109. Refer to Levi Strauss. In order to maintain a competitive advantage in the clothing industry, Levi had
to create more efficient new methods of dealing with its suppliers. Its ____ began with the
discontinuation of inefficient methods of suppliers and continued through a substitution of electronic
networks for outdated systems.
a.
dominant design
b.
competitive advantage
c.
innovation stream
d.
comparative differential
e.
inventive flow
110. Refer to Levi Strauss. Why did Levi decide in 1982 to change the way it was conducting business?
a.
to protect its competitive advantage
b.
to downsize its work force
c.
to make outsourcing more economically feasible
d.
to create economies of scale
e.
to direct group norm development
111. Refer to Levi Strauss. Prior to the reinvention of the company, which began in 1982, the company
most likely did not have a(n):
a.
history of innovation discontinuity
b.
design iteration
c.
competitive advantage
d.
creative work environment
e.
organizational culture
112. Refer to Levi Strauss. Unfreezing, change intervention, and refreezing were the processes used by
Morgan and her team to:
a.
motivate Asian suppliers
b.
manage the Asian suppliers’ resistance to change
c.
create a more dynamic work environment
d.
coordinate a creative work environment
e.
gather competitive intelligence about Levi’s suppliers
113. Refer to Levi Strauss. Initially, Morgan found ____ strong in Asia.
a.
change forces
b.
internal strengths
c.
frozen change
d.
acceptance forces
e.
resistance forces
114. Refer to Levi Strauss. Which of the specific techniques 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
e.
tactical manipulation
115. Refer to Levi Strauss. Emily Morgan is an example of a(n):
a.
ombudsman
b.
mentor
c.
organizational liaison
d.
change agent
e.
gatekeeper
Wal-Mart
Wal-Mart Stores Inc., the world’s largest retailer, has been trying to rekindle growth in its U.S.
operations. Sales at its U.S. stores have been declining due to remodeling projects, limited
opportunities for growth, and problems with its clothes offerings. In addition, the low-income shoppers
who patronize Wal-Mart have less money to spend because of higher gas prices. Wal-Mart has been
very candid about its need to implement a growth strategy for its U.S. stores. In 2007, Wal-Mart
named Bill Simon chief operating officer and Pat Curran executive vice president of people as it
redesigned its organizational structure and shifted its executives to different posts. According to
Wal-Mart, Simon will oversee five operation’s presidents, representing 3,400 stores, and will also
manage the company’s pharmacies, optical businesses, and in-store medical clinics. Curran will lead
the company’s new human resources division, which will oversee Wal-Mart’s nearly 1.2 million U.S.
employees. In 2006, Wal-Mart tried to enhance its image by playing down its discount roots. It stocked
upscale items like organic food and plasma TVs, hoping wealthier consumers would spend more at its
stores. But its lower-income customers balked at some of the changes, and Wal-Mart’s profits
suffered.
116. Refer to Wal-Mart. In 2006, Wal-Mart tried ineffectively to use organizational _____ to rekindle its
growth strategy in the United States.
a.
innovation
b.
synergy
c.
creativity
d.
development
e.
deployment
117. Refer to Wal-Mart. In 2007, Wal-Mart employed organizational _____ to rekindle its growth strategy
in the United States.
a.
redeployment
b.
synergy
c.
creativity
d.
development
e.
change
118. Refer to Wal-Mart. The preparation of the annual stockholders’ report for the 2006 year could be
called a(n) _____ because it was a formal project that assessed the retailer’s performance and found it
was not meeting its goal.
a.
experiment
b.
redeployment
c.
prototype
d.
milestone
e.
reinforcement
119. Refer to Wal-Mart. When Wal-Mart changed the type of merchandise it sold in its stores in 2006,
customers responded with:
a.
freezing
b.
boycotting
c.
resistance
d.
environmental change
e.
cognitive dissonance
120. Refer to Wal-Mart. If Wal-Mart had ignored its changing environment in the United States and done
nothing, it might have experienced:
a.
the end of its PLC
b.
organizational decline
c.
hierarchical chaos
d.
its demise in terms of the Wheel of Retailing theory
e.
functional obsolescence
Whirlpool
During its 95-year history, Whirlpool has become an expert in manufacturing excellence with its
classic white appliances engineered for efficiency, long-lasting life, and low price. Periodically the
products have received a facelift or a small improvement in function and performance, but this usually
amounted to little more than a new wash cycle option.
