MGMT7 7th Edition By Chuck Williams – Test Bank A+

Description

1. Creating and executing a plan is one of the most important tasks of a manager. a. True
2. False

ANSWER: True

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: WILL.MGMT.15.5.01 – 5.1

TOPICS: AACSB Analytic

KEYWORDS: Creation of Value | Strategy

1. On average, companies that create plans have larger profits and grow much faster than companies that don’t. a. True
2. False

ANSWER: True

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.5.01a – 5.1a TOPICS: AACSB Analytic KEYWORDS: Creation of Value | Strategy

1. Planning can impede change, create a false sense of certainty, and lead to the detachment of planners. a. True
2. False

ANSWER: True

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.5.01b – 5.1b TOPICS: AACSB Analytic KEYWORDS: Creation of Value | Strategy

1. Planning is one of the best ways to improve organizational and individual performance. a. True
2. False

ANSWER: True

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: WILL.MGMT.15.5.01a – 5.1a TOPICS: AACSB Analytic KEYWORDS: Creation of Value | Strategy

1. Planning is a three-step process which involves setting goals, then next developing effective action plans, and finally tracking progress toward goal achievement.
2. a. True
3. False

ANSWER: False

RATIONALE: Planning consists of a total of five steps: (1) setting goals, (2) developing commitment to the goals, (3) developing effective action plans, (4) tracking progress toward goal achievement, and (5) maintaining flexibility in planning. See Exhibit 5.1.

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.5.02 – 5.2

TOPICS: AACSB Analytic

KEYWORDS: Creation of Value | Strategy

1. S.M.A.R.T. goals are Specific, Meaningful, Active, Reachable, and Timely. a. True
2. False

ANSWER: False

RATIONALE: S.M.A.R.T. goals are Specific, Measurable, Attainable, Realistic, and Timely.

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.5.02a – 5.2a TOPICS: AACSB Analytic KEYWORDS: Creation of Value | Strategy

1. Encouraging worker participation in goal setting, making goals public, and getting top management’s support are all recommended ways to increase goal commitment in a company.
2. a. True
3. False

ANSWER: True

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.5.02b – 5.2b

TOPICS: AACSB Analytic

KEYWORDS: Creation of Value | Leadership Principles | Strategy

1. Both proximal and distal goals are used to provide additional motivation and rewards for employees. a. True
2. False

ANSWER: True

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.5.02d – 5.2d

TOPICS: AACSB Analytic

KEYWORDS: Creation of Value | Leadership Principles | Strategy

1. For planning to be effective, workers need a specific, challenging goal as well as regular feedback to track their progress.
2. a. True
3. False

ANSWER: True

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: WILL.MGMT.15.5.02d – 5.2d

TOPICS: AACSB Analytic

KEYWORDS: Creation of Value | Leadership Principles | Strategy

1. 10. The two approaches to maintaining flexibility in organizations while they plan are outcome-based planning and change-based
2. a. True
3. False

ANSWER: False

RATIONALE: The two approaches are traditional planning, which involves committing resources to one plan, and options-based planning, which involves investing resources in multiple plans.

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.5.02e – 5.2e TOPICS: AACSB Analytic KEYWORDS: Creation of Value | Strategy

1. 11. Planning works best when the goals and action plans at the bottom and middle of the organization supports the goals and action plans at the top of the
2. a. True
3. False

ANSWER: True

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: WILL.MGMT.15.5.03 – 5.3

TOPICS: AACSB Analytic

KEYWORDS: Creation of Value | Leadership Principles | Strategy

1. 12. Developing a purpose statement is the sole responsibility of middle a. True
2. False

ANSWER: False

RATIONALE: Developing a purpose statement is the responsibility of top managers. See Exhibit 5.3.

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: WILL.MGMT.15.5.03a – 5.3a

TOPICS: AACSB Analytic

KEYWORDS: Creation of Value | Leadership Principles | Strategy

1. 13. A strategic objective is a statement of a company’s purpose or reason for a. True
2. False

ANSWER: False

RATIONALE: This is the definition of a purpose statement. The strategic objective, which flows from the vision, is a more specific goal that unifies company-wide efforts, stretches and challenges the organization, and possesses a finish line and a timeframe.

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.5.03a – 5.3a

TOPICS: AACSB Analytic

KEYWORDS: Creation of Value | HRM | Strategy

1. 14. An organization’s purpose must regularly change to adapt to changes in the environment over a. True
2. False

ANSWER: False

RATIONALE: One of the defining characteristics of an organization’s purpose statement is that it should

be enduring.

POINTS: 1

DIFFICULTY: Difficult

LEARNING OBJECTIVES: WILL.MGMT.15.5.03a – 5.3a TOPICS: AACSB Analytic KEYWORDS: Creation of Value | Strategy

1. 15. Tactical plans specify how a company will use its resources, budgets, and people to accomplish specific goals within its
2. a. True
3. False

ANSWER: True

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: WILL.MGMT.15.5.03b – 5.3b TOPICS: AACSB Analytic KEYWORDS: Creation of Value | Strategy

1. 16. Tactical plans and objectives are used to direct behavior, efforts, and attention over the next six months to two
2. a. True
3. False

ANSWER: True

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: WILL.MGMT.15.5.03b – 5.3b TOPICS: AACSB Analytic KEYWORDS: Creation of Value | Strategy

1. 17. Management by objectives is a two-step process in which managers and their employees discuss possible goals and then meet regularly to review progress toward the accomplishment of those
2. a. True
3. False

ANSWER: False

RATIONALE: Management by objectives is a four-step process in which managers and their employees (1) discuss possible goals; (2) participatively select goals that are challenging, attainable, and consistent with the company’s overall goals; (3) jointly develop tactical plans that lead to accomplishment of tactical goals and objectives; and (4) meet regularly to review progress toward accomplishment of those goals

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: WILL.MGMT.15.5.03b – 5.3b

TOPICS: AACSB Analytic

KEYWORDS: Creation of Value | Leadership Principles | Strategy

1. 18. The three kinds of operational plans are single-use plans, standing plans, and a. True
2. False

ANSWER: True

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.5.03c – 5.3c TOPICS: AACSB Analytic KEYWORDS: Creation of Value | Strategy

1. 19. Standing plans deal with unique, one-time-only a. True
2. False

ANSWER: False

RATIONALE: This is the definition of single-use plans. Standing plans are created once and then used repeatedly to handle frequently recurring events.

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.5.03c – 5.3c TOPICS: AACSB Analytic KEYWORDS: Creation of Value | Strategy

1. 20. The three kinds of standing plans are policies, procedures, and rules and a. True
2. False

ANSWER: True

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.5.03c – 5.3c TOPICS: AACSB Analytic KEYWORDS: Creation of Value | Strategy

1. 21. Budgeting is a critical management task, one that most managers could do a. True
2. False

ANSWER: True

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: WILL.MGMT.15.5.03c – 5.3c TOPICS: AACSB Analytic KEYWORDS: Creation of Value | Strategy

1. 22. All decision making by management is a. True
2. False

ANSWER: False

RATIONALE: Rational decision making is a systematic process of defining problems, evaluating alternatives, and choosing optimal solutions. Not all decision making is this logical.

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: WILL.MGMT.15.5.04g – 5.4g TOPICS: AACSB Reflective Thinking KEYWORDS: Individual Dynamics | Strategy

1. 23. The term decision making is used to refer to the process of choosing a solution from available a. True
2. False

ANSWER: True

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: WILL.MGMT.15.5.04 – 5.4

TOPICS: AACSB Reflective Thinking

KEYWORDS: Individual Dynamics | Strategy

1. 24. The process of rational decision making emphasizes the use of systematic procedures to arrive at optimal

Not all processes of decision making follow suit. a. True

1. False

ANSWER: True

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.5.04 – 5.4

TOPICS: AACSB Reflective Thinking

KEYWORDS: Individual Dynamics | Strategy

1. 25. The six steps in the rational decision-making process are as follows: (1) frame the problem, (2) identify decision criteria, (3) weight the criteria, (4) generate alternative courses of action, (5) evaluate each alternative, and (6) compute the optimal
2. a. True
3. False

ANSWER: False

RATIONALE: The six steps in the rational decision-making process are as follows: (1) define the problem, (2) identify decision criteria, (3) weight the criteria, (4) generate alternative courses of action, (5) evaluate each alternative, and (6) compute the optimal decision.

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.5.04 – 5.4

TOPICS: AACSB Reflective Thinking

KEYWORDS: Individual Dynamics | Strategy

1. 26. Both absolute comparisons and relative comparisons are methods for identifying decision a. True
2. False

ANSWER: False

RATIONALE: These are methods for weighting the criteria, not identifying them.

POINTS: 1

DIFFICULTY: Difficult

LEARNING OBJECTIVES: WILL.MGMT.15.5.04c – 5.4c TOPICS: AACSB Reflective Thinking KEYWORDS: Individual Dynamics | Strategy

1. 27. Groupthink is more likely to occur in a highly cohesive group that is insulated from others and has no established procedure for systematically defining problems and exploring
2. a. True
3. False

ANSWER: True

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: WILL.MGMT.15.5.05a – 5.5a TOPICS: AACSB Reflective Thinking KEYWORDS: Group Dynamics | Strategy

1. 28. After earning $8 billion in profit, Royal Dutch/Shell decided to strive to double its profits within the next five

Which classical management function would be instrumental in achieving this goal?

1. a. motivating
2. research and development c. planning
3. marketing e. optimizing

ANSWER: c

RATIONALE: Planning is defined as choosing a goal and developing a strategy to attain that goal.

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: WILL.MGMT.15.5.01 – 5.1

TOPICS: AACSB Analytic

KEYWORDS: Creation of Value | Leadership Principles | Strategy

1. 29. Planning is ultimately based upon .
2. a. how a planner deals with bounded rationality
3. choosing a goal and developing a method or strategy to achieve that goal c. the relationship between organizational line and staff personnel
4. whether the mission statement is internally or externally oriented e. the personality type of the individual engaged in planning

ANSWER: b

RATIONALE: This is the definition of planning.

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.5.01 – 5.1

TOPICS: AACSB Analytic

KEYWORDS: Creation of Value | Leadership Principles | Strategy

1. 30. One of the benefits of planning is how it . a. encourages people to work faster
2. encourages people to try a variety of different ways to do others’ jobs c. reduces employee turnover
3. eliminates all discriminatory practices e. does none of these

ANSWER: e

RATIONALE: Section 1 of the chapter offers four benefits from planning: (1) intensified work effort, (2) increased persistence toward goals, (3) direction, and (4) creation of task strategies that lead to stronger performance.

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.5.01a – 5.1a

TOPICS: AACSB Analytic

KEYWORDS: Creation of Value | HRM | Strategy

1. 31. One of the benefits of planning is how it .
2. a. encourages people to work harder for extended periods
3. encourages people to try a variety of different ways to do others’ jobs c. reduces employee turnover
4. creates a mechanistic environment e. does none of these

ANSWER: a

RATIONALE: Section 1 of the chapter offers four benefits from planning: (1) intensified work effort, (2) increased persistence toward goals, (3) direction, and (4) creation of task strategies that lead to stronger performance.

POINTS: 1

DIFFICULTY: Difficult

LEARNING OBJECTIVES: WILL.MGMT.15.5.01a – 5.1a

TOPICS: AACSB Analytic

KEYWORDS: Creation of Value | HRM | Strategy

1. 32. One of the benefits of planning is how it . a. improves vertical integration of departments
2. encourages people to engage in behaviors directly related to goal accomplishment
3. c. encourages people to remain with the company, rather than go to work for the competition eliminates the need for change agents
4. e. makes a long-term mission statement redundant

ANSWER: b

RATIONALE: Section 1 of the chapter offers four benefits from planning: (1) intensified work effort, (2) increased persistence toward goals, (3) direction, and (4) creation of task strategies that lead to stronger performance.

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.5.01a – 5.1a

TOPICS: AACSB Analytic

KEYWORDS: Creation of Value | HRM | Strategy

1. 33. How does a company benefit from planning?
2. a. increased use of groupthink less solidified group cohesion
3. c. more compliance with organizational culture
4. intensified effort, persistence, direction, and creation of task strategies e. the ability to make greater use of devil’s advocacy

ANSWER: d

RATIONALE: Section 1 of the chapter offers four benefits from planning: (1) intensified work effort, (2) increased persistence toward goals, (3) direction, and (4) creation of task strategies that lead to stronger performance.

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.5.01a – 5.1a

TOPICS: AACSB Analytic

KEYWORDS: Creation of Value | HRM | Strategy

1. 34. The use of
2. a. assumptions commitment c. detachment d. tactics
3. e. benchmarking

in planning produces a false sense of certainty and is often cited as one of the major pitfalls of

ANSWER: a

RATIONALE: The three pitfalls of planning are: (1) planning may produce a false sense of security, (2) planning may impede change and adaptation, and (3) planners may operate detached from “ground level” reality of the company and its environment. Assumptions may play a role in creating a false sense of security to the degree that planners view them as certainties rather than probabilities.

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: WILL.MGMT.15.5.01b – 5.1b TOPICS: AACSB Analytic KEYWORDS: Creation of Value | Strategy

1. 35. According to the text, which of the following is a pitfall of planning?
2. a. the acceptance of sacrificing solutions
3. a false sense of certainty based on faulty assumptions
4. c. the inability of organizational line personnel to accept the long-term benefit of planning
5. the requirement for expensive employee training before plans can be effectively implemented e. outsourcing

ANSWER: b

RATIONALE: The three pitfalls of planning are: (1) planning may produce a false sense of security, (2) planning may impede change and adaptation, and (3) planners may operate detached from “ground level” reality of the company and its environment.

POINTS: 1

DIFFICULTY: Difficult

LEARNING OBJECTIVES: WILL.MGMT.15.5.01b – 5.1b

TOPICS: AACSB Analytic

KEYWORDS: Creation of Value | HRM | Strategy

1. 36. Which of the following is a possible outcome of planning?
2. a. Planning may lead to a mechanistic organizational
3. Planning may harm individual and organizational performance. c. Planning can eliminate the need for formalization.
4. Planning will allow the company to know about all changes in its external environment before they occur. e. All of these are possible outcomes of planning

ANSWER: b

RATIONALE: Planning plays a rather controversial role in management. Its critics have pointed out that it

may harm individual and organizational performance. Planning is no “silver bullet.”

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: WILL.MGMT.15.5.01b – 5.1b

TOPICS: AACSB Analytic

KEYWORDS: Creation of Value | HRM | Strategy

1. 37. The last step in effective planning is to . a. maintain flexibility in planning
2. develop long-term action plans c. develop goal commitment
3. acculturate the employees
4. e. track progress toward goal achievement

ANSWER: a RATIONALE: See Exhibit 5.1. POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: WILL.MGMT.15.5.02 – 5.2

TOPICS: AACSB Analytic

KEYWORDS: Creation of Value | HRM | Strategy

1. 38. According to the M.A.R.T. guidelines, goals should be . a. Service-oriented
2. Measurable c. Rational
3. Tactical
4. e. Actionable

ANSWER: b

RATIONALE: S.M.A.R.T. goals should be: (1) Specific, (2) Measurable, (3) Attainable, (4) Realistic, and (5) Timely.

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.5.02a – 5.2a TOPICS: AACSB Analytic KEYWORDS: Creation of Value | Strategy

1. 39. According to the M.A.R.T. guidelines, goals should be . a. Aggregated
2. Reliable c. Timely
3. Motivated e. all of these

ANSWER: c

RATIONALE: S.M.A.R.T. goals should be: (1) Specific, (2) Measurable, (3) Attainable, (4) Realistic, and (5) Timely..

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: WILL.MGMT.15.5.02a – 5.2a TOPICS: AACSB Analytic KEYWORDS: Creation of Value | Strategy

1. 40. According to the M.A.R.T. guidelines, goals should be . a. Synergistic
2. Maximized c. Accelerated d. Role-related e. none of these

ANSWER: e

RATIONALE: S.M.A.R.T. goals should be: (1) Specific, (2) Measurable, (3) Attainable, (4) Realistic, and (5) Timely.

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.5.02a – 5.2a TOPICS: AACSB Analytic KEYWORDS: Creation of Value | Strategy

1. 41. Which of the following is NOT one of the characteristics of M.A.R.T. goals?
2. a. Synergistic Measurable c. Timely
3. Attainable e. Realistic

ANSWER: a

RATIONALE: S.M.A.R.T. goals should be: (1) Specific, (2) Measurable, (3) Attainable, (4) Realistic, and (5) Timely.

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.5.02a – 5.2a TOPICS: AACSB Analytic KEYWORDS: Creation of Value | Strategy

1. 42. The most popular approach to increasing goal commitment is . a. encouraging workers’ participation in goal setting
2. making goals public
3. c. getting top management’s support
4. assigning realistic and attainable goals e. management by mentoring

ANSWER: a

RATIONALE: Participative goal setting leads to higher goal commitment and is the most popular approach to achieving commitment.

