Chapter 7: Innovation and Change
TRUE/FALSE
1. Organizational innovation is defined as doing things differently in an organization.
2. 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.
3. Nearly all technology cycles follow a bell-shaped pattern of innovation.
4. In 1977, at age 23, Jake Burton left a job at an investment firm to work in a wood shop where he
developed the first marketable snow board. Three decades later, he is the owner of Burton
Snowboards, the leader in the $2.3 billion snow sports industry. Burton is responsible for the
beginning of a technology cycle.
5. Technology cycles for low-tech products follow the typical U-curve pattern of innovation.
6. The typical S-curve pattern of innovation indicates that both early and late in the technology cycle,
increased effort (i.e., money, research and development) brings only small improvements in
technological performance.
7. 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.
8. Companies that want to sustain a competitive advantage must understand and protect themselves from
the strategic threats of innovation.
9. In 2007, a startup company called Optovue introduced a new medical technology that used an infrared
beam to probe a patient’s eyes for ailments like glaucoma. Even though this new technology was a
significant breakthrough in treatment, it is not a technological discontinuity as it is not part of an
innovation stream.
10. Batteries currently used in cell phones have an annoyingly short life. The development of a new power
source for cell phones would be an example of technological substitution.
11. The research on technology cycles and technological innovation applies only to high-tech products
developed in the bioengineering, robotics, and computer industries.
12. The term “innovation streams” refers to patterns of innovation over time that can create sustainable
competitive advantage.
13. 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.
14. Technological discontinuities are followed by discontinuous change characterized by technological
substitution and design competition.
15. Dominant designs emerge because they solve a practical problem, as a result of the negotiations of
independent standards bodies, or because of critical mass.
16. The same techniques for managing innovation work equally as well after technological discontinuities
as during periods of incremental change.
17. A creative work environment requires organizational encouragement and supervisory encouragement,
as well as work group encouragement.
18. According to the Doing the Right Thing box, a manager should give credit to his or her subordinates
when departments develop innovative ideas.
19. The three parts of the experiential approach to innovation are design iterations, testing, and milestones.
20. If it is your business, it is perfectly okay to take the credit for your employee’s idea.
21. When Finis, a manufacturer of swimming gear, developed SwiMP3, a waterproof music player, it
probably created several product prototypes before settling on a design.
22. Milestones are formal review points that tend to lengthen the innovation process.
23. When Finis, a manufacturer of swimming gear, developed SwiMP3, a waterproof music player, it
probably used milestones to make sure the innovative product was brought to market in a timely
fashion.
24. 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.
25. Organizational decline occurs when companies don’t anticipate, recognize, neutralize, or adapt to the
internal or external pressures that threaten their survival.
26. Organizational decline is typically reversible at any of its five stages.
27. In a properly managed organization, there will be no resistance to needed change.
28. When Robert Haas became the CEO of Levi Strauss & Company, he wanted to change the company’s
mission “from dressing the world in riveted denim to showing that a company driven by social values
could outperform a company hostage to profits alone.” This mission statement change shows social
responsibility and would not have met any resistance.
29. According to Kurt Lewin, managing organizational change is a simple process that requires
organizational dialogue, change intervention, and reformatting.
30. Resistance to change results from organizational factors, such as the absence of promotion guidelines,
bonuses, and praise.
31. Even though education and communication, participation, negotiation, top management support, and
coercion can all be used to manage resistance to change, coercion should only be used in crisis
situations or as a last resort.
32. One of the most common errors managers make when leading change is to establish a sense of urgency
for the change.
33. Declaring victory too soon is one of the mistakes managers often make in the refreezing stage of
change.
34. According to John Kotter’s analysis of errors managers make when leading change, managers tend to
make the largest number of errors during the unfreezing stage of organizational change.
35. Results-driven change focuses primarily on changing company procedures, management philosophy,
or employee behavior.
36. The General Electric Workout is a special kind of activity-oriented change.
37. One of the primary responsibilities of a transition management team is to establish a context for
change and to provide guidance.
