This case deals with the business innovation and change management at LG Electronics Digital Appliance Company(DAC) which has been implementing its large scale innovation since 1989. Although the importance of innovation is emphasized frequently, innovation and change management of a big company are not easy tasks to successfully accomplish. Because of the bureaucratic nature derived from its own success, big companies act as though its early achievement were to last forever. DAC, once a leading company of home appliance industry in Korea had experienced major crises such as labor union struggles in 1989, abrupt price fall by 20% in 1994, and the Korea’s economic crisis(IMF) in 1997. But DAC has overcome those business crises by implementing its own change management practices for near 20 years, and now it has become the third largest home electronics appliance company in the world. The main theme of this case is to investigate those success factors which could be found from the history of DAC’s innovation. The author pointed out three major factors to be important for the success of DAC’s innovation as follows; 1) balanced consideration between two dimensions of innovation, ie., business innovation and employees’ emotional side, 2) fulfilling the generally recommended change management steps, and 3) using the proper innovation support programs and tools.