POINTS: 1

DIFFICULTY: Difficult

LEARNING OBJECTIVES: WILL.MGMT.15.5.02b – 5.2b TOPICS: AACSB Reflective Thinking KEYWORDS: Creation of Value | Strategy

1. 43. Which of the following is a commonly used method for increasing goal commitment?
2. a. encouraging worker participation in goal setting keeping goals private
3. c. setting ethical goals
4. using ombudsman to set goals e. all of these

ANSWER: a

RATIONALE: Participative goal setting leads to higher goal commitment and is the most popular approach to achieving commitment.

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: WILL.MGMT.15.5.02b – 5.2b TOPICS: AACSB Reflective Thinking KEYWORDS: Creation of Value | Strategy

1. 44. Which of the following is a commonly used method for increasing goal commitment?
2. a. reward whistleblowing make goals public
3. c. get the union’s support use the equity theory
4. e. establish a median goal for all employees

ANSWER: b

RATIONALE: The text includes the example of a study that found college students had stronger goal commitment when they publicly committed to a goal of raising their GPA. Goal commitment is enhanced by such public goal statements.

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: WILL.MGMT.15.5.02b – 5.2b

TOPICS: AACSB Analytic

KEYWORDS: Creation of Value | HRM | Strategy

1. 45. A(n) lists the specific steps, people, resources, and time period for accomplishing a a. strategy
2. proximal goal c. distal goal
3. action plan
4. e. subordinate objective

ANSWER: d

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.5.02c – 5.2c

TOPICS: AACSB Analytic

KEYWORDS: Creation of Value | Leadership Principles | Strategy

1. 46. Which of the following is an accepted method for tracking progress toward goal achievement?
2. a. setting response and stimulus goals
3. gathering and providing performance feedback c. using operant and classical conditioning
4. mechanistic and dynamic feedback e. data warehousing and data mining

ANSWER: b

RATIONALE: Providing feedback is identified as one of two major approaches to tracking progress toward goal attainment. The other is setting proximal and distal goals.

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.5.02d – 5.2d TOPICS: AACSB Analytic KEYWORDS: Creation of Value | HRM

1. 47. The goal of a company was to reduce the expenses incurred by the sales force. A manager examining weekly expense sheets would be using which of the accepted methods for tracking progress toward goal achievement? a. setting realistic and attainable goals
2. gathering and providing performance feedback c. developing concrete action plans
3. making sure goals are measurable
4. e. comparing dynamic with mechanistic goals

ANSWER: b

RATIONALE: Providing feedback is identified as one of two major approaches to tracking progress toward goal attainment. This manager is providing data useful for determining progress in relation to sales productivity and cost containment.

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.5.02d – 5.2d

TOPICS: AACSB Analytic

KEYWORDS: Creation of Value | HRM | Leadership Principles

1. 48. A manufacturer of suntan lotion could set a(n)

goal to increase revenues by 8 percent over the next five

years and a(n)

1. a. tactical; strategic

goal to increase sales next June in the Miami Beach area by 3 percent.

1. operational; tactical c. distal; proximal
2. operational; strategic e. proximal; distal

ANSWER: c

RATIONALE: Proximal goals are short-term or subgoals, while distal goals are long-term or primary.

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: WILL.MGMT.15.5.02d – 5.2d TOPICS: AACSB Analytic KEYWORDS: Creation of Value | HRM

1. 49. can help organizations to maintain flexibility as they a. Environmental munificence
2. Options-based planning c. Formalization
3. Liaisons
4. e. Group cohesiveness

ANSWER: b

RATIONALE: Options-based planning is a major approach to planning which provides greater strategic flexibility.

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: WILL.MGMT.15.5.02e – 5.2e

TOPICS: AACSB Analytic

KEYWORDS: Creation of Value | HRM | Strategy

1. 50. planning keeps options open by making small, simultaneous investments in many alternative a. Learning-based
2. Options-based c. Conditioned
3. Functional e. Operant

ANSWER: b

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: WILL.MGMT.15.5.02e – 5.2e TOPICS: AACSB Analytic KEYWORDS: Creation of Value | Strategy

1. 51. The basic purpose of planning is to leave commitments open by maintaining slack a. options-based planning
2. learning-based planning c. traditional planning
3. operant planning
4. e. the establishment of planning windows

ANSWER: a

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.5.02e – 5.2e TOPICS: AACSB Analytic KEYWORDS: Creation of Value | Strategy

1. 52. For options-based planning to work, the organization must . a. have slack resources
2. use cross-functional teams
3. c. have broad spans of management have tall organizational structures e. use decentralization

ANSWER: a

RATIONALE: Slack resources are defined as a cushion of extra resources that can be used with options- based planning to adapt to unanticipated changes, problems, or opportunities.

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: WILL.MGMT.15.5.02e – 5.2e TOPICS: AACSB Analytic KEYWORDS: Creation of Value | Strategy

1. 53. Planning works best when the goals and action plans at the

of the organization support the goals and action

plans at the

of the organization.

1. a. bottom and top; middle top and middle; bottom c. bottom and middle; top
2. group level; individual level e. staff level; line level

ANSWER: c

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.5.03 – 5.3

TOPICS: AACSB Analytic

KEYWORDS: Creation of Value | HRM | Leadership Principles | Strategy

1. 54. Top management is responsible for developing long-term

that make clear how the company will serve

customers and position itself against competitors in the next two to five years. a. standing plans

1. tactical plans
2. c. operational plans strategic plans
3. e. mission statements

ANSWER: d

RATIONALE: This is the definition of strategic plans, which are typically developed by top management.

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: WILL.MGMT.15.5.03a – 5.3a

TOPICS: AACSB Analytic

KEYWORDS: Creation of Value | Leadership Principles | Strategy

55.

is responsible for developing strategic plans that make clear how the company will serve customers and position itself against competitors in the next two to five years.

1. a. An action team
2. Middle management c. Planning staff
3. A change agent
4. e. Top management

ANSWER: e

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: WILL.MGMT.15.5.03a – 5.3a

TOPICS: AACSB Analytic

KEYWORDS: Creation of Value | Leadership Principles | Strategy

1. 56. An Australian manufacturer of surfboards wants to increase awareness of its brand in the S. market. A

plan to accomplish this objective might be to host a series of surfboard competitions in California . a. contingency

1. single-use c. standing
2. visionary e. tactical

ANSWER: e

RATIONALE: Tactical plans are plans created and implemented by middle managers. They specify how the company will use resources, budgets, and people over the next six months to two years to accomplish specific goals within its mission statement. Here, the surfboard maker is using this tactical plan to increase brand awareness in the United States.

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.5.03b – 5.3b TOPICS: AACSB Analytic KEYWORDS: Creation of Value | Strategy

1. 57. A department store is experiencing greater than usual losses due to theft and management wants it stopped. Middle management decided to hire a security company to study the problem and develop the best plan for dealing with Middle management have implemented a(n) plan.
2. a. contingency strategic
3. c. operational visionary
4. e. tactical

ANSWER: e

RATIONALE: Tactical plans are plans created and implemented by middle managers that specify how the company will use resources, budgets, and people over the next six months to two years to accomplish specific goals within its mission statement.

POINTS: 1

DIFFICULTY: Difficult

LEARNING OBJECTIVES: WILL.MGMT.15.5.03b – 5.3b TOPICS: AACSB Analytic KEYWORDS: Creation of Value | Strategy

58.

plans are plans that specify how a company will use resources, budgets, and people to accomplish specific goals within its mission.

1. a. Strategic Tactical
2. c. Operational Single-use e. Dialectical

ANSWER: b

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.5.03b – 5.3b TOPICS: AACSB Analytic KEYWORDS: Creation of Value | Strategy

1. 59. Who is responsible for the creation of tactical plans?
2. a. team leaders
3. lower-level managers c. middle managers
4. top managers e. staff advisors

ANSWER: c

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.5.03b – 5.3b TOPICS: AACSB Reflective Thinking KEYWORDS: Leadership Principles

1. 60. What type of planning would be used to create the festivities necessary to celebrate the 100-year anniversary of a furniture manufacturer?
2. a. single-use plan
3. contingency plan c. scenario plan
4. standing plan
5. e. role-model plan

ANSWER: a

RATIONALE: Single-use plans are defined as plans that cover unique, one-time events (in this case the

100-year anniversary).

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: WILL.MGMT.15.5.03c – 5.3c TOPICS: AACSB Analytic KEYWORDS: Creation of Value | Strategy

1. 61. Management by objectives (MBO) is a management technique often used to develop and carry out . a. single-use plans
2. standing plans
3. c. operational plans tactical plans
4. e. hierarchical plans

ANSWER: d

RATIONALE: MBO is defined as a four-step process in which managers and employees (1) discuss and (2) select goals, (3) develop tactical plans, and (4) meet regularly to review progress toward goal accomplishment. MBO focuses on shorter-term tactical planning.

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.5.03b – 5.3b

TOPICS: AACSB Analytic

KEYWORDS: Creation of Value | HRM | Leadership Principles | Strategy

1. 62. Which of the following is NOT a step in the management by objectives (MBO) process?
2. a. jointly discuss possible goals
3. participatively select goals that are challenging c. jointly develop operational plans
4. meet regularly to review progress toward goal accomplishment
5. e. participate in the selection of goals that are consistent with the company’s overall goals

ANSWER: c

RATIONALE: MBO is defined as a four-step process in which managers and employees (1) discuss and (2) select goals, (3) develop tactical plans, and (4) meet regularly to review progress toward goal accomplishment. MBO focuses on shorter-term tactical planning.

POINTS: 1

DIFFICULTY: Difficult

LEARNING OBJECTIVES: WILL.MGMT.15.5.03b – 5.3b

TOPICS: AACSB Analytic

KEYWORDS: Creation of Value | HRM | Leadership Principles | Strategy

1. 63. When done correctly, management by objectives (MBO) is an extremely effective method for . a. brainstorming
2. developing policies and procedures
3. c. broadening the span of transformation problem framing
4. e. tactical planning

ANSWER: e

RATIONALE: MBO is defined as a four-step process in which managers and employees (1) discuss and (2) select goals, (3) develop tactical plans, and (4) meet regularly to review progress toward goal accomplishment. MBO focuses on shorter-term tactical planning.

POINTS: 1

DIFFICULTY: Difficult

LEARNING OBJECTIVES: WILL.MGMT.15.5.03b – 5.3b

TOPICS: AACSB Analytic

KEYWORDS: Creation of Value | HRM | Leadership Principles | Strategy

1. 64. Who is primarily responsible for developing operational plans?
2. a. lower-level managers middle managers
3. c. top managers staff advisors e. any of these

ANSWER: a

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: WILL.MGMT.15.5.03c – 5.3c

TOPICS: AACSB Analytic

KEYWORDS: Creation of Value | HRM | Leadership Principles | Strategy

65.

plans direct the behavior, efforts, and priorities of operative employees for periods ranging from one to six months.

1. a. Strategic Tactical
2. c. Operational Standing
3. e. Procedural

ANSWER: c

RATIONALE: Operational plans are defined as day-to-day plans, developed and implemented by lower-

level managers, for producing or delivering the organization’s products and services over a

30-day to six-month period.

POINTS: 1

DIFFICULTY: Difficult

LEARNING OBJECTIVES: WILL.MGMT.15.5.03c – 5.3c

TOPICS: AACSB Analytic

KEYWORDS: Creation of Value | HRM | Strategy

1. 66. There are three kinds of plans. They are single-use plans, standing plans, and a. strategic
2. tactical
3. c. operational MBO
4. e. actionable

ANSWER: c

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: WILL.MGMT.15.5.03c – 5.3c TOPICS: AACSB Analytic KEYWORDS: Creation of Value | Strategy

1. 67. are a type of operational a. Single-use plans
2. Contingency plans
3. c. Short-term strategies Mission modifications e. Benchmarks

ANSWER: a

RATIONALE: The three kinds of operational plans are single-use plans, standing plans, and budgets.

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.5.03c – 5.3c TOPICS: AACSB Analytic KEYWORDS: Creation of Value | Strategy

1. 68. The

is a type of operational plan that saves managers time because it is created once and then used

repeatedly to handle frequently recurring events. a. standing plan

1. budget
2. c. multiple-use plan
3. options-based plan e. forecast

ANSWER: a

RATIONALE: Standing plans are used repeatedly to handle frequently recurring events.

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.5.03c – 5.3c

TOPICS: AACSB Analytic

KEYWORDS: Creation of Value | Leadership Principles | Strategy

1. 69. In case of a fire, most organizations have a series of actions that must take place beginning with notifying the fire department and include evacuating buildings. What kind of a standing plan is described in this example?
2. a. rules and regulations procedures
3. c. policies
4. organizational norms e. security governances

ANSWER: b

RATIONALE: Procedures are defined as a standing plan indicating the specific steps that should be taken in response to a particular event. Here the company has established procedures to be used in the event of a fire.

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: WILL.MGMT.15.5.03c – 5.3c

TOPICS: AACSB Analytic

KEYWORDS: Creation of Value | HRM | Strategy

1. 70. are types of standing a. Policies and procedures
2. Targeted plans
3. c. Long-term tactical strategies MBO guidelines
4. e. Transformational plans

ANSWER: a

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: WILL.MGMT.15.5.03c – 5.3c TOPICS: AACSB Analytic KEYWORDS: Creation of Value | Strategy

1. 71. are standing plans that indicate the specific steps that should be taken in response to a particular a. Policies
2. Procedures
3. c. Actionable plans
4. Options-based plans e. Single-use plans

ANSWER: b

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: WILL.MGMT.15.5.03c – 5.3c TOPICS: AACSB Analytic KEYWORDS: Creation of Value | Strategy

1. 72. A(n)

is a standing plan that indicates the general course of action that should be taken in response to a

particular event or situation. a. policy

1. procedure c. rule
2. regulation e. heuristic

ANSWER: a

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.5.03c – 5.3c

TOPICS: AACSB Analytic

KEYWORDS: Creation of Value | Ethical Responsibilities | HRM | Legal Responsibilities | Strategy

1. 73. Which of the following is the most specific type of standing plan?
2. a. policies
3. procedures
4. c. rules and regulations forecasts
5. e. MBO plans

ANSWER: c

RATIONALE: Rules and regulations are defined as standing plans that describe how a particular action should be performed or what must happen or not happen in response to a particular event. Rules and regulations are more specific than procedures because they precisely define what must happen (and not happen) in response to a particular event.

POINTS: 1

DIFFICULTY: Difficult

LEARNING OBJECTIVES: WILL.MGMT.15.5.03c – 5.3c

TOPICS: AACSB Analytic

KEYWORDS: Creation of Value | HRM | Strategy

1. 74. Budgets are an example of a. strategic
2. tactical
3. c. operational actionable e. single-use

ANSWER: c

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: WILL.MGMT.15.5.03c – 5.3c

TOPICS: AACSB Analytic

KEYWORDS: Creation of Value | HRM | Strategy

1. 75. At a canning factory, new employees were instructed never to wear loose-fitting clothes when working around the canning machine. What kind of a standing plan is described in this example?
2. a. rules and regulations procedures
3. c. policies
4. organizational norms e. security governances

ANSWER: a

RATIONALE: This is a precise statement of the type of clothing that should not be worn in the workplace (a rule).

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: WILL.MGMT.15.5.03c – 5.3c

TOPICS: AACSB Analytic

KEYWORDS: Creation of Value | HRM | Strategy

1. 76. is the process of choosing a solution from available a. Decision making
2. Problem identification c. Heuristics
3. Multivariable selection e. Problem solving

ANSWER: a

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: WILL.MGMT.15.5.04 – 5.4

TOPICS: AACSB Reflective Thinking

KEYWORDS: Individual Dynamics | Strategy

1. 77. is a systematic process of defining problems, evaluating alternatives, and choosing optimal a. Problem identification
2. Rational decision making c. Benchmarking
3. Multivariable selection e. Keystoning

ANSWER: b

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: WILL.MGMT.15.5.04 – 5.4

TOPICS: AACSB Reflective Thinking

KEYWORDS: Individual Dynamics | Strategy

1. 78. Neither Chile nor Peru have a mass­market café culture, but that fact has not stopped Starbucks from engaging in

to determine how best to expand into those markets. a. intuitive conditioning

1. benchmarking
2. c. decision making
3. organizational design e. conditioned learning

ANSWER: c

RATIONALE: Decision making is the process of choosing a solution from available alternatives.

POINTS: 1

DIFFICULTY: Difficult

LEARNING OBJECTIVES: WILL.MGMT.15.5.04 – 5.4

TOPICS: AACSB Analytic

KEYWORDS: Environmental Influence | Individual Dynamics | Strategy

1. 79. Neither Chile nor Peru has a mass­market café culture, but that fact has not stopped Starbucks from trying to determine what can be done to make its coffee houses successful in those markets. By recognizing that people in these two South American countries do not drink coffee like people in the United States and that they should change this habit, Starbucks has begun a process with problem
2. a. rational decision making trend analysis
3. c. sacrificing
4. selection of optimal solutions e. framing constraints

ANSWER: a

RATIONALE: The first step in rational decision making is problem identification.

