Question 1

Which of the following is true regarding ambidextrous organizations?
A) Incentive plans are uniform through out the organization.
B) There is tight coordination of R&D activities.
C) The organization is characterized by high levels of formalization and standardization.
D) R&D units are allowed to function like small, independent ventures.

Accepted Answer

Ambidextrous organizations allow for R&D units to function like small, independent ventures, pursuing innovation and experimentation without the constraints of tight coordination or uniform incentive plans. This flexibility and autonomy allows for successful exploration and exploitation of new ideas. High levels of formalization and standardization (C) may stifle innovation, while tight coordination of R&D activities (B) may hinder experimentation and exploration.

Question 2

Since much innovation arises from experimentation and improvisation,the _____ organization structure is typically considered better suited to creativity and innovation.
A) mechanistic
B) formalized
C) standardized
D) organic

Accepted Answer

The organic organization structure is better suited to creativity and innovation as it allows for flexibility, decentralization, and informal communication channels that facilitate experimentation and improvisation. Mechanistic, formalized, and standardized structures, on the other hand, emphasize centralized decision-making, strict policies and procedures, and standardized work processes, which can stifle creativity and innovation.

Question 3

An advantage of the centralized structure for R&D is that it
A) can lead to products that better satisfy customer needs.
B) can enable greater division of labor.
C) it leads to a sense of ownership and empowerment among employees.
D) leads to higher sales revenues.

Accepted Answer

Centralized R&D structures can enable greater division of labor by concentrating resources and expertise in a single location, allowing for more specialized roles and efficient processes.

Question 4

Schumpeter said that large firms are likely to have
A) a more difficult time raising funds.
B) lower returns with lower sales volumes because fixed costs of R&D are high.
C) better-developed complementary activities that enable them to be more innovative.
D) poorer global reach due to bureaucracy.

Accepted Answer

Schumpeter argued that large firms are more likely to have better-developed complementary activities that enable them to be more innovative, such as research and development (R&D) departments and marketing strategies. These complementary activities allow for economies of scale, which often result in lower costs and higher profits.

Question 5

In loosely coupled organization structures
A) coordination is achieved through adherence to shared objectives and common standards.
B) the possibility for achieving synergies is high.
C) the firm reduces its chance of developing a product that has a price-to-value ratio that attracts customers.
D) the overhead and administrative complexities of maintaining a wide scope of activities are increased.

Accepted Answer

Loosely coupled organization structures rely on shared objectives and common standards to achieve coordination among different units or departments. This allows for flexibility and autonomy while still working towards a common goal.

Answer: B
 Loosely coupled organizations allow for more collaboration and communication between different units or departments, leading to an increased possibility of achieving synergies or finding new opportunities for growth.

Answer: C
 Loose coupling is not directly related to product development or pricing strategies, and there is no evidence to suggest that it would increase the likelihood of developing a product with an unfavorable price-to-value ratio.

Answer: D
 Loosely coupled organizations often have less administrative overhead since they allow for greater autonomy and flexibility. This may actually reduce the complexities of maintaining a wide scope of activities, rather than increasing them.

Question 6

Which of the following statements is true about small firms?
A) They face difficulties in monitoring employees.
B) Rewarding employees is much more difficult for them.
C) They tend to be more entrepreneurial.
D) They are likely to have lower rates of new product success.

Accepted Answer

Small firms typically have fewer levels of hierarchy and less bureaucratic procedures, allowing them to be more agile and adaptable to changes in the market. This often results in a more entrepreneurial culture within the organization. While small firms may face challenges in monitoring and rewarding employees, these factors are not necessarily more difficult for them than for larger firms. Additionally, small firms may have higher rates of new product success since they can be more innovative and nimble in exploring and implementing new ideas.

Question 7

ErgoFlex manufactures office furniture.The company is considering adopting a modular production system.In which of the following scenarios would a modular system offer greater value to the company?
A) When customers want office chairs with rubber wheels
B) When customers want office chairs with lumbar support
C) When customers want office chairs with headrests
D) When some customers want office chairs with rubber wheels and lumbar support while the remaining prefer headrests only.

Accepted Answer

A modular production system would offer greater value in scenario D where some customers want office chairs with rubber wheels and lumbar support while the remaining prefer headrests only. With a modular system, ErgoFlex can easily customize the chairs according to the unique requirements of each customer segment, without having to overhaul the entire production process. This would result in greater efficiency, lower costs and higher customer satisfaction. In scenarios A, B and C, customers' requirements do not appear to necessitate modular production.

Question 8

Old Hickory Furniture Company achieves both efficiency and flexibility by using the same components (legs of a dining room table)for several different types of tables.This is referred to as
A) modularity.
B) architecture.
C) transparent substitution.
D) organic innovation.

