Management Skills Assessment and

Development 1st Edition Griffin Test Bank

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Chapter 5: Conceptual Skills

Student: ___________________________________________________________________________

1. CEO Sydney and his team of business unit presidents are meeting to discuss the organization’s goals for the
next five years. They are considering issues such as which markets to enter and exit, what products to develop
and which to drop, which business units to divest, whether to acquire small competitors, etc. Sydney’s team is
developing a:
A. goal.
B. strategy.
C. competence.
D. scope.
E. strength.

2. Miranda and her team are planning how to achieve the strategy they have spent weeks developing. These
people are working on the ______________ stage.
A. deploying
B. planning
C. formulation
D. implementation
E. creative
3. Thanks to its point-of-sale inventory control and purchasing system, WalMart is able to eliminate costs from
its processes and keep its prices lower than its competitors. This represents a _________ for WalMart.
A. strength
B. weakness
C. opportunity
D. threat
E. strategy

4. Harvey’s Hardware sells nuts, bolts, and many other common small parts. It also offers instruction in the
installation of copper water pipes which no other hardware store in its market does. For Harvey’s Hardware,
this represents a:
A. common strategy
B. common strength
C. competitive parirty
D. distinctive competence
E. strategic implementation

5. Millie’s Fabric Shop sells fabrics, patterns, and notions. So do JoAnn Fabrics, Hancock Fabrics, and just
about every other fabric shop. In this case Millie’s has:
A. a common strength.
B. competitive parity.
C. a distinctive competence.
D. a market advantage.
E. an internal weakness.

6. Tennessee Innovations seems to attract and retain employees with an exceptional amount of creative
genius. The company holds hundreds of patents for its inventions. Although other firms have tried to imitate
TI’s recruiting strategies and compensation packages, the best college graduates prefer TI. For Tennessee
Innovations, this represents:
A. a distinctive competence.
B. competitive parity.
C. operational strength.
D. a sustained competitive advantage.
E. insight.
7. JoAnn Fabrics, Hancock Fabrics, and many other fabric stores have begun to carry materials for craft projects
such as yarn crafts and flower arranging, and to offer classes in these crafts. Millie’s Fabrics does not carry
these products or offer any classes in crafts. Thus, Millie has a:
A. competitive weakness.
B. distinct disadvantage.
C. distinctive competence.
D. competitive parity.
E. competitive disadvantage.

8. Millie’s Fabrics has invested so much money in her inventory of fabrics and patterns that she has none left to
add craft materials to her product mix as many of her competitors have. Millie has identified a:
A. strength
B. weakness
C. opportunity
D. threat
E. distinctive competence

9. Harvey’s Hardware has noticed that many customers have asked about purchasing lawn mower blades
because theirs have become dull. Harvey knows these can be sharpened to extend their useful life but no one
nearby provides this service. Harvey knows how and can purchase the necessary equipment quickly and
inexpensively. Harvey has identified:
A. a threat.
B. a weakness.
C. an opportunity.
D. a competitive advantage.
E. a new career.

10. For years Andy’s Autos was the only used car dealer in town. Recently Candy’s Cars opened down the
block. Candy’s Cars represents a(n) ___________ to Andy.
A. strength
B. weakness
C. opportunity
D. threat
E. problem

11. Butch’s Butcher Shoppe is afraid to raise the price of T-bone steaks too much because his customers may
decide to buy chicken breasts instead. Which of Michael Porter’s five forces is Butch concerned about?
A. Level of competitive rivalry
B. Power of suppliers
C. Power of Buyers
D. Threat of substitutes
E. Threat of new entrants
12. Tennessee Innovations expects 30% of all revenues to be generated by products developed in the last five
years. Tennessee Innovations values:
A. strategic planning.
B. divergent thinking.
C. cognitive ability.
D. creativity.
E. competitive advantage

13. The English tutor has noticed that students coming into the learning lab for help with a variety of subjects
all have problems with the same issue: language arts. This tutor is using:
A. cognitive ability.
B. creative thinking.
C. convergent thinking
D. divergent thinking
E. innovation

14. “Sleep on it.” “If you have a tough problem to solve, think about it right before you fall asleep. You’ll
wake up with the answer.” This advice relies on :
A. divergent thinking.
B. convergent thinking.
C. cognitive ability.
D. intellect.
E. incubation.

15. “I wasn’t even thinking about it and the answer just came to me!” When this happens, we call this:
A. amazing.
B. common.
C. insight.
D. intuition.
E. genius.

