aligned organizational design. 5. Organizational Change : Organizational Change. In general, the organization must scan their environment and change to accommodate the changing contingencies in the environment. Organizational change is the action any firm takes to change any of its underlying components, such as processes, culture, people, product, infrastructure, or technology. While organizational change is often discussed as a single concept, there are multiple types of organizational change to be specific, depending on the objectives and approach taken, there might be eight main types of organizational change. One, organization-wide change. Organization-wide change is a large scale transformation that affects the whole company. This could include restructuring leadership, adding a new policy, or introducing a new enterprise technology. To transformational change. Transformational change specifically targets accompanies organizational strategy. Transformational change also involves de merging changes where new competencies are developed in order to allow two or more business units that once acted as a single entity to act independently. Three, incremental change. This involves continuous, small improvements in an ongoing manner. For remedial change. Leaders implement remedial change when they identify a need to address deficiencies or poor company performance. For example, financial distress requires remedial change. Five, operational change. This is a change to workflows, resource allocation, and production systems to optimize how an organization creates and captures value. Six, structure change. Organizations hierarchy of authority and structural characteristics can be changed as a result of certain shifts. Seven, personnel change. Personnel changes happen when a company experiences new hires or downsizing. Each of these types of organizational change can cause a significant shift in employee engagement. Eight, unplanned change. This is typically defined as necessary action following unexpected events. While unplanned change cannot be predicted, it can be dealt with in an organized manner. So whatever the objectives, the organization must search their environment and change to accommodate the changing contingencies in the environment continuously. Therefore, we observed that the major companies now have separate divisions specializing in change management. While changes not unusual in the history of organizations. What perhaps is different this time is that organizational change nowadays has become a highly managed activity. The work of change managers involves process consultation, work restructuring, strategic HRM planning, and the design of IT solutions. Many of the tools used by change management consultants involved project and program management standards with budget and time constraints and scope. Change management in contemporary organizations is therefore action-oriented with different tools and techniques and with measures and monitoring procedures for implementation. According to this approach, linear and rational management of solutions are the most appropriate. And sequencing of interventions with tools and techniques is supposed to induce new behavior rather than trying to form attitudes and beliefs about the change among people. However, various studies on planned change processes suggests that the failure rate of these processes is more than 70%, a percentage that seems stable over the last decade. The major reason for this failure seems to be that change managers overemphasized contingencies in the environment. Linear management of different solutions and action-oriented interventions to implement these solutions. Moving towards the fit between environmental contingencies and the organizational factors is important. Yet individuals who are the object of change are largely missed. Change managers do give attention to individuals, groups in the change process. However, when handling the people side of change, they again focus on topics like performance metrics, numbers on papers and KPIs to streamline business processes. These messages are mostly discussed from ascending perspective and have a general functional holistic view on change. Change managers use what we call the doctor-patient model. They diagnose the situation and prescribe solutions without engaging the patient in deciding what is best for them, without giving them choice. They actual dynamics going on inside the organization, however, supplant these linear and functionalist approaches of change managers. This is because there are three properties that define organizations, such as problematic preferences, unclear technology, and fluid participation. 6. Organizational Change II: There are three properties that define organizations, such as problematic preferences, unclear technology, and fluid participation. First of all, no matter how large or project you're taking on, the success of that project relies on people. It's individuals who change, not organizations. The best process is useless if people don't routinely follow the process. The best technology has no use. If people don't plug it in and use it to its capability, changes. Therefore, ultimately, each individual doing their job and making the change. However, as we earlier mentioned, individuals who are responsible for transformational processes have limited computational facilities. They can't deal with the complexity very well. Human beings might strive for rationality, but their rationality is restricted within the limits of their own knowledge. Consequently, human beings, when confronted with change, pursue what they think is appropriate to their own identity. As mentioned before, they think what fits with the kind of person I am. What would a person like me do? Also, as people get more experienced with greater skills, they get better at a certain activity. So when making decisions regarding change, human beings pursue what they know they're better at. The activities that have been successful at in the past. And the joint effect is that when organizational members are first exposed to information about a