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: WILL.MGMT.15.5.04 – 5.4

TOPICS: AACSB Analytic

KEYWORDS: Environmental Influence | Individual Dynamics | Strategy

1. 80. The European Union encourages companies to abandon national boundaries and offer the same products to all of the member countries. Allianz, Germany’s largest insurance group, is considering converting from a German company to a European company. If it makes this decision rationally, it will first .
2. a. create decision criteria based on national GNPs
3. identify problems arising from tax and regulatory issues c. decide whether to expand to one nation at a time
4. create a committee to make the final decision e. avoid the use of bounded rationality

ANSWER: b

RATIONALE: Problem identification is the first step in rational decision making.

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.5.04 – 5.4

TOPICS: AACSB Analytic

KEYWORDS: Environmental Influence | Individual Dynamics | Strategy

1. 81. A

exists when there is a gap between a desired state (what managers want) and an existing state (the

situation that the managers are facing). a. service gap

1. benchmark
2. c. condition of uncertainty minimum threshold
3. e. problem

ANSWER: e

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.5.04a – 5.4a TOPICS: AACSB Reflective Thinking KEYWORDS: Individual Dynamics | Strategy

1. 82. Which of the following is one of the six steps in the rational decision-making process?
2. a. choose a minimally acceptable alternative solution evaluate the effectiveness of the decision
3. c. weight the criteria
4. introduce the decision to those who will be impacted by it e. identify customer service gaps

ANSWER: c

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: WILL.MGMT.15.5.04 – 5.4

TOPICS: AACSB Reflective Thinking

KEYWORDS: Individual Dynamics | Strategy

1. 83. In the 1960s, Coca-Cola executives in Atlanta learned there was a bottler in the Colombian jungle that was bottling pirated Coke in dumped bottles. The company recognized this unauthorized bottler as a(n) .
2. a. standard of malfeasance problem
3. c. benchmark
4. keystone issue e. absolute criteria

ANSWER: b

RATIONALE: A problem exists when there is a gap between a desired state (what managers want) and an existing state (the situation that the managers are facing).

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: WILL.MGMT.15.5.04a – 5.4a

TOPICS: AACSB Analytic

KEYWORDS: Environmental Influence | Individual Dynamics | Strategy

1. 84. One method of weighing decision criteria uses to every other
2. a. absolute comparisons relative comparisons c. valences
3. minimum threshold rule
4. e. comparative ranking scales

, which is a process where each decision is compared directly

ANSWER: b

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.5.04c – 5.4c TOPICS: AACSB Reflective Thinking KEYWORDS: Individual Dynamics | Strategy

1. 85. In the 1960s, Coca-Cola executives in Atlanta learned there was a bottler in the Colombian jungle that was bottling

pirated Coke in dumped bottles. Coke decided in the

stage of the rational decision-making process that it had

to either bring some sort of legal action against the unauthorized bottler, ignore it, or buy it. a. problem definition

1. criteria weighting
2. c. generation of alternative courses of action identification of decision criteria
3. e. finding the optimal solution

ANSWER: c

RATIONALE: Taking legal action, ignoring, or buying are three possible courses of action that would solve the problem.

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: WILL.MGMT.15.5.04d – 5.4d

TOPICS: AACSB Analytic

KEYWORDS: Environmental Influence | Individual Dynamics | Strategy

1. 86. As a company that manufactures janitorial cleaning supplies tries to develop more environmentally -friendly products that can clean as well as its current ones, the company’s manager must select among alternatives derived

from oranges, parsley, lemon, or a combination of these ingredients. This is the making model.

1. a. generate alternative courses of action evaluate each alternative
2. c. compute the optimal decision satisfice each alternative
3. e. bounded rationality

step in the rational decision-

ANSWER: b

RATIONALE: The company must evaluate each alternative ingredient.

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.5.04e – 5.4e

TOPICS: AACSB Analytic

KEYWORDS: Environmental Influence | Individual Dynamics | Strategy

1. 87. Marie-Helene de Taillac is a well-known European designer of understated, very delicate jewelry. Once she determined that further growth was impossible without changing how she distributed her product, she decided to open her own retail outlet to sell her products rather than letting department stores sell it. Since she made the decision without really examining how much the costs involved in implementing her decision, she has engaged in

behavior. a. benchmarking b. laddering

1. c. satisficing maximizing e. leapfrogging

ANSWER: c

RATIONALE: She chose an alternative solution that was “good enough” without examining every last

variable.

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.5.04g – 5.4g

TOPICS: AACSB Analytic

KEYWORDS: Environmental Influence | Individual Dynamics | Strategy

1. 88. occurs when managers choose an alternative that is good enough, rather than the best possible a. Maximizing
2. Optimizing
3. c. Availability bias Negative frame e. Satisficing

ANSWER: e

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: WILL.MGMT.15.5.04g – 5.4g TOPICS: AACSB Reflective Thinking KEYWORDS: Individual Dynamics | Strategy

1. 89. Groupthink occurs in .
2. a. newly formed groups whose members were arbitrarily selected and who are assigned to make programmed decisions
3. groups in which members have dissimilar backgrounds
4. c. standing committees whose members are under no pressure to agree groups whose members are elected to serve as figureheads
5. e. highly cohesive groups where there is a great deal of pressure to agree with each other

ANSWER: e

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: WILL.MGMT.15.5.05a – 5.5a TOPICS: AACSB Reflective Thinking KEYWORDS: Group Dynamics

1. 90. is the emotional reaction that can occur when disagreements become personal rather than a. A-type conflict
2. C-type conflict
3. c. Emotive empowerment
4. Organizational disharmony e. Norm disruption

ANSWER: b

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: WILL.MGMT.15.5.05b – 5.5b TOPICS: AACSB Reflective Thinking KEYWORDS: Individual Dynamics

1. 91. The

approach to decision-making is a method in which an individual or a subgroup is assigned the role of a

1. a. dialectical inquiry groupthink
2. c. devil’s advocacy Delphi
3. e. dyadic communications

ANSWER: c

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: WILL.MGMT.15.5.05b – 5.5b TOPICS: AACSB Reflective Thinking KEYWORDS: Group Dynamics

1. 92. The

is a decision-making method in which a panel of experts responds to questions and to each other until an

agreement is reached on how a specific issue should be handled. a. dialectical inquiry technique

1. nominal group technique c. Delphi technique
2. electronic brainstorming technique e. feedback method

ANSWER: c

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.5.05d – 5.5d TOPICS: AACSB Reflective Thinking KEYWORDS: Group Dynamics

1. 93. The nominal group technique improves group decision making by . a. requiring the selection of co-leaders to prevent member dominance
2. providing predetermined group norms c. eliminating group cohesiveness
3. decreasing a-type conflict
4. e. encouraging all members to have an equal voice in the decision making process

ANSWER: d

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.5.05c – 5.5c TOPICS: AACSB Reflective Thinking KEYWORDS: Group Dynamics

1. 94. Which of the following is NOT one of the rules for effective brainstorming?
2. a. The more ideas, the
3. Select an open-minded group leader. c. All ideas are acceptable.
4. Criticism is not allowed.
5. e. Use other members’ ideas to come up with more

ANSWER: b

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.5.05e – 5.5e TOPICS: AACSB Reflective Thinking KEYWORDS: Group Dynamics

1. 95. Which of the following is a disadvantage of face-to-face brainstorming that is overcome by electronic brainstorming?
2. a. assimilation blocking production blocking c. delegation errors
3. group norm evaluation e. negative valence

ANSWER: b

RATIONALE: One example of production blocking is having to wait your turn to share your idea.

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.5.05e – 5.5e

TOPICS: AACSB Reflective Thinking

AACSB Technology

KEYWORDS: Group Dynamics | Information Technologies

Krispy Kreme

Krispy Kreme is a relatively small doughnut seller. It has only 295 stores while Dunkin Donuts has over 3,600 outlets in the United States and Canada. In spite of its size, Krispy Kreme has been described by many as “the hottest brand in America.” The company’s success in an environment which has made success difficult for many food operations is due in large part to the long-term vision of its top management and its establishment and achievement of S.M.A.R.T. goals. The company originated in Winston-Salem, North Carolina, in the mid-1930s when Vernon Rudolph bought a secret recipe for yeast doughnuts from a French pastry cook. Rudolph ran the company until he died in 1973 without naming a successor, which caused the company problems for the next decade.

1. 96. Refer to Krispy Kreme. How does Krispy Kreme benefit from planning?
2. a. Planning makes persistence
3. Planning allows managers to direct their employees to “do their best.”
4. c. Planning gives direction to managers and d. Planning eliminates the need for task strategies.
5. e. Planning would provide all of these benefits to Krispy

ANSWER: c

RATIONALE: Section 1 of the chapter offers four benefits from planning: (1) intensified work effort, (2) increased persistence toward goals, (3) direction, and (4) creation of task strategies that lead to stronger performance.

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: WILL.MGMT.15.5.01a – 5.1a TOPICS: AACSB Analytic KEYWORDS: Creation of Value | Strategy

1. 97. Refer to Krispy Kreme. Krispy Kreme’s goal to open six new Krispy Kreme stores by 2009 in British Columbia where it already has a well-established reputation would be an example of a M.A.R.T. goal because it is . a. specific, marketable, and temporal
2. specific, measurable, attainable, realistic, and timely
3. c. service-oriented, manageable, achievable, and time-oriented
4. standardized, measurable, actionable, response-driven, and temporal e. selective, marketable, achievable, and real-time-oriented

ANSWER: b

RATIONALE: These are the characteristics of S.M.A.R.T. goals.

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.5.02a – 5.2a TOPICS: AACSB Analytic KEYWORDS: Creation of Value | Strategy

1. 98. Refer to Krispy Kreme. The company’s goal to open six new Krispy Kreme stores in the next six months in British

Columbia where it already has a well-established reputation would be an example of a(n) goal. a. distal

1. temporal c. adjacent d. proximal e. advocacy

ANSWER: d

RATIONALE: Proximal goals are short-term.

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: WILL.MGMT.15.5.02d – 5.2d TOPICS: AACSB Analytic KEYWORDS: Creation of Value | Strategy

1. 99. Refer to Krispy Kreme. The company’s goal to never reveal its secret recipe to anyone outside the company is an

example of a(n) goal. a. distal

1. temporal c. adjacent d. proximal e. advocacy

ANSWER: a

RATIONALE: Distal goals are long-term, primary goals.

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: WILL.MGMT.15.5.02d – 5.2d TOPICS: AACSB Analytic KEYWORDS: Creation of Value | Strategy

1. 100. Refer to Krispy Kreme. Which of the following would be an example of an operational plan for Krispy Kreme?
2. a. to open a new plant for making doughnut mix outside the S. b. to change the color of the “walking KK” logo of the company
3. c. to turn on the HOT DOUGHNUTS NOW sign whenever fresh doughnuts came off the line to hire a new human relations vice­president to oversee all of the company’s operations
4. e. to modify the doughnut mix recipe so that less expensive ingredients can be used

ANSWER: c

RATIONALE: Operational plans are day-to-day type decisions such as this advertising move.

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.5.03c – 5.3c TOPICS: AACSB Analytic KEYWORDS: Creation of Value | Strategy

D.G. Yuengling & Son

With beer sales dropping around the world, you should be ecstatic that sales of Yuengling (pronounced Ying-Ling) beer are up 225 percent in the last six years. But as you walk through the caves and tunnels of Yuengling’s Eagle Brewery, carved into Sharp Mountain in 1831 to maintain a perfect 50-degree temperature for storing beer, you see not only the history of America’s oldest brewery everywhere you turn, but also chipped paint, rusting pipes, and an aging plant that can’t keep up with the growing demand for Yuengling beer. So far, thanks to hard work, dedicated workers, and some luck, you’ve doubled your production capacity from 250,000 to 500,000 barrels of beer a year, but if you push for more, the old brewery will break.

Yet with sales up so dramatically, the company faces a problem. Says CEO and owner Dick Yuengling, “We are sold out of beer. We run the risk of losing our customer base because we don’t have any product on the shelves.” Shortages are so bad that the advertising

budget has been cut from $3 to $2 a barrel. Yuengling explains, “You can’t fuel the fire when we can’t get them beer anyway.” With production stuck at 500,000 barrels a year, Yuengling beer has become harder to find even as it has become more popular. Sales representative Diane Adams said, “It was a little hairy. People were up in arms.” So, rather than sacrifice sales in its home market of Pennsylvania, where Yuengling has its largest market

share (10 percent), the company has temporarily stopped shipping beer to distributors in Maine, Massachusetts, and Rhode Island. Since that strategy won’t help Yuengling grow outside Pennsylvania, you still face the question of how to permanently increase beer production to meet the growing demand.

You’ve identified five options. The first is to add new storage and finishing tanks to Eagle Brewery to increase production capacity by 10 percent to 550,000 barrels a year. Though doable, this is only a short-term solution. Second, you could outsource production to another company. This would be more cost-effective, but would Yuengling beer produced in non-Yuengling factories taste different? For a specialty beer, this could be a substantial risk. Still, outsourcing would be affordable, and Yuengling has done it before, outsourcing production of its Black

and Tan beer to Pabst Blue Ribbon’s brewery in Lehigh, Pennsylvania, until Pabst closed that facility four years ago. The third option is to buy another brewery, but there aren’t many for sale and those that are would be expensive and require significant upgrades. For example, it would cost $13 million to buy and $5 million to fix Stroh’s 1.5 million­barrel brewery in Tampa, Florida, which is far from Yuengling’s northeastern markets.

A fourth option is to build a new factory capable of producing 1.2 million barrels per year, but that would cost $50 million and take three years. The fifth and final option is simply to do nothing. The company is already very profitable, has low overhead costs, and is very efficient. In other words, by doing nothing the company could still make a lot of money without incurring the risks inherent in the other options. And risk is a real consideration because everyone in the company remembers that Yuengling was losing money just a few years ago.

1. 101. Refer to Yuengling. In the first stage of the planning process for Yuengling, it should have . a. developed an effective action plan that would satisfy all of its customers
2. identified its problem as the fact that demand for its beer exceeds its ability to supply it c. developed several alternative methods for supply its beer to customers
3. established a budget
4. e. developed goal commitment to customer satisfaction

ANSWER: b

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: WILL.MGMT.15.5.04a – 5.4a TOPICS: AACSB Analytic KEYWORDS: Strategy

1. 102. Refer to Yuengling. Yuengling’s objective to pay off its loan for a new $50 million brewery within five years was an example of a
2. a. generational
3. learning-based c. distal
4. options-based e. proximal

ANSWER: c

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: WILL.MGMT.15.5.02d – 5.2d

TOPICS: AACSB Analytic

KEYWORDS: Environmental Influence | Strategy

1. 103. Refer to Yuengling. What type of planning allowed Yuengling to purchase the Stroh’s brewery?
2. a. resource-based learning-based
3. c. environmentally-specific options-based
4. e. generational

ANSWER: d

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.5.02e – 5.2e

TOPICS: AACSB Analytic

KEYWORDS: Environmental Influence | Strategy

1. 104. What is planning and what are its benefits?

ANSWER: Planning is choosing a goal and developing a method to achieve that goal. Planning is one of the best ways to improve organizational and individual performance. It encourages people to work harder (intensified effort), to work hard for extended periods (persistence), to engage in behaviors directly related to goal accomplishment (directed behavior), and to think of better ways to do their jobs (task strategies). But most important, companies that plan have larger profits and faster growth than companies that don’t plan.

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: WILL.MGMT.15.5.01a – 5.1a

TOPICS: AACSB Analytic

KEYWORDS: Creation of Value | HRM | Strategy

1. 105. Briefly describe the benefits and pitfalls of

ANSWER: Planning refers to choosing a goal and developing a method or strategy to achieve that goal. Planning has numerous benefits. It is one of the best ways to improve both organizational and individual performance. It encourages people to work harder (intensified effort), to work hard for extended periods (persistence), to engage in behaviors directly related to goal accomplishment (directed behavior), and to think of better ways to do their jobs (task strategies). But most important, companies that plan have larger profits and faster growth than companies that don’t plan. However, planning also has three potential pitfalls. Companies that are overly committed to their plans may be slow to adapt to changes in their environment. Planning is based on assumptions about the future, and when those assumptions are wrong, plans are likely to fail. Finally, planning can fail when planners are detached from the implementation of plans.

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.5.01a-01b – 5.1a-5.1b

TOPICS: AACSB Analytic

KEYWORDS: Creation of Value | HRM | Strategy

1. 106. List the steps in effective

ANSWER: Planning consists of a total of five steps: (1) setting goals, (2) developing commitment to the goals, (3) developing effective action plans, (4) tracking progress toward goal achievement, and (5) maintaining flexibility in planning.

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.5.02 – 5.2

TOPICS: AACSB Analytic

KEYWORDS: Creation of Value | HRM | Leadership Principles | Strategy

1. 107. Identify and explain the purpose of the M.A.R.T. guidelines.

ANSWER: One way of writing effective goals for yourself, your job, or your company is to use the S.M.A.R.T. guidelines. S.M.A.R.T. goals are Specific, Measurable, Attainable, Realistic, and Timely. The purpose of the S.M.A.R.T. guidelines is to give managers an easy-to-remember acronym that can help them to set effective goals during their stressful and busy daily activities.