16. The Food and Drug Administration requires pharmaceutical companies to test new drugs in lab animals then
in clinical trials to make sure the drug works as claimed and that the benefits outweigh the risks. This process
is called:
A. incubation.
B. preparation.
C. insight.
D. verification.
E. codification.
17. Before launching a new product, especially one with a long development time, a firm may built a set of
_____________ to test for engineering integrity and market interest.
A. concept models
B. prototypes
C. experimentals
D. incubators
E. mock-ups

18. Harvey called together his staff and asked them to brainstorm ideas that would increase customer traffic into
the store. As soon as one person expressed an idea, another would piggyback onto it with a modification to
make the idea even better. Which stage of the innovation process does this exemplify?
A. Development
B. Application
C. Launch
D. Growth
E. Maturity

19. More than a century ago, all tires for bicycles and buggies were solid rubber. Then a scientist figured out
that through a process called vulcanization, rubber could be “cooked” so it would be firmer and could hold its
shape. The bicycle tire was redesigned to hold an inner tube made of this vulcanized rubber. This process is an
example of which stage of the innovation process?
A. Development
B. Application
C. Launch
D. Growth
E. Maturity

20. Although the vulcanization process was discovered in 1839 by Charles Goodyear , it wasn’t until about
1898 that Frank Seiberling realized the market potential of pneumatic tires for bicycles. The question was,
would customers be willing to “ride on air” instead of on the solid rubber they were accustomed to? Which
state in the innovation process does this represent?
A. Development
B. Application
C. Launch
D. Maturity
E. Decline
21. Within a few years of the introduction of pneumatic tires for bicycles, Henry Ford was building cars in an
assembly line in Detroit. Cars need tires; drivers want a smooth ride. Enter Harvey Firestone in 1906 with the
pneumatic automobile tire. Before long, all tires were pneumatic, or “balloon” tires. This represents which
stage of the innovation process?
A. Introduction
B. Application
C. Launch
D. Growth
E. Decline

22. The first pneumatic tires were made with cotton cords inside to strengthen the rubber. These cords were in
layers, or plies, and criss-crossed each other to form an X; thus their name, bias-ply tires. For many decades all
cars coming off the assembly lines in Detroit sported bias-ply tires. At this point the pneumatic tires would be
in which stage of the innovation process?
A. Development
B. Launch
C. Growth
D. Maturity
E. Decline

23. In the mid-1940s Michelin commercialized the radial tire which provided better fuel economy and less road
slip. Within 25 years consumers were asking for radial tires for their new cars. By the mid-1970s bias-ply tires
were no longer popular for automobiles. This stage of the innovation process is called:
A. Development
B. Application
C. Growth
D. Maturity
E. Decline

24. The change from human welders to robot welders represents a(n) ______________ innovation.
A. managerial technical
B. incremental managerial
C. technical process
D. radical process
E. incremental product

25. The change from film cameras to digital photography represents a(n) _________________ innovation.
A. radical product
B. incremental product
C. technical process
D. managerial process
E. incremental technical
26. The change from painted cels to create cartoons to computerized animation represents a(n)
______________ innovation.
A. radical process
B. radical product
C. technical product
D. managerial process
E. incremental product

27. Generic drugs are copies of brand name drugs developed by large pharmaceutical companies. The
manufacturers of the generics sell their products at prices considerably less than the larger firms. They do no
research or development and so do not introduce new drugs. Which of the following explains why?
A. lack of initiative
B. lack of FDA approval
C. lack of resources
D. lack of opportunity
E. lack of innovation

28. When Max showed him the flat disk that could be thrown to another player like a flying saucer, Charles
thought the idea inane. He saw no market potential for such a device. Wham-O developed the product into the
Frisbee and made a fortune. What was Charles’ problem?
A. Failure to plan ahead
B. Lack of resources
C. Resistance to change
D. Failure to recognize opportunities
E. Lack of initiative

29. Mabel had been typing letters on her Smith-Corona for over 20 years, so when she was asked to switch to a
word processor, she respectfully declined to give up her beloved typewriter. It is apparent that Mabel:
A. lacks resources.
B. cannot see opportunities
C. is resistant to change.
D. should be retired.
E. does not welcome progress

30. 3M is known for its idea generation and the development of new and sometimes unusual products. The
corporate expectation is that a significant portion of its annual revenues will come from products that did not
exist five years ago. This has created a(n) _______________ that supports innovation.
A. mindset
B. reward system
C. internal structure
D. organizational culture
E. research and development department
31. An explosion at a magnesium diecast facility has damaged six of the eight diecast work
stations. Production schedules had to be modified and workers reassigned. This is an example of:
A. a contingency plan.
B. reactive change.
C. external forces.
D. planned change.
E. a catastrophe.