pending change, they end up preferring to do something that's not the best optimal activity. Moreover, people are not only imperfectly rational and their preferences, but also these people share their experiences and perceived reality of what is appropriate with other people. And they together formulate those aforementioned many worlds or groups in the organization. Consequently, many worlds or groups build buffers between various inconsistent realities and preferences. For example, universities focus on research, teaching, and service as there are three primary goals. Despite the longstanding presence of these goals, different, many worlds with different values and skills and diverse preferences have conflicting views over whether or not research and teaching are mutually exclusive. How central servers should be to faculty life, and whether professor or teaching assistant should bear primary responsibility for the teaching mission. It can therefore become difficult and problematic for organizations to bring a set of preferences in line with change processes. Organizations cannot exclusively attend to all personal values, beliefs, and skills when conceiving change. These situations make implementing change in organizations difficult when surrounded by individual and group constraints and by potential conflicts of interest. Second, although individuals and organizations do manage to survive and even produce despite the potential conflicts of interest, most of the time their own environment and thereby processes are not well understood by them. For example, even in an open organizational structure, to perception of the environment is reliant upon the perspectives of only a small number of people. Even each boundary spanner might not use the same criteria for assessing the environment. This reliance on the perceptions of a small number of people and differences in the criterion is how unclear technologies are implemented. Consequently, the production part of an organization which is responsible for the transformation process, might not always understand processes concerning change. This means that lack of information or information or mismatch is endemic in organizational change Processes. Third, there is a fluid participation of individuals in organizations. First of all, the audiences and decision-makers can change capriciously. And organizations, for example, while some employees spend an entire professional career at one organization, most advance their careers within multiple corporations. Fluid participation, however, extends beyond organizational members duration within an organization. Participants, for example, might vary in the amount of time and effort they devote to certain domains. The employee who was highly involved in one domain in the beginning of the decision-making process might be less involved at the later stages. On involved actors might miss meetings, miss deadlines, and not deliver the deliverables. Fluid participation of members reduces teamwork and diminishes the ability to get the work done. Stable membership allows each team member to develop important knowledge about the team's task, environment, customers, suppliers, and so on. Each time a member is unengaged or is replaced, that knowledge disappears, thus reducing the teams efficacy. Implementing change in organizations is therefore surrounded by knowledge loss. Overall, the above-mentioned general attributes of individuals and organizations are not beneficial to change. One should remember that the more you try to literally and determined realistically manage various solutions in organizations. Action-oriented tools and techniques under the mentioned circumstances, the more it comes to a halt. Worse yet, too many organizational change practitioners put themselves into a change management box and don't know how to effectively relate to the other components of organizational transformation. For example, they fail to understand other components of integrated change, such as organizational design, culture, and leadership. In fact, managing change in modern organizations can be an anarchic mess where above-mentioned traits such as fluid participation, problematic preferences, unclear technologies and design culture and leadership components of integrated change make the participants, Problems and Solutions flow disconnected from each other. However, we must remember that change is constant and always happening in organizations. Although organizations rarely do exactly what they're told to do, they're frequently transformed into forms remarkably different from the original. This assumption of constant change linked to the notion that organizations are like organisms which sustain themselves and grow. Organizations change in response to their environment. But they don't follow clear instructions and they rarely fulfill the intentions of a particular group of actors. Change in organizations is therefore a self-organizing process where outcomes cannot be precisely predicted in advance. Therefore, in changing the organization, managers have to be concerned about stimulating the Self-Organizing Process of change to happen while effectively relating to the other components of organizational transformation. 