abstract
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If schools of business are to retain their relevance to contemporary business 'problems they must teach their students about the management of innovation. This can be accomplished in the introduction to organizational behaviour course by using the PETS model. The PETS model proposes that there are four essential elements of organizational function; people, environment, technology and structure; and that for an organization to function optimally the four elements must be compatible with each other. For an organization to manage innovation effectively it must have the appropriate mix of the four elements; namely, change positive people, uncertain environment, complex technology and organic structure. Suggestions are made for the teaching of the PETS model and its application to the management of innovation.