ISM 4041 Midterm CH 1-6

The strategic process DOES NOT include which of the following steps? Evaluation/control Planning Implementation Approval These are all steps in the strategic process.

Approval

Which one of these is an example of process innovation? E-mail security Just-in-time inventory (JIT) Firewalls Virus protection software Both "just-in-time inventory (JIT)" and "firewalls"

Both "just-in-time inventory (JIT)" and "firewalls"

What was the common mistake of Polaroid, Swiss Watch, and the United States steel industry? Giving technology away to competitors Failing to improve their technology Loss of government backing Intervention of the WTO Failing to form international alliances

Failing to improve their technology

A firm uses technology in an offensive manner, when it employs a technology in a manner the same as competitors in order to gain a competitive advantage. T/F

False

Basic research takes knowledge new to the firm and allows the firm to change its strategic position in the industry, or at least, change its potential position in the industry.

False

Buyers gain power when the costs of switching to competing brands or substitutes are high. T/F

False

Complacency disappears when there is a satisfaction with the status quo.

False

Economies of scale lowers the ability to enter and lowers the power of new entrants. T/F

False

Ideas are the key to innovation. T/F

False

In an innovative company, the external groups are most important because they allow interaction and idea exchange. T/F

False

Increases in demand for a product increases rivalry in an industry. T/F

False

Innovation is only the invention of a new product or process. T/F

False

Innovation is usually the product of one person's effort and genius. T/F

False

Innovation occurs when the firm is motivated with unrealistic expectations. T/F

False

Linking of different disciplines to plan, develop, implement, monitor, and control technological capabilities to shape and accomplish the strategic objectives of an organization is the definition of technology. T/F

False

Managers must be reactive and make technology a part of the overall strategic efforts of the firm if they want to be successful. T/F

False

Objective measures are always the best methods of judging the success of innovation. T/F

False

Substitutes form the price floor for a product. T/F

False

The action that eventually led to Polaroid's bankruptcy was their major strategic shift into the digital camera market. T/F

False

The four critical elements to implementing innovation as a strategy are leadership, engagement, extension, and sustainability. T/F

False

The myth about innovation is that firms need to seek a balance of behaviors among its employees to be successful. T/F

False

With all that is involved in innovation, the direction of a new product is easy to forecast. T/F

False

What is the name given to a firm that is the first to the market for a given product? Innovator Leader First mover Producer Follower

First mover

What is a substitute product? A product that is exactly the same as another A product that performs a similar function but is not exactly the same as another A completely different product A product that goes well with another product Another product which customers like

A product that performs a similar function but is not exactly the same as another

Delbecq's and Mills' characteristics of a firm that manages innovation well does NOT include which of the following? Sets of realistic expectations Separate funds for innovation Clear direction on studies to be done and follow-ups that are expected Periodic review of informal proposals by a group outside of line management Internal focus so boundary spanning does not distract from firm's focus

Internal focus so boundary spanning does not distract from firm's focus

A major source of innovation in the appliance industry is: Canada. Finland. the United States. Russia. Japan.

Japan

The tools of management must change as technology changes, but the process of determining what those new tools should be is in its infancy. T/F

True

The ultimate outcome from the leader's efforts at implementation is to put into place systems, structures, people, and processes that will help the organization move in the direction it desires and towards long-term sustainability. T/F

True

Two principle ways a company can acquire new technology are internal innovation and/or some type of alliance or purchase. T/F

True

When fostering the correct environment for innovation, one thing a manager should do is separate funds for innovation. T/F

True

Without the tools of management, the benefits of technology and innovation cannot be fully realized. T/F

True

Successful skills development programs are characterized by all of the following except: a state of informed optimism. a dynamic process that changes as there is a need for employees to change. directed empowerment. a turning prism. a consistent view of the firm so that the firm is not distracted from its mission.

a consistent view of the firm so that the firm is not distracted from its mission.

The pitfalls for innovation to avoid include all of the following except: applying the process too narrowly. overlooking people processes. being too confident of your ability to lead the process. relying on technology to fix all systems problems. avoiding the elimination of processes and people.

applying the process too narrowly.

It is better to have supportive systems and policies in firms that: have very loose systems and policies. have strict systems and policies that measure all things. leave the development of such systems and policies to mid-level managers. are consistent with the effort to encourage innovation. avoid any specification of the systems and policies until problems arise so that you can then design those systems and policies as needed.

are consistent with the effort to encourage innovation.