7. Design Enabler: Organizational design. If the previous lessons are to make one thing clear, it's that organizational change mostly happens at the cognitive and social psychological level of individuals, groups, and thereby organizations. However, it's also necessary to sum up the role of organizational design in change processes in the level of organizational design. In the earlier lesson, we've said that depending on the most strategic value, organizations can define the prime coordinating mechanism, type of decentralization, and key parts of the organization differently and build different organizational design configurations such as simple structure, machine bureaucracy, performance bureaucracy, divisional lysed form, and adhocracy. We've also mentioned that building an appropriate design can help managers to attain fit between internal factors and contingencies in the environment and to achieve a worthwhile performance. Therefore, managers will need to revisit organizational design issues while conceiving change and correct misfits and restore performance back to acceptable levels by correctly identifying key parts of the organization, prime coordinating mechanisms, type of decentralization. While it's clear that correct identification and use of these three basic dimensions are important for creating appropriate design and for achieving a worthwhile performance. We should respectively delve into other general characteristics by which particularly innovative organizations are normally structured. First is the degree of formalization. Formalization states that the more strictly rules are enforced, the lower the rate of organizational innovation. Despite the fact that rules provide legal security and equity, which are important organizational values. Nevertheless, rules can become ends in themselves. When this is the case, rules may limit the risky process of innovation. Innovation often comes about through a risky process involving experimentation, trial and error, and uncertain outcomes. Therefore, enforcing rules very strictly can impede innovations. In fact, you have to have a kind of system that supports generating mostly mistakes and an occasional good thing. And that's a hard system to create. Second is the degree of stratification. Stratification generally refers to the number of status levels in an organization's hierarchy, which are connected to differences in salary, prestige, and power among position occupants. Cantor calls this the elevator mentality and states that the higher the number of status levels within an organization, the lower the rate of organizational innovation. Stratification leads to preoccupation with personal status, which discourages confrontation of viewpoints, inhibits creative thinking and risk-taking. With the result that few innovations are initiated and fewer still are adopted and implemented. In fact, you have to have a kind of decentralized system that gives more power and autonomy to middle and lower level staff to encourage confrontation of viewpoints, creative thinking, risk-taking, and socialization without having the feeling of being onstage. Third is complexity. Complexity is the degree of task differentiation and occupational professionalism. The complexity factor postulates that the greater the number of task differentiations in an organization, and the greater the degree of professionalism of differentiated units, the greater the rate of organizational innovation. Organizational complexity is more than a simple division of labor. Organizational complexity is the number of different professional units with distinct tasks that exist within the organization. For example, matrix organization would be considered complex organizations where different people with distinct tasks and a narrow focus of expertise from diverse departments work together. Organizational actors, however, might face cognitive limitations in comprehending their internal and external environments as a system becomes more complex. And this might cause innovation dilemma. Therefore, we need to emphasize requisite variety. Requisite variety is an ideal state and the aspiration of organizations to deal properly with the diversity of problems the world throws at them. Van de Ven contends that given the cognitive limitations of individuals, the organizations themselves will have to be designed in ways so as to enhance their member's ability to adapt and mirror the degree of complexity in the environment. Van de van further argues that one effective way of achieving requisite variety is through making internal and external environmental scanning a responsibility of all members, rather than making it a responsibility of only boundary spanners. This ensures that the perceptions of the environment are not reliant upon the perspectives of only a small number of people. Consequently, all actors in the organization might find their own way and working and improving their relationships with each other and their clients and produce spontaneous change and innovation on a continuous basis. Most importantly, this way of change management will be embedded in the DNA of the overall organization. This way, people will most likely roll up their sleeves and try to understand and improve operations. Another important factor includes organizational slack. Organizational slack is the resources available to the firm which are not committed to any spending. While organizational slack is multi-dimensional, it's usually assessed in terms of financial resources that can be used in a discretionary manner. Organizational slack is about something extra, about a certain surplus or cushion. Organizations are more likely to support special projects in the presence of slack, because slack allows an organization to experiment with new ideas in relation to a changing environment and they protect the organization from risks. Organizational slack is therefore considered to be the important source for funding innovation. Studies investigating the interplay between organizational slack and innovation suggests that increases in the former appears to be followed by innovation in organizations. Finally, we must also emphasize the degree of production. The higher the emphasis on quantity versus quality, the lower the rate of organizational innovation. Therefore, organizations should focus on improving the quality of products and services rather than quantity. Indeed, adhering to all of these ideas are challenging, but it's only through attempting to meet such challenges that the organizational innovation can progress. 