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: WILL.MGMT.15.5.02a – 5.2a TOPICS: AACSB Analytic KEYWORDS: Creation of Value | Strategy

1. 108. Identify three ways of increasing goal commitment. Which one is most commonly used by managers?

ANSWER: Managers can bring about goal commitment in three ways. The first and most popular approach is to set goals participatively. Rather than assigning goals to workers, managers and employees choose goals together. The second technique is making the goal public by having individuals and work units tell others about their goals. The third way of increasing goal commitment is to obtain top management’s support. Top management can show support for a plan or program by providing funds, speaking publicly about the plan, or participating in the plan itself.

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.5.02b – 5.2b

TOPICS: AACSB Analytic

KEYWORDS: Creation of Value | HRM | Leadership Principles | Strategy

1. 109. Briefly identify and explain the two accepted methods of tracking progress toward goal

ANSWER: There are two accepted methods of tracking progress. The first is to set proximal goals and distal goals. Proximal goals are short-term goals or subgoals, whereas distal goals are long-term or primary goals. The idea behind setting proximal goals is that they may be more motivating and rewarding than waiting to achieve far-off distal goals. The second method of tracking progress is to gather and provide performance feedback. Regular, frequent performance feedback allows workers and managers to track their progress toward goal achievement and make adjustments in effort, direction, and strategies.

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.5.02d – 5.2d

TOPICS: AACSB Analytic

KEYWORDS: Creation of Value | HRM | Strategy

1. 110. Identify the four basic steps in the management by objectives

ANSWER: Management by objectives is a four-step process in which managers and employees (1) discuss possible goals, (2) participatively select goals, (3) jointly develop tactical plans, and (4) meet regularly to review progress toward goal accomplishment.

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: WILL.MGMT.15.5.03b – 5.3b

TOPICS: AACSB Analytic

KEYWORDS: Creation of Value | HRM | Leadership Principles

1. 111. List and briefly describe the three kinds of operational

ANSWER: The three kinds of operational plans are: (1) single-use plans, which cover unique,

one-time-only events; (2) standing plans, which save managers time because they are created once and then used repeatedly to handle frequently recurring events; and (3) budgets, which are quantitative plans which managers use to decide how to allocate available money to best accomplish company goals.

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: WILL.MGMT.15.5.03c – 5.3c

TOPICS: AACSB Analytic

KEYWORDS: Creation of Value | HRM | Leadership Principles

1. 112. List and briefly describe the three kinds of standing plans. Comment on their relative

ANSWER: The three types of standing plans are policies, procedures, and rules and regulations.

Each is more specific than the previous. Policies are the least specific type of standing plan. They indicate the general course of action that company managers should take in response to a particular event or situation. Procedures are more specific than policies, because they indicate the series of steps that should be taken in response to a particular event. Rules and regulations are even more specific than procedures because they specify what must happen or not happen. They describe precisely how a particular action should be performed.

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.5.03c – 5.3c TOPICS: AACSB Analytic KEYWORDS: Creation of Value | Strategy

1. 113. Define the terms decision making and rational decision making. Briefly differentiate between

ANSWER: Decision making is the process of choosing a solution from available alternatives.

Rational decision making is a systematic process in which managers define problems, evaluate alternatives, and choose optimal solutions that provide maximum benefits to their organizations. Rational decision making is more structured and would be one of the approaches that might be used in the more general process of decision making.

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.5.04 – 5.4

TOPICS: AACSB Analytic

KEYWORDS: Strategy

1. 114. List the six steps in the rational decision making

ANSWER: The six steps in the rational decision making process are: (1) define the problem, (2) identify decision criteria, (3) weight the criteria, (4) generate alternative courses of action, (5) evaluate each alternative, and (6) compute the optimal decision.

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: WILL.MGMT.15.5.04 – 5.4

TOPICS: AACSB Reflective Thinking

KEYWORDS: Individual Dynamics | Strategy

1. 115. Briefly explain what decision criteria are. Identify two approaches that may be used to weight these

ANSWER: Decision criteria are the standards used to guide judgments and decisions. Typically, the more criteria that a potential solution meets, the better that solution should be.

After identifying decision criteria, the next step in the rational decision making process is deciding which criteria are more or less important. While there are numerous mathematical models for weighting decision criteria, all require the decision maker to provide an initial ranking of the decision criteria. Some use absolute comparisons, in which each criterion is compared to a standard or ranked on its own merits. Another method is relative comparisons, in which each criterion is compared directly to every other criterion.

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.5.04b – 5.4b TOPICS: AACSB Reflective Thinking KEYWORDS: Individual Dynamics | Strategy

1. 116. Briefly identify the two types of conflict that may spontaneously occur in situations of group decision

Comment on the probable effectiveness of group decisions given each type of conflict.

ANSWER: The two types of conflict that might spontaneously occur in a group are c-type conflict and a-type conflict. C-type conflict, or cognitive conflict, focuses on problem- and issue-related differences of opinion. In c-type conflict, group members disagree because their different experiences and expertise lead them to different views of the problem and its potential solutions. However, c-type conflict is also characterized by a willingness to examine, compare, and reconcile those differences to produce the best possible solution. By contrast, a-type conflict, or affective conflict, refers to the emotional reactions that can occur when disagreements become personal rather than professional. A-type conflict often results in hostility, anger, resentment, distrust, cynicism, and apathy. So, unlike c-type conflict, a-type conflict undermines team effectiveness by preventing teams from engaging in the kinds of activities (including

c-type conflict!) that are critical to team effectiveness. Thus, c-type conflict can enhance the quality of group decisions, while a-type conflict will probably reduce the effectiveness of those decisions.

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: WILL.MGMT.15.5.05b – 5.5b TOPICS: AACSB Reflective Thinking KEYWORDS: Group Dynamics | Strategy

1. 117. Describe a planning effort that you are acquainted with (either through reading or personal experience), and explain how both the benefits and pitfalls of planning described in the chapter were manifest in your case. Comment on the extent to which your case seems to substantiate or refute the claims made in the text for the benefits and pitfalls of

ANSWER: Planning is defined as choosing a goal and developing a method or strategy to achieve that goal. Student case examples should clearly identify both the goal of the planning effort and the method used to achieve it. The more benefits and pitfalls of planning (summarized below) the student integrates into his or her answer, the better the answer. Adequate answers will simply restate text examples. Better answers will be original applications of the text material to a case or scenario not presented in the text or class lecture; such answers show not only mastery of the material but ability to apply it. Either way, answers should clearly indicate how the events and outcomes in the case that is presented either substantiate or refute the statements made about the benefits and pitfalls of planning in the text.

Planning is one of the best ways to improve both organizational and individual performance. As presented in the text, planning has four main benefits. It encourages people (1) to work harder (intensified effort), (2) to work hard for extended periods (persistence), (3) to engage in behaviors directly related to goal accomplishment (directed behavior), and (4) to think of better ways to do their jobs (task strategies). But most important, companies that plan have larger profits and faster growth than companies that don’t plan. However, planning also has three potential pitfalls. (1) Companies that are overly committed to their plans may be slow to adapt to changes in their environment. (2) Planning is based on assumptions about the future, and when those assumptions are wrong, plans are likely to fail. (3) Finally, planning can fail

when planners are detached from the implementation of plans.

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.5.01a-01b – 5.1a-5.1b

TOPICS: AACSB Analytic

KEYWORDS: Creation of Value | HRM | Leadership Principles

1. 118. A daughter of a well-known financier is currently in her first year of college but has decided that she definitely wants to earn an MBA as soon as possible after earning her four-year college degree. Outline the five steps in effective planning and use these planning guidelines to develop an appropriate plan for

ANSWER: Planning consists of a total of five steps: (1) setting goals, (2) developing commitment to the goals, (3) developing effective action plans, (4) tracking progress toward goal achievement, and (5) maintaining flexibility in planning. In terms of (1) setting goals, goals need to be specific and challenging in order to direct behavior and increase effort. Her present goal is specific, but could be made more challenging by targeting any one of the top 25 MBA programs in the country as her goal. In terms of (2) developing commitment to her goal, we can assume that if She has selected this goal on her own (i.e., participatively) and understands all of its implications, then she is probably already sufficiently committed to it at a personal level. She might enhance this commitment by making a public statement of her goal and soliciting (and receiving) support from her parents in achieving it. In terms of (3) developing

effective action plans, She should research the MBA degree and how it contributes to career success. Then she should draw up a concrete written plan, outlining the

specific steps, people, resources, and time period for accomplishing her goal. Her research will probably lead her to conclude that she should gain several years of work experience in her desired industry before enrolling in an MBA program. In terms of (4) tracking progress toward goal achievement, She should set a series of integrated proximal and distal goals, where the proximal goals (e.g., maintain a high GPA,

arrange for an internship while in college, network as much as possible to develop connections for a later job search) and clearly related subgoals will move her forward to her distal (long-term or primary) goals. Examples of distal goals might be obtaining an entry level position in finance at a major corporation upon graduation and then obtaining company support to pursue a top-flight MBA degree within five years of beginning work. She should utilize her grades as well as contact with her professors while in college to solicit feedback and evaluate her progress and use her

performance appraisals and other contacts as sources of feedback once she begins working full-time after graduation. Finally, in terms of (5) maintaining flexibility in planning, She should be ready to revise her overall plan if, at any point along the way, insurmountable obstacles become apparent. For example, if it should become clear that she cannot earn a high GPA in college, then she should lower her sights and shoot for a less prestigious MBA program.

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.5.02 – 5.2

TOPICS: AACSB Analytic

KEYWORDS: Creation of Value | Strategy

1. 119. How can organizations maintain flexibility as they plan? Explain how the method for maintaining flexibility is different from traditional

ANSWER: Organizations can use options-based planning to maintain flexibility as they plan. The goal of options-based planning is to keep options open by making small, simultaneous investments in many options or plans. Then when one or a few of these plans emerge as likely winners, you invest even more in these plans while discontinuing or reducing investment in the others.

This approach differs significantly from traditional planning. In part, options-based planning is the opposite of traditional planning. For example, the purpose of a traditional action plan is to commit people and resources to a particular course of action. However, the purpose of options-based planning is to leave those commitments open. Holding options open gives you choices and those choices give you flexibility.

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.5.02e – 5.2e TOPICS: AACSB Analytic KEYWORDS: Creation of Value | Strategy

1. 120. Compare and contrast the planning done at the top, middle, and bottom levels of an

ANSWER: Planning at all levels of management must follow the five steps in effective planning: (1) setting goals, (2) developing commitment to the goals, (3) developing effective action plans, (4) tracking progress toward goal achievement, and (5) maintaining flexibility in planning. Similarly, planning at all three levels of management is interrelated, as proper planning requires that the goals at the bottom and middle of the organization support the objectives at the top of the organization. However, there are significant differences in the objectives and timetables of the planning process at the top, middle, and lower levels of the organization. Top management develops strategic plans that indicate how a company will serve customers and position itself against competitors over a two- to five-year period. Strategic planning starts with the creation of an organizational vision and mission. Middle managers use techniques like management by objectives to develop tactical plans that direct behavior, efforts, and priorities over the next six months to two years. Finally, lower-level managers develop operational plans that guide daily activities in producing or delivering an organization’s products and services. Operational plans typically span periods ranging from 30 days to six months. There are three kinds of operational plans: single-use plans, standing plans (policies, procedures, and rules and regulations), and budgets. Thus, all three levels of planning should follow the same steps, but the objectives and timetables are different at each level, and plans at all levels must be carefully developed to ensure their effective interdependence in achieving overall organizational goals.

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.5.03 – 5.3

TOPICS: AACSB Analytic

KEYWORDS: Creation of Value | HRM | Leadership Principles

1. 121. Describe the management by objectives (MBO) process. Which type of manager would be responsible for MBO?

What is the probable value of MBO to managers?

ANSWER: Management by objectives is a management technique often used by middle managers to develop and carry out tactical plans. Middle management is responsible for developing and carrying out tactical plans to accomplish the organization’s mission. Tactical plans specify how a company will use resources, budgets, and people to accomplish specific goals within its mission cover the next six months to two years. Management by objectives, or MBO, is a four-step process in which managers and their employees (1) discuss possible goals, (2) participatively select goals that are challenging, attainable, and consistent with the company’s overall goals, (3) jointly develop tactical plans that lead to accomplishment of tactical goals and objectives, and (4) meet regularly to review progress toward accomplishment of those goals. When done right, MBO is an extremely effective method of tactical planning. The results from 70 different organizations strongly support the effectiveness of management by objectives. On average, companies that effectively use MBO will outproduce those that don’t use MBO by an incredible 44.6 percent! And in companies where top management is committed to MBO (that is, where objective-setting begins at the top) the average increase in performance is an even more astounding 56.5 percent. By contrast, when top management does not participate in or support MBO, the average increase in productivity drops to 6.1 percent. In all, though, there is a 97 percent chance that companies that use MBO will outperform those that don’t! Thus, MBO can make a very big difference to the companies that use it.

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.5.03b – 5.3b

TOPICS: AACSB Analytic

KEYWORDS: Creation of Value | HRM | Leadership Principles

1. 122. Explain how the rational decision-making process may help to overcome predispositions and biases that a manager has in a given decision making

ANSWER: Rational decision making is a systematic process of defining problems, evaluating alternatives, and choosing optimal solutions. It is based upon a clearly defined series

of six steps, which, when followed, force a manager to carefully identify and evaluate multiple relevant aspects of a problem. The six steps in the rational decision-making process are: (1) define the problem, (2) identify decision criteria, (3) weight the criteria, (4) generate alternative courses of action, (5) evaluate each alternative, and (6) compute the optimal decision.

The systematic application of this process helps managers cut through intuitive feelings and biases which might otherwise predominate in decision making. When managers pay more explicit attention to carefully defining the problem and concretely articulating decision criteria and weights, they develop a more objective framework for evaluating and selecting among alternatives. Further, the mathematical approach to computing the optimal value of each alternative in order to make the final decision further reduces the chances that non-rational biases or influences will intervene and influence the outcome. In these ways, the rational decision-making process can help

to ensure a more logical and systematically defensible decision to problems facing the manager.

POINTS: 1

DIFFICULTY: Difficult

LEARNING OBJECTIVES: WILL.MGMT.15.5.04 – 5.4

TOPICS: AACSB Analytic

KEYWORDS: Individual Dynamics | Motivation Concepts | Strategy

1. 123. Define the two types of conflict that may spontaneously occur in situations of group decision making. List and explain the approaches to structured conflict that may help to enhance the quality of group decisions. Be sure to comment on the research results which evaluate their

ANSWER: Most people view conflict negatively. However, the right kind of conflict can lead to much better group decision making. C-type conflict, or cognitive conflict, focuses on problem- and issue-related differences of opinion. In c-type conflict, group members disagree because their different experiences and expertise lead them to different views of the problem and its potential solutions. However, c-type conflict is characterized by a willingness to examine, compare, and reconcile those differences

to produce the best possible solution. By contrast, a-type conflict, or affective conflict, refers to the emotional reactions that can occur when disagreements become personal rather than professional. A-type conflict often results in hostility, anger, resentment, distrust, cynicism, and apathy. So, unlike c-type conflict, a-type conflict undermines team effectiveness by preventing teams from engaging in the kinds of activities, such as c-type conflict, that are critical to team effectiveness.

Devil’s advocacy and dialectical inquiry are two methods that introduce structured c- type conflict into the group decision-making process. Devil’s advocacy creates c-type conflict by assigning an individual or a subgroup the role of a critic. This individual criticizes and questions a proposed solution in order to help decision makers decide whether to use, change, or not use the original proposed solution. Dialectical inquiry creates c-type conflict by forcing decision makers to state the assumptions behind a proposed solution (a thesis) and to then generate a solution that is the opposite (antithesis) of the proposed solution. It takes the form of a debate between advocates of the thesis and antithesis and, like the devil’s advocacy approach, helps decision makers decide whether to use, change, or not use the original proposed solution.

When properly used, both the devil’s advocacy and dialectical inquiry approaches introduce c-type conflict into the decision-making process. Contrary to the common belief that conflict is bad, studies show that these methods lead to less a-type conflict, improved decision quality, and greater acceptance of decisions once they have been made. In meta-analytic research on the effectiveness of these techniques, each technique has been compared to decisions obtained by following experts’ advice. While the estimated probabilities of success may seem small, (55 percent for dialectical inquiry and 58 percent for devil’s advocacy), they very likely understate the effects of both techniques. In other words, the probabilities of success would have been much larger if both techniques had been compared to the unstructured decision- making processes typical of the average group’s or manager’s approach.

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: WILL.MGMT.15.5.05b – 5.5b TOPICS: AACSB Reflective Thinking KEYWORDS: Group Dynamics | Strategy

1. Organizational innovation is defined as “doing things differently” inside an organization.
2. a. True
3. False

ANSWER: False

RATIONALE: Organizational innovation is the successful implementation of creative ideas in an organization.

