MGMT Principles of Managements Canadian 3rd Edition by Williams - Test Bank

MGMT Principles of Managements Canadian 3rd Edition by Williams – Test Bank

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Chapter 6 Innovation and Change
MULTICHOICE
1. What is the term for the successful implementation of creative ideas in organizations?
(A) organizational change
(B) organizational innovation
(C) organizational creativity
(D) organizational development
Answer : (B)
2. Josephine is a valuable employee to her company. She has found new ways to complete
work processes that have saved the company thousands of dollars. What makes Josephine so
valuable to her company?
(A) synergistic use of resources
(B) ideation
(C) creativity
(D) organizational adaptation
Answer : (C)
3. Creativity was needed to improve efficiency without raising costs at WestJet. Over the last
few years, the company has implemented winglets and a bring-your-own-device policy
across their fleet. What do these successful changes exemplify?
(A) corporate synergy
(B) organizational innovation
(C) assembly networking
(D) reverse engineering
Answer : (B)
4. McDonald’s restaurants are involved in a long-term, worldwide movement to change
consumers’ perceptions of their products by selling food that is healthier. What is
McDonald’s engaged in?
(A) organizational change
(B) reverse engineering
(C) market diversification
(D) product revitalization
Answer : (A)
5. George was appointed president of a health devices company. Within a year the board of
directors was very happy with George’s appointment. The company’s structure was
transformed to a team structure. New suppliers were found. The culture became one of hard
work and meeting goals. What did George bring to the company to please the board?
(A) organizational innovation
(B) organizational development
(C) organizational change
(D) organizational re-engineering
Answer : (C)
6. When Gregg Steiner became the vice president for Pinxav, he knew the diaper-rash
product manufacturer’s sales were declining. At a trade show, Steiner was pitching the
product and said, “If you’re not happy with the product, I will not only give you your money
back-I’ll buy you our competitor’s product. I’ll buy you whatever other brand you want.”
Suddenly, customers were interested, and they all pulled out their money. None of the
customers ever took Steiner up on his offer. Steiner then decided to make it part of his
business practice. What is this new guarantee an example of?
(A) corporate synergy
(B) organizational innovation
(C) assembly networking
(D) organizational networking
Answer : (B)
7. TicketsNow.com tapped a market that Ticketmaster had neglected: it specialized in
locating and securing premium seating and tickets to sold-out events. What did the company
use to locate and serve a profitable market?
(A) synergy
(B) ideation
(C) creativity
(D) organizational adaptation
Answer : (C)
8. What must necessarily come before organizational innovation in the successful
implementation of creative ideas in organizations?
(A) synergy
(B) design competition
(C) resource development
(D) creativity
Answer : (D)
9. The development of CDs was a source of which of the following to companies in the
recording industry, just as audiotapes and 8-track tapes had once been?
(A) a sustainable competitive advantage
(B) creativity re-engineering
(C) technological discontinuity
(D) technological replacement
Answer : (C)
10. What is the term for the knowledge, tools, and techniques used to transform inputs into
outputs?
(A) resource manipulation
(B) procedural innovation
(C) a transformation system
(D) technology
Answer : (D)
11. TRX Ltd. used to budget a large amount of expenditure for meetings where managers
from across the province would meet at head office. With the inception of phone
conferencing the budget for meetings was cut substantially as managers were required to
come to head office less frequently. With the inception of video conferencing, managers now
never conduct meetings by phone and rarely meet at head office. What is this an example
of?
(A) the technology process
(B) a technology pattern
(C) a technology cycle
(D) the technology continuum
Answer : (C)
12. What is the shape of the typical innovation pattern that nearly all technology cycles
follow?
(A) W-curve
(B) U-curve
(C) bell-shaped
(D) S-curve
Answer : (D)
13. Which of the following best identifies where in the typical S-curve pattern of innovation
increased effort-that is, money, research and development, etc.-brings only small
improvements in technological performance?
(A) at the beginning of the cycle
(B) in the middle of the cycle
(C) at the end of the cycle
(D) throughout the entire cycle
Answer : (D)
14. Where in the typical S-curve pattern of innovation will small amounts of effort result in
significant increases in performance?
(A) during the growth stage of the cycle
(B) at the midpoint of the cycle
(C) at the end of the cycle
(D) throughout the cycle
Answer : (B)
15. Which of the following will an organization be able to achieve in an ongoing series of
technology cycles?
(A) satisfaction of more customers with fewer resources
(B) creation of a competitive advantage
(C) control of variable costs
(D) elimination of the product-innovation process
Answer : (B)
16. In the typical S-curve pattern of innovation, increased effort-that is, money, research
and development, etc.-brings only small improvements in technological performance when
the performance limits of the technology are reached. At what point in the cycle does this
occur?
(A) during the introductory stage of the cycle
(B) at the break-even point of the cycle
(C) during the maturity stage of the cycle
(D) at the end of the cycle
Answer : (D)
17. At what point in the typical S-curve pattern of innovation is a company likely to be when
significant improvements in performance can be gained only through radical new designs or
new performance-enhancing materials?
(A) It is at its break-even point.
(B) It is at the problem identification stage of the innovation cycle.
(C) It is at the end of the innovation cycle.
(D) It is at either the beginning or end of the innovation cycle.
Answer : (C)
18. A technology cycle occurs whenever there are major advances or changes in which
particular aspects of a field or discipline?
(A) the human, technical, and conceptual skills needed
(B) the structure or personnel requirements
(C) the internal environment resources
(D) the knowledge, tools, and techniques
Answer : (D)
19. What is the term for patterns of innovation over time that can create a sustainable
competitive advantage?
(A) innovation maps
(B) organization development
(C) results-driven change
(D) innovation streams
Answer : (D)
20. Through which of the following processes does an innovation stream move from one
technology cycle to another?
(A) technological substitution
(B) technological variation
(C) technological continuity
(D) technological selection
Answer : (A)
21. In terms of innovation streams, what occurs when customers purchase flat-screen
computer monitors to replace older, bulkier monitors?
(A) technological substitution
(B) technological expansion
(C) re-engineering
(D) demarketing
Answer : (A)
22. When DaimlerChrysler learned that it took longer than any other U.S. car manufacturer
to assemble a vehicle, it purchased newer, more flexible manufacturing systems to replace
its older ones. Which period of the innovation stream did it enter when it made this change?
(A) technological adaptation
(B) the era of dominant design
(C) the technological growth stage
(D) discontinuous change
Answer : (D)
23. Which phase of a technology cycle is characterized by technological substitution and
design competition?
(A) technological adaptation
(B) the era of dominant design
(C) the technological growth stage
(D) discontinuous change
Answer : (D)
24. What is the term for the purchase of new technologies to replace older ones?
(A) adaptive change
(B) design replacement
(C) technological substitution
(D) dominant design
Answer : (C)
25. Which of the following characterizes discontinuous change in an innovation stream?
(A) synergy
(B) technological substitution
(C) incremental change
(D) empathetic design
Answer : (B)
26. During which phase of a technology cycle do companies innovate by lowering the cost
and improving the functioning and performance of the dominant design?
(A) the technological discontinuity phase
(B) the discontinuous change phase
(C) the process implementation phase
(D) the incremental change phase
Answer : (D)
27. What are the phases of a technology cycle within an innovation stream in order from
beginning to end?
(A) incremental change, discontinuous change, dominant design, and technological
discontinuity
(B) discontinuous change, incremental change, technological discontinuity, and dominant
design
(C) dominant design, discontinuous change, incremental change, and technological
discontinuity
(D) technological discontinuity, discontinuous change, dominant design, and incremental
change
Answer : (D)
28. The auto industry has been perfecting the internal combustion engine (ICE) for some
120 years. Billions of dollars of work is ongoing at all of the auto companies on alternatives
to ICEs. A cooperative program between the Big Three and government to replace ICEs with
electric engines has been operating since 1993. What is the internal combustion engine
(ICE) an example of?
(A) a dominant design
(B) design dichotomy
(C) a synergistic design
(D) a differential design
Answer : (A)
29. October 15, 2013 was known as Tablet Tuesday. Several large technology companies
launched their next generation of tablets. Microsoft introduced its second tablet. Apple’s
new iPad promised to be sleeker and faster. Nokia introduced its first tablet. What occurred
on this date with these companies and their new product introductions?
(A) technological discontinuity
(B) design competition
(C) technology cycle
(D) innovation streams
Answer : (B)
30. Titleist has been manufacturing golf balls for several years, but each year it comes out
with new designs. Titleist developed the new Pro V1 golf ball, with a solid core that is
designed to benefit players with high swing speeds. Which term describes how this
manufacturer remains competitive?
(A) technological discontinuity
(B) discontinuous change
(C) dominant design
(D) incremental change
Answer : (D)
31. What do companies need to excel at managing in order to successfully manage
innovation streams?
(A) sources of innovation
(B) innovation during synergistic change
(C) reciprocity
(D) environmental design issues
Answer : (A)
32. At Deloitte’s Montreal offices, upper management encourages collaboration among
employees. Throughout the organization, there are flex spaces and social spaces to facilitate
this collaboration. What type of workplace culture does this exemplify?