8. Leadership: Leadership. Leadership refers to a potential or capacity to influence others. Leadership is a process. Leadership is not a property of a person. The process involves a particular form of influence called motivating. Since leadership involves the process of influencing and motivating, one thing that all leaders have in common is Followers. Exhibiting leadership means not only influencing and motivating followers, but also doing so in a manner that enables the organization to attain its goals. Therefore, another thing that all leaders have in common is the situation and context. Coming from this definition, leadership is another process of influencing organizational members and thereby affecting innovation outcomes. Nonetheless, most early research on leadership described leadership as a general personality trait independent of the context in which the leadership was performed. We refer to this as a heroic conception of leadership. This is because early research on leadership mostly put forward charismatic and heroic persons, symbols and innovation agents. The propagators of heroic conception of leadership believed that innovative leaders were born. And as such, leaders were believed to possess certain qualities and traits that lead them to greatness. Consequently, in the early literature, it became impossible to speak of leadership without speaking of leaders and their personality traits. However, they inability to differentiate between successful and unsuccessful leaders by their specific personality traits without being biased. Led researchers to study other variables such as behavior or style. In particular, researchers shifted the question From, what are innovative leaders like to what do innovative leaders do? And they tried to predict the innovativeness of leaders by identifying a central behaviors associated with them. In particular, these studies identified certain leadership behaviors as the best or most successful to achieve innovation. However, in assessing leadership behavior, the studies focused on the independent behavioural dimensions of leaders as opposed to the cause or context of the behavior. And we're primarily concerned with the consequences of such behaviors. Consequently, relationships between the so-called universal model of best leadership behavior and Innovation outcomes varied markedly from one research to another. Since that's the case, the studies weren't able to produce a solid body of scientific evidence sufficient to guide the practice. Therefore, we argue that the contingency approach is the most influential approach to understand Leadership and Innovation outcomes. The contingency approach argues that the leadership is a dependent rather than an independent variable. And that there is no one best way of leadership, and it all depends. Contingency theories describe that leadership behavior that's applicable in some situations and contexts might not be another situations. This is because organizations are not like machines with one right way of organizing. But instead, organizations are like organisms with multiple ways of organizing. Therefore, leadership should be contingent upon organizational situations and characteristics of followers. It also means that the most suitable leadership for an organization is the one that best fits the nature of the situation and followers, that contingency approach therefore, seeks to depict the characteristics of the situation and follower dynamics in an organization and examines the leadership approaches that can be used for innovative outcomes. Regarding the situational characteristics. According to osborne, Hunt and Josh, There are four situations as stability, crisis, Dynamic Equilibrium, and edge of chaos. And there are leadership approaches that each context requires. The authors stress that stability requires a nested view of leadership for the crisis situations, the authors suggested the emergent and processual aspects of leadership to resolve the crisis. For the context labeled dynamic equilibrium, they suggested that the key aspects of leadership would be to shape long-term directions and network building. Finally, in the analysis of the edge of chaos, the authors highlight the collective mental models within the organization, orchestration, systemic flexibility, and sophistication. Regarding the follower dynamics, we can identify ability, skills, confidence, and poor performance of followers. There are four possible leadership processes that can be identified, such as supporting low task, high relationship, coaching, high task, high relationship, directing, high task, low relationship, and delegating low task, low relationship. Leader should provide emotional support to employees when employees are under a lot of stress. Leader should also coach employees and encouraged them to reach their goals. Leaders can be authoritative and provide specific directions to their employees, giving them structured jobs when employees are unclear about how to go about doing their jobs. Leaders can also delegate and make sure that employees are involved in making important decisions when employees have high levels of ability, organizational leaders in general can influence determinants of organizational performance, such as innovation and adaptation, by mustering their behavior and flexibility to fit the situation. However, we must be aware that leadership is not merely a reaction to situational events, but rather as a process that's shaped in multiple ways by situational forces and follower dynamics. The leader in this case is thus an engine of the whole process. Therefore, instead of focusing on a single behavior, leader should always be decisively shaping various processes in terms of clarifying the path and organizational learning processes through supporting employees, coaching employees, and rewarding them to reach their goal and dynamize ing the discourse of groups by directing or delegating. Leaders therefore, should give people the knowledge, resources, and direction necessary to take the steps to make change happen. Leader should implement different emergent strategies that match the organizational culture change they're trying to make. Leader should also be skeptical in terms of being able to perform in the future and should engage in the search for solutions across environments and organizational capabilities to shape long-term directions and develop networks. 