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: WILL.MGMT.15.7.01 – 7.1

TOPICS: AACSB Analytic

KEYWORDS: Creation of Value | HRM | Operations Management

1. A technology cycle begins with the birth of a new technology and ends when that technology reaches its limits and dies; it is then replaced by newer, substantially better technology.
2. a. True
3. False

ANSWER: True

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: WILL.MGMT.15.7.01a – 7.1a

TOPICS: AACSB Analytic

AACSB Technology

KEYWORDS: Environmental Influence | Information Technologies | Strategy

1. Nearly all technology cycles follow a bell-shaped pattern of innovation. a. True
2. False

ANSWER: False

RATIONALE: Nearly all technology cycles follow a typical S-curve pattern of innovation. See Exhibit 7.1.

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.7.01a – 7.1a

TOPICS: AACSB Analytic

AACSB Technology

KEYWORDS: Environmental Influence | Information Technologies | Strategy

1. 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. a. True

1. False

ANSWER: True

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.7.01a – 7.1a

TOPICS: AACSB Analytic

AACSB Technology

KEYWORDS: Creation of Value | Strategy

1. Companies that want to sustain a competitive advantage must understand and protect themselves from the strategic threats of innovation.
2. a. True
3. False

ANSWER: True

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: WILL.MGMT.15.7.01b – 7.1b

TOPICS: AACSB Analytic

AACSB Technology

KEYWORDS: Creation of Value | Environmental Influence | Strategy

1. Innovation streams are patterns of innovation over time that can create sustainable competitive advantage. a. True
2. False

ANSWER: True

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.7.01b – 7.1b

TOPICS: AACSB Analytic

AACSB Technology

KEYWORDS: Creation of Value | Environmental Influence | Strategy

1. An innovation stream begins with a technological discontinuity, which is a scientific advance or a unique combination of existing technologies creating a significant breakthrough in performance or function.
2. a. True
3. False

ANSWER: True

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.7.01b – 7.1b

TOPICS: AACSB Analytic

AACSB Technology

KEYWORDS: Creation of Value | Environmental Influence | Strategy

1. Technological innovation not only makes it possible 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.
2. a. True
3. False

ANSWER: True

POINTS: 1

DIFFICULTY: Difficult

LEARNING OBJECTIVES: WILL.MGMT.15.7.01b – 7.1b

TOPICS: AACSB Analytic

AACSB Technology

KEYWORDS: Creation of Value | Environmental Influence | Strategy

1. Technology cycles for low-tech products follow the typical U-curve pattern cycle of innovation. a. True
2. False

ANSWER: False

RATIONALE: All technology cycles typically follow an S-curve pattern of innovation.

POINTS: 1

DIFFICULTY: Difficult

LEARNING OBJECTIVES: WILL.MGMT.15.7.01b – 7.1b

TOPICS: AACSB Analytic

AACSB Technology

KEYWORDS: Creation of Value | Environmental Influence | Strategy

1. 10. Technological discontinuities are followed by discontinuous change characterized by technological substitution and design
2. a. True
3. False

ANSWER: True

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.7.01b – 7.1b

TOPICS: AACSB Analytic

AACSB Technology

KEYWORDS: Creation of Value | Environmental Influence | Strategy

1. 11. Dominant designs emerge because they solve a practical problem, are a result of the negotiations of independent standards bodies, or because of critical
2. a. True
3. False

ANSWER: True

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.7.01b – 7.1b

TOPICS: AACSB Analytic

AACSB Technology

KEYWORDS: Creation of Value | Environmental Influence | Strategy

1. 12. The same techniques for managing innovation work equally as well after technological discontinuities as during periods of incremental
2. a. True
3. False

ANSWER: False

RATIONALE: What works well when managing innovation after technological discontinuities doesn’t work well when managing innovation during periods of incremental change (and vice versa).

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: WILL.MGMT.15.7.02 – 7.2

TOPICS: AACSB Analytic

AACSB Technology

KEYWORDS: Creation of Value | Environmental Influence | HRM | Strategy

1. 13. A creative work environment requires organizational encouragement and supervisory encouragement as well as work group
2. a. True
3. False

ANSWER: True

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: WILL.MGMT.15.7.02a – 7.2a

TOPICS: AACSB Analytic

KEYWORDS: Creation of Value | Group Dynamics | HRM | Leadership Principles

1. 14. The three parts of the experiential approach to innovation are design iterations, testing, and a. True
2. False

ANSWER: False

RATIONALE: There are five parts to the experiential approach to innovation: design iterations, testing, milestones, multifunctional teams, and powerful leaders.

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.7.02b – 7.2b

TOPICS: AACSB Analytic

AACSB Technology

KEYWORDS: Creation of Value | HRM | Operations Management

1. 15. Milestones are formal review points that tend to lengthen the innovation a. True
2. False

ANSWER: False

RATIONALE: Milestones are formal review points that shorten the innovation process.

POINTS: 1

DIFFICULTY: Difficult

LEARNING OBJECTIVES: WILL.MGMT.15.7.02b – 7.2b

TOPICS: AACSB Analytic

AACSB Technology

KEYWORDS: Creation of Value | HRM | Operations Management

1. 16. Fully functional change occurs when incremental improvements are made to a dominant technological design. In a fully functional change, the improved version of the technology is fully backward compatible with the older a. True
2. False

ANSWER: False

RATIONALE: Generational 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.

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: WILL.MGMT.15.7.02b – 7.2b

TOPICS: AACSB Analytic

AACSB Technology

KEYWORDS: Creation of Value | HRM | Information Technologies | Operations Management

1. 17. According to Kurt Lewin, managing organizational change is a simple process that requires organizational dialogue, change intervention, and
2. a. True
3. False

ANSWER: False

RATIONALE: According to Kurt Lewin, managing organizational change is a basic process of unfreezing, change intervention, and refreezing.

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: WILL.MGMT.15.7.04 – 7.4

TOPICS: AACSB Analytic

KEYWORDS: Creation of Value | Group Dynamics | HRM | Leadership Principles

1. 18. Resistance to change usually results from organizational factors: such as the absence of promotion guidelines, bonuses, and
2. a. True
3. False

ANSWER: False

RATIONALE: Resistance to change results from personal factors such as self-interest, misunderstanding and distrust, and a general intolerance for change.

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.7.04 – 7.4

TOPICS: AACSB Analytic

KEYWORDS: Creation of Value | Group Dynamics | HRM | Individual Dynamics | Leadership

Principles

1. 19. 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 a crisis or as a last
2. a. True
3. False

ANSWER: True

POINTS: 1

DIFFICULTY: Difficult

LEARNING OBJECTIVES: WILL.MGMT.15.7.04a – 7.4a

TOPICS: AACSB Analytic AACSB Communication AACSB Ethics

KEYWORDS: Creation of Value | Ethical Responsibilities | Group Dynamics | HRM | Leadership

Principles

1. 20. Declaring victory too soon is one of the mistakes managers often make in the refreezing stage of a. True
2. False

ANSWER: True

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.7.04b – 7.4b

TOPICS: AACSB Analytic

KEYWORDS: Creation of Value | Group Dynamics | HRM | Leadership Principles

1. 21. Results-driven change focuses primarily on changing company procedures, management philosophy, or employee
2. a. True
3. False

ANSWER: False

RATIONALE: This is the definition of activity-oriented change. By contrast, results-driven change supplants the sole emphasis on activity with a laser-like focus on quickly measuring and improving results.

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.7.04c – 7.4c

TOPICS: AACSB Analytic

KEYWORDS: Creation of Value | HRM | Leadership Principles

1. 22. The General Electric Workout is a special kind of activity-oriented a. True
2. False

ANSWER: False

RATIONALE: The General Electric Workout is a special kind of results-driven change.

POINTS: 1

DIFFICULTY: Difficult

LEARNING OBJECTIVES: WILL.MGMT.15.7.04c – 7.4c

TOPICS: AACSB Analytic

KEYWORDS: Creation of Value | Group Dynamics | HRM | Leadership Principles

1. 23. Organizational is the successful implementation of creative ideas in a. change
2. innovation c. creativity
3. development e. deployment

ANSWER: b

RATIONALE: Definition of organizational innovation.

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: WILL.MGMT.15.7.01 – 7.1

TOPICS: AACSB Analytic

AACSB Technology

KEYWORDS: Creation of Value | Group Dynamics | HRM | Leadership Principles

1. 24. Creativity was needed to improve efficiency without raising costs at one automobile maker. Over the last few years, the company has successfully implemented a creative engineering program that allows its plants to produce more than one type of car from the same assembly line. This successful change to a flexible manufacturing system is an example of .
2. a. corporate synergy
3. organizational innovation c. assembly networking
4. organizational networking e. reverse engineering

ANSWER: b

RATIONALE: Organizational innovation is the successful implementation of creative ideas in organizations.

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: WILL.MGMT.15.7.01 – 7.1

TOPICS: AACSB Analytic

AACSB Technology

KEYWORDS: Creation of Value | HRM | Operations Management

1. 25. When Gregg Steiner became the vice president for Cleveland-based Pinxav, he knew 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 ” 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 .
2. a. corporate synergy
3. organizational innovation c. assembly networking
4. organizational networking e. reverse engineering

ANSWER: b

RATIONALE: Organizational innovation is the successful implementation of creative ideas in organizations-, in this case the risk-free trial offer.

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.7.01 – 7.1

TOPICS: AACSB Analytic

KEYWORDS: Creation of Value | Strategy

1. 26. The development of the DVD player was a source of had once
2. a. a sustainable competitive advantage creativity reengineering
3. c. technological discontinuity planned shrinkage
4. e. technological replacement

to companies in the movie industry just as VHS tapes

ANSWER: c

RATIONALE: A technological discontinuity creates a significant breakthrough in performance or function.

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.7.01a – 7.1a

TOPICS: AACSB Analytic

AACSB Technology

KEYWORDS: Creation of Value | Environmental Influence | Strategy

1. 27. is the knowledge, tools, and techniques used to transform inputs into a. Resource manipulation
2. Procedural innovation
3. c. A transformation system Technology
4. e. Creativity

ANSWER: d

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: WILL.MGMT.15.7.01a – 7.1a

TOPICS: AACSB Analytic

AACSB Technology

KEYWORDS: Environmental Influence | Information Technologies | Strategy

1. 28. 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

1. pattern c. cycle
2. hierarchy e. continuum

ANSWER: c

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: WILL.MGMT.15.7.01a – 7.1a

TOPICS: AACSB Analytic

AACSB Technology

KEYWORDS: Environmental Influence | Information Technologies | Strategy

1. 29. Nearly all technology cycles follow the typical pattern of a. W-curve
2. U-curve
3. c. bell-shaped S-curve
4. e. V-shaped

ANSWER: d RATIONALE: See Exhibit 7.1. POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.7.01a – 7.1a

TOPICS: AACSB Analytic

AACSB Technology

KEYWORDS: Creation of Value | Environmental Influence | Strategy

1. 30. In the typical S-curve pattern of innovation, increased effort (i.e., money, research and development) brings only small improvements in technological performance ,
2. a. early in the cycle
3. throughout the cycle
4. c. at the end of the cycle
5. at both the beginning and end of the cycle e. in the maturity stage of the cycle

ANSWER: d

POINTS: 1

DIFFICULTY: Difficult

LEARNING OBJECTIVES: WILL.MGMT.15.7.01a – 7.1a

TOPICS: AACSB Analytic

AACSB Technology

KEYWORDS: Creation of Value | Environmental Influence | Strategy

1. 31. In the typical S-curve pattern of innovation, small amounts of effort will result in significant increases in performance .
2. a. during the growth stage of the cycle at the midpoint of the cycle
3. c. only at the end of the cycle throughout the cycle
4. e. only at the beginning of the cycle

ANSWER: b

POINTS: 1

DIFFICULTY: Difficult

LEARNING OBJECTIVES: WILL.MGMT.15.7.01a – 7.1a

TOPICS: AACSB Analytic

AACSB Technology

KEYWORDS: Creation of Value | Environmental Influence | Strategy

1. 32. 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
2. at the breakeven point of the cycle
3. c. during the maturity stage of the innovation cycle throughout the cycle
4. e. at the end of the cycle

ANSWER: e

RATIONALE: The curve flattens at the beginning and ending of cycles, creating the characteristic “S”

shape. The flat curve signifies less return on effort.

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.7.01a – 7.1a

TOPICS: AACSB Analytic

AACSB Technology

KEYWORDS: Creation of Value | Environmental Influence | Strategy

1. 33. 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 in the S-curve pattern of a. at its breakeven point
2. at the problem identification stage of the innovation cycle c. at the end of the innovation cycle
3. at either the beginning or end of the innovation cycle e. at the end of its maturity stage

ANSWER: c

POINTS: 1

DIFFICULTY: Difficult

LEARNING OBJECTIVES: WILL.MGMT.15.7.01a – 7.1a

TOPICS: AACSB Analytic

AACSB Technology

KEYWORDS: Creation of Value | Environmental Influence | Strategy

1. 34. A technology cycle occurs whenever there are major advances or changes in the in a field or a. human, technical, and conceptual skills needed
2. structure or personnel requirements c. internal resource environment
3. knowledge, tools, and techniques e. way information is integrated

ANSWER: d

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.7.01a – 7.1a

TOPICS: AACSB Analytic

AACSB Technology

KEYWORDS: Creation of Value | Environmental Influence | Strategy

1. 35. Patterns of innovation over time that can create sustainable competitive advantage are called . a. innovation maps
2. organization development c. results-driven change
3. innovation streams e. cyclical inventions

ANSWER: d

POINTS: 1

DIFFICULTY: Difficult

LEARNING OBJECTIVES: WILL.MGMT.15.7.01b – 7.1b

TOPICS: AACSB Analytic

AACSB Technology

KEYWORDS: Creation of Value | Environmental Influence | Strategy

1. 36. An innovation stream moves from one technology cycle to another through the process of . a. technological substitution
2. dominant design
3. c. incremental environmental change organizational synergy
4. e. transition management

ANSWER: a

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: WILL.MGMT.15.7.01b – 7.1b

TOPICS: AACSB Analytic

AACSB Technology

KEYWORDS: Creation of Value | Environmental Influence | Strategy

1. 37. In terms of innovation streams, what replace the older, bulkier
2. a. technological substitution technological expansion c. reengineering
3. demarketing
4. e. the pioneering era

occurred when customers purchased flat-screen computer monitors to

ANSWER: a

RATIONALE: Technological substitution is the purchase of new technologies to replace old ones.

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.7.01b – 7.1b

TOPICS: AACSB Analytic

AACSB Technology

KEYWORDS: Creation of Value | Environmental Influence | Strategy

1. 38. When a S. automaker 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 stage of the technology cycle did it enter?
2. a. technological adaptation
3. the era of dominant design
4. c. the technological growth stage change substitution
5. e. discontinuous change

ANSWER: e

RATIONALE: Discontinuous change is the stage of the technology cycle characterized by technological substitution and design competition. DaimlerChrysler substituted new technology for the old technology in order to improve its efficiency.

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.7.01b – 7.1b

TOPICS: AACSB Analytic

AACSB Technology

KEYWORDS: Creation of Value | Environmental Influence | HRM | Strategy

1. 39. Kodak is a company associated with photography. The development of the digital camera forced Kodak into the innovation stream because the new imaging process was a(n) .
2. a. technological subtraction technological discontinuity c. process obsolescence
3. process addition
4. e. example of design advantage

ANSWER: b

RATIONALE: Technological discontinuity is a scientific advance that creates a significant breakthrough in performance or function.

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.7.01b – 7.1b

TOPICS: AACSB Analytic

AACSB Technology

KEYWORDS: Creation of Value | Environmental Influence | Strategy

1. 40. Kodak is a company associated with photography. The company has recognized that digital photography is a threat to the future growth of the company’s film business. 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 .
2. a. technological adaptation
3. the era of dominant design
4. c. the technological growth stage change substitution
5. e. discontinuous change

ANSWER: e

RATIONALE: Discontinuous change is the phase of the technology cycle characterized by technological substitution and design competition.

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.7.01b – 7.1b

TOPICS: AACSB Analytic

KEYWORDS: Creation of Value | Environmental Influence | Strategy

1. 41. Kodak is a company 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 .
2. a. design substitution
3. modular management c. design competition
4. hierarchical management e. a creative flow

ANSWER: c

RATIONALE: Design competition is competition between old and new technologies in order to establish a dominant design.