Accepted Answer

Modularity refers to designing products or systems with interchangeable parts or components that can be used in various configurations. Old Hickory Furniture Company's use of the same legs for several types of tables is an example of modularity, which allows for both efficiency in manufacturing and flexibility in product offerings. The other answer choices, architecture, transparent substitution, and organic innovation, do not accurately describe this concept.

Question 9

Dove Laboratories is a large pharmaceutical firm that is 70 years old.It has consistently invested heavily in R&D.One would expect Dove to have
A) better capabilities to take on larger innovation projects.
B) fewer rules and regulations than smaller firms.
C) increasingly effective governance systems.
D) foolproof communication systems.

Accepted Answer

Dove Laboratories has had 70 years to build up their capabilities and resources, including their R&D department. This would indicate that they have better capabilities to take on larger innovation projects than smaller firms.

Question 10

If Jasper Electronics decentralizes its R&D by divisions,it will most likely
A) achieve greater economies of scale.
B) eliminate the duplication of efforts.
C) benefit more from the learning curve.
D) result in development projects that take advantage of the diversity of knowledge and market contacts that may exist in different divisions.

Accepted Answer

Decentralizing R&D by divisions will allow Jasper Electronics to take advantage of the diversity of knowledge and market contacts that may exist in different divisions. This could lead to more innovative and effective development projects. Options A, B, and C are not directly related to decentralizing R&D by divisions.

Question 11

Quasiformal structures
A) are slow to respond to the need for change.
B) foster interactions based on hierarchy.
C) are more relationship-focused.
D) play important boundary-spanning roles.

Accepted Answer

The answer of Quasiformal structures
A) are slow to respond to...

Question 12

Michael is a part of a new product development team that operates nearly autonomously from its parent organization-WorldLogix.Within the team,there is a considerable decentralization of authority and little bureaucracy.Michael's team can be referred to as
A) a modular team.
B) skunk works.
C) an inorganic group.
D) a loosely coupled team.

Accepted Answer

Michael's team is a skunk works team. Skunk works teams are created within an organization to work on innovative and often secret projects with a high degree of autonomy and minimal bureaucracy. They are typically made up of highly skilled and motivated individuals who are given the freedom to experiment and innovate without being micromanaged by the parent organization. The term "skunk works" originated with Lockheed Martin in the 1940s, when a team of engineers was given the task of designing and building a high performance fighter plane in record time. The team was given a separate facility and a mandate to work as quickly and efficiently as possible, and the project was a resounding success. Since then, the term has come to be associated with any small, highly focused team that is given a degree of autonomy to pursue innovative projects.

Question 13

According to the _____,if Frankie's Chicken Shack excels in cooking and selling chicken,this ability could lead to its downfall if it does not embrace new technology because it may become overconfident,careless,or slow to change.
A) law of diminishing returns
B) principle of disaggregation
C) Icarus Paradox
D) research of Porter

Accepted Answer

The Icarus Paradox suggests that success and strengths can lead to overconfidence, carelessness, and resistance to change, ultimately resulting in downfall. Therefore, if Frankie's Chicken Shack excels in cooking and selling chicken but does not embrace new technology, it may become overconfident and slow to change, which can ultimately lead to its downfall. The other options (A, B, and D) do not address the potential negative consequences of success and strength.

Question 14

Swaback Motors told its R&D department that it did not matter what the motor they developed was like as long as it would fit into the engine housing and connect to the electrical and other mechanical parts.This is an example of
A) organic technology.
B) loose coupling.
C) functional preference.
D) default designing.

Accepted Answer

Loose coupling refers to a design approach where components are designed to be independent and interchangeable, focusing on fitting and connecting rather than specific characteristics.

Question 15

Tracie Fashions has become very profitable and now employees 80 persons.Tracie had been very informal in running the company,but now feels she needs to have more rules and regulation of employee behavior.Tracie desires more
A) creativity.
B) formalization.
C) delegation.
D) decentralization.

Accepted Answer

Formalization refers to the process of standardizing procedures and behaviors in an organization. As the company has grown and become more profitable, Tracie may feel the need to implement more structure and rules to ensure consistency and efficiency in the organization. This can help ensure that employees understand their roles and responsibilities, know what is expected of them, and can work effectively together. While creativity, delegation, and decentralization are also important factors in managing a successful organization, they are not directly related to the need for more rules and regulations.

Question 16

Since a large company tends to have more bureaucracy,fixed costs,and commitments to employees and customers,you can expect it to be _____.
A) more responsive to change
B) less responsive to change
C) oblivious to change
D) unaffected by change

Accepted Answer

A large company with more bureaucracy, fixed costs, and commitments is usually less responsive to change. This is because changes in a large company require more time, resources, and approvals from different layers of management, which can slow down the decision-making process. Additionally, a large company may have established procedures and policies that can limit its ability to adapt quickly to changes in the market or industry.

