Business management Chapter 7

Which of the following is an aspect of the experiential approach to innovation?

Design iteration.

In the context of managing change, _____ support the status quo of an organization.

resistance forces. Resistance forces support the status quo, that is, the existing conditions in an organization.

change agent

A change agent is the individual who is formally in charge of guiding a change effort. This person can be someone from within a company or a professional consultant. See 7-4: Managing Change

product prototype

A product prototype is a full-scale working model that is being tested for design, function, and reliability. See 7-2: Managing Innovation

frequent design iterations

By trying a number of very different designs or making successive improvements and changes in the same design, frequent design iterations reduce uncertainty and improve understanding. Simply put, the more prototypes one builds, the more likely one is to learn what works and what does not. See 7-2: Managing Innovation

When resistance to change is based on insufficient, incorrect, or misleading information, which of the following is the best approach that a manager can use to manage resistance to change?

Education and communication. Managers should educate employees about the need for change and communicate change-related information to them. See 7-4: Managing Change

In the context of the experiential approach to innovation, which of the following is true of design iteration?

Frequent design iterations improve understanding.

Generational change

Generational change occurs 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. See 7-2: Managing Innovation

Portrance's iX processor is the latest installment in the Portrance microprocessor product line. It is fully backward compatible with the earlier versions of the microprocessor. Which of the following terms best describes this dominance of Portrance's new iX processor over its older versions?

Generational change.

Inaction Stage of Organizational Decline

In the inaction stage of organizational decline, as organizational performance problems become more visible, management may recognize the need to change but still take no action. Possibly, managers wrongly assume that they can easily correct the problems, so they don't feel the situation is urgent. See 7-3: Organizational Decline: The Risk of Not Changing

Which of the following is a characteristic of the inaction stage of organizational decline?

Managers wrongly assume that they can easily correct the problems, so they don't feel the situation is urgent.

results-driven change

One of the reasons that organizational change efforts fail is that they are activity oriented rather than results oriented. See 7-4: Managing Change

Organizational development

Organizational development emphasizes employee participation in diagnosing, solving, and evaluating problems. Organizational development takes a long-range approach to change. See 7-4: Managing Change

In an organization, which of the following acts as a hindrance to a creative work environment?

Presence of internal conflict

Resistance forces, This is in contrast to change forces

This is in contrast to change forces, which lead to differences in the form, quality, or condition of an organization over time. See 7-4: Managing Change

compression approach to innovation

With the compression approach, the general strategy is to compress the time and steps needed to bring about small, consistent improvements in performance and functionality. Because a dominant technology design already exists, the general strategy is to continue improving the existing technology. See 7-2: Managing Innovation

An individual who is formally in charge of guiding a change effort in an organization is referred to as a _____.

change agent

Mark was the person who was in charge of the plan to reinvent Supernova Automobiles. He played a major role in the company making a shift to building solar-powered automobiles from making regular fuel-powered cars. After the change intervention gave satisfactory results, Mark left the project and started working on another project. In the context of organizational development, Mark is a(n) _____.

change agent.

The _____ assumes that innovation is a predictable process that can be planned using a series of steps and reducing the time it takes to complete those steps can speed up the innovation process.

compression approach to managing innovation

Discontinuous change is characterized by _____, in which an old technology and several different new technologies compete to establish a new technological standard or dominant design.

design competition.

Before TREX Mobiles launched its latest smartphone, it built a prototype of the phone and tested its performance repeatedly, improving the model each time. In the context of the experiential approach to innovation, this process is called _____.

design iteration.

When significant improvements in performance can only be gained through radical new designs or new performance-enhancing materials, it is likely that a company is at the _____.

end of the technology cycle.

The _____ assumes that innovation is occurring within a highly uncertain environment.

experiential approach to innovation. According to this approach, the key to fast product innovation is to use intuition, flexible options, and hands-on experience to reduce uncertainty and accelerate learning and understanding. See 7-2: Managing Innovation

design iteration

is a cycle of repetition in which a company tests a prototype of a new product or service, improves on the design, and then builds and tests the improved product or service prototype. See 7-2: Managing Innovation

During the last decade, as people sought to replace their obsolete floppy discs, there was an increase in sales in CDs, DVDs, pen drives, and portable hard discs. The replacement of floppy discs by other advanced storage devices is an example of _____.

technological substitution. Technological substitution occurs when customers purchase new technologies to replace older technologies. See 7-1: Why Innovation Matters

In terms of change tools and techniques, the General Electric workout is a special kind of _____.

results-driven change

The three steps in the basic process of managing organizational change outlined by Kurt Lewin are:

unfreezing, change intervention, and refreezing.