The creation of new knowledge involves _____. basic research integration applied research product research industry research

basic research

The type of research Einstein used to develop his work with laser physics is: quantitative. applied. systems integration. qualitative. basic.

basic.

The effect of technology is typically seen as _____. flat negative cascading same limited

cascading

The structure of any organization has two basic purposes which are: coordination and leadership. communication and flexibility. openness and flexibility. communication and coordination. being flat and open.

communication and coordination.

Benchmarking involves: building a bench or portfolio of new products that can be introduced to the market. building a bench or portfolio of innovations that the firm pursues consecutively. comparing the "best" firms in any domain to a given firm's performance and processes in that domain. comparing your firm's performance and processes in a given domain to the industry average in that domain. determining how the firms with the largest sales in a given domain conduct their activities in a given domain.

comparing the "best" firms in any domain to a given firm's performance and processes in that domain.

Each of the following are stages in the technology life cycle according to the S-curve except: embryonic. growth. maturity. aging. death.

death

Firms that use technology in a similar manner as other firms in its industry are using it in a(n) _____ manner. offensive defensive substitute competitive innovative

defensive

Confronting as a means to encourage creative thinking involves: exploring an area outside of your comfort zone. deliberate debates. building a portfolio of skills. creative employees developing new projects. a camping trip by employees to build teamwork.

deliberate debates.

Evaluation and control is employed to _____. judge what industries the firm should be in ensure the firm is reaching the goals and objectives established evaluate which firm should be in the strategic group reward the top performers in the firm determine the CEO's salary for the year

ensure the firm is reaching the goals and objectives established

When Louis Gerstner took over IBM, he determined that planning should have all of the following activities except: ensuring external opportunities and threats were the focus of the planning not internal organizational issues. ensuring that the plan is focused on key implementation issues. structuring on going processes to re-examine fundamental strategic challenges. ensuring allocation decisions were not impacted by short term shifts in strategy. promoting widespread support and involvement in process.

ensuring allocation decisions were not impacted by short term shifts in strategy.

Reengineering's goals include all of the following except: increasing productivity. optimizing value to shareholders. achieving quantum results. expanding functions. eliminating unnecessary levels and work.

expanding functions

Strategic groups are: firms from substitute industries. firms from the same industry and compete in similar manners. firms from the same industry and compete in different manners. firms in the same industry that have the same size. firms from different industries that are in the same region.

firms from the same industry and compete in similar manners.

Alignment within the organization is concerned with: fit between the systems in the firm. fit between the firm and the industry. fit between the leadership and the firm's workers. fit between the top management and the middle management. fit between the environment and the leadership of the firm.

fit between the systems in the firm.

Business-level strategy establishes: how domains such as marketing will operate to achieve strategic goals. how individual businesses will operate. what industries and businesses the firm will compete. how individuals will progress through the corporation. the defensive use of technology in the firm

how individual businesses will operate.

Richard D'Aveni is associated with: re-engineering. hyper-competition. the five forces model. diamond of national competitiveness. the resource theory.

hyper-competition.

A mission statement: helps the firm stay focused. summarizes where a business wants to go. requires fundamental rethinking and redesign. ​​ increases the efficiencies or the effectiveness of an organization. is how the firm will carry out its goals and objectives.

increases the efficiencies or the effectiveness of an organization.

Diffusion is concerned with: market penetration by a new product. information sharing in an organization. common culture development in a multi-national firm. joint ventures and the blending of cultures. joint ventures and the level of support for a new product.

information sharing in an organization.

Technology's impact: is ongoing. occurs in small very distinct steps. occurs in large shifts over time. is not significant. is limited unless combined with money.

is ongoing.

All of the following are characteristics that enhance the initiative that sparks innovation except: asking questions to identify problems & opportunities. learning new skills. taking risks. being proactive. managing innovation.

managing innovation.

Technology's impact is: only in particular business units. significant only for certain people in the organization. occurs only outside the business organization since it is so pervasive. organization-wide. effects societies, not businesses.

organization-wide.