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.7.01b – 7.1b

TOPICS: AACSB Analytic

AACSB Technology

KEYWORDS: Creation of Value | Information Technologies | Strategy

1. 42. is the phase of a technology cycle characterized by technological substitution and design a. Technological adaptation
2. The era of dominant design
3. c. The technological growth stage Change substitution
4. e. Discontinuous change

ANSWER: e

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.7.01b – 7.1b

TOPICS: AACSB Analytic

AACSB Technology

KEYWORDS: Creation of Value | Environmental Influence | Strategy

1. 43. The purchase of new technologies to replace older ones is an example of . a. adaptive change
2. design replacement
3. c. technological substitution dominant design
4. e. innovative exchange

ANSWER: c

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: WILL.MGMT.15.7.01b – 7.1b

TOPICS: AACSB Analytic

AACSB Technology

KEYWORDS: Environmental Influence | Information Technologies | Strategy

1. 44. Discontinuous change in an innovation stream is characterized by . a. synergy
2. technological substitution c. incremental change
3. empathetic design
4. e. innovative reciprocity

ANSWER: b

POINTS: 1

DIFFICULTY: Difficult

LEARNING OBJECTIVES: WILL.MGMT.15.7.01b – 7.1b

TOPICS: AACSB Analytic

AACSB Technology

KEYWORDS: Environmental Influence | Information Technologies | Strategy

1. 45. 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

1. discontinuous change c. dominant design
2. incremental change
3. e. technological continuity

ANSWER: d

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.7.01b – 7.1b

TOPICS: AACSB Analytic

AACSB Technology

KEYWORDS: Creation of Value | Environmental Influence | Strategy

1. 46. 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
2. discontinuous change, incremental change, technological discontinuity, and dominant design
3. c. dominant design, discontinuous change, era of incremental change, and technological discontinuity technological discontinuity, discontinuous change, dominant design, and incremental change
4. e. technological discontinuity, incremental change, discontinuous change, and technological continuity

ANSWER: d RATIONALE: See Exhibit 7.2. POINTS: 1

DIFFICULTY: Difficult

LEARNING OBJECTIVES: WILL.MGMT.15.7.01b – 7.1b

TOPICS: AACSB Analytic

AACSB Technology

KEYWORDS: Creation of Value | Environmental Influence | Strategy

1. 47. The auto industry has been perfecting the internal combustion engine (ICE) for some 120 years. The Partnership for a New Generation of Vehicles (PNGV), a cooperative program between the Big Three and the S. government to replace ICEs with electric engines, has been operating since 1993. The internal combustion engine (ICE) is an example of .
2. a. a dominant design design dichotomy
3. c. a synergistic design a differential design
4. e. a dichotomous product

ANSWER: a

RATIONALE: A dominant design refers to the technology that is the accepted market standard.

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.7.01b – 7.1b

TOPICS: AACSB Analytic

AACSB Technology

KEYWORDS: Creation of Value | Environmental Influence | Strategy

1. 48. Titleist has been manufacturing golf balls for several years, but each year it comes out with new golf ball

Titleist’s development of the new Pro VI golf ball with a solid core designed to benefit players with high swing speeds is one example of how the manufacturer survives through .

1. a. technological discontinuity discontinuous change
2. c. dominant design
3. incremental change
4. e. technological continuity

ANSWER: d

RATIONALE: During the incremental change phase of a technology cycle, companies innovate by improving the functioning and performance of the dominant design.

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.7.01b – 7.1b

TOPICS: AACSB Analytic

AACSB Technology

KEYWORDS: Creation of Value | Environmental Influence | Strategy

1. 49. Companies need to excel at managing in order to successfully manage innovation a. the sources of innovation
2. innovation during synergistic change c. reciprocity
3. environmental design issues e. behavioral formality

ANSWER: a

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: WILL.MGMT.15.7.02a – 7.2a

TOPICS: AACSB Analytic

AACSB Technology

KEYWORDS: Creation of Value | Environmental Influence | Strategy

1. 50. are workplace cultures in which workers perceive that new ideas are welcomed, valued, and a. Creative work environments
2. Innovative societies
3. c. Homogeneous work environments Participative work teams
4. e. Empathetic work stations

ANSWER: a

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: WILL.MGMT.15.7.02a – 7.2a

TOPICS: AACSB Analytic

KEYWORDS: Creation of Value | Group Dynamics | HRM | Individual Dynamics

1. 51. Which of the following is NOT one of the components of creative work environments?
2. a. challenging work
3. group compensation c. freedom
4. supervisory encouragement
5. e. organizational encouragement

ANSWER: b RATIONALE: See Exhibit 7.3. POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: WILL.MGMT.15.7.02a – 7.2a

TOPICS: AACSB Analytic

AACSB Technology

KEYWORDS: Creation of Value | Group Dynamics | HRM | Individual Dynamics

1. 52. Which of the following is a component of a creative work environment that encourages creativity?
2. a. the development of challenging work organizational encouragement
3. c. the granting of autonomy
4. the removal of organizational impediments e. all of these

ANSWER: e

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.7.02a – 7.2a

TOPICS: AACSB Analytic

AACSB Technology

KEYWORDS: Creation of Value | Group Dynamics | HRM | Individual Dynamics

1. 53. Kodak is a company associated with photography and has decided to become a market leader in digital

Kodak can encourage the development of a culture where workers perceive that new ideas are welcomed by offering challenging work and supervisory encouragement. In other words, the company can create a(n) . a. creative work environment

1. open system
2. c. adaptive culture
3. culture of change
4. e. tall structure to encourage horizontal communications

ANSWER: a

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.7.02a – 7.2a

TOPICS: AACSB Analytic

AACSB Technology

KEYWORDS: Creation of Value | Group Dynamics | HRM | Individual Dynamics

1. 54. 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 across all of its plants around the
2. a. manage flow through the use of Gantt charts
3. concentrate on dominant design and ignore incremental design c. engage in creative reciprocity
4. establish creative work environments e. do none of these

ANSWER: d

RATIONALE: A creative work environment is a workplace culture in which workers perceive that new ideas are welcomed, valued, and encouraged. It is an important precondition for exploring new products and markets.

POINTS: 1

DIFFICULTY: Difficult

LEARNING OBJECTIVES: WILL.MGMT.15.7.02a – 7.2a

TOPICS: AACSB Analytic

KEYWORDS: Creation of Value | Environmental Influence

1. 55. Which of the following is an organizational impediment to creativity in a work environment?
2. a. internal conflict
3. rigid management structures
4. c. bias toward the status quo (i.e., a conservative environment)
5. power struggles e. all of these

ANSWER: e

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.7.02a – 7.2a

TOPICS: AACSB Analytic

AACSB Technology

KEYWORDS: Creation of Value | Group Dynamics | HRM | Individual Dynamics

1. 56. Unverferth Manufacturing has been a manufacturer and supplier of innovative agricultural equipment since

Recently it began developing a new 12-row strip-till subsoiler, which prepares 10-inch-wide seed beds spaced 40 inches apart. Before introducing the new tiller to the market, Unverferth developed and tested nearly three-dozen product prototypes. Unverferth used the approach to innovation.

1. a. compression experiential
2. c. technological substitution generational change
3. e. technological disruption

ANSWER: b

RATIONALE: The experiential 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.

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.7.02b – 7.2b

TOPICS: AACSB Analytic

AACSB Technology

KEYWORDS: Creation of Value | Environmental Influence | HRM | Strategy

1. 57. Unverferth Manufacturing has been a manufacturer and supplier of innovative agricultural equipment since

Recently it began developing a new 12-row subsoiler, which prepares 10-inch-wide seed beds spaced 40 inches apart. 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.

1. a. service development process duplication
2. c. design iteration
3. design compliance
4. e. process reengineering

ANSWER: c

RATIONALE: Design iteration is a cycle of repetition in which a company tests a prototype of a new product, improves on that design, and then builds and tests a new prototype.

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.7.02b – 7.2b

TOPICS: AACSB Analytic

AACSB Technology

KEYWORDS: Creation of Value | Environmental Influence | Strategy

1. 58. 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.

1. a. compression experiential
2. c. technological substitution generational change
3. e. technological disruption

ANSWER: b

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: WILL.MGMT.15.7.02b – 7.2b

TOPICS: AACSB Analytic

AACSB Technology

KEYWORDS: Creation of Value | Environmental Influence | Strategy

1. 59. Which of the following is NOT a part of the experiential approach to innovation?
2. a. hands-on experience to reduce uncertainty testing
3. c. multifunctional teams design iterations
4. e. initiative conversations

ANSWER: e

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.7.02b – 7.2b

TOPICS: AACSB Analytic

AACSB Technology

KEYWORDS: Creation of Value | HRM | Strategy

1. 60. Covisint is an e-commerce venture involving many car manufacturers 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. The management concept of was used to develop
2. a. serve development process duplication c. design iteration
3. design compliance
4. e. process reengineering

ANSWER: c

RATIONALE: Design iteration is a cycle of repetition in which a company tests a prototype of a new product, improves on that design, and then builds and tests a new prototype.

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.7.02b – 7.2b

TOPICS: AACSB Analytic

AACSB Technology

KEYWORDS: Creation of Value | HRM | Strategy

1. 61. The use of milestones in the experiential approach to innovation . a. serves to eliminate manufacturing bottlenecks
2. shortens the innovation process
3. c. creates incrementally sustainable advantages
4. virtually eliminates problems associated with the control function of management e. does all of these

ANSWER: b

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.7.02b – 7.2b

TOPICS: AACSB Analytic

AACSB Technology

KEYWORDS: Creation of Value | HRM | Strategy

1. 62. What is the first step for managing innovation during discontinuous change?
2. a. design iteration budgeting
3. c. the establishment of a dominant design supplier involvement
4. e. process duplication

ANSWER: a

RATIONALE: Design iteration is a cycle of repetition in which a company tests a prototype of new product or service, improves on that design, and then test the improved prototype. This iterative process is basic to managing innovation.

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.7.02b – 7.2b

TOPICS: AACSB Analytic

AACSB Technology

KEYWORDS: Creation of Value | HRM | Strategy

1. 63. The use of milestones in the experiential approach to innovation .
2. a. provides structure to the general chaos that follows technological discontinuities shortens the innovation process
3. c. builds momentum by giving people a sense of accomplishment lets an organization know when to take corrective action
4. e. does all of these

ANSWER: e

POINTS: 1

DIFFICULTY: Difficult

LEARNING OBJECTIVES: WILL.MGMT.15.7.02b – 7.2b

TOPICS: AACSB Analytic

AACSB Technology

KEYWORDS: Creation of Value | HRM | Strategy

1. 64. The purpose of multifunctional teams is to .
2. a. allow organizations to concentrate on their internal environments and ignore the external environments until they have completed the brainstorming process
3. were primarily used by dot-coms and are no longer popular
4. c. speed innovation through early identification of new ideas or problems that would typically not have been generated until much later
5. do not typically use milestones because of group cohesiveness
6. e. replace organizational structures on a typical organizational chart

ANSWER: c

POINTS: 1

DIFFICULTY: Difficult

LEARNING OBJECTIVES: WILL.MGMT.15.7.02b – 7.2b

TOPICS: AACSB Analytic

AACSB Technology

KEYWORDS: Creation of Value | HRM | Strategy

1. 65. 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

1. milestones c. dialectical
2. generational e. prototypical

ANSWER: a

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: WILL.MGMT.15.7.02c – 7.2c

TOPICS: AACSB Analytic

AACSB Technology

KEYWORDS: Creation of Value | HRM | Leadership Principles | Strategy

1. 66. ARI is a leading provider of sales and profit-building technology services for equipment dealers. When Unverferth Manufacturing, a supplier of agricultural equipment, wanted to change the way it supplied information it contacted ARI. ARI presented the manufacturer with a solution that allowed it to replace its paper catalogs with online catalogs. As a result, Unverferth was able to eliminate costly paper catalogs and gain the ability to provide up-to- the-minute information to its dealers. This incremental change that was aided by supplier involvement was an example of the approach to
2. a. generational experiential c. milestones
3. compression e. supply-side

ANSWER: d

RATIONALE: It is appropriate to use a compression approach to manage innovation in more certain environments during periods of incremental change. During such periods, the goals are lower costs and incremental improvements in the performance and function of the existing technological design.

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.7.02c – 7.2c

TOPICS: AACSB Analytic

AACSB Technology

KEYWORDS: Creation of Value | Environmental Influence | Strategy

1. 67. It is appropriate to use a(n)

approach to manage innovation in more certain environments during periods of

incremental change, in which the goals are lower costs and incremental improvements in the performance and function of the existing technological design.

1. a. experiential compression c. prototypical d. milestones
2. e. reinforcement

ANSWER: b

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: WILL.MGMT.15.7.02c – 7.2c

TOPICS: AACSB Analytic

AACSB Technology

KEYWORDS: Creation of Value | Environmental Influence | Strategy

1. 68. The goals of the compression approach to innovation are .
2. a. speed, lower costs, and incremental change of dominant design
3. the development of milestones and the comparison of actual milestones with forecasts c. the establishment of a dominant design and speed
4. absolute-time management and the creation of a dominant design
5. e. a matrix innovation process and a sustainable competitive advantage

ANSWER: a

RATIONALE: Whereas the experiential approach is used to manage innovation toward new designs, the compression approach is aimed at lower costs and incremental improvement of the dominant design.

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.7.02c – 7.2c

TOPICS: AACSB Analytic

AACSB Technology

KEYWORDS: Creation of Value | Environmental Influence | Strategy

1. 69. The first step in the compression approach to innovation is . a. overlapping of the individual steps
2. planning
3. c. supplier involvement granting autonomy
4. e. creating multifunctional teams

ANSWER: b

POINTS: 1

DIFFICULTY: Difficult

LEARNING OBJECTIVES: WILL.MGMT.15.7.02c – 7.2c

TOPICS: AACSB Analytic

AACSB Technology

KEYWORDS: Creation of Value | Environmental Influence | Strategy

1. 70. 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, is said to have
2. a. a milestone
3. intuitive change
4. c. generational change coercive change
5. e. discontinuous innovation

ANSWER: c

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: WILL.MGMT.15.7.02c – 7.2c

TOPICS: AACSB Analytic

AACSB Technology

KEYWORDS: Creation of Value | Environmental Influence | Strategy

1. 71. Unverferth Manufacturing makes agricultural equipment. It used finite element analysis (FEA) software to speed up the design cycle for its 12-row sub-soiler. Which aspect of the compression approach to innovation would the use of this software apply?
2. a. planning
3. supplier involvement
4. c. shortening the time of individual steps multifunctional teams
5. e. functional isolation

ANSWER: c

RATIONALE: Software is often used to shorten the time of individual steps.

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: WILL.MGMT.15.7.02c – 7.2c

TOPICS: AACSB Analytic

AACSB Technology

KEYWORDS: Creation of Value | HRM | Information Technologies | Operations Management

1. 72. 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, many software manufacturers engage in .
2. a. coercive change
3. dominant design manipulation c. generational change
4. intuitive change
5. e. incremental modification

ANSWER: c

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.7.02c – 7.2c

TOPICS: AACSB Analytic

AACSB Technology

KEYWORDS: Creation of Value | HRM | Information Technologies | Operations Management

1. 73. forces support the status a. Dialectical
2. Generational c. Resistance
3. Experiential e. Autonomous

ANSWER: c

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: WILL.MGMT.15.7.04 – 7.4

TOPICS: AACSB Analytic

KEYWORDS: Creation of Value | Group Dynamics | HRM | Individual Dynamics

1. 74. According to social psychologist Kurt Lewin,

lead to differences in the form, quality, or condition of an

organization over time, while

support the status quo, or the existing state of conditions in an organization.

1. a. compressed changes; generational changes generational forces; resistance forces
2. c. generational changes; inertial changes change forces; inertial forces
3. e. change forces; resistance forces

ANSWER: e

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.7.04a – 7.4a

TOPICS: AACSB Analytic

KEYWORDS: Creation of Value | Group Dynamics | HRM | Individual Dynamics

1. 75. Which of the following is one of the sources of resistance to change?
2. a. self-interest
3. multifunctional teams
4. c. a dynamic organizational culture discontinuous innovation
5. e. sustainable status quo

ANSWER: a

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.7.04a – 7.4a

TOPICS: AACSB Analytic

KEYWORDS: Creation of Value | Group Dynamics | HRM | Individual Dynamics

1. 76. Which of the following statements about resistance to change is true?
2. a. Resistance to change will not occur when those affected by the change participate in its planning and
3. Resistance to change will not occur when employees are educated about the need for change.
4. c. Resistance to change will not occur when change efforts receive significant managerial d. Resistance to change disappears when the organization operates in conditions of certainty.
5. e. Resistance to change will always occur; it is

ANSWER: e

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: WILL.MGMT.15.7.04a – 7.4a

TOPICS: AACSB Analytic

KEYWORDS: Creation of Value | Group Dynamics | HRM | Individual Dynamics

1. 77. Which of the following is one of the three steps in the basic process of managing organizational change outlined by

Kurt Lewin?

1. a. unfreezing
2. organizational dialogue c. change definition
3. incremental change e. change mentoring

ANSWER: a

RATIONALE: According to Kurt Lewin, managing organizational change is a basic process of unfreezing, change intervention, and refreezing.