(A) creative work environment
(B) innovative society
(C) homogeneous work environment
(D) participative work team
Answer : (A)
33. Malcolm believes people produce best when they are exposed to some form of pressure.
He changed the goals of his design team from being easily attainable to being of much
higher standard and needing completion within shorter time frames. What component of a
creative work environment did Malcolm introduce to the design team?
(A) challenging work
(B) mechanistic structures
(C) freedom
(D) autocratic leadership
Answer : (A)
34. Donald feels his design team could be more creative if they met somewhere other than
the lunch room where others are constantly coming and going. Donald created space in his
large office where the team could meet without interruptions. After this move the team
meetings were much more productive. What component of a creative work environment did
Donald use to encourage greater creativity in his team?
(A) regular brainstorming meetings
(B) training
(C) employee profit-sharing
(D) the removal of organizational impediments
Answer : (D)
35. Calgary-based DIRTT Environmental Services is exploring new products and markets
through the development of interior construction and design products in its plants in British
Columbia, Arizona, and Georgia. What can DIRTT do to jump-start this innovative process?
(A) It can manage flow through the use of Gantt charts.
(B) It can concentrate on dominant design and ignore incremental design.
(C) It can engage in creative reciprocity.
(D) It can establish creative work environments.
Answer : (D)
36. Which of the following is an organizational impediment to creativity in a work
environment?
(A) internal synergies
(B) organic management structures
(C) change culture
(D) power struggles
Answer : (D)
37. Narrative 6-1
Unverferth Manufacturing is a manufacturer and supplier of innovative agricultural
equipment. Recently it began developing a new 12-row strip-till subsoiler that is ideal for
cotton production. Before introducing the new tiller to the market, Unverferth developed
and tested nearly three dozen product prototypes.
Refer to Narrative 6-1. What approach to innovation did Unverferth use?
(A) the compression approach
(B) the experiential approach
(C) the technological substitution approach
(D) the generational change approach
Answer : (B)
38. Narrative 6-1
Unverferth Manufacturing is a manufacturer and supplier of innovative agricultural
equipment. Recently it began developing a new 12-row strip-till subsoiler that is ideal for
cotton production. Before introducing the new tiller to the market, Unverferth developed
and tested nearly three dozen product prototypes.
Refer to Narrative 6-1. What did Unverferth use to produce the best possible tiller before
introducing it to the market?
(A) service development
(B) process duplication
(C) design iteration
(D) design compliance
Answer : (C)
39. Which approach to innovation assumes that innovation is occurring within a highly
uncertain environment and that the key to fast product innovation is to use intuition, flexible
options, and hands-on experience to reduce uncertainty and accelerate learning and
understanding?
(A) the compression approach
(B) the experiential approach
(C) the technological substitution approach
(D) the generational change approach
Answer : (B)
40. Which of the following is a part of the experiential approach to innovation?
(A) distant management
(B) testing
(C) independent work
(D) initiative conversations
Answer : (B)
41. Sears Canada is working to revitalize a tired national brand. It recently tested a new
logo and store layout in stores in Thornhill and Burlington, ON, before rolling the changes
out nationally. Which of the following, therefore, was used to develop Sears Canada’s new
store layouts?
(A) server development
(B) process duplication
(C) design iteration
(D) design compliance
Answer : (C)
42. What is the best reason to use milestones in the experiential approach to innovation?
(A) Milestones serve to eliminate manufacturing bottlenecks.
(B) Milestones shorten the innovation process.
(C) Milestones create incrementally sustainable advantages.
(D) Milestones virtually eliminate problems associated with the control function of
management.
Answer : (B)
43. What is the first aspect for managing innovation during discontinuous change?
(A) design iteration
(B) budgeting
(C) establishment of a dominant design
(D) involvement of suppliers
Answer : (A)
44. Which statement describes the outcome from the use of milestones in the experiential
approach to innovation?
(A) The use of milestones results in the general chaos that follows technological
discontinuities.
(B) The use of milestones lengthens the innovation process.
(C) The use of milestones maintains the status quo.
(D) The use of milestones lets an organization know when to take corrective action.
Answer : (D)
45. Jennifer is expanding her Canadian company by penetrating the Asian market. She
brings together a task force comprising managers from marketing, finance, and operations
to determine how to be successful in this market. What kind work team did Jennifer create
to expand into Asia?
(A) milestone team
(B) innovation team
(C) multifunctional team
(D) experiential team
Answer : (C)
46. Which approach to managing innovation assumes that innovation is a predictable
process made up of a series of steps and that condensing the time it takes to complete those
steps can speed up innovation?
(A) compression
(B) milestones
(C) dialectical
(D) generational
Answer : (A)
47. ARI is a leading provider of sales and profit-building technology services for equipment
dealers. When Unverferth Manufacturing wanted to change the way it supplied information
to its dealers by implementing a website, it contacted ARI. ARI provided a solution that
allowed Unverferth to replace its paper catalogues with catalogues on CDs and to create a
website. Aided by supplier involvement, Unverferth was able to eliminate costly paper
catalogues and gain the ability to provide up-to-the-minute information to its dealers. Which
approach to innovation does this incremental change exemplify?
(A) generational
(B) experiential
(C) milestones
(D) compression
Answer : (D)
48. Which innovation management approach is best in fairly certain environments, during
periods of incremental change, and when the goals are lower costs and incremental
improvements in the performance and function of the existing technological design?
(A) experiential
(B) compression
(C) prototypical
(D) milestones
Answer : (B)
49. What are the goals of the compression approach to innovation?
(A) speed, lower costs, and incremental change of dominant design
(B) the development of milestones and the comparison of actual milestones with forecasts
(C) the establishment of a dominant design and speed
(D) absolute-time management and the creation of a dominant design
Answer : (A)
50. What is the first step in the compression approach to innovation?
(A) overlapping of the individual steps
(B) planning
(C) supplier involvement
(D) granting of autonomy
Answer : (B)
51. Which of the following is an important part of both the compression approach and the
experiential approach to innovation?
(A) multifunctional teams
(B) design iterations
(C) milestones
(D) synergistic processes
Answer : (A)
52. What is said to have occurred when incremental improvements are made to a dominant
technological design such that the improved version of the technology is fully backward
compatible with the older version?
(A) a milestone
(B) an intuitive change
(C) a generational change
(D) a coercive change
Answer : (C)
53. Unverferth Manufacturing makes agricultural equipment. It used finite element analysis
(FEA) software to speed up the design cycle for its 12-row subsoiler. Which aspect of the
compression approach to innovation would the use of this software assist?
(A) planning
(B) supplier involvement
(C) shortening time of individual steps
(D) multifunctional teams
Answer : (C)
54. Backward compatibility is an important consideration for software users who are using
an accounting program to facilitate their tax preparation and who want to use a newer
version that has greater capacity. Therefore, which of the following do many software
manufacturers engage in?
(A) coercive change
(B) dominant design manipulation
(C) generational change
(D) intuitive change
Answer : (C)
55. Jim is very happy with how his company has provided a living for himself and his family.
His wife, Kim, knows the company needs to adopt new technologies to continue to serve
their customers especially with growing competition. However, Jim is reluctant and asks
Kim why they should change something that has been so successful. What kind of force is
Jim to his company in this situation?
(A) dialectical
(B) generational
(C) resistance
(D) experiential
Answer : (C)
56. According to social psychologist Kurt Lewin, what leads to differences in the form,
quality, or condition of an organization over time?
(A) compressed changes
(B) generational forces
(C) generational changes
(D) change forces
Answer : (D)
57. Which of the following is one of the sources of resistance to change?
(A) self-interest
(B) multifunctional teams
(C) a dynamic organizational culture
(D) discontinuous innovation
Answer : (A)
58. Paul has hired an Industry Canada consultant to review the labour-intensive process his
company uses to make its products. Paul is hoping that automation can be implemented to
reduce the costs of production and make his company more profitable. What kind of force is
Paul to his company?
(A) experiential: resistance to change will not occur when those affected by the change
participate in its planning and implementation
(B) generational: resistance to change will not occur when employees are educated about
the need for change
(C) resistance: resistance to change will not occur when change efforts receive significant
managerial support
(D) change: resistance to change will always occur; it is inevitable
Answer : (D)
59. According to Kurt Lewin, which of the following is one of the three steps in the basic
process of managing organizational change?
(A) unfreezing
(B) organizational dialogue
(C) change definition
(D) incremental change
Answer : (A)
60. According to Kurt Lewin, what are the three steps in the basic process of managing
organizational change?
(A) unfreezing, change intervention, and refreezing
(B) organizational change, departmental change, and individual change
(C) change definition, change motivation, and change
(D) synthesizing, motivating, and rewarding
Answer : (A)
61. Which of the following is one basic method for managing resistance to change?
(A) implementation of rigid structures
(B) autocratic leadership
(C) change simulation
(D) negotiation
Answer : (D)
62. What should managers use as an approach to manage resistance to change when the
resistance is based on insufficient, incorrect, or misleading information?
