As firms work to become more efficient and effective in the global business environment, they are forced to continually innovate. Innovation in an organization:
A) will always increase a firm's performance.
B) may enhance or destroy a firm's capabilities.
C) should not be pursued by industry leaders.
D) happens only incrementally.

Question

Quizplus · Accepted Answer

Innovation can have varied impacts on a firm's capabilities; it may enhance them by introducing new products, services, or processes that improve efficiency and market competitiveness. However, it can also destroy existing capabilities if the innovation makes previous processes, products, or skills obsolete, or if the firm fails to implement the innovation effectively. Choices A, C, and D are incorrect because innovation does not always increase performance, industry leaders also need to innovate to maintain their positions, and innovation can be both incremental and radical.

As Firms Work to Become More Efficient and Effective in the Global