Question 17

Dynamic Electronics Company develops and sells its technologically-advanced digital camera in markets all over the world.For this industry,it is most likely that the company uses a _____ structure for its R&D.
A) decentralized
B) centralized
C) spaghetti
D) homogenized

Accepted Answer

For a technologically-advanced product like a digital camera, it is most efficient and effective for the R&D to be centralized. This ensures that there is a cohesive strategy and direction for the development of the product, as well as streamlined communication and sharing of resources among the R&D team. Decentralized structures may lead to fragmentation and duplication of effort, which could negatively impact the development and launch of the product. Therefore, a centralized structure is the best choice for Dynamic Electronics Company.

Question 18

Frankie's Chicken Shack wanted to ensure the quality and consistency of chicken served; so the cooking procedures were highly standardized.What will Frankie be giving up by making this move?
A) Customer contact
B) Waste
C) Creativity and experimentation
D) The company's cost advantage

Accepted Answer

By standardizing cooking procedures, Frankie's Chicken Shack may be restricting the ability of chefs to experiment with recipes and innovate with new menu items. This lack of creativity could limit the restaurant's appeal to customers who are looking for unique and exciting dining experiences.

Question 19

Tracie Fashions has become very profitable and now employees 80 persons.Tracie needed to have better regulation of employee behavior so she formalized the company with more rules,procedures,and written documentation.This may result in
A) less creativity.
B) more creativity.
C) disgruntled employees because they do not know what to expect.
D) more flexibility in responding to fashion trends.

Accepted Answer

Formalizing the company with more rules and procedures may result in less creativity as employees may feel constrained by the increased regulations and less motivated to take risks and think outside the box.

Question 20

A large company might want to disaggregate in order to
A) lengthen development cycles.
B) reduce costs.
C) become more responsive.
D) improve the rate of product adoption.

Accepted Answer

Disaggregating, or breaking up a company into smaller pieces, can make it more responsive to changes in the market and customer needs. This is because smaller units can focus more closely on specific areas and make quicker decisions, without being bogged down by bureaucracy and layers of management. Lengthening development cycles (option A) would not be a desirable outcome for most companies, and reducing costs (option B) can be achieved through other means besides disaggregation. Improving the rate of product adoption (option D) is related to responsiveness, but disaggregation alone might not guarantee this result.

Quiz 10: Organizing for Innovation

Which of the following is true regarding ambidextrous organizations?

Since much innovation arises from experimentation and improvisation,the _____ organization structure is typically considered better suited to creativity and innovation.

An advantage of the centralized structure for R&D is that it

Schumpeter said that large firms are likely to have

In loosely coupled organization structures

Which of the following statements is true about small firms?

ErgoFlex manufactures office furniture.The company is considering adopting a modular production system.In which of the following scenarios would a modular system offer greater value to the company?

Old Hickory Furniture Company achieves both efficiency and flexibility by using the same components (legs of a dining room table) for several different types of tables.This is referred to as

Dove Laboratories is a large pharmaceutical firm that is 70 years old.It has consistently invested heavily in R&D.One would expect Dove to have

If Jasper Electronics decentralizes its R&D by divisions,it will most likely

Quasiformal structures

Michael is a part of a new product development team that operates nearly autonomously from its parent organization-WorldLogix.Within the team,there is a considerable decentralization of authority and little bureaucracy.Michael's team can be referred to as

According to the _____,if Frankie's Chicken Shack excels in cooking and selling chicken,this ability could lead to its downfall if it does not embrace new technology because it may become overconfident,careless,or slow to change.

Swaback Motors told its R&D department that it did not matter what the motor they developed was like as long as it would fit into the engine housing and connect to the electrical and other mechanical parts.This is an example of

Tracie Fashions has become very profitable and now employees 80 persons.Tracie had been very informal in running the company,but now feels she needs to have more rules and regulation of employee behavior.Tracie desires more

Since a large company tends to have more bureaucracy,fixed costs,and commitments to employees and customers,you can expect it to be _____.

Dynamic Electronics Company develops and sells its technologically-advanced digital camera in markets all over the world.For this industry,it is most likely that the company uses a _____ structure for its R&D.

Frankie's Chicken Shack wanted to ensure the quality and consistency of chicken served; so the cooking procedures were highly standardized.What will Frankie be giving up by making this move?

Tracie Fashions has become very profitable and now employees 80 persons.Tracie needed to have better regulation of employee behavior so she formalized the company with more rules,procedures,and written documentation.This may result in

A large company might want to disaggregate in order to