(A) education and communication
(B) participation and experience
(C) negotiation and mentoring
(D) coercion and rewards
Answer : (A)
63. Downsizing has thinned the ranks of hospital personnel. In one hospital, management
was bewildered by the high staff turnover rate, while in patient care areas, each nurse was
doing the work of two nurses. Hospital employees were adamantly resisting any more
change. According to Kurt Lewin, what method could hospital administrators use to manage
this resistance?
(A) reduce communication to employees about the change process
(B) adopt an autocratic leadership style
(C) provide significant managerial support
(D) encourage employees to work independently
Answer : (C)
64. Which of the following is a method for managing resistance to change that should be
used only as a last resort or under crisis conditions?
(A) mentoring
(B) arbitration
(C) negotiation
(D) coercion
Answer : (D)
65. When Enbridge merged with Spectra Energy, the company cited “achievable cost
synergies,” which usually means staff cuts. In which stage of organizational change would
the CEO need to use empathy and communicate the specific details of the merger?
(A) change intervention
(B) the change prototype
(C) unfreezing
(D) refreezing
Answer : (C)
66. When Joe Natale joined Rogers Communications in early 2017, the company was
faltering due to customer dissatisfaction and inefficient operations. Natale’s vision was to
restore Rogers to a leadership role within the industry. It was a radical proposition. During
which stage of organizational change would it be especially important to have this vision in
mind?
(A) change intervention
(B) the change prototype
(C) unfreezing
(D) refreezing
Answer : (A)
67. Which of the following is one group that John Kotter recommends be included in a core
change coalition to guide and support organizational change?
(A) lobbyists
(B) suppliers
(C) union leaders
(D) creditors
Answer : (C)
68. According to John Kotter, during which stage of organizational change do managers
tend to make the mistake of not having a powerful change coalition?
(A) unfreezing change
(B) implementing change
(C) refreezing change
(D) initiating change
Answer : (A)
69. According to John Kotter, which of the following actions will adversely influence
refreezing efforts?
(A) sharing a vision
(B) removing obstacles to the company’s new vision
(C) creating a powerful enough guiding coalition
(D) declaring victory too soon
Answer : (D)
70. Which statement describes an advantage of the results-driven change approach?
(A) it supplants the sole emphasis on activity with a focus on process, not on outcomes
(B) managers reinforce the status quo
(C) it encourages employees to resist making rash decisions
(D) managers introduce changes in policies, procedures, rules, and regulations only when
they will improve measured performance
Answer : (D)
71. Which type of change is the General Electric Workout?
(A) activity-oriented change
(B) results-driven change
(C) generational change
(D) vision-driven change
Answer : (B)
72. Which term refers to the individual who is formally in charge of guiding a change effort?
(A) change ombudsperson
(B) staff moderator
(C) change mentor
(D) change agent
Answer : (D)
73. Connie has changed the organizational structure in her company to a team structure.
Many employees have new functions and different people to work with. Connie has given
Pat the responsibility to ensure the changes implemented are followed. What role has Pat
been given by Connie?
(A) change ombudsperson
(B) staff moderator
(C) change mentor
(D) change agent
Answer : (D)
74. Which of the following describes organizational development?
(A) it requires a steering committee
(B) it takes a short-term approach to change
(C) it is a philosophy and collection of planned change interventions
(D) it assumes that top management support is not necessary for change
Answer : (C)
75. When Joe Natale joined Rogers Communications, the company was faltering due to
customer dissatisfaction and inefficient operations. Natale’s vision was to restore Rogers to
a leadership role within the industry. It was a radical proposition. What role did Natale fill in
this case?
(A) change ombudsman
(B) staff moderator
(C) change mentor
(D) change agent
Answer : (D)
76. What is the first of eight steps in organizational development intervention?
(A) pioneering
(B) inception
(C) introduction
(D) entry
Answer : (D)
77. Which of the following approaches is aimed at changing large systems, small groups, or
individuals?
(A) the General Electric workout
(B) the functional approach to change
(C) organizational development
(D) results-driven change
Answer : (C)
78. Which of the following techniques is used in large-system intervention?
(A) survey feedback
(B) training
(C) team building
(D) counselling/coaching
Answer : (A)
79. Which of the following is likely to occur in organizations that don’t recognize the need
for change?
(A) technological substitution
(B) organizational decline
(C) design competition
(D) coercive design intervention
Answer : (B)
80. An NHL team that has lost 12 of its last 15 games but sticks with its coach and key
players because they’ll turn it around is most likely in which stage of organizational
decline?
(A) blinded
(B) inaction
(C) faulty action
(D) crisis
Answer : (B)
81. When Firm A announces a round of job cuts and “belt tightening,” which stage of
organizational decline is it in?
(A) blinded
(B) inaction
(C) faulty action
(D) crisis
Answer : (C)
82. A firm that pays retention bonuses, payable only if they stay to a critical point, to key
executives to guide them through a tumultuous period in the firm’s history is most likely in
which stage of organizational decline?
(A) blinded
(B) inaction
(C) faulty action
(D) crisis
Answer : (D)
83. Which of the following actions is most appropriate for a firm in Stage 5 of organizational
decline?
(A) prompt action
(B) corrective action
(C) effective reorganization
(D) dissolution
Answer : (D)
84. Narrative 6-2
An Internet strategy enabled Nestlé to change its way of doing business and allowed the
company to change its staid, risk-averse culture. Nestlé leaders overhauled company
processes-from buying raw materials to processing purchase orders to marketing the
roughly 2,000 products under its 200 brands.
Refer to Narrative 6-2. In terms of organizational development, what type of intervention
did Nestlé use?
(A) unit
(B) large system
(C) unit-focused
(D) results-focused
Answer : (B)
85. Narrative 6-2
An Internet strategy enabled Nestlé to change its way of doing business and allowed the
company to change its staid, risk-averse culture. Nestlé leaders overhauled company
processes-from buying raw materials to processing purchase orders to marketing the
roughly 2,000 products under its 200 brands.
Refer to Narrative 6-2. Which type of change did Nestlé use to reinvent the company?
(A) activity-oriented
(B) results-driven
(C) generational
(D) vision-driven
Answer : (B)
86. Narrative 6-3
Athabasca University has evolved over its nearly 50-year history. Course delivery has
evolved along with Athabasca University-from text-based learning modules to video
cassettes, partnerships with educational television, and now to an internet-enabled teaching
and learning model that coexists with the text and video-based independent learning
models. In 1994, Athabasca pioneered an online Executive MBA program. In addition to
innovating learning models, Athabasca developed a Centre for Distance Education, which is
globally known for its research into distance learning and offers graduate programs in the
field.
Refer to Narrative 6-3. Which of the following terms applies to why Athabasca developed the
online executive MBA in 1994?
(A) technological subtraction
(B) technological discontinuity
(C) process obsolescence
(D) process addition
Answer : (B)
87. Narrative 6-3
Athabasca University has evolved over its nearly 50-year history. Course delivery has
evolved along with Athabasca University-from text-based learning modules to video
cassettes, partnerships with educational television, and now to an internet-enabled teaching
and learning model that coexists with the text and video-based independent learning
models. In 1994, Athabasca pioneered an online Executive MBA program. In addition to
innovating learning models, Athabasca developed a Centre for Distance Education, which is
globally known for its research into distance learning and offers graduate programs in the
field.
Refer to Narrative 6-3. Which of the following stages did Athabasca University enter as it
tried to compete with its online executive MBA product?
(A) technological adaptation
(B) the era of dominant design
(C) the technological growth stage
(D) discontinuous change
Answer : (D)
88. Narrative 6-3
Athabasca University has evolved over its nearly 50-year history. Course delivery has
evolved along with Athabasca University-from text-based learning modules to video
cassettes, partnerships with educational television, and now to an internet-enabled teaching
and learning model that coexists with the text and video-based independent learning
models. In 1994, Athabasca pioneered an online Executive MBA program. In addition to
innovating learning models, Athabasca developed a Centre for Distance Education, which is
globally known for its research into distance learning and offers graduate programs in the
field.
Refer to Narrative 6-3. Athabasca University continues to innovate its online collaborative
learning model, used for the executive MBA, at the same time as it provides an
individualized, self-paced learning option for other courses. What does the existence of both
technologies exemplify?
(A) design substitution
(B) modular management
(C) design competition
(D) hierarchical management
Answer : (C)
89. Narrative 6-3
Athabasca University has evolved over its nearly 50-year history. Course delivery has
evolved along with Athabasca University-from text-based learning modules to video
cassettes, partnerships with educational television, and now to an internet-enabled teaching
and learning model that coexists with the text and video-based independent learning
models. In 1994, Athabasca pioneered an online Executive MBA program. In addition to
innovating learning models, Athabasca developed a Centre for Distance Education, which is
globally known for its research into distance learning and offers graduate programs in the
field.
Refer to Narrative 6-3. Athabasca leverages the Centre for Distance Education to break
down barriers and that celebrates new initiatives and ideas. What is this called?