38. According to the What Really Works, “Change the Work Setting or Change the People? Do Both!” the
purpose of changing individual behavior is to improve organizational performance.
39. Person-focused intervention would use training as well as counseling or coaching.
MULTIPLE CHOICE
1. Organizational ____ is the successful implementation of creative ideas in organizations.
a.
change
b.
innovation
c.
creativity
d.
development
e.
deployment
2. ____ refers to the production of novel and useful ideas.
a.
The synergistic use of resources
b.
Ideation
c.
Creativity
d.
Organizational adaptation
e.
Innovative style
3. McDonald’s restaurants are involved in a long–term, worldwide movement to change consumers’
perceptions of its products by selling food that is healthier. McDonald’s is engaged in:
a.
organizational change
b.
reverse engineering
c.
demarketing
d.
market diversification
e.
product revitalization
4. A company has experienced organizational ____ when its form, quality, or condition changes over
time.
a.
innovation
b.
development
c.
change
d.
reengineering
e.
manipulation
5. Gregg Steiner joined Cleveland-based Pinxav in 2003 knowing the diaper–rash product manufacturer’s
sales were declining. At a trade show Steiner was pitching the product to some new mothers who had
never heard of it. The mothers weren’t convinced that they should part with their money for a
new-to–them product. The inspired Steiner said, “If you’re not happy with the product, I will not only
give you your money back—I’ll buy you our competitors’ product. I’ll buy you whatever other brand
you want.” Suddenly, the women were interested, and they all plunked down their money. None of the
women ever took Steiner up on his offer. So Steiner decided to make it part of his business practice.
This new guarantee was an example of:
a.
corporate synergy
b.
organizational innovation
c.
assembly networking
d.
organizational networking
e.
reverse engineering
6. Mike Domek is the owner of the Florida-based TicketsNow.com. Domek’s company tapped a market
that Ticketmaster had neglected: He specialized in locating and securing premium seating and tickets
to sold-out events. Domek used ____ to locate and serve a profitable market.
a.
synergy
b.
ideation
c.
creativity
d.
organizational adaptation
e.
innovative style
7. In the successful implementation of creative ideas in organizations, ____ must necessarily come before
____.
a.
synergy; resource deployment
b.
organizational innovation; creativity
c.
resource development; creativity
d.
organizational development; organizational innovation
e.
creativity; organizational innovation
8. A technology ____ 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.
process
b.
pattern
c.
cycle
d.
hierarchy
e.
continuum
9. Nearly all technology cycles follow the typical ____ pattern of innovation.
a.
W-curve
b.
U-curve
c.
bell-shaped
d.
S-curve
e.
V-shaped
10. A technology cycle occurs whenever there are major advances or changes in the ____ in a field or
discipline.
a.
human, technical, and conceptual skills needed
b.
structure or personnel requirements
c.
internal resource environment
d.
knowledge, tools, and techniques
e.
way information is integrated
11. In the typical S-curve pattern of innovation, increased effort (i.e., money, research, and development)
brings only small improvements in technological performance:
a.
early in the cycle
b.
throughout the cycle
c.
at the end of the cycle
d.
at both the beginning and end of the cycle
e.
in the maturity stage of the cycle
12. In the typical S-curve pattern of innovation, small amounts of effort will result in significant increases
in performance:
a.
during the growth stage of the cycle
b.
at the midpoint of the cycle
c.
only at the end of the cycle
d.
throughout the cycle
e.
only at the beginning of the cycle
13. In the typical S-curve pattern of innovation, increased effort (i.e., money, research and development)
brings only small improvements in technological performance when performance limits of the
technology are reached:
a.
during the introductory stage of the cycle
b.
at the breakeven point of the cycle
c.
during the maturity stage of the innovation cycle
d.
throughout the cycle
e.
at the end of the cycle
14. In the typical S-curve pattern of innovation, 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:
a.
at its breakeven point
b.