9. Culture: Culture, organizational change, exploration and innovation are directly linked to organizational culture. That's because organizational culture is a system of shared assumptions, values, and beliefs which governs how people behave in organizations. The culture of an organization acts as a uniting force among members of an organization and provides them with a sense of identity. The culture of an organization isn't just one aspect of the game. It is the game. One can also say that culture describes the way things are. In this view, culture can be among the greatest assets that an organization possesses. As culture may support the highest innovation possible. For example, it's believed that cultural aspects such as openness for feedback, information for alternative opinions and perspectives, tolerance for uncertainty, egalitarianism and tolerance for errors, among other things, stimulate a more innovation oriented culture and ultimately lead to an increase in performance. Culture can also become a barrier for an organization and hinder realization of the highest innovation possible when the rules and boundaries established by the culture don't advance the innovativeness of the organization. For example, it can be that culture constraints or limits individual and group level capabilities. And or that culture actually encourages risk avoidance and intolerance for errors. And therefore, during implementation of some sort of innovation in an organization, managers must first conduct audits of their institutional culture, which involve extensive observations and carry out cultural change in the context of ERP implementation. Previous studies conducted state that one reason for many ERP failures is that we pay insufficient attention to the organizational culture. Here we need to note that the process of changing organizations culture starts with changing people's assumption about behavior, which is similar to learning. However, learning takes place at the level of individuals. While cultural change focuses on organizational level processes that is distinct from individual learning, cultural change refers to the institutionalization of the lessons learned at the level of relationships in organizational context. Organizational learning can also be based on deeper forms of culture and norms, but it's meditated by more short-term fluctuations. Culture, on the other hand, is more stable, deeper, and it evolves and changes slowly. Culture originally the domain of anthropologists analyzes the underlying structure of shared values, norms, and beliefs of the group members. Something an organization is which are manifested in symbols, myths, social drama, and rituals. Something an organization has. These things together give each organization a distinctive character. In this view, a new organizational culture can be formed through two basic components. One, through substance, which is contained in an implicit set of ideologies. Norms, values and beliefs which bind people together and interpret their world to them. To through practices which include surface level myths, rituals and symbols which are communicated between members. Substance of culture is considered to be the core of culture and its formal definition was offered by shine. Organizational culture is the pattern of basic assumptions that a given group has invented or developed in learning to cope with problems of external adaptation and internal integration. And that have worked well enough to be considered valid and therefore to be taught to new members as the correct way to perceive, think, and feel as related to those problems. Cultural adaptation is therefore continuous and largely unconscious. The core of culture is the taken for granted assumptions, expectations, and outlooks that govern social interactions. The abstract concept of culture can be transformed into a tool that can be used to better shape the dynamics of change and innovation through two ways. First, there's the leadership. Literature suggests that leadership is crucial for the effectiveness of organizational culture changes. For example, substance of culture and thereby practices can be consciously designed and manipulated by leadership. In particular, leaders can create a sense of urgency and encourage individuals and groups to question their existing assumptions about behavior. Second, it's also believed that the variables mentioned earlier, such as the degree of formalization, stratification, complexity, slack, and requisite variety can also stimulate openness of individuals for feedback, for alternative opinions, tolerance for uncertainty and errors and can ultimately lead to a more innovation oriented culture. In this view, causality is not unidirectional in cultural adaptations. Culture can influence innovation, but the culture is also influenced by innovative settings. This is because innovative settings can determine the organizational members attitudes and perceptions of organizational events, thereby affecting culture and innovation. To conclude, the world organizations occupy is too complex to understand, let alone to control or change bifunctional holistic processes. For example, leaders and innovative settings helped to shape the culture rules and rituals. The culture rules and rituals helped to shape its members and situations. Members and situations then stand at the apex of the leader's behavior and thereby change and innovation goals. In organizations, the relationship between different concepts represent an ongoing interplay. In this paradigm, organizations rarely do exactly what they're told to do amid all the complexity. And managers cannot change and control Innovation attributes with much precision. Organizations are always transformed into forms remarkably different from the original. Therefore, it's imperative for change managers to first of all, focus on stimulating the self-organizing process of change in the organization for the real change to take place in building proper organizational design, leadership, culture, and value alignments. Besides that, there's a need for certain elements of financial slack in the organization complexity and a culture of manifest foolishness that have lightened implications for human behaviors and thereby for change.