(A) a creative work environment
(B) an open system
(C) an adaptive culture
(D) a culture of change
Answer : (A)
90. Narrative 6-4
Emily Morgan is a 30-year veteran at Levi Strauss & Company. She joined the company as a
secretary in the advertising department and slowly began rising through the ranks. The
more she saw how the company worked, the more dissatisfied she became. In 1982, when
talk of reinventing the company spread through headquarters and senior management
began looking for volunteers, Morgan became a part of the change initiative. She led the
team that designed the Develop Sources process, a system for working with suppliers. In
1995, Morgan became vice president for fulfillment, Asia. Her job was to convince Levi’s
Asian suppliers to adopt more efficient production and distribution techniques. The Asian
suppliers were afraid of change. Once Morgan and her staff showed suppliers how use of
the Develop Sources program would benefit them, Morgan’s job to transform Levi’s Asian
operations became easier.
Refer to Narrative 6-4. In order to maintain a competitive advantage in the clothing
industry, Levi’s had to create new, more efficient methods of dealing with its suppliers.
What is the term for the process of Levi’s discontinuing inefficient methods of dealing with
suppliers through substituting electronic networks for outdated systems?
(A) dominant design
(B) competitive advantage
(C) innovation stream
(D) comparative differential
Answer : (C)
91. Narrative 6-4
Emily Morgan is a 30-year veteran at Levi Strauss & Company. She joined the company as a
secretary in the advertising department and slowly began rising through the ranks. The
more she saw how the company worked, the more dissatisfied she became. In 1982, when
talk of reinventing the company spread through headquarters and senior management
began looking for volunteers, Morgan became a part of the change initiative. She led the
team that designed the Develop Sources process, a system for working with suppliers. In
1995, Morgan became vice president for fulfillment, Asia. Her job was to convince Levi’s
Asian suppliers to adopt more efficient production and distribution techniques. The Asian
suppliers were afraid of change. Once Morgan and her staff showed suppliers how use of
the Develop Sources program would benefit them, Morgan’s job to transform Levi’s Asian
operations became easier.
Refer to Narrative 6-4. Why did Levi’s decide in 1982 to change the way it was conducting
business?
(A) to protect its competitive advantage
(B) to downsize its workforce
(C) to make outsourcing more economically feasible
(D) to create economies of scale
Answer : (A)
92. Narrative 6-4
Emily Morgan is a 30-year veteran at Levi Strauss & Company. She joined the company as a
secretary in the advertising department and slowly began rising through the ranks. The
more she saw how the company worked, the more dissatisfied she became. In 1982, when
talk of reinventing the company spread through headquarters and senior management
began looking for volunteers, Morgan became a part of the change initiative. She led the
team that designed the Develop Sources process, a system for working with suppliers. In
1995, Morgan became vice president for fulfillment, Asia. Her job was to convince Levi’s
Asian suppliers to adopt more efficient production and distribution techniques. The Asian
suppliers were afraid of change. Once Morgan and her staff showed suppliers how use of
the Develop Sources program would benefit them, Morgan’s job to transform Levi’s Asian
operations became easier.
Refer to Narrative 6-4. Which of the following characteristics did Levi’s most likely NOT
have prior to the reinvention of the company in 1982?
(A) a history of innovation discontinuity
(B) design iteration
(C) competitive advantage
(D) a creative work environment
Answer : (D)
93. Narrative 6-4
Emily Morgan is a 30-year veteran at Levi Strauss & Company. She joined the company as a
secretary in the advertising department and slowly began rising through the ranks. The
more she saw how the company worked, the more dissatisfied she became. In 1982, when
talk of reinventing the company spread through headquarters and senior management
began looking for volunteers, Morgan became a part of the change initiative. She led the
team that designed the Develop Sources process, a system for working with suppliers. In
1995, Morgan became vice president for fulfillment, Asia. Her job was to convince Levi’s
Asian suppliers to adopt more efficient production and distribution techniques. The Asian
suppliers were afraid of change. Once Morgan and her staff showed suppliers how use of
the Develop Sources program would benefit them, Morgan’s job to transform Levi’s Asian
operations became easier.
Refer to Narrative 6-4. What was the result of the unfreezing, change intervention, and
refreezing processes used by Morgan and her team?
(A) motivated Asian suppliers
(B) management of the Asian suppliers’ resistance to change
(C) creation of a more dynamic work environment
(D) coordination of a creative work environment
Answer : (B)
94. Narrative 6-4
Emily Morgan is a 30-year veteran at Levi Strauss & Company. She joined the company as a
secretary in the advertising department and slowly began rising through the ranks. The
more she saw how the company worked, the more dissatisfied she became. In 1982, when
talk of reinventing the company spread through headquarters and senior management
began looking for volunteers, Morgan became a part of the change initiative. She led the
team that designed the Develop Sources process, a system for working with suppliers. In
1995, Morgan became vice president for fulfillment, Asia. Her job was to convince Levi’s
Asian suppliers to adopt more efficient production and distribution techniques. The Asian
suppliers were afraid of change. Once Morgan and her staff showed suppliers how use of
the Develop Sources program would benefit them, Morgan’s job to transform Levi’s Asian
operations became easier.
Refer to Narrative 6-4. Which of the following elements did Morgan find strong in Asia
initially?
(A) change forces
(B) internal strengths
(C) frozen change
(D) resistance forces
Answer : (D)
95. Narrative 6-4
Emily Morgan is a 30-year veteran at Levi Strauss & Company. She joined the company as a
secretary in the advertising department and slowly began rising through the ranks. The
more she saw how the company worked, the more dissatisfied she became. In 1982, when
talk of reinventing the company spread through headquarters and senior management
began looking for volunteers, Morgan became a part of the change initiative. She led the
team that designed the Develop Sources process, a system for working with suppliers. In
1995, Morgan became vice president for fulfillment, Asia. Her job was to convince Levi’s
Asian suppliers to adopt more efficient production and distribution techniques. The Asian
suppliers were afraid of change. Once Morgan and her staff showed suppliers how use of
the Develop Sources program would benefit them, Morgan’s job to transform Levi’s Asian
operations became easier.
Refer to Narrative 6-4. What specific technique for dealing with resistance to change did
Morgan use to convince the Asian suppliers that it was in their best interest to adopt the
Develop Sources process?
(A) coercion
(B) top management support
(C) education and communication
(D) direction
Answer : (C)
96. Narrative 6-4
Emily Morgan is a 30-year veteran at Levi Strauss & Company. She joined the company as a
secretary in the advertising department and slowly began rising through the ranks. The
more she saw how the company worked, the more dissatisfied she became. In 1982, when
talk of reinventing the company spread through headquarters and senior management
began looking for volunteers, Morgan became a part of the change initiative. She led the
team that designed the Develop Sources process, a system for working with suppliers. In
1995, Morgan became vice president for fulfillment, Asia. Her job was to convince Levi’s
Asian suppliers to adopt more efficient production and distribution techniques. The Asian
suppliers were afraid of change. Once Morgan and her staff showed suppliers how use of
the Develop Sources program would benefit them, Morgan’s job to transform Levi’s Asian
operations became easier.
Refer to Narrative 6-4. Which of the following roles does Emily Morgan exemplify?
(A) ombudsperson
(B) mentor
(C) organizational liaison
(D) change agent
Answer : (D)
97. Narrative 6-5
Bill Gore started the W.L. Gore Company when he left DuPont to develop innovative uses for
Teflon (PTFE), the then new non-stick plastic. Today, W.L. Gore is best known for Gore-Tex,
a waterproof, windproof, and temperature-resistant fabric that breathes and does not trap
perspiration and body heat. Gore-Tex is used for coats, gloves, camping and hiking gear,
and for protective outerwear worn by firefighters and military, emergency, and medical
personnel.
But in recent years, Gore-Tex sales have steadily declined. A number of alternative fabrics,
such as Entrant GII and eVENT, work nearly as well but cost only $6 to $8 per yard
compared to $15 to $30 per yard for Gore-Tex. So W.L. Gore must reduce its dependence on
Gore-Tex, which accounts for 21 percent of its $1.6 billion in revenues, by consistently
developing other innovative products.
In general, W.L. Gore goes for dramatic rather than incremental improvements. On its
website, it declares that Gore’s products are designed to be the highest quality in their class
and revolutionary in their effect.
Gore created Glide dental floss, which doesn’t shred, tear, and get caught in your teeth.
Glide is a thin, Teflon-like tape which was soon the number two floss in the market, and
today is the number one floss recommended by dental professionals. Gore then sold Glide to
Procter & Gamble, but still makes Glide for P&G, earning substantial profits. It then
reinvested in other innovative products, such as CleanStream filters for vacuum cleaners;
Radome, used to cover microwave transmission sites (think of the large golf-ball structures
you sometimes see around airports); stent-grafts for medical treatment; and many more.