at the problem identification stage of the innovation cycle
c.
at the end of the innovation cycle
d.
at either the beginning or end of the innovation cycle
e.
at the end of its maturity stage
15. Patterns of innovation over time that can create sustainable competitive advantage are called:
a.
innovation maps
b.
organization development
c.
results-driven change
d.
innovation streams
e.
cyclical inventions
16. The development of CDs was a source of ____ to companies in the recording industry just as
audiotapes and 8-track tapes had once been.
a.
a sustainable competitive advantage
b.
creativity reengineering
c.
technological discontinuity
d.
planned shrinkage
e.
technological replacement
17. ____ is the knowledge, tools, and techniques used to transform inputs into outputs.
a.
Resource manipulation
b.
Procedural innovation
c.
A transformation system
d.
Technology
e.
Creativity
18. An ongoing series of technology cycles will allow an organization to:
a.
satisfy more customers with fewer resources
b.
create a competitive advantage
c.
control variable costs
d.
eliminate the product-innovation process
e.
eliminate problems associated with economies of scale
19. An innovation stream moves from one technology cycle to another through the process of:
a.
technological substitution
b.
dominant design
c.
incremental environmental change
d.
organizational synergy
e.
transition management
20. In terms of innovation streams, ____ occurred when customers purchased flat-screen computer
monitors to replace the older, bulkier monitors.
a.
technological substitution
b.
technological expansion
c.
reengineering
d.
demarketing
e.
the pioneering era
21. When DaimlerChrysler learned that it took longer than any other U.S. car manufacturer to assemble a
vehicle, it entered which period of the innovation stream when it purchased newer, more flexible
manufacturing systems to replace its older ones?
a.
technological adaptation
b.
the era of dominant design
c.
the technological growth stage
d.
change substitution
e.
discontinuous change
22. Kodak is a company name that is associated with photography. The company has recognized that
digital photography is a threat to the future growth of the company. Therefore, the company has
decided to become a market leader in digital imaging. The development of the digital camera forced
Kodak into the innovation stream because the new imaging process was a(n):
a.
technological subtraction
b.
technological discontinuity
c.
process obsolescence
d.
process addition
e.
example of design advantage
23. Kodak is a company name that is associated with photography. The company has recognized that
digital photography is a threat to the future growth of the company. Therefore, the company has
decided to become a market leader in digital imaging. As Kodak tried to compete in this new
innovation stream, it entered:
a.
technological adaptation
b.
the era of dominant design
c.
the technological growth stage
d.
change substitution
e.
discontinuous change
24. ____ is the phase of a technology cycle that is characterized by technological substitution and design
competition.
a.
Technological adaptation
b.
The era of dominant design
c.
The technological growth stage
d.
Change substitution
e.
Discontinuous change
25. The term ____ refers to the purchase of new technologies to replace older ones.
a.
adaptive change
b.
design replacement
c.
technological substitution
d.
dominant design
e.
innovative exchange
26. Discontinuous change in an innovation stream is characterized by:
a.
synergy
b.
technological substitution
c.
incremental change
d.
empathetic design
e.
innovative reciprocity
27. Kodak is a company name that is associated with photography. The company has recognized that
digital photography is a threat to the future growth of the company. Therefore, the company has
decided to become a market leader in digital imaging while still providing customer support for people
still using film cameras. The existence of both technologies is an example of:
a.
design substitution
b.
modular management
c.
design competition
d.
hierarchical management
e.
a creative flow
28. During the ____ phase of a technology cycle, companies innovate by lowering the cost and improving
the functioning and performance of the dominant design.
a.
technological discontinuity
b.
discontinuous change
c.
dominant design
d.
incremental change
e.
technological continuity
29. In order, from beginning to end, the phases of a technology cycle within an innovation stream consist
of:
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, era of incremental change, and technological
discontinuity
d.
technological discontinuity, discontinuous change, dominant design, and incremental
change
e.