When Red Arc Enterprises, a shipping company, was merged with a larger shipping company, there was a strong resistance to change among the employees of Red Arc. When the CEO of Red Arc got to know of this, he met everyone and explained why the change was necessary and how it could serve to benefit everyone. According to Kurt Lewin, Red Arc is in the _____ stage of managing organizational change

unfreezing.

_____ is the successful implementation of creative ideas in organizations, like the construction of the Edge office building in Amsterdam

Organizational innovation.

Which of the following occurs in the adoption stage of organizational development interventions?

Organizational members accept ownership and responsibility for the change, which is then carried out through the entire organization. This is the seventh step of an organizational development intervention. See 7-4: Managing Change

Which of the following is an aspect of the compression approach to innovation?

Planning. Planning is defined as choosing a goal and a method or strategy to achieve that goal. When planning for incremental innovation, the goal is to squeeze or compress development time as much as possible, and the general strategy is to create a series of planned steps to accomplish that goal. See 7-2: Managing Innovation

frozen behavior

Resistance to change is an example of frozen behavior. See 7-4: Managing Change

Which of the following factors causes resistance to change?

Self-interest. People resist change out of self-interest because they fear that change will cost or deprive them of something they value. Resistance might stem from a fear that the changes will result in a loss of pay, power, responsibility or even perhaps one's job. See 7-4: Managing Change

If a technological innovation follows the typical S-curve pattern of innovation, which of the following will indicate that small amounts of effort, in terms of money or research and development, will lead to significant increase in technological performance?

A steeper slope at the midpoint of the curve. A steeper slope at the midpoint of the curve indicates that small amounts of effort, in terms of money or research and development, result in significant increase in technological performance. See 7-1: Why Innovation Matters

Touchstone Hardware was a popular company that specialized in making floppy disks. At the start of the 21st century, when people began switching to CDs and DVDs to store their information, it was brought to the notice of senior managers that the company needed to switch its focus to the production of new storage devices. However, the managers did not feel it was important to make this switch. They dismissed CDs and DVDs as just a passing phase. Which of the following stages of organizational decline best illustrates the current situation of the company?

Blinded stage. Touchstone Hardware is in the blinded stage of organizational decline. In this case, the senior managers of the company did not recognize the need to switch to a new technology. See 7-3: Organizational Decline: The Risk of Not Changing

Which of the following methods for managing resistance to change should only be used as a last resort or under crisis conditions?

Coercion

Coercion

Coercion is the use of formal power and authority to force others to change, and it should only be used as a last resort or under crisis conditions. It should be used only when a crisis exists or when all other attempts to reduce resistance to change have failed because it can create intense negative reactions (e.g., fear, stress, resentment, sabotage of company products). See 7-4: Managing Change

Over the long run, which of the following is the best way for a company to sustain competitive advantage?

Creating innovation streams, of its own innovative ideas and products year after year. Innovation streams are patterns of innovation over time that can create sustainable competitive advantage. See 7-1: Why Innovation Matters

When Fletcher Motors, an automobile manufacturer, learned that it took longer than any other manufacturer to assemble a vehicle, it purchased existing flexible manufacturing systems to replace its older ones. Which stage of the technology cycle is illustrated in the scenario?

Discontinuous change. Fletcher Motors replaced its older manufacturing systems with comparatively newer systems. In other words, Fletcher Motors engaged in technological substitution. Discontinuous change is the phase of a technology cycle characterized by technological substitution and design competition. See 7-1: Why Innovation Matters

Dominant designs emerge because they solve a practical problem, are a result of the negotiations of independent standards bodies, or because of critical mass.

Dominant designs emerge in several ways. One is a critical mass, meaning that a particular technology can become the dominant design simply because most people use it. See 7-1: Why Innovation Matters

Damien Richard is the CEO of QuickShop, a chain of supermarkets. QuickShop is soon going to employ the latest technology, which will help customers reduce their shopping time by an ask-and-get approach. In this approach, a customer has to just name the product, and the robots will bring it to them. QuickShop's employees are worried about losing their jobs if this technology is employed. On speaking to several of the employees, Damien finds that many of them have misguided opinions about the implementation of the technology, causing them to have insecurities. What should Damien do to help them adapt to the change more easily?

He must educate his employees about the need for the change and explain its benefits to them before employing it. so that the employees don't have any misconceptions.

Blinded stage

In the blinded stage, decline begins because key managers fail to recognize the internal or external changes that will harm their organizations.

faulty action stage

In this stage, faced with rising costs and decreasing profits and market share, management will announce belt-tightening plans designed to cut costs, increase efficiency, and restore profits. In other words, rather than recognizing the need for fundamental changes, managers assume that if they just run a tighter ship, company performance will return to previous levels. See 7-3: Organizational Decline: The Risk of Not Changing

Which of the following statements is true about the compression approach to managing innovation?