Gore frequently asks potential customers for help when designing new products (e.g.,
design iterations and testing). For example, the Gore engineer developing Elixir acoustic
guitar strings talked to another Gore engineer who played the guitar. They, in turn, asked
experienced guitar players to give them feedback on the product. Thanks to Elixir strings’
thin plastic coating, their resistance to dust, skin fragments, dirt, and oil lends a better
sound for five times longer than normal guitar strings. Elixir strings now have a 35 percent
share of the market.
Gore also provides flexible options for innovation by making time for dabbling. Everyone in
the company is encouraged to spend 10 percent of their time on new ideas or products. If
those ideas have potential, a Gore sponsor, typically a more senior person, will guide and
coach that employee on how to further advance the idea or product. When ideas or
innovations are to the point where further development requires a significant investment by
the company, they are reviewed by a multifunctional team that goes through an exercise
called Real, Win, Worth. They ask: Is the opportunity real? Is there really somebody out
there that will buy this? Can we win? What do the economics look like? Can we make money
doing this? Is it unique and valuable? Can we have a sustained advantage [such as a
patent]?
Refer to Narrative 6-5. What feature did Gore-Tex fabric give its manufacturer when it was
introduced?
(A) discontinuous change
(B) competitive advantage
(C) product-driven vision
(D) generational product
Answer : (B)
98. Narrative 6-5
Bill Gore started the W.L. Gore Company when he left DuPont to develop innovative uses for
Teflon (PTFE), the then new non-stick plastic. Today, W.L. Gore is best known for Gore-Tex,
a waterproof, windproof, and temperature-resistant fabric that breathes and does not trap
perspiration and body heat. Gore-Tex is used for coats, gloves, camping and hiking gear,
and for protective outerwear worn by firefighters and military, emergency, and medical
personnel.
But in recent years, Gore-Tex sales have steadily declined. A number of alternative fabrics,
such as Entrant GII and eVENT, work nearly as well but cost only $6 to $8 per yard
compared to $15 to $30 per yard for Gore-Tex. So W.L. Gore must reduce its dependence on
Gore-Tex, which accounts for 21 percent of its $1.6 billion in revenues, by consistently
developing other innovative products.
In general, W.L. Gore goes for dramatic rather than incremental improvements. On its
website, it declares that Gore’s products are designed to be the highest quality in their class
and revolutionary in their effect.
Gore created Glide dental floss, which doesn’t shred, tear, and get caught in your teeth.
Glide is a thin, Teflon-like tape which was soon the number two floss in the market, and
today is the number one floss recommended by dental professionals. Gore then sold Glide to
Procter & Gamble, but still makes Glide for P&G, earning substantial profits. It then
reinvested in other innovative products, such as CleanStream filters for vacuum cleaners;
Radome, used to cover microwave transmission sites (think of the large golf-ball structures
you sometimes see around airports); stent-grafts for medical treatment; and many more.
Gore frequently asks potential customers for help when designing new products (e.g.,
design iterations and testing). For example, the Gore engineer developing Elixir acoustic
guitar strings talked to another Gore engineer who played the guitar. They, in turn, asked
experienced guitar players to give them feedback on the product. Thanks to Elixir strings’
thin plastic coating, their resistance to dust, skin fragments, dirt, and oil lends a better
sound for five times longer than normal guitar strings. Elixir strings now have a 35 percent
share of the market.
Gore also provides flexible options for innovation by making time for dabbling. Everyone in
the company is encouraged to spend 10 percent of their time on new ideas or products. If
those ideas have potential, a Gore sponsor, typically a more senior person, will guide and
coach that employee on how to further advance the idea or product. When ideas or
innovations are to the point where further development requires a significant investment by
the company, they are reviewed by a multifunctional team that goes through an exercise
called Real, Win, Worth. They ask: Is the opportunity real? Is there really somebody out
there that will buy this? Can we win? What do the economics look like? Can we make money
doing this? Is it unique and valuable? Can we have a sustained advantage [such as a
patent]?
Refer to Narrative 6-5. Which kind of innovation is encouraged at W.L. Gore?
(A) transitional
(B) compression
(C) dominant design
(D) incremental
Answer : (C)
99. Narrative 6-5
Bill Gore started the W.L. Gore Company when he left DuPont to develop innovative uses for
Teflon (PTFE), the then new non-stick plastic. Today, W.L. Gore is best known for Gore-Tex,
a waterproof, windproof, and temperature-resistant fabric that breathes and does not trap
perspiration and body heat. Gore-Tex is used for coats, gloves, camping and hiking gear,
and for protective outerwear worn by firefighters and military, emergency, and medical
personnel.
But in recent years, Gore-Tex sales have steadily declined. A number of alternative fabrics,
such as Entrant GII and eVENT, work nearly as well but cost only $6 to $8 per yard
compared to $15 to $30 per yard for Gore-Tex. So W.L. Gore must reduce its dependence on
Gore-Tex, which accounts for 21 percent of its $1.6 billion in revenues, by consistently
developing other innovative products.
In general, W.L. Gore goes for dramatic rather than incremental improvements. On its
website, it declares that Gore’s products are designed to be the highest quality in their class
and revolutionary in their effect.
Gore created Glide dental floss, which doesn’t shred, tear, and get caught in your teeth.
Glide is a thin, Teflon-like tape which was soon the number two floss in the market, and
today is the number one floss recommended by dental professionals. Gore then sold Glide to
Procter & Gamble, but still makes Glide for P&G, earning substantial profits. It then
reinvested in other innovative products, such as CleanStream filters for vacuum cleaners;
Radome, used to cover microwave transmission sites (think of the large golf-ball structures
you sometimes see around airports); stent-grafts for medical treatment; and many more.
Gore frequently asks potential customers for help when designing new products (e.g.,
design iterations and testing). For example, the Gore engineer developing Elixir acoustic
guitar strings talked to another Gore engineer who played the guitar. They, in turn, asked
experienced guitar players to give them feedback on the product. Thanks to Elixir strings’
thin plastic coating, their resistance to dust, skin fragments, dirt, and oil lends a better
sound for five times longer than normal guitar strings. Elixir strings now have a 35 percent
share of the market.
Gore also provides flexible options for innovation by making time for dabbling. Everyone in
the company is encouraged to spend 10 percent of their time on new ideas or products. If
those ideas have potential, a Gore sponsor, typically a more senior person, will guide and
coach that employee on how to further advance the idea or product. When ideas or
innovations are to the point where further development requires a significant investment by
the company, they are reviewed by a multifunctional team that goes through an exercise
called Real, Win, Worth. They ask: Is the opportunity real? Is there really somebody out
there that will buy this? Can we win? What do the economics look like? Can we make money
doing this? Is it unique and valuable? Can we have a sustained advantage [such as a
patent]?
Refer to Narrative 6-5. Gore’s approach to innovation is to use frequent design iterations,
frequent testing, regular milestones, multifunctional teams, and powerful leadership. What
approach to innovation does the company use?
(A) experiential
(B) transitional
(C) vision-driven
(D) generational
Answer : (A)
100. Narrative 6-5
Bill Gore started the W.L. Gore Company when he left DuPont to develop innovative uses for
Teflon (PTFE), the then new non-stick plastic. Today, W.L. Gore is best known for Gore-Tex,
a waterproof, windproof, and temperature-resistant fabric that breathes and does not trap
perspiration and body heat. Gore-Tex is used for coats, gloves, camping and hiking gear,
and for protective outerwear worn by firefighters and military, emergency, and medical
personnel.
But in recent years, Gore-Tex sales have steadily declined. A number of alternative fabrics,
such as Entrant GII and eVENT, work nearly as well but cost only $6 to $8 per yard
compared to $15 to $30 per yard for Gore-Tex. So W.L. Gore must reduce its dependence on
Gore-Tex, which accounts for 21 percent of its $1.6 billion in revenues, by consistently
developing other innovative products.
In general, W.L. Gore goes for dramatic rather than incremental improvements. On its
website, it declares that Gore’s products are designed to be the highest quality in their class
and revolutionary in their effect.
Gore created Glide dental floss, which doesn’t shred, tear, and get caught in your teeth.
Glide is a thin, Teflon-like tape which was soon the number two floss in the market, and
today is the number one floss recommended by dental professionals. Gore then sold Glide to
Procter & Gamble, but still makes Glide for P&G, earning substantial profits. It then
reinvested in other innovative products, such as CleanStream filters for vacuum cleaners;
Radome, used to cover microwave transmission sites (think of the large golf-ball structures
you sometimes see around airports); stent-grafts for medical treatment; and many more.
Gore frequently asks potential customers for help when designing new products (e.g.,
design iterations and testing). For example, the Gore engineer developing Elixir acoustic
guitar strings talked to another Gore engineer who played the guitar. They, in turn, asked
experienced guitar players to give them feedback on the product. Thanks to Elixir strings’
thin plastic coating, their resistance to dust, skin fragments, dirt, and oil lends a better
sound for five times longer than normal guitar strings. Elixir strings now have a 35 percent
share of the market.