technological discontinuity, incremental change, discontinuous change, and technological
continuity
30. The auto industry has been perfecting the internal combustion engine (ICE) for some 120 years. There
is plenty of work ongoing at all of the auto companies on alternatives to ICEs. The money invested by
them is measured in billions of dollars. The Partnership for a New Generation of Vehicles (PNGV),
the cooperative program between the Big Three automakers and the U.S. government to replace ICEs
with electric engines, has been operating since 1993. The internal combustion engine (ICE) is an
example of:
a.
a dominant design
b.
design dichotomy
c.
a synergistic design
d.
a differential design
e.
a dichotomous product
31. Which of the following statements about managing innovation is true?
a.
Companies that manage innovation by allowing technological discontinuities risk quick
organizational decline and dissolution.
b.
Companies that can’t manage incremental innovation slowly deteriorate as they fall farther
behind industry leaders.
c.
The techniques that are effective in managing innovation after technological
discontinuities are equally effective in managing innovation during periods of incremental
change.
d.
The management of innovation begins with dominant design.
e.
All of these statements about managing innovation are true.
32. Titleist has been manufacturing golf balls for several years, but each year it comes out with new golf
ball designs. Titleist’s development of the new Pro VI golf ball with a solid core that is designed to
benefit players with high swing speeds is one example of how the manufacturer survives through:
a.
technological discontinuity
b.
discontinuous change
c.
dominant design
d.
incremental change
e.
technological continuity
33. Companies need to excel at managing ____ in order to successfully manage innovation streams.
a.
the sources of innovation
b.
managing innovation during synergistic change
c.
reciprocity
d.
environmental design issues
e.
behavioral formality
34. ____ are workplace cultures in which workers perceive that new ideas are welcomed, valued, and
encouraged.
a.
Creative work environments
b.
Innovative societies
c.
Homogeneous work environments
d.
Participative work teams
e.
Empathetic work stations
35. Which of the following is NOT one of the components of creative work environments?
a.
challenging work
b.
group compensation
c.
freedom
d.
supervisory encouragement
e.
organizational encouragement
36. Which of the following is a component of a creative work environment that encourages creativity?
a.
challenging work
b.
organizational encouragement
c.
freedom
d.
lack of organizational impediments
e.
all of these
37. Kodak is a company name that is associated with photography. The company has recognized that
digital photography is a threat to the future growth of the company. Therefore, the company has
decided to become a market leader in digital imaging. The company can encourage the development of
a culture where workers perceive new ideas are welcomed by offering challenging work and
supervisory encouragement. In other words, the company can create a(n):
a.
creative work environment
b.
open system
c.
adaptive culture
d.
culture of change
e.
tall structure to encourage horizontal communications
38. Hewlett-Packard is currently exploring new products and markets through the development of digital
imaging products in its plants in India, South Africa, and the United States. To jump–start this
innovative process, Hewlett-Packard can:
a.
manage flow through the use of Gantt charts
b.
concentrate on dominant design and ignore incremental design
c.
engage in creative reciprocity
d.
establish creative work environments
e.
do none of these
39. Years ago, Jason Goldberg, T–Mobile USA’s strategic planning director, grew frustrated with the flood
of unqualified applicants found on job boards and knew things had to change. So, in 2004, he
developed a plan to reinvent online recruiting by combining the referring power of a social network
with a recruiter’s perspective. He called his creation Jobster. This description of Goldberg’s action
indicates that:
a.
he has a sense of autonomy and control over his ideas
b.
Jobster operates outside the innovation stream
c.
he has learned to control the uncertainty of an organizational environment
d.
the culture at Jobster does not support innovation
e.
Jobster is probably in the faulty action stage of its organizational development
40. Which of the following is an organizational impediment to creativity in a work environment?
a.
internal conflict
b.
rigid management structures
c.
conservative bias toward the status quo
d.
power struggles
e.
all of these
41. Unverferth Manufacturing has been a manufacturer and supplier of innovative agricultural equipment
since 1948. In 2003, it began developing a new 12-row strip-till subsoiler, which prepares
10-inch-wide seed beds spaced 40 inches apart, a width that is commonly used in cotton production.