32. Every year the automakers introduce revised models, usually in September. Modifications may be minimal,
just enough to distinguish the new year’s models from the old year’s. This is an example of:
A. reactive change.
B. proactive change.
C. planned change.
D. external change.
E. customer preference change.

33. An injury at the Timbuktu plant resulted in a requirement from OSHA that all the firm’s plants equip the
machines with light curtains to prevent similar injuries. This is an example of:
A. retrofit change.
B. reasonable change.
C. reactive change.
D. required change.
E. responsibile change.

34. Months ahead of the actual recession, forecasters at Janus Mfg. anticipated that the economy was slowing
which would reduce the demand for its ATVs. Janus stopped producing its ATVs for inventory and instead
began production only when an ATV had been ordered by a dealer. This move allowed Janus to minimize the
impact on its employees and to survive the recession in better shape than its competitors. This is an example
of:
A. preparation.
B. planned change.
C. proactive change.
D. partial change.
E. prognostication.

35. Kurt Lewin’s model for change is:

A. anticipate, activate, celebrate.
B. plan, do, check, act.
C. ready, fire, aim.
D. thaw, take action, freeze.
E. unfreeze, change, refreeze.
36. The HR Manager noted that 12 employees had left the laminating department in the last three months,
which was an unusually high number. The HR manager is at the ______________ step in the change process.
A. recognition
B. goal-setting
C. diagnosing
D. selection
E. implementation

37. A 300% annual turnover rate was much too high for the industry for the laminating department. This
needed to be brought back down to about 25%. This is the __________ step in change management.
A. recognition
B. goal-setting
C. selection
D. implementation
E. evaluation

38. The HR manager wanted to know why the turnover in the laminatihn department had reached 300% so she
conducted exit interviews with the next several departing employees. Tney all mentioned, in negative context,
the newly appointed group leader. This is the ___________ step in change management.
A. goal setting
B. diagnosing
C. selection
D. implementation
E. evaluation

39. After discovering that several good employees had resigned because of a new group leader, the HR manager
met with the group leader. It became apparent his inexperience in supervision had contributed to the high
turnover. After a discussion of several options, the group leader agreed to enroll in business and supervision
courses at the local community college. This is the _____________ step in change management.
A. recognition
B. goal-setting
C. diagnosing
D. selection
E. implementation

40. As part of a corrective action plan, the group leader enrolled in an introductory business course and a
supervision course at the local community college. This is the _______________ step of change management.
A. reaction
B. diagnosis
C. selection
D. implementation
E. evaluation
41. At the end of his first semester, the group leader met again with the HR manager to discuss his
progress. Turnover in his department had dropped by 2/3 but was still not quite where it needed to be. This is
the ____________ step in change management.
A. recognition
B. statistical analysis
C. diagnosis
D. appraisal
E. evaluation

42. Rumors are flying like gnats at sunset. The plant will close, the plant will not close, employees will lose
their jobs, no one will get laid off, the company is being sold, the company is going public--no one knows what
is going to happen or how it will affect them. If changes were introduced now, what would be the likely cause
of resistance to it?
A. Feelings of loss
B. Fear
C. Uncertainty
D. Threatened self-interests
E. Different perceptions

43. “The competition has been increasing its market share thanks to the improvements they made in their
processing system. If we want to regain the customers we’ve lost, we need to figure how to take costs out of
our production methods.” So says the CEO. As his advisor, what would you suggest he do?
A. Keep the employees informed of the loss in sales.
B. Tell the employees about the competition.
C. Ask the employees for their ideas.
D. Announce the implementation of new production methods.
E. Lay workers off.

44. Sales people are trained to ask a prospective customer, “So, if we could overcome each of your objections,
you would be ready to buy, right?” This is an example of:
A. increasing the forces for change.
B. facilitating change.
C. communicating the need for change.
D. using manipulation to bring about change.
E. reducing the resistance to change.
45. There were no indications of problems. Then one day the plant manager called everyone together and
announced the plant would begin laying people off unless they accepted a cut in pay and forfeited some of their
benefits. The workforce was taken completely by surprise and the rumors began to fly. What tactic should
management use to reduce resistance to this change?
A. Participation
B. Education and Communication
C. Facilitation
D. Risk management
E. Manipulation

46.