Gore also provides flexible options for innovation by making time for dabbling. Everyone in
the company is encouraged to spend 10 percent of their time on new ideas or products. If
those ideas have potential, a Gore sponsor, typically a more senior person, will guide and
coach that employee on how to further advance the idea or product. When ideas or
innovations are to the point where further development requires a significant investment by
the company, they are reviewed by a multifunctional team that goes through an exercise
called Real, Win, Worth. They ask: Is the opportunity real? Is there really somebody out
there that will buy this? Can we win? What do the economics look like? Can we make money
doing this? Is it unique and valuable? Can we have a sustained advantage [such as a
patent]?
Refer to Narrative 6-5. Elixir, Gore’s acoustic guitar string, is coated with a thin layer of
plastic that avoids the accumulation of dust, microscopic layers of skin (from musicians’
fingers), and dirt and oil, all of which affect musical quality and sound. What process did
Gore employees use to develop Elixir?
(A) transitional innovation
(B) compression design
(C) dominant design
(D) incremental change
Answer : (D)
101. Narrative 6-5
Bill Gore started the W.L. Gore Company when he left DuPont to develop innovative uses for
Teflon (PTFE), the then new non-stick plastic. Today, W.L. Gore is best known for Gore-Tex,
a waterproof, windproof, and temperature-resistant fabric that breathes and does not trap
perspiration and body heat. Gore-Tex is used for coats, gloves, camping and hiking gear,
and for protective outerwear worn by firefighters and military, emergency, and medical
personnel.
But in recent years, Gore-Tex sales have steadily declined. A number of alternative fabrics,
such as Entrant GII and eVENT, work nearly as well but cost only $6 to $8 per yard
compared to $15 to $30 per yard for Gore-Tex. So W.L. Gore must reduce its dependence on
Gore-Tex, which accounts for 21 percent of its $1.6 billion in revenues, by consistently
developing other innovative products.
In general, W.L. Gore goes for dramatic rather than incremental improvements. On its
website, it declares that Gore’s products are designed to be the highest quality in their class
and revolutionary in their effect.
Gore created Glide dental floss, which doesn’t shred, tear, and get caught in your teeth.
Glide is a thin, Teflon-like tape which was soon the number two floss in the market, and
today is the number one floss recommended by dental professionals. Gore then sold Glide to
Procter & Gamble, but still makes Glide for P&G, earning substantial profits. It then
reinvested in other innovative products, such as CleanStream filters for vacuum cleaners;
Radome, used to cover microwave transmission sites (think of the large golf-ball structures
you sometimes see around airports); stent-grafts for medical treatment; and many more.
Gore frequently asks potential customers for help when designing new products (e.g.,
design iterations and testing). For example, the Gore engineer developing Elixir acoustic
guitar strings talked to another Gore engineer who played the guitar. They, in turn, asked
experienced guitar players to give them feedback on the product. Thanks to Elixir strings’
thin plastic coating, their resistance to dust, skin fragments, dirt, and oil lends a better
sound for five times longer than normal guitar strings. Elixir strings now have a 35 percent
share of the market.
Gore also provides flexible options for innovation by making time for dabbling. Everyone in
the company is encouraged to spend 10 percent of their time on new ideas or products. If
those ideas have potential, a Gore sponsor, typically a more senior person, will guide and
coach that employee on how to further advance the idea or product. When ideas or
innovations are to the point where further development requires a significant investment by
the company, they are reviewed by a multifunctional team that goes through an exercise
called Real, Win, Worth. They ask: Is the opportunity real? Is there really somebody out
there that will buy this? Can we win? What do the economics look like? Can we make money
doing this? Is it unique and valuable? Can we have a sustained advantage [such as a
patent]?
Refer to Narrative 6-5. The list of Gore’s products clearly indicates that the company’s core
competency is innovation. Patterns of innovation over time can create sustainable
competitive advantage, in a number of different products and industries. Which of the
following is Gore, therefore, capable of developing?
(A) innovation cycles
(B) innovation designs
(C) innovation transitions
(D) innovation streams
Answer : (D)
TRUEFALSE
102. Organizational innovation is defined as doing things differently in an organization.
(A) True
(B) False
Answer : (B)
103. A technology cycle begins with the “birth” of a new technology and ends when that
technology reaches its limits and “dies” as it is replaced by a newer, substantially better
technology.
(A) True
(B) False
Answer : (A)
104. Nearly all technology cycles follow a bell-shaped pattern of innovation.
(A) True
(B) False
Answer : (B)
105. The typical S-curve pattern of innovation indicates that both early and late in the
technology cycle, increased effort-that is, money, research and development, etc.-brings
only small improvements in technological performance.
(A) True
(B) False
Answer : (A)
106. Companies that want to sustain a competitive advantage must understand and protect
themselves from the strategic threats of innovation.
(A) True
(B) False
Answer : (A)
107. The research on technology cycles and technological innovation applies only to high-
tech products developed in the bioengineering, robotics, and computer industries.
(A) True
(B) False
Answer : (B)
108. The term innovation streams refers to patterns of innovation over time that can create
a sustainable competitive advantage.
(A) True
(B) False
Answer : (A)
109. An innovation stream begins with a technological discontinuity, in which a scientific
advance or a unique combination of existing technologies creates a significant breakthrough
in performance or function.
(A) True
(B) False
Answer : (A)
110. Technological innovation makes it possible not only to duplicate the benefits obtained
from a company’s distinctive advantage, but also quickly creates an opportunity to turn a
company’s competitive advantage into a competitive disadvantage.
(A) True
(B) False
Answer : (A)
111. Technology cycles for low-tech products follow the typical U-curve pattern of
innovation.
(A) True
(B) False
Answer : (B)
112. Technological discontinuities are followed by discontinuous change characterized by
technological substitution and design competition.
(A) True
(B) False
Answer : (A)
113. Dominant designs emerge because they solve a practical problem, as a result of the
negotiations of independent standards bodies or because of critical mass.
(A) True
(B) False
Answer : (A)
114. The same techniques for managing innovation work equally as well after technological
discontinuities as during periods of incremental change.
(A) True
(B) False
Answer : (B)
115. A creative work environment requires organizational encouragement and supervisory
encouragement, as well as work group encouragement.
(A) True
(B) False
Answer : (A)
116. The three parts of the experiential approach to innovation are design iterations,
testing, and milestones.
(A) True
(B) False
Answer : (B)
117. Milestones are formal review points that tend to lengthen the innovation process.
(A) True
(B) False
Answer : (B)
118. Fully functional change occurs when incremental improvements are made to a
dominant technological design so that the improved version of the technology is fully
backward compatible with the older version.
(A) True
(B) False
Answer : (B)
119. In a properly managed organization, there will be no resistance to needed change.
(A) True
(B) False
Answer : (B)
120. According to Kurt Lewin, managing organizational change is a simple process that
requires organizational dialogue, change intervention, and reformatting.
(A) True
(B) False
Answer : (B)
121. Resistance to change results from organizational factors, such as the absence of
promotion guidelines, bonuses, and praise.
(A) True
(B) False
Answer : (B)
122. Even though education and communication, participation, negotiation, top
management support, and coercion can all be used to manage resistance to change,
coercion should be used only in crisis situations or as a last resort.
(A) True
(B) False
Answer : (A)
123. Declaring victory too soon is one mistake managers often make in the refreezing stage
of change.
(A) True
(B) False
Answer : (A)
124. Results-driven change focuses primarily on changing company procedures,
management philosophy, or employee behaviour.
(A) True
(B) False
Answer : (B)
125. The General Electric workout is a special kind of activity-oriented change.
(A) True
(B) False
Answer : (B)
126. Organizational decline is an irreversible occurrence when companies don’t anticipate,
recognize, neutralize, or adapt to the internal or external pressures that threaten their
survival.
(A) True
(B) False
Answer : (B)
127. In terms of organizational decline, overconfidence is a potential cause of inaction.
(A) True
(B) False
Answer : (B)
128. Retention bonuses are needed for talented managers in a company that’s in an
organizational decline crisis mode.
(A) True
(B) False
Answer : (B)
129. Bankruptcy occurs at the dissolution stage of organizational decline.
(A) True
(B) False
Answer : (A)
ESSAY
130. Define creativity. Explain its relationship to organizational innovation.
Graders Info :
Creativity is the production of novel and useful ideas. Organizational innovation is the
successful implementation of creative ideas in an organization. Thus, creativity is a
precursor to the process of organizational innovation, and organizational creativity could be
considered a form of organizational innovation.
131. Briefly describe the typical pattern of technology cycles that occurs during
technological innovation.
Graders Info :
Technology cycles typically follow an S-curve pattern of innovation. Early in the cycle,
technological progress is slow and improvements in technological performance are small.
However, as a technology matures, performance improves quickly. Finally, small
improvements occur as the limits of a technology are reached. At this point, significant
improvements in performance must come from new technologies.
132. What are innovation streams? Describe a typical innovation stream.
Graders Info :
Innovation streams are patterns of innovation over time that can create a sustainable
competitive advantage. A typical innovation stream consists of a series of technology cycles,
which begin with a new technology and end when that technology is replaced by a newer,
substantially better technology. Innovation streams typically consist of (1) a technological
discontinuity; (2) discontinuous change, characterized by technological substitution and
design competition; (3) the emergence of a dominant design; and (4) a focus on incremental
change until the next technological discontinuity occurs.