Before introducing the new tiller to the market, Unverferth developed and tested nearly three dozen
product prototypes. Unverferth used the ____ approach to innovation.
a.
compression
b.
experiential
c.
technological substitution
d.
generational change
e.
technological disruption
42. Unverferth Manufacturing has been a manufacturer and supplier of innovative agricultural equipment
since 1948. In 2003, it began developing a new 12-row subsoiler, which prepares 10-inch-wide seed
beds spaced 40 inches apart, a width that is commonly used in cotton production. Before introducing
the new tiller to the market, Unverferth developed and tested nearly three dozen product prototypes.
Unverferth used ____ to produce the best possible tiller before introducing it to the market.
a.
service development
b.
process duplication
c.
design iteration
d.
design compliance
e.
process reengineering
43. The ____ 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.
compression
b.
experiential
c.
technological substitution
d.
generational change
e.
technological disruption
44. Which of the following is NOT a part of the experiential approach to innovation?
a.
hands-on experience to reduce uncertainty
b.
testing
c.
multifunctional teams
d.
design iterations
e.
initiative conversations
45. Covisint is an e-commerce venture involving DaimlerChrysler, Ford, GM, Peugeot, and
Renault/Nissan that allows carmakers access to online auctions for buying component parts and
materials. Because the idea of such a Web site was a new concept, the prototype site was built and
tested, then revised, and rebuilt for further testing before the Web site was ever offered to customers.
____ was used to develop Covisint.
a.
Serve development
b.
Process duplication
c.
Design iteration
d.
Design compliance
e.
Process reengineering
46. What is the first step for managing innovation during discontinuous change?
a.
design iteration
b.
budgeting
c.
the establishment of a dominant design
d.
supplier involvement
e.
process duplication
47. Billionaire Richard Branson is committed to combating global warming. In 2007, he introduced
Europe’s first scheduled passenger train fueled by vegetable oil. Branson’s Virgin Trains is running
one of its trains on a 20 percent biodiesel blend for a six–month trial, and the British entrepreneur said
his whole fleet might eventually be converted to run on biofuels. This single train running on a
biodiesel blend is an example of a(n):
a.
innovative iteration
b.
product prototype
c.
product sample
d.
discontinuous design
e.
systematic design
48. Billionaire Richard Branson is committed to combating global warming. In 2007, he introduced
Europe’s first scheduled passenger train fueled by vegetable oil. Branson’s Virgin Trains is running
one of its trains on a 20 percent biodiesel blend for a six-month trial, and the British entrepreneur said
his whole fleet might eventually be converted to run on biofuels. From this information, you can
surmise that Branson uses _____ to manage innovation.
a.
service development
b.
process duplication
c.
design iteration
d.
design compliance
e.
process reengineering
49. The use of milestones in the experiential approach to innovation:
a.
serves to eliminate manufacturing bottlenecks
b.
shortens the innovation process
c.
creates incrementally sustainable advantages
d.
virtually eliminates problems associated with the control function of management
e.
does all of these
50. Film directors at Pixar use daily _____ with their animation teams to review progress and to make sure
that the film stays on budget and on schedule.
a.
design iterations
b.
multifunctional teams
c.
product prototypes
d.
milestones
e.
testing
51. Multifunctional teams:
a.
allow organizations to concentrate on their internal environments and ignore the external
environments until they have completed the brainstorming process
b.
were primarily used by dotcoms and are no longer popular
c.
speed innovation through early identification of new ideas or problems that would
typically not have been generated until much later
d.
do not typically use milestones because of group cohesiveness
e.
replace organizational structures on a typical organizational chart
52. The ____ approach to managing innovation assumes that innovation is a predictable process made up
of a series of steps and that compressing the time it takes to complete those steps can speed up
innovation.
a.
compression
b.
milestones
c.
dialectical
d.
generational
e.
prototypical