All of the following are what a firm needs to consider as it seeks to build fit except: focus building the group within the department or division. seek to reduce barriers between departments. ensure that the information on competitors is current and central to the implementation effort since they shape a firm's success. gather information from customers and consumers. recognize that the importance of external concerns will depend on the nature of the firm's industry.

recognize that the importance of external concerns will depend on the nature of the firm's industry.

The higher the _____, the more likely firms are to cut prices and in turn their profits. new entrants substitutes rivalry suppliers buyers

rivalry

Rivalry increases when: the number of competitors increases. demand for product is slowing. switching costs are high. exit barriers are high. strategic payoff is high.

switching costs are high.

Engagement focuses on: creating a questioning attitude in employees. team building. fostering inertia. delegating authority. funding critical needs.

team building.

Technology pushes society when: innovations make unwanted changes in society that are unfortunate such as pollution. innovations push the government to make new regulations in order to control the activity. new technology strains the social fabric of the society to the breaking point. technology is not demanded by society, but once available it is quickly adopted by society. technology is demanded by society and it leads to changes in the society.

technology is not demanded by society, but once available it is quickly adopted by society.

Linux is an example of continuous technology because: the changes in the program are dramatic. the changes in the logic of the system happen over a relatively short period of time. the changes are implemented by a large number of individuals from all over the world. the technology changes are so disruptive that change happens continuously. it is not an example of continuous technology.

the changes in the logic of the system happen over a relatively short period of time.

Informal power comes from: the title of the individual. the official position of the individual. the expertise and knowledge of the individual. age of the person. strength of the person.

the expertise and knowledge of the individual.

One of the primary reasons firms have difficulty being innovative is: the firm's structure. competitors' actions. the industry structure. communication technology failures. skills of people in the organization.

the firm's structure.

The law of diminishing returns is discussed in Chapter 4 in terms of: the level of investment necessary to bring an investment to market. the ability of an industry to shape returns of a firm. how complementary products shape the returns of a firm. the power of a firm to shape competition in that industry. the need to avoid analysis by paralysis.

the need to avoid analysis by paralysis.

Normative institutions are concerned with: the laws in a country. the norms of professions and industries. the progress of technology at a normal pace. the ability to obtain the insights of average consumers. the banking industry.

the norms of professions and industries.

Sticky notes are a good example of _____. small innovations that make too much money the role of teamwork in innovation the central role of a single person in the innovation process how to rescue a failed product how a single product can rescue a troubled firm

the role of teamwork in innovation

It is beneficial to be a follower when _____. an industry is growing too fast an industry has high customer loyalty there are high customer educational costs the industry leader is the first mover there are few penalties for industry mistakes

there are high customer educational costs

Buyers are strong if all of the following are present except: when the buyers buy a large percentage of the industry's output. the low switching cost. the large number of sellers in the industry. when the industry is selling a commodity product to the buyers. when there are high capital requirements.

when there are high capital requirements.

Which of the following is not a primary way for innovative organizations to encourage creative thinking and perpetual challenging within the organization? Referring Confronting Portfolio of skills Adventuring Opportunity identifying

Referring

The purpose of an innovative strategy is to create and effectively utilize new products and processes. T?F

True

The root of Porter's Five Forces model is industrial organization economics. T/F

True

Which is not one of the five forces in Michael Porter's analysis? Buyers Innovators Rivalry Suppliers Substitutes

Innovators

Which of these is not a factor that favors innovation? Increased time for internal development More control of the process Greater understanding of technology Profit potential as a first mover Potential to develop the next generation of technology

Increased time for internal development

It took how long to develop large flat screen panels for market? 6 months 1 year 3 years 5 years 20 years

20 years

It was found in the state of Washington that in technology-based industries each job in turn supports an average of _____ jobs while the state average is _____ jobs per employee in all other industries. 3.55; 1.01 3.55; 5.05 3.55; 2.86 0.25; 2.86 1.39; 2.86

3.55; 2.86

Which of the following does 3M do to encourage innovation? Employees are required to spend 35% of their time on innovative projects. Seed money is provided to promising ideas. Compensation system rewards employees for innovations. Compensation system is strictly focused on employees innovation so slacking employees do not slow them down. 25% of revenue is spent on advertising each year.

Compensation system rewards employees for innovations.