At Whirlpool, where efficiency was king, the idea of innovation as a key to success met
considerable resistance. Corporate director Nancy Snyder said, “Over the years people have used many
nice adjectives to describe Whirlpool. But ‘innovative’ has rarely been among them.” Initial efforts at
innovation produced some new products. Expenses, however, far exceeded any positive results from
those innovations, and when the former CEO tried to push all 61,000 employees to exercise their
creativity, most employees saw the effort as a waste of time and employee moral dropped.
Nonetheless, without significant innovation, Whirlpool will find itself in a never-ending
price-cutting battle. In its second attempt at an innovation campaign, Whirlpool worked to establish
innovation as a cornerstone of company strategy, creating three “I–Boards” of senior managers to
evaluate effort and fund new ideas. 600 mid–level managers were trained as “I–Mentors” in innovation
tools and techniques to encourage and evaluate new ideas. The training of 22,000 employees to look
for product and marketing innovations brought about new ideas that helped increase annual sales from
$350 million to over $3 billion.
Looking for new innovative ideas is not just a matter of finding one-big hit either. It’s often a
matter of finding small but continual processes or improvements. Teams comprised of employees from
different areas of the company developed more colorful and appealing refrigerators, stacking
washer/dryer combinations, and dishwashers with “turbo zones” for cleaning particularly crusty
dishes.
To manage resistance, Whirlpool management created what it calls the Innovation Embedment
S-Curve, a five-stage model that demonstrates the importance of innovation and how it becomes
established in an organization. Ultimately, this will help the organization see the value of innovation as
a key to success and mobilizes them to create new opportunities for the company.
121. Refer to Whirlpool. Whirlpool approaches innovation using frequent design iterations, frequent
testing, regular milestones, multifunctional teams, and powerful leadership. It uses the _____ approach
to innovation.
a.
experiential
b.
transitional
c.
vision-driven
d.
generational
e.
compression
122. Refer to Whirlpool. Which of the following statements about how Whirlpool manages innovation is
true?
a.
Whirlpool risks rapid organizational decline and dissolution because it manages
innovation by allowing technological discontinuities.
b.
Whirlpool will slowly deteriorate because it cannot manage incremental innovation.
c.
Whirlpool can use the same techniques to manage innovation during periods of
technological discontinuity and during periods of incremental change.
d.
The management of innovation at Whirlpool ended with the development of a dominant
design.
e.
None of these statements about how Whirlpool manages innovation is true.
123. Refer to Whirlpool. Which of the following methods for overcoming resistance to change would
Whirlpool probably NOT have used?
a.
education and communication
b.
participation
c.
negotiation
d.
coercion
e.
change manipulation
124. Refer to Whirlpool. The effort at Whirlpool was directed from the top down. In order to use their
support as a tool for overcoming resistance to change, Whirlpool’s top managers not only had to talk
about the importance of change, but also had to:
a.
provide any necessary employee training
b.
provide any resources as that were needed
c.
allow employees autonomy to make the change happen
d.
make necessary changes with the company’s suppliers
e.
do all of these
125. Refer to Whirlpool. While they managed the change that made Whirlpool a leader in innovation and
risk-taking, its employees were required to go through three steps. These were:
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
e.
change definition, change mobilization, and change acceptance
SHORT ANSWER
1. Define creativity. Explain its relationship to organizational innovation.
2. Briefly describe the typical pattern of technology cycles that occurs during technological innovation.
3. What are innovation streams? Describe a typical innovation stream.
4. How are technology cycles and innovation streams related?
5. What are creative work environments? What does a manager need to do to develop and manage
creative work environments?
6. 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?
7. Differentiate between the experiential and compression approaches to innovation. What is the single
component that both approaches have in common?
8. What is organizational decline? List its five stages.
9. Identify and briefly describe the three steps involved in the process of managing organizational change
as defined by Kurt Lewin.
10. Identify the methods that can be used to manage resistance to change. Which one should be used only
as a last resort?
ANS:
11. Provide one example of a common error made by managers when they lead change at each of the three
steps of the change process.
ESSAY
1. 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.
2. 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 only be played 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
video disk 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.
3. 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.
4. 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
2011.
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 very 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.
ANS:
5. Explain the difference between activity-oriented and results-driven change, and list the advantages of
the results-driven approach to change. Characterize each of the approaches to organizational change
presented in the text in terms of their apparent degree of emphasis on activities or results.