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.7.04a – 7.4a

TOPICS: AACSB Analytic

KEYWORDS: Creation of Value | Group Dynamics | HRM | Individual Dynamics

1. 78. The three steps in the basic process of managing organizational change outlined by Kurt Lewin are . a. unfreezing, change intervention, and refreezing
2. organizational change, departmental change, and individual change c. change definition, change motivation, and change
3. synthesizing, motivating, and rewarding
4. e. change definition, change mobilization, and change acceptance

ANSWER: a

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.7.04a – 7.4a

TOPICS: AACSB Analytic

KEYWORDS: Creation of Value | Group Dynamics | HRM | Individual Dynamics

1. 79. Which of the following is NOT one of the basic methods for managing resistance to change?
2. a. education and communication participation
3. c. change simulation negotiation
4. e. coercion

ANSWER: c

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.7.04a – 7.4a

TOPICS: AACSB Analytic

KEYWORDS: Creation of Value | Group Dynamics | HRM | Individual Dynamics

1. 80. When resistance to change is based on insufficient, incorrect, or misleading information, managers should use as an approach to manage
2. a. education and communication participation
3. c. negotiation coercion
4. e. change manipulation

ANSWER: a

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: WILL.MGMT.15.7.04a – 7.4a

TOPICS: AACSB Analytic

AACSB Technology

KEYWORDS: Creation of Value | Group Dynamics | HRM | Individual Dynamics | Leadership

Principles

1. 81. Downsizing has thinned the ranks of hospital personnel. Hospital employees were adamantly resisting any more change. What method could hospital administrators use to manage this resistance?
2. a. educate employees about the need for change
3. let the employees participate in implementing the change process c. provide significant managerial support
4. let employees discuss and agree on who will do what after change occurs e. any or all of these

ANSWER: e

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.7.04a – 7.4a

TOPICS: AACSB Analytic

KEYWORDS: Creation of Value | Group Dynamics | HRM | Individual Dynamics | Leadership

Principles

1. 82. Which of the following methods for managing resistance to change should only be used as a last resort or under crisis conditions?
2. a. mentoring arbitration c. negotiation d. coercion
3. e. reinforcement modification

ANSWER: d

RATIONALE: Coercion is the use of formal power and authority to force others to change.

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: WILL.MGMT.15.7.04a – 7.4a

TOPICS: AACSB Analytic

KEYWORDS: Creation of Value | Group Dynamics | HRM | Individual Dynamics | Leadership

Principles

1. 83. When a merger of South Carolina-based Springs Industries with the Brazilian textile producer Coteminas was announced, the CEO of Springs was quoted as saying, “It is unclear what effect this move will have on our employees though no immediate layoffs are planned. There may be some in the ” In this stage of the organizational change, the CEO should use empathy and communicate specific details of the merger.
2. a. change intervention
3. the change prototype c. unfreezing
4. refreezing
5. e. change mobilization

ANSWER: c

RATIONALE: The unfreezing stage involves getting the people affected by the change to believe that change is needed. Employees at Springs are likely to resist the change that will come with the merger because they do not know what to expect and have, moreover, been prompted to wonder whether their jobs may be at stake.

POINTS: 1

DIFFICULTY: Difficult

LEARNING OBJECTIVES: WILL.MGMT.15.7.04a – 7.4a

TOPICS: AACSB Analytic

AACSB Communication

KEYWORDS: Creation of Value | Group Dynamics | HRM | Individual Dynamics | Leadership

Principles

1. 84. Tom Valerio was the point man on a major push to reinvent CIGNA Property & Casualty. His vision for CIGNA was to become a top-quartile, specialist property and casualty company. It was a radical proposition. During the organizational change, having this vision was especially important during the
2. a. change intervention
3. the change prototype c. unfreezing
4. refreezing
5. e. change mobilization

ANSWER: a

RATIONALE: The absence of a vision is one of the common mistakes made during the change stage.

POINTS: 1

DIFFICULTY: Difficult

LEARNING OBJECTIVES: WILL.MGMT.15.7.04a – 7.4a

TOPICS: AACSB Analytic

AACSB Communication

KEYWORDS: Creation of Value | Group Dynamics | HRM | Individual Dynamics | Leadership

Principles

1. 85. According to John Kotter, which of the following actions will adversely influence refreezing efforts?
2. a. the absence of a vision
3. not removing obstacles to the company’s new vision c. not creating a powerful enough guiding coalition
4. declaring victory too soon e. all of these

ANSWER: d

POINTS: 1

DIFFICULTY: Difficult

LEARNING OBJECTIVES: WILL.MGMT.15.7.04b – 7.4b

TOPICS: AACSB Analytic

KEYWORDS: Creation of Value | Group Dynamics | HRM | Individual Dynamics | Leadership

Principles

1. 86. Which of the following statements describes an advantage of the results-driven change approach to managing change?
2. a. It supplants the sole emphasis on activity with a focus on quickly measuring and improving b. Managers actually test to see if changes make a difference.
3. c. Quick, visible improvements motivate employees to continue to make additional
4. Managers introduce changes in policies, procedures, rules, and regulations only when they will improve measured performance.
5. e. All of these were cited as advantages of the results-driven change

ANSWER: e

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.7.04c – 7.4c

TOPICS: AACSB Analytic

KEYWORDS: Creation of Value | Group Dynamics | HRM | Individual Dynamics | Leadership

Principles

1. 87. An Internet strategy enabled Nestlé USA to change its way of doing business and allowed the company to change

its staid, risk-averse culture; from buying raw materials to processing purchase orders to marketing the roughly

2,000 products that make up its nearly 200 brands. Employees worked to “Make e-business the way we do

business.” Nestlé USA used change to reinvent the company.

1. a. activity-oriented results-driven
2. c. generational vision-driven
3. e. resources-driven

ANSWER: b

RATIONALE: Results-driven change focuses primarily on changing company procedures, management philosophy, or employee behavior.

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.7.04c – 7.4c

TOPICS: AACSB Analytic

KEYWORDS: Creation of Value | Group Dynamics | HRM | Individual Dynamics | Leadership

Principles | Strategy

1. 88. The General Electric workout is a special kind of . a. activity-oriented change
2. results-driven change c. generational change d. vision-driven change
3. e. resources-driven change

ANSWER: b

POINTS: 1

DIFFICULTY: Difficult

LEARNING OBJECTIVES: WILL.MGMT.15.7.04c – 7.4c

TOPICS: AACSB Analytic

KEYWORDS: Creation of Value | Group Dynamics | HRM | Individual Dynamics | Leadership

Principles

1. 89. A(n) is the individual who is formally in charge of guiding a change a. change ombudsman
2. staff moderator c. change mentor d. change agent
3. e. intrapreneur

ANSWER: d

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: WILL.MGMT.15.7.04c – 7.4c

TOPICS: AACSB Analytic

KEYWORDS: Creation of Value | Group Dynamics | HRM | Individual Dynamics | Leadership

Principles

1. 90. Organizational development .
2. a. takes a long-range approach to change
3. creates change by educating workers and managers to change ideas, beliefs, and behaviors so that problems can be solved in new ways
4. c. assumes that top management support is necessary for change emphasizes employee participation in all stages of the change
5. e. is accurately described by all of these

ANSWER: e

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.7.04c – 7.4c

TOPICS: AACSB Analytic

KEYWORDS: Creation of Value | Group Dynamics | HRM | Individual Dynamics | Leadership

Principles

1. 91. Organizational development . a. requires a steering committee
2. takes a short-term approach to change
3. c. is a philosophy and collection of planned change interventions
4. assumes that top management support is not necessary for change e. is accurately described by all of these

ANSWER: c

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.7.04c – 7.4c

TOPICS: AACSB Analytic

KEYWORDS: Creation of Value | Group Dynamics | HRM | Individual Dynamics | Leadership

Principles

1. 92. Tom Valerio was the point man on a major push to reinvent CIGNA Property & Casualty. His vision for CIGNA was to become a top-quartile, specialist property and casualty company. It was a radical proposition. Valerio was a(n)
2. a. change ombudsman staff moderator
3. c. change mentor change agent
4. e. intrapreneur

ANSWER: d

RATIONALE: A change agent is the individual who is formally in charge of guiding a change effort.

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.7.04c – 7.4c

TOPICS: AACSB Analytic

KEYWORDS: Creation of Value | Group Dynamics | HRM | Individual Dynamics | Leadership

Principles

1. 93. There are eight general steps for organizational development intervention. The first step is . a. pioneering
2. inception
3. c. introduction entry
4. e. startup

ANSWER: d

RATIONALE: The steps are listed in Exhibit 7.5. During the entry step, the problem is discovered.

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.7.04c – 7.4c TOPICS: AACSB Reflective Thinking KEYWORDS: Creation of Value | Group Dynamics

1. 94. Which of the following approaches is aimed at changing large systems, small groups, or individuals?
2. a. General Electric workout
3. the functional approach to change c. organizational development
4. results-driven change
5. e. Lewin’s change synthesis

ANSWER: c

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.7.04c – 7.4c

TOPICS: AACSB Analytic

KEYWORDS: Creation of Value | Group Dynamics | HRM | Individual Dynamics | Leadership

Principles

1. 95. An Internet strategy enabled Nestlé USA to change its way of doing business and allowed the company to change

its staid, risk-averse culture; from buying raw materials to processing purchase orders to marketing the roughly

2,000 products that make up its nearly 200 brands. Employees worked to “Make e-business the way we do business.” In terms of organizational development, the process described here is primarily a(n) intervention. a. unit

1. large system c. unit-focused
2. results-focused e. cultural

ANSWER: b

RATIONALE: The large system intervention was used to change the character and the performance of the organization.

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.7.04c – 7.4c

TOPICS: AACSB Analytic

AACSB Technology

KEYWORDS: Creation of Value | Group Dynamics | HRM | Individual Dynamics | Leadership

Principles | Strategy

Levi Strauss

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. According to Morgan, the company was “dysfunctional” and “internally competitive, one division against another.” This is why Morgan became a part of the change initiative when talk of reinventing the company spread through headquarters. 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 Asia 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.

1. 96. 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 discontinuing inefficient methods of

suppliers and continued with substituting electronic networks for outdated systems. a. dominant design

1. competitive advantage c. innovation stream
2. comparative differential e. inventive flow

ANSWER: c

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.7.01b – 7.1b

TOPICS: AACSB Analytic

KEYWORDS: Creation of Value | Environmental Influence | HRM | Information Technologies | Operations Management

1. 97. Refer to Levi Strauss. Why did Levi decide to change the way it was conducting business?
2. a. to protect its competitive advantage to downsize its work force
3. c. to make outsourcing more economically feasible to create economies of scale
4. e. to direct group norm development

ANSWER: a

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.7.01b – 7.1b

TOPICS: AACSB Analytic

KEYWORDS: Creation of Value | Environmental Influence | HRM | Strategy

1. 98. Refer to Levi Strauss. Prior to the reinvention of the company, which began in 1982, the company most likely did not have a(n) .
2. a. history of innovation discontinuity design iteration
3. c. competitive advantage
4. creative work environment e. organizational culture

ANSWER: d

RATIONALE: Creative work environments, in which workers perceive that new ideas are welcomed,

valued and encouraged, are basic to making the sorts of continuous innovations that sustain competitive advantage.

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.7.02a – 7.2a

TOPICS: AACSB Analytic

KEYWORDS: Creation of Value | HRM | Strategy

1. 99. Refer to Levi Strauss. Initially, Morgan found strong in a. change forces
2. internal strengths c. frozen change
3. acceptance forces e. resistance forces

ANSWER: e

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: WILL.MGMT.15.7.04 – 7.4

TOPICS: AACSB Analytic

KEYWORDS: Creation of Value | Environmental Influence | Strategy

1. 100. Refer to Levi Strauss. Unfreezing, change intervention, and refreezing were the processes used by Morgan and her team to
2. a. motivate Asian suppliers
3. manage the Asian suppliers’ resistance to change
4. c. create a more dynamic work environment coordinate a creative work environment
5. e. gather competitive intelligence about Levi’s suppliers

ANSWER: b

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: WILL.MGMT.15.7.04a – 7.4a

TOPICS: AACSB Analytic

KEYWORDS: Creation of Value | Environmental Influence | Strategy

1. 101. 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?
2. a. coercion
3. top management support
4. c. education and communication direction
5. e. tactical manipulation

ANSWER: c

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: WILL.MGMT.15.7.04a – 7.4a

TOPICS: AACSB Analytic

KEYWORDS: Creation of Value | Environmental Influence | Individual Dynamics | Strategy

1. 102. Refer to Levi Strauss. Emily Morgan is an example of a(n) . a. ombudsman
2. mentor
3. c. organizational liaison change agent
4. e. gatekeeper

ANSWER: d

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: WILL.MGMT.15.7.04c – 7.4c

TOPICS: AACSB Analytic

KEYWORDS: Creation of Value | Environmental Influence | Individual Dynamics | Strategy

1. W. L. Gore

Bill Gore started the W. L. Gore Company in his basement when he left DuPont to develop innovative uses for Teflon (polytetrafluoroethylene or 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. Marketed as “Guaranteed to Keep You Dry,” Gore­Tex is used not only for coats, gloves, and camping and hiking gear but also for protective outerwear worn by firefighters and military, emergency, and medical personnel. But in recent years Gore-Tex sales have steadily declined. One reason is that a number of alternative fabrics, like 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 the challenge for W. L. Gore is to reduce its dependence on Gore-Tex, which accounts for 21% of its $1.6 billion in revenues, by coming up with ways to consistently develop innovative products in other areas.

In general, W. L. Gore goes for dramatic rather than incremental improvements. On its web site, it declares, “At Gore, we take our reputation for product leadership seriously, continually delivering new products and better solutions to the world. Gore’s products are designed to be the highest quality in their class and revolutionary in their effect.”

Gore has created a number of innovative products, including Glide dental floss, the first floss that didn’t shred, tear, and get caught in your teeth. Gore used its expertise in stretched plastics to essentially create a thin, Teflon-like tape used as dental floss. Glide 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 since Gore still makes Glide for P&G, Gore continues to make substantial profits that it then reinvests in other innovative products such as CleanStream filters, which filter dirt particles out of the air before it comes out of your vacuum cleaner; Radome, which is used to cover microwave transmission sites (think of the large “golf ball” structures you sometimes see around airports); medical stent-grafts, stents that are attached to an aorta to treat aortic aneurysms; and many more.

Gore has also been innovative in the processes it uses to develop new products. The company frequently asks potential customers for help when designing new products (i.e., design iterations and testing). When Gore engineer Dave Myers was developing Elixir, Gore’s best­selling acoustic guitar strings, which are 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, he talked to Chuck Hebestreit, another Gore engineer who played the guitar. They, in turn, asked experienced guitar players to give them feedback on the product. Steve Young, who

now heads Elixir products for Gore, said, “We gave it to guitar players to try out, and they were amazed that it [meaning the guitar sound] didn’t go dead [unlike regular guitar strings].” Why? Because, thanks to their resistance to dust, skin, dirt, and oil, Elixir guitar strings last five times as long as normal guitar strings. Elixir guitar strings now have a 35% share of the market.

Gore also provides flexible options for innovation by making “time for dabbling.” What this means is that everyone in the company is encouraged to spend 10% 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 their ideas or products. 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.” Gore’s former CEO Chuck Carroll explained how this works: “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]?”

1. 103. Refer to Gore. When introduced, Gore-Tex fabric gave its manufacturer W. L. Gore a . a. discontinuous change
2. competitive advantage c. product-driven vision
3. generational product e. results-driven change

ANSWER: b

RATIONALE: Gore-Tex was the basis of differentiation and competitive advantage.

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: WILL.MGMT.15.7.01b – 7.1b

TOPICS: AACSB Analytic

KEYWORDS: Creation of Value | Environmental Influence | Strategy

1. 104. Refer to Gore. What kind of innovation is encouraged at W. L. Gore?
2. a. transitional
3. compression
4. c. dominant design incremental
5. e. self-initiated

ANSWER: c

RATIONALE: Gore is aiming for revolutionary new and popular products (dominant designs).

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: WILL.MGMT.15.7.01b – 7.1b

TOPICS: AACSB Analytic

KEYWORDS: Creation of Value | HRM | Strategy

1. 105. Refer to Gore. Gore’s approach to innovation is to use frequent design iterations, frequent testing, regular milestones, multifunctional teams, and powerful leadership. This means it uses the approach to a. experiential
2. transitional
3. c. vision-driven generational e. compression

ANSWER: a

RATIONALE: This is the definition of experiential approach.

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: WILL.MGMT.15.7.02b – 7.2b

TOPICS: AACSB Analytic

KEYWORDS: Creation of Value | Group Dynamics | HRM | Individual Dynamics | Leadership

Principles | Strategy

1. 106. Refer to Gore. 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 musician’s fingers), and dirt and oil, all of which affect musical quality and sound. To develop Elixir, Gore employees used .
2. a. transitional innovation compression design
3. c. dominant design
4. incremental change e. self-initiated design

ANSWER: d

RATIONALE: Gore improved the performance of an existing product (guitar strings), and this is characteristic of incremental change.

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: WILL.MGMT.15.7.02c – 7.2c

TOPICS: AACSB Analytic

KEYWORDS: Creation of Value | HRM | Strategy

1. 107. Refer to Gore. The list of Gore’s products clearly indicates that the company’s core competency is innovation. As

a company, Gore is capable of developing

, that is, patterns of innovation over time that can create sustainable

competitive advantage, in a number of different products and industries. a. technology cycles

1. recalcitrant designs c. creative transitions d. innovation streams e. transitional designs

ANSWER: d

RATIONALE: Innovation streams are defined as patterns of innovation over time that can create sustainable competitive advantage.