It aims at consistent improvement of existing designs.

In terms of change tools and techniques, which of the following is true of organizational development?

It emphasizes employee participation in diagnosing, solving, and evaluating problems.

The S-curve pattern of innovation

The S-curve pattern of innovation is a pattern of technological innovation characterized by slow initial progress, then rapid progress, and then slow progress again as a technology matures and reaches its limits. When significant improvements in performance can only be gained through radical new designs or new performance-enhancing materials, it is likely that a company is at the end of the technology cycle. See 7-1: Why Innovation Matters

compression approach to innovation

The compression approach to innovation 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. The compression approach to innovation has five aspects: planning, supplier involvement, shortening the time of individual steps, overlapping steps, and multifunctional teams. See 7-2: Managing Innovation

The experiential approach to innovation has five aspects

The experiential approach to innovation has five aspects: design iterations, testing, milestones, multifunctional teams, and powerful leaders.

internal conflict

To foster creativity, companies may have to remove impediments to creativity from their work environments. Internal conflict and power struggles, rigid management structures, and a conservative bias toward the status quo can all discourage creativity. See 7-2: Managing Innovation

Unfreezing

Unfreezing is getting the people affected by change to believe that change is needed. See 7-4: Managing Change

If a technological innovation follows the S-curve pattern of innovation, a flat slope at the beginning of the curve indicates that:

an increased effort can bring only small improvements in its performance. Early in a technology cycle, there is still much to learn, so progress is slow. In the typical S-curve pattern of innovation, a flat slope at the beginning of the curve indicates that increased effort (in terms of money or research and development) can bring only small improvements in technological performance at extreme ends of the cycle. See 7-1: Why Innovation Matters

There are eight general steps for organizational development interventions. The third step is _____.

assessment and feedback. Assessment and feedback is the third step of organizational development. In this stage, the change agent gathers information about the problem and provides feedback about it to decision makers and those affected by it. See 7-4: Managing Change

Levio is a company that develops mobile applications. It aims to become the market leader in its field. Levio focuses on developing a culture where workers are made to feel that new ideas are welcome. It plans to do this by offering challenging work and supervisory encouragement to its workers. In this scenario, the company is attempting to develop a(n) _____.

creative work environment. In creative work environments, workers perceive that creative thoughts and ideas are welcomed and valued. See 7-2: Managing Innovation

Xamber Tools, a metal tool manufacturing firm, is facing a threat of organizational decline due to the rising costs of raw materials, decreasing profits and lower market share. To fix these problems, the management decides to cut costs of production to increase efficiency and profit. The cost cut does not help the company, and the company eventually files for bankruptcy. In this scenario, Xamber Tools is most likely in the _____ of organizational decline.

faulty action stage.

Discontinuous change

is characterized by technological substitution and design competition. Design competition is the part of discontinuous change in which the old technology and several different new technologies compete to establish a new technological standard or dominant design. See 7-1: Why Innovation Matters

A particular technology becomes the dominant design because of critical mass, which means that:

it is used by most people.

A technology is most likely to become a dominant design if:

it solves a practical problem.

Garrison Motors Inc. developed a creative manufacturing technique that helps improve the efficiency of their production. It allows the company to produce more than one type of car from the same assembly line. In this scenario, the development of a new technique by Garrison Motors to improve its workflow efficiency is an example of _____.

organizational innovation. In this scenario, the development of a new technique by Garrison Motors to improve its workflow efficiency is an example of organizational innovation. Organizational innovation is the successful implementation of creative ideas in organizations. See 7-1: Why Innovation Matters

Dynamics Inc. is a company that specializes in household appliances. It is currently working on creating a new geyser that can heat water in less than five minutes. The company has developed a working model that is being tested for design, function, and reliability. In terms of the experiential approach to innovation, this working model is called a _____.

product prototype. This is an example of a product prototype. A product prototype is a full-scale working model that is being tested for design, function, and reliability. See 7-2: Managing Innovation

Feldman Films is a company associated with photography, and has been in business for the last 30 years. The invention and development of the digital camera forced Feldman Films to start thinking fresh. Feldman Films applied design thinking to strategy and innovation in response to the competitive threat from the digital camera. In this scenario, the development of the digital camera was a _____.

technological discontinuity. In this scenario, the development of the digital camera was a technological discontinuity. A technological discontinuity is the phase of an innovation stream in which a scientific advance or unique combination of existing technologies creates a significant breakthrough in performance or function. See 7-1: Why Innovation Matters

Studies of hundreds of technological innovations have shown that nearly all technology cycles follow _____. This pattern of technological innovation is characterized by slow initial progress, then rapid progress, and then slowly progress again as the technology matures and reaches its limits. See 7-1: Why Innovation Matters

the S-curve pattern of innovation.