What emerges when there is a satisfaction with the status quo? Poor job performance Loss of technological advantage Complacency Engagement Inertia

Complacency

Which one of these statements is a myth about innovation? Seek a balance of behaviors. Leadership, culture, and process form a three-legged stool. Ideas are the key to innovation. Your organization has lots of brilliant ideas that you've never heard of. Do not blind yourself to the human dimension.

Ideas are the key to innovation.

_____ is pivotal in determining engagement by employees in the innovation implementation process. Employee compensation Status of a leader Rank of a leader Organizational culture Goal of an organization

Organizational culture

Which one of these methods to encourage creativity involves stretching your skills? Adventuring Confronting Portfolio of skill Opportunity identifying Rewarding

Portfolio of skill

The first question a firm considering an innovation strategy should ask is "should we innovate, or not"? T/F

True

The management of innovation requires firms to encourage risk-taking. T/F

True

The task force on Management of Technology listed five specific reasons why individuals and organizations should be concerned about the management of technology. Which of these is NOT one of the five reasons provided? The rapid pace of technological change demands a cross discipline approach. The rapid pace of technology development and the increasing sophistication of consumers have shortened the product life cycle. The need for increasing production times. Increasing international competition. As technology changes, the tools of management must change.

The need for increasing production times.

The management of technology involves a much broader scope of continuation and nurturing of existing technology than does innovation. T/F

True

A negative element to embracing internal innovation as a strategy includes a greater risk of failure to develop the right product at the right time.

True

Culture is the key element in determining the level of engagement within the organization.

True

Extension occurs when product and market competencies are understood sufficiently so that ideas lead to action.

True

Firms must constantly seek to actively manage and improve their technological potential. T/F

True

Generally speaking, the structure of an organization must be characterized by flexibility and openness if innovation is to take place. T/F

True

In the implementation process of the strategy, if the right people or supports are not in place at any one place in the flow, the entire process can be stopped. T/F

True

It is sometimes more beneficial to be a follower in an industry then a leader. T/F

True

Management of technology includes the evaluation/control phase for examining innovations after they become an ongoing part of the organization. T/F

True

Managing innovation is a cross-discipline activity. T/F

True

One of the methods that helps establish the view by employees that they are part of the organization is building a knowledge-based culture. T/F

True

Process activities are related to how the firm reacts to trying new ideas. T/F

True

Strategy can be defined as: a process whereby new and improved products, processes, materials, and services are developed and transferred to a new plant or market where they are appropriate. the critical tools, methods, and systems employed in the creation of goods or in providing services. a coordinated set of actions that fulfill the firm's objectives, purposes, and goals. the systematic gathering of information that leads to the generation of feasible alternatives for the firm. an industrial integration view of the firm based on industrial organization economics.

a coordinated set of actions that fulfill the firm's objectives, purposes, and goals.

Technology is defined to include _____ employed in producing a good or service. knowledge products processes methods all of these choices

all of these choices

The impact of a strategy comes from the firm setting a clear direction and taking actions that are consistent with that strategy. The common areas that the firm needs to focus on include: incentives. structure and decision making. communication and employee relations. culture. all of these choices.

all of these choices.

Technology can be broadly defined as: a process whereby new and improved products, processes, materials, and services are developed and transferred to a new plant or market where they are appropriate. all the knowledge, products, processes, tools, methods, and systems employed in the creation of goods or in providing services. a coordinated set of actions that fulfill the firm's objectives, purposes, and goals. the systematic gathering of information that leads to the generation of feasible alternatives for the firm. the elements of planning, implementation, and evaluation and control.

all the knowledge, products, processes, tools, methods, and systems employed in the creation of goods or in providing services.

Innovation can be defined as: the process whereby new and improved products, processes, materials, and services are developed and transferred to a new plant or market where they are appropriate. all the knowledge, products, processes, tools, methods, and systems employed in the creation of goods or providing services. a coordinated set of actions that fulfill the firm's objectives, purposes, and goals. the systematic gathering of information that leads to the generation of feasible alternatives for the firm. the elements of planning, implementation, and evaluation and control.

all the knowledge, products, processes, tools, methods, and systems employed in the creation of goods or providing services.

It can be expected that the theory and methods of managing technology and innovation learned from the text are: applicable only in the United States. applicable only in the United States and Canada. applicable only in the United States, Canada, and the United Kingdom. applicable only in the United States, Canada, the United Kingdom, and parts of Europe. applicable around the world.

applicable around the world.