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: WILL.MGMT.15.7.01b – 7.1b

TOPICS: AACSB Analytic

KEYWORDS: Creation of Value | Group Dynamics | HRM | Individual Dynamics | Leadership

Principles | Strategy

1. 108. Briefly describe the typical pattern of technology cycles that occurs during technological

ANSWER: 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.

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.7.01a – 7.1a

TOPICS: AACSB Analytic

AACSB Technology

KEYWORDS: Environmental Influence | Information Technologies | Strategy

1. 109. What are innovation streams? Describe a typical innovation

ANSWER: Innovation streams are patterns of innovation over time that can create sustainable competitive advantage. A typical innovation stream consists of a series of technology cycles. A technology cycle begins with a new technology and ends 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; followed by (4) a focus on incremental change until the next technological discontinuity occurs.

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: WILL.MGMT.15.7.01b – 7.1b

TOPICS: AACSB Analytic

AACSB Technology

KEYWORDS: Creation of Value | Environmental Influence | HRM | Strategy

1. 110. How are technology cycles and innovation streams related?

ANSWER: 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 sustainable competitive advantage. As illustrated in Exhibit 7.2, 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.

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.7.01 – 7.1

TOPICS: AACSB Analytic

AACSB Technology

KEYWORDS: Creation of Value | Environmental Influence | Strategy

1. 111. What are creative work environments and what does a manager need to do to develop and manage creative work environments?

ANSWER: 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: (1) challenging work, (2) organizational encouragement, (3) supervisory encouragement, (4) work group encouragement, and (5) 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.

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: WILL.MGMT.15.7.02a – 7.2a

TOPICS: AACSB Analytic

AACSB Technology

KEYWORDS: Creation of Value | Group Dynamics | HRM | Individual Dynamics | Leadership

Principles

1. 112. 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?

ANSWER: 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.

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.7.02 – 7.2

TOPICS: AACSB Analytic

AACSB Technology

KEYWORDS: Creation of Value | Group Dynamics | HRM | Individual Dynamics | Leadership

Principles | Strategy

1. 113. Differentiate between the experiential and compression approaches to innovation. What is the single component that both approaches have in common?

ANSWER: The experiential and compression approaches are complementary approaches to managing innovation; each one is appropriate in a different phase 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:

(1) design iterations, (2) testing, (3) milestones, (4) multifunctional teams, and (5) powerful leaders. There are also five parts to the compression approach to innovation: (1) planning, (2) supplier involvement, (3) shortening the time of individual steps, (4) overlapping steps, and (5) multifunctional teams. The single component that both approaches have in common is multifunctional teams.

POINTS: 1

DIFFICULTY: Difficult

LEARNING OBJECTIVES: WILL.MGMT.15.7.02 – 7.2

TOPICS: AACSB Analytic

KEYWORDS: Creation of Value | Group Dynamics | HRM | Individual Dynamics | Leadership

Principles | Strategy

1. 114. Identify and briefly describe the three steps involved in the process of managing organizational change as defined by Kurt

ANSWER: 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 behavior and work practices. Refreezing is supporting and reinforcing the new changes so they stick.

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: WILL.MGMT.15.7.04 – 7.4

TOPICS: AACSB Analytic

KEYWORDS: Creation of Value | Group Dynamics | HRM | Individual Dynamics | Leadership

Principles

1. 115. Identify the methods that can be used to manage resistance to change. Which one should be used only as a last resort?

ANSWER: 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 (i.e., 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 (i.e., fear, stress, resentment, 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.

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.7.04a – 7.4a

TOPICS: AACSB Analytic

AACSB Ethics

KEYWORDS: Creation of Value | Ethical Responsibilities | Group Dynamics | HRM | Leadership

Principles

1. 116. Provide one example of a common error made by managers when they lead change at each of the three steps of the change

ANSWER: 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. These errors are as follows, by stage. For the Unfreezing stage: not establishing a great enough sense of urgency; not creating a powerful enough guiding coalition. For the Change stage: lacking a vision; undercommunicating the vision by a factor of ten; not removing obstacles to the new vision; not systematically planning for and creating short-term wins. For the Refreezing stage: declaring victory too soon; not anchoring changes in the corporation’s culture.

POINTS: 1

DIFFICULTY: Difficult

LEARNING OBJECTIVES: WILL.MGMT.15.7.04b – 7.4b

TOPICS: AACSB Analytic

AACSB Communication

KEYWORDS: Creation of Value | Group Dynamics | HRM | Individual Dynamics | Leadership

Principles

1. 117. 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

ANSWER: Organizations can create competitive advantage for themselves if they have a distinctive competence that allows them to make, do, or perform something better than their competitors. A competitive advantage becomes sustainable if other companies cannot duplicate the benefits obtained from that distinctive competence. Technological innovation is important for sustainable competitive advantage because it enables other companies 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.

While technological innovation can threaten a company’s sustainable competitive advantage, the ability to create innovation streams can protect a company’s sustainable competitive advantage because a stream of innovative ideas and products enables the company to stay one step ahead of the industry game. 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. Companies that keep an innovation stream going are often on the leading edge of this process and, therefore, able to sustain a competitive advantage.

Students may provide a variety of examples to illustrate the concepts of innovation streams resulting in sustainable competitive advantage. The text provides an example of Intel and the innovation stream associated with its microchips. Student examples should be evaluated based on the degree to which the examples actually illustrate the concepts and components of innovation streams and the degree to which students integrate the concepts 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.

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.7.01 – 7.1

TOPICS: AACSB Analytic

AACSB Technology

KEYWORDS: Creation of Value | Environmental Influence | HRM | Strategy

1. 118. The format war between HD-DVD and Blu Ray was preceded by a nearly identical competition between 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 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 renew (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. But 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. By late 2008 Circuit City stores were in bankruptcy and closed.

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.

ANSWER: Organizations can create competitive advantage for themselves if they have a distinctive competence that allows them to make, do, or perform something better than their competitors. 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 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.

POINTS: 1

DIFFICULTY: Difficult

LEARNING OBJECTIVES: WILL.MGMT.15.7.01 – 7.1

TOPICS: AACSB Analytic

AACSB Technology

KEYWORDS: Creation of Value | Environmental Influence | Strategy

1. 119. 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

ANSWER: 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, companies need to be good at three things to successfully manage innovation streams: (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: (1) challenging work, (2) organizational encouragement, (3) supervisory encouragement, (4) work group encouragement, and (5) 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: (1) design iterations, (2) testing, (3) milestones, (4) multifunctional teams, and (5) 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: (1) planning, (2) supplier involvement, (3) shortening the time of individual steps, (4) overlapping steps, and (5) 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 behavior 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 behavioral components of the other two. The key to quality in answers is the extent to which the behavioral dimensions of values, beliefs, and attitudes are tied in to the argument in favor of majority influence for the given approach.

POINTS: 1

DIFFICULTY: Difficult

LEARNING OBJECTIVES: WILL.MGMT.15.7.01b-2 – 7.1b-7.2

TOPICS: AACSB Analytic

AACSB Technology

KEYWORDS: Creation of Value | Group Dynamics | HRM | Individual Dynamics | Leadership

Principles

1. 120. Explain the difference between activity-oriented and results-driven change. 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

ANSWER: One of the reasons that organizational change efforts fail is that they are activity- oriented, meaning that they primarily focus on changing company procedures, management philosophy, or employee behavior. Typically, there is much buildup and preparation as consultants are brought in, presentations are made, books are read, and employees and managers are trained. There’s a tremendous emphasis on doing things the new way. But for all the focus on activities, on doing, there’s almost no focus on results, on seeing if all this activity has actually made a difference.

By contrast, results-driven change supplants the sole emphasis on activity with a laser-like focus on quickly measuring and improving results. Rather than emphasizing changes in philosophy, procedures, and employee behavior, this approach emphasizes identifying and working with easily measurable dimensions associated with demonstrably successful change. As one manager put it, change is a project, not a process. This direct emphasis on measuring and improving results is the first advantage of the results-driven change approach. The second advantage is that managers introduce changes in procedures, philosophy, or behavior only if they are likely to improve measured performance. In other words, managers actually test to see if changes make a difference. A third advantage of results-driven change is that quick, visible improvements motivate employees to continue making additional changes to improve measured performance. Consequently, unlike most change efforts, the quick successes associated with results-driven change are particularly effective at reducing resistance to change.

The text identifies results-driven change, the General Electric workout, and organizational development as different change tools and techniques that can be used to create and manage organizational change. Among these approaches, the General Electric workout is a special kind of results-driven change. It is a three-day meeting that brings together managers and employees from different levels and parts of an organization to quickly generate and act on solutions to specific business problems. At the other end of the spectrum, as an activity-oriented approach, would be organizational development. Organizational development is a philosophy and collection of planned change interventions designed to improve an organization’s long- term health and performance, which clearly places greatest emphasis upon process, philosophy, procedure, and behavior.

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: WILL.MGMT.15.7.04c – 7.4c

TOPICS: AACSB Analytic

KEYWORDS: Creation of Value | Group Dynamics | HRM | Individual Dynamics | Leadership

Principles

1. Organizational innovation is defined as doing things differently in an organization. a. True
2. False

ANSWER: False

RATIONALE: Organizational innovation is the successful implementation of creative ideas in an organization.

POINTS: 1

LEARNING OBJECTIVES: WILL.MGMT.15.7.01 – 7.1

TOPICS: AACSB Analytic

1. The research on technology cycles and technological innovation applies only to high-tech products developed in the bioengineering, robotics, and computer industries.
2. a. True
3. False

ANSWER: False

RATIONALE: It’s important to note that technology cycles and technological innovation are not limited to

“high technology.”

POINTS: 1

LEARNING OBJECTIVES: WILL.MGMT.15.7.01a – 7.1a

TOPICS: AACSB Reflective Thinking

1. Organizational decline is typically reversible at any of its five stages. a. True
2. False

ANSWER: False

RATIONALE: Decline is typically reversible only at each of the first four stages; by the time the dissolution stage is reached and the company is being dissolved through bankruptcy or by selling assets, it is normally too late to reverse the process.

POINTS: 1

LEARNING OBJECTIVES: WILL.MGMT.15.7.03 – 7.3

TOPICS: AACSB Analytic

1. Resistance to change results from organizational factors, such as the absence of promotion guidelines, bonuses, and praise.
2. a. True
3. False

ANSWER: False

RATIONALE: Resistance to change results from personal factors, such as self-interest, misunderstanding and distrust, and a general intolerance for change.

POINTS: 1

LEARNING OBJECTIVES: WILL.MGMT.15.7.04 – 7.4

TOPICS: AACSB Analytic

1. is the knowledge, tools, and techniques used to transform inputs into outputs. a. Resource manipulation
2. Procedural innovation
3. c. A transformation system Technology
4. e. Creativity

ANSWER: d

POINTS: 1

LEARNING OBJECTIVES: WILL.MGMT.15.7.01a – 7.1a

TOPICS: AACSB Analytic

1. 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

1. pattern c. cycle
2. hierarchy e. continuum

ANSWER: c

POINTS: 1

LEARNING OBJECTIVES: WILL.MGMT.15.7.01a – 7.1a

TOPICS: AACSB Analytic

1. Patterns of innovation over time that can create sustainable competitive advantage are called:
2. a. innovation maps
3. organization development c. results-driven change
4. innovation streams e. cyclical inventions

ANSWER: d

POINTS: 1

LEARNING OBJECTIVES: WILL.MGMT.15.7.01b – 7.1b

TOPICS: AACSB Analytic

1. 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

1. milestones c. dialectical
2. generational e. prototypical

ANSWER: a

POINTS: 1

LEARNING OBJECTIVES: WILL.MGMT.15.7.02c – 7.2c

TOPICS: AACSB Analytic

1. Which of the following is one of the three steps in the basic process of managing organizational change outlined by

Kurt Lewin?

1. a. unfreezing
2. organizational dialogue c. change definition
3. incremental change e. change mentoring

ANSWER: a

POINTS: 1

LEARNING OBJECTIVES: WILL.MGMT.15.7.04a – 7.4a

TOPICS: AACSB Analytic

1. 10. According to John Kotter’s analysis of the errors managers make when leading change, the first and potentially most serious of these errors is:
2. a. not establishing a great enough sense of urgency declaring victory too soon
3. c. not anchoring changes in the corporation’s culture not removing obstacles to the new vision
4. e. a poorly designed organizational mission

ANSWER: a

POINTS: 1

LEARNING OBJECTIVES: WILL.MGMT.15.7.04b – 7.4b

TOPICS: AACSB Analytic

1. 11. The General Electric workout is a special kind of:
2. a. activity-oriented change results-driven change
3. c. generational change vision-driven change
4. e. resources-driven change

ANSWER: b

POINTS: 1

LEARNING OBJECTIVES: WILL.MGMT.15.7.04c – 7.4c

TOPICS: AACSB Analytic

1. 12. Which of the following approaches is aimed at changing large systems, small groups, or individuals?
2. a. General Electric workout
3. the functional approach to change c. organizational development
4. results-driven change
5. e. Lewin’s change synthesis

ANSWER: c

POINTS: 1

LEARNING OBJECTIVES: WILL.MGMT.15.7.04c – 7.4c

TOPICS: AACSB Reflective Thinking

1. The process view of an organization will typically be very similar to the structural, hierarchical view of the organization.
2. a. True
3. False

ANSWER: False

RATIONALE: The process view of an organization will typically be very different from the structural, hierarchical view of the organization.

POINTS: 1

LEARNING OBJECTIVES: WILL.MGMT.15.9.01 – 9.1

TOPICS: AACSB Analytic

1. The two disadvantages associated with product departmentalization are costly duplication and difficulties with cross- departmental coordination.
2. a. True
3. False

ANSWER: True

POINTS: 1

LEARNING OBJECTIVES: WILL.MGMT.15.9.01b – 9.1b

TOPICS: AACSB Analytic

1. Specialized jobs are generally inefficient. a. True
2. False

ANSWER: False

RATIONALE: Specialized jobs are highly efficient but can be tedious unless managers use job rotation, job enlargement, and job enrichment to make them more interesting.

POINTS: 1

LEARNING OBJECTIVES: WILL.MGMT.15.9.03a – 9.3a

TOPICS: AACSB Analytic

1. Job enlargement and job enrichment mean essentially the same thing. a. True
2. False

ANSWER: False

RATIONALE: While job enlargement increases the number of tasks performed, job enrichment adds a fundamentally different dimension: authority and control to make meaningful decisions about the work.

POINTS: 1

LEARNING OBJECTIVES: WILL.MGMT.15.9.03b – 9.3b

TOPICS: AACSB Analytic

1. is the collection of activities that transforms inputs into outputs that customers value. a. Reengineering
2. Functionalization
3. c. Organizational structure Production positioning
4. e. Organizational process

ANSWER: e

POINTS: 1

LEARNING OBJECTIVES: WILL.MGMT.15.9.01 – 9.1

TOPICS: AACSB Analytic

1. One of the key assumptions underlying the chain of command is report to just one supervisor.
2. a. delegation of command empowerment
3. c. synergistic authority unity of command
4. e. centralization of authority

ANSWER: d

POINTS: 1

LEARNING OBJECTIVES: WILL.MGMT.15.9.02a – 9.2a

TOPICS: AACSB Analytic

, which means that workers should

1. A(n) function is an activity that contributes directly to creating or selling the company’s products. a. staff
2. line
3. c. mechanistic organic
4. e. charted

ANSWER: b

POINTS: 1

LEARNING OBJECTIVES: WILL.MGMT.15.9.02b – 9.2b

TOPICS: AACSB Analytic

1. The core philosophy upon which the job characteristic model is based is:
2. a. reciprocity empathy
3. c. autonomy
4. internal motivation
5. e. motivational valences

ANSWER: d

RATIONALE: Internal motivation is the motivation that comes from the job itself rather them from outside rewards.

POINTS: 1

LEARNING OBJECTIVES: WILL.MGMT.15.9.03c – 9.3c

TOPICS: AACSB Analytic

1. A(n)

organization is an organization that is characterized by specialized jobs and responsibilities,

precisely defined, unchanging roles, and a rigid chain of command based on centralized authority and vertical communication.

1. a. modular
2. departmentalized c. standardized
3. organic
4. e. mechanistic

ANSWER: e

POINTS: 1

LEARNING OBJECTIVES: WILL.MGMT.15.9.04 – 9.4

TOPICS: AACSB Analytic

10.

is a fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical measures of performance, such as cost, quality, service, and speed.

1. a. Pooling interdependence
2. Reciprocating interdependence c. Reengineering
3. Repositioning
4. e. Manufacturing conversion

ANSWER: c

POINTS: 1

LEARNING OBJECTIVES: WILL.MGMT.15.9.04a – 9.4a

TOPICS: AACSB Analytic

1. 11. Except for the core business activities that they can perform better, faster, and cheaper than others, outsource all remaining business activities to outside companies, suppliers, specialists, or a. modular organizations
2. hierarchical organizations c. boundaryless organizations d. organizational networks
3. e. virtual organizations

ANSWER: a

POINTS: 1

LEARNING OBJECTIVES: WILL.MGMT.15.9.05a – 9.5a

TOPICS: AACSB Analytic