133. How are technology cycles and innovation streams related?
Graders Info :
A technology cycle begins with the “birth” of a new technology and ends when that
technology reaches its limits and “dies” as it is replaced by a newer, substantially better
technology. Technology cycles typically follow an S-curve pattern of innovation. Early in the
cycle, technological progress is slow and improvements in technological performance are
small. However, as a technology matures, performance improves quickly. Finally, small
improvements occur as the limits of a technology are reached. At this point, significant
improvements in performance must come from new technologies. Innovation streams are
defined as patterns of innovation over time that can create a sustainable competitive
advantage. As illustrated in Exhibit 6.2, a typical innovation stream consists of a series of
technology cycles over time. Each cycle involves variation selection based upon four stages
of activity (technological discontinuity, discontinuous change, dominant design, and era of
incremental change), followed by technological substitution involving the advanced
technology, and then repeating this cyclical process until another technological advance
occurs.
134. What are creative work environments? What does a manager need to do to develop and
manage creative work environments?
Graders Info :
Creative work environments are workplace cultures in which workers perceive that new
ideas are welcomed, valued, and encouraged. Creative work environments have five
components that encourage creativity: challenging work, organizational encouragement,
supervisory encouragement, work group encouragement, and freedom. A sixth component,
organizational impediments, must be managed so as not to discourage creativity.
Organizational impediments include such things as internal conflict and power struggles,
rigid management structures, and a conservative bias toward the status quo. These can all
discourage creativity, since they create the perception that others in the organization will
decide which ideas are acceptable and deserve support.
135. Given the nature and demands of technology cycles and innovation streams, identify
the two types of change that companies need to be able to manage. What are the
approaches most appropriate for managing each type of change?
Graders Info :
Given the nature and demands of technology cycles and innovation streams, managers must
be equally good at managing innovation in two very different circumstances. Unfortunately,
what works well when managing innovation after technological discontinuities doesn’t work
well when managing innovation during periods of incremental change (and vice versa).
First, during discontinuous change, companies must find a way to anticipate and survive the
technological discontinuities that can suddenly transform industry leaders into losers and
industry unknowns into industry powerhouses. The most appropriate approach under these
circumstances is the experiential approach to innovation. Second, after a new dominant
design emerges following discontinuous change, companies must manage the very different
process of incremental improvement and innovation in order to keep up with industry
leaders. In this case, a compression approach to innovation is most appropriate.
136. Differentiate between the experiential and compression approaches to innovation.
What is the single component that both approaches have in common?
Graders Info :
The experiential and compression approaches are complementary approaches to managing
innovation, which are differentially appropriate to the phases of the technology cycle. The
experiential approach is used to manage innovation in highly uncertain environments during
periods of discontinuous change, while the compression approach is used to manage
innovation in more certain environments during periods of incremental change. There are
five parts to the experiential approach to innovation: design iterations, testing, milestones,
multifunctional teams, and powerful leaders. There are also five parts to the compression
approach to innovation: planning, supplier involvement, shortening the time of individual
steps, overlapping steps, and multifunctional teams. The single component that both
approaches have in common is multifunctional teams.
137. Identify and briefly describe the three steps involved in the process of managing
organizational change, as defined by Kurt Lewin.
Graders Info :
According to Kurt Lewin, managing organizational change is a basic process of unfreezing,
change intervention, and refreezing. Unfreezing is getting the people affected by change to
believe that change is needed. During the change intervention itself, workers and managers
change their behaviour and work practices. Refreezing is supporting and reinforcing the
new changes so they “stick.”
138. Identify the methods that can be used to manage resistance to change. Which one
should be used only as a last resort?
Graders Info :
The following methods can be used to manage resistance to change: education and
communication, participation, negotiation, top management support, and coercion.
Managers should educate employees about the need for change and communicate change-
related information to them. Employees who participate in planning and implementing the
change process have a better understanding of the need for change and are more likely to
support it. Employees are less likely to resist change if they are allowed to negotiate-that is,
discuss and agree on-who will do what after change occurs. Resistance to change also
decreases when change efforts receive significant managerial support, including providing
the training, resources, and autonomy needed to make change happen. Finally, use of
formal power and authority to force others to change is called coercion. Because of the
intense negative reactions it can create-that is, fear, stress, resentment, and sabotage of
company products-coercion should be used only when a crisis exists or when all other
attempts to reduce resistance to change have failed.
139. Provide one example of a common error made by managers when they lead change at
each of the three steps of the change process.
Graders Info :
The basic change process occurs in three stages (unfreezing, change, refreezing). John
Kotter has listed common errors of managers in leading the change process at each of these
three stages. By stage, these errors are unfreezing-not establishing a great enough sense of
urgency, not creating a powerful enough guiding coalition; change-lacking a vision, under-
communicating the vision by a factor of 10, not removing obstacles to the new vision, not
systematically planning for and creating short-term wins; and refreezing-declaring victory
too soon, not anchoring changes in the corporation’s culture.
140. Suggest how a firm can distinguish between faulty action, in the organizational decline
context, and appropriate cost-cutting or effectiveness increase measures in the firm.
Graders Info :
Faulty action normally occurs when firms are faced with rising costs and decreasing profits
and market share. Management announces “belt tightening” plans designed to cut costs,
increase efficiency, and restore profits.
Cost-cutting is about balancing efficiency with effectiveness; actions which do this
appropriately ensure that effectiveness (i.e., “doing the right things”) is still in place before
applying cost cutting measures.
141. Explain how the concept of innovation streams relates to the concept of sustainable
competitive advantage. Give an example of how this occurs in the business world.
Graders Info :
Organizations can create a competitive advantage for themselves if they have a distinctive
competence that allows them to make, do, or perform something better than their
competitors. Furthermore, a competitive advantage becomes sustainable if other companies
cannot duplicate the benefits obtained from that distinctive competence. Technological
innovation, however, makes it possible not only to duplicate the benefits obtained from a
company’s distinctive advantage, but also to quickly turn a company’s competitive
advantage into a competitive disadvantage.
The best way to protect a competitive advantage is to create a stream of innovative ideas
and products. Innovation streams begin with technological discontinuities that create
significant breakthroughs in performance or function. Technological discontinuities are
followed by discontinuous change, in which customers purchase new technologies
(technological substitution) and companies compete to establish the new dominant design
(design competition). Dominant designs emerge because of critical mass, because they solve
a practical problem, or because of the negotiations of independent standards bodies.
Because technological innovation is both competence enhancing and competence
destroying, companies that bet on the wrong design often struggle, while companies that
bet on the eventual dominant design usually prosper. Emergence of a dominant design leads
to a focus on incremental change, lowering costs, and small, but steady improvements in the
dominant design. This focus continues until the next technological discontinuity occurs.
Students may provide a variety of examples to illustrate the concepts of innovation streams
resulting in a sustainable competitive advantage. The text provides an example of Intel and
the innovation stream associated with its microchips. Student examples should be evaluated
with regard to the degree to which they are appropriate and clearly integrate the concepts
and components of innovation streams into their explanations. In general, examples that
come from outside the text demonstrate a higher level of learning than those simply
repeating points made in the book.
142. In the mid-1990s, in hopes of replacing consumer videotape use in the viewing of
prerecorded movies, two forms of digital videodisk were introduced, DVD and DIVX. While
DVD technology was used by a variety of manufacturers (including Sony and RCA), DIVX
was a proprietary format developed by Circuit City. Both formats could play DVD movies,
which cost about $30 each. However, DIVX movies (which could be played only on a DIVX
player, and not on a DVD player) could be purchased for $5 and viewed for 24 hours, with
the ability to view them renewable (including perpetual viewing) for a reasonable charge
and a telephone call. Circuit City believed that consumers beginning to buy videodisk
players and disks would prefer its format, since the disks were less expensive and offered
the convenience similar to a rental with the option of a purchase (conveniently, by telephone
from home) at a later date. However, the DIVX format never took off, and in mid-1999,
Circuit City announced that it was being discontinued. This left DVD as the dominant format
for videodisks.
Relate this example to the model of the innovation stream and corporate attempts to gain
competitive advantage through technological innovation. Explain how this competition in
formats between DVD and DIVX fits the model of the innovation stream.
Graders Info :
Organizations can create a competitive advantage for themselves if they have a distinctive
competence that allows them to make, do, or perform something better than their
competitors. Furthermore, a competitive advantage becomes sustainable if other companies
cannot duplicate the benefits obtained from that distinctive competence. Technological
innovation, however, makes it possible not only to duplicate the benefits obtained from a
company’s distinctive advantage, but also to quickly turn a company’s competitive
advantage into a competitive disadvantage. This is exactly what Circuit City was trying to
do. It hoped that its development of, and considerable investment in, the proprietary DIVX
technology would enable it to become the dominant videodisk format. Such a development
would have destroyed any competitive advantage that Sony, RCA, and other manufacturers
of DVD players might have since they would have to either license the DIVX format from
Circuit City or settle for a lesser market share. This situation can be analyzed in more detail
using the model of innovation streams.
In general, the best way to protect a competitive advantage is to create a stream of
innovative ideas and products. Innovation streams (patterns of innovation over time that can
create a sustainable competitive advantage) begin with technological discontinuities that
create significant breakthroughs in performance or function. This was occurring as digital
videodisk technology was being introduced as a potential replacement for videotape.
Technological discontinuities are followed by discontinuous change, in which customers
purchase new technologies (technological substitution-or the replacement of VHS videotape
recorders with videodisk players) and companies compete to establish the new dominant
design (design competition-DVD or DIVX).
Dominant designs emerge because of critical mass, because they solve a practical problem,
or because of the negotiations of independent standards bodies. In this case, DVD was
accepted by a variety of manufacturers and developed according to independent standards.
Circuit City took a big risk in developing DIVX, which was a different, incompatible, and
proprietary format that it hoped would prove more popular than DVD. In the end, it proved
less popular. DVD began to develop a critical mass of players in the marketplace, and
Circuit City decided to admit its mistake and cut its losses immediately.
Because technological innovation is both competence enhancing and competence
destroying, companies that bet on the wrong design often struggle, while companies that
bet on the eventual dominant design usually prosper. In this case, Circuit City bet on the
wrong design and lost, while Sony, RCA, and others bet on the winning design. The
elimination of DIVX from the videodisk market heralds the emergence of a dominant design
in the standard DVD format. This can be expected to lead to a focus on incremental change,
lowering costs, and small, but steady improvements in that dominant design. This focus will
continue until the next technological discontinuity occurs.
143. Identify and briefly describe the three things that companies need to be good at in
order to successfully manage innovation streams. Explain why managing these factors is
important. Specify which one of the three might tend to be more influenced by
organizational culture and less influenced by the manager’s own personal ability.
Graders Info :
Given the nature and demands of technology cycles and innovation streams, managers must
be equally good at managing innovation in two very different circumstances. First, during
discontinuous change, companies must find a way to anticipate and survive the
technological discontinuities that can suddenly transform industry leaders into losers and
industry unknowns into industry powerhouses. Companies that can’t manage innovation
following technological discontinuities risk quick organizational decline and dissolution.
Second, after a new dominant design emerges following discontinuous change, companies
must manage the very different process of incremental improvement and innovation.
Companies that can’t manage incremental innovation slowly deteriorate as they fall farther
behind industry leaders. Finally, in order to have innovation streams to manage, companies
must be able to promote the creative ideas that lead to organizational innovation in the first
place.
Unfortunately, what works well when managing innovation after technological
discontinuities doesn’t work well when managing innovation during periods of incremental
change (and vice versa). Consequently, to successfully manage innovation streams,
companies need to be good at three things: (1) managing the sources of innovation, (2)
managing innovation during discontinuous change, and (3) managing innovation during
incremental change.
In terms of managing the sources of innovation, companies can jump-start innovation by
building creative work environments, in which workers perceive that creative thoughts and
ideas are welcomed and valued. Creative work environments have five components that
encourage creativity: challenging work, organizational encouragement, supervisory
encouragement, work group encouragement, and freedom. A sixth component,
organizational impediments, must be managed so as not to discourage creativity.
The experiential approach to innovation is most appropriate when managing discontinuous
change, in which a technological discontinuity created a significant breakthrough in
performance or function. This approach assumes that innovation is occurring within a highly
uncertain environment and that the key to fast product innovation is to use intuition, flexible
options, and hands-on experience to reduce uncertainty and accelerate learning and
understanding. There are five parts to the experiential approach to innovation: design
iterations, testing, milestones, multifunctional teams, and powerful leaders.
The compression approach to innovation can be used during periods of incremental change,
in which the focus is on systematically improving the performance and lowering the cost of
the dominant technological design. The compression approach assumes that innovation is a
predictable process, that incremental innovation can be planned using a series of steps, and
that compressing the time it takes to complete those steps can speed up innovation. There
are five parts to the compression approach to innovation: planning, supplier involvement,
shortening the time of individual steps, overlapping steps, and multifunctional teams.
Of these three approaches, one might argue that building creative work environments would
be the one more affected by organizational culture than the individual manager’s own
ability. The emphasis on attitudes, perception, and interpersonal behaviour in this approach
would be more susceptible to overriding influences from organizational culture than the
more procedural emphases of the other two approaches, which would be more easily
influenced by managerial skill. However, an argument could be made for the experiential
learning approach as being more affected by organizational culture, based upon the role of
intuition, flexibility, multifunctional teams, and powerful leaders. Similarly, but perhaps to a
lesser extent, an argument could be made for the compression approach as being more
affected by organizational culture, based upon the use of multifunctional teams. However,
this argument seems least appropriate in the context of all three approaches, given the
more obvious behavioural components of the other two. The key to quality in answers is the
extent to which the behavioural dimensions of values, beliefs, and attitudes are tied in to the
argument in favour of majority influence for the given approach.
144. Shortly after taking office in January 1993, President Bill Clinton decided to take steps
to eliminate discrimination which he believed was occurring against gay men and women in
the military. Without consulting with members of the military, he announced that he would
be issuing an Executive Order banning all forms of discrimination against homosexuals in
the military. There followed a tremendous controversy, played out in the public press and
media, including threats of resignation by members of the Joint Chiefs of Staff. Ultimately,
the new president backed down and agreed not to issue any Executive Order until a special
commission (including members of the public and the military) had been formed and given
the opportunity to study the problem and agree upon specific recommendations for change.
This procedure was followed, and what resulted was the “Don’t Ask, Don’t Tell” approach to
dealing with homosexuality in the military. The Canadian military has gone much further
than the “Don’t Ask, Don’t Tell” policy. In 1996, the Jean Chrétien Liberals received the
support of the Bloc Québécois and NDP parties, which had openly gay MPs. In 1996, sexual
orientation was added to the Canadian human rights legislation.
Identify and briefly describe the three steps involved in the process of managing
organizational change, according to Kurt Lewin, and specify which of these three steps
President Clinton initially handled poorly in the above scenario. Then, identify the
approaches that can be used to manage resistance to change, and specify which of them the
president was using when he made his initial announcement regarding the planned
Executive Order, and which were probably used in reaching the final resolution to this
issue.
Graders Info :
According to Kurt Lewin, managing organizational change is a basic process of unfreezing,
change intervention, and refreezing. Unfreezing is getting the people affected by change to
believe that change is needed. During the change intervention itself, workers and managers
change their behaviour and work practices. Refreezing is supporting and reinforcing the
new changes so they “stick.” Initially, President Clinton handled the unfreezing stage poorly.
While he was personally convinced that the existing procedures for dealing with homosexual
men and women in the military were wrong and inappropriate, he did not involve any of the
people who would be affected by the change in evaluating or verifying this opinion before
announcing the change that he planned to make. Thus, he encountered a high level of
resistance to change, both within and outside of the military. Because resistance to change
is natural and inevitable, managers need to unfreeze resistance to change to create
successful change programs. The following methods can be used to manage resistance to
change: education and communication, participation, negotiation, top management support,
and coercion.
When resistance to change is based on insufficient, incorrect, or misleading information,
managers should educate employees about the need for change and communicate change-
related information to them. Managers must also supply the information and funding or
other support that employees need to make changes. Another way to reduce resistance to
change is to have those affected by the change participate in planning and implementing the
change process. Employees who participate have a better understanding of change and the
need for it. Furthermore, employee concerns about change can be addressed as they occur
if employees participate in the planning and implementation process. Employees are less
likely to resist change if they are allowed to discuss and agree on who will do what after
change occurs. Resistance to change also decreases when change efforts receive significant
managerial support. Top managers must do more than talk about the importance of change.
They must provide the training, resources, and autonomy needed to make change happen.
Finally, use of formal power and authority to force others to change is called coercion.
Because of the intense negative reactions it can create-that is, fear, stress, resentment, and
sabotage of company products-coercion should be used only when a crisis exists or when all
other attempts to reduce resistance to change have failed.
President Clinton was attempting to use coercion when he made his initial announcement
about the impending Executive Order. However, this reliance only on his formal power and
authority was insufficient (and inappropriate, as his first step and only step in managing
resistance) to rally the military and the public to his side. Thus, he had to start over, by
forming an independent commission to study the problem and make recommendations.
Since this commission was made up of members of the public as well as the military, and
there was considerable collection and evaluation of data before possible solutions were
identified and ultimately agreed on by all parties, the final solution clearly entailed the use
of all five methods for managing resistance-education and communication, participation,
negotiation, top management support, and coercion (since the president would not let the
issue be dropped). Jean Chrétien did not have to consider coercion when he introduced
legislation to add sexual orientation to the Canadian human rights legislation. The support
of the Bloc Québécois and NDP parties resulted in a smooth passing of the legislation.