1. The set of strategic alternatives from which an

organization chooses as it conducts business in a Strategic
particular industry management ____
2. The set of strategic alternatives from which an
organization chooses as it manages across several
industries and markets Strategy ____
3. A way of approaching business opportunities and Strategic
challenges leadership ____
4. An organization that competes in dozens of Effective
unrelated markets strategies ____
5. The range of markets in which an organization Distinctive
will compete competence ____
6. The process of creating strategies for an
organization Scope ____
7. The practice of duplicating another firm’s
distinctive competence Conglomerate ____
8. A comprehensive plan for accomplishing an Business-level
organization’s goals strategy ____
9. The capability to understand the complexities of Corporate-level
both the organization and its environment strategy ____
10. Strategies that promote a superior alignment Strategy
between the organization and its environment formulation ____
11. Something an organization does exceptionally
well Strategic imitation ____
47.

1. Skills and capabilities that enable an organization

to create and implement strategies Deliberate strategy ____
2. The result of exploiting a distinctive competence Emergent strategy ____
3. A strength possessed by only a small number of
competing firms SWOT analysis ____
4. The failure of an organization to implement Organizational
strategies its competitors are implementing strengths ____
5. The careful evaluation of an organization’s
internal strengths and weaknesses and its external
opportunities and threats Common strength ____
6. The situation that exists when large numbers of
competing firms are able to implement the same
strategy Competitive parity ____
7. A pattern of action that develops over time in the Distinctive
absence of mission and goals competence ____
8. An organizational capability possessed by a large Competitive
number of competing firms advantage ____
Competitive
9. A plan chosen to support specific goals disadvantage ____

48.

1. A skill that allows people to see similarities Organizational

among situations threats ____
2. A skill that allows people to see differences Convergent
among situations thinking ____
3. A spontaneous breakthrough in which the
creative person achieves a new understanding of Organizational
some problem or situation opportunities ____
4. The ability of an individual to generate new
ideas Incubation ____
5. A product built just to see if the ideas behind the
new product actually work Prototype ____
6. An external condition that increases the difficulty
of an organization’s performing at a high level Divergent thinking ____
7. An individual’s power to think intelligently and
to analyze situations and data effectively Innovation ____
8. The managed effort of an organization to develop
new products or services Insight ____
9. An external condition that may generate high
performance Cognitive ability ____
10. A period of less-intense conscious concentration
during which knowledge and ideas mature and
develop Creativity ____
49. Michael Porter’s five forces are:

50. _____________ _____________ involves the evaluation, modification, and improvement of creative ideas.

51. The shift from horse-drawn wagons to self-propelled automobiles would be a(n) ____________ innovation.

52. The change from bias ply tires to radial tires would be a(n) ____________ innovation.
53. Reel-to-reel tape players are now considered museum items. Today we listen to music on a digital device
such as an iPod. This represents a(n) ________________ innovation.

54. The evolution of tires from solid rubber to bias ply to radial would be a(n) _____________ change.

55. TVs have changed quite a bit from the 1940s when a huge box sat in the living room. From black-and-
white to color to projection to LCD to LED, these changes have been ____________.

56. In the 1950s, a telephone was a device that hung on the wall. Neighbors shared a party line. Today many
homes don’t even have a land line. Instead, the residents communicate using a cell phone. This change
represents a(n) ______________ innovation.
57. In the days before computers, letters were typed on a typewriter. Today they are created using a word
processor on a personal computer. This represents a _____________ innovation.

58. Televisions used to be made on a production line by assembling the necessary parts into a cabinet. After
assembly was complete, an inspector would plug the set in and turn it on. If it worked, it shipped. If it didn’t
work, it was scrapped. Then Zenith came up with a better idea. Workers tested the parts before putting them
into the set, spawning the slogan, “The quality goes in before the name goes on.” This represents a
_________________ innovation.

59. At automotive plants, people used to weld parts of the body together. Now robots do the work. This type
of change would be considered a ______________ innovation

60. List three reasons that organizations may fail to innovate.

61. An oarganization’s ____________ is the set of values, beliefs, and symbols that help guide its behavior.

62. Donald is head of accounting at ABC Company, which has just been purchased by XYZ
Corporation. Knowing that the new combined company will not need two accounting heads, Donald is afraid
he might lose his job. Which of the types of resistance to change is at work here?

63. Furniture just isn’t selling this year like it did last year. The store’s interior designer thinks it is because the
styles are outdated and has recommended a near-total replacement of traditional styles with contemporary styles
more to her liking. The store owner thinks it is because the interior designer isn’t promoting the furniture in the
store and wants her to increase her efforts to sell the existing inventory. What kind of resistance to change do
we see here?
64. In the old building, the accounting people were together in a large, open area with only aisles separating
their work spaces. The plans for the new building provide for offices shared by two people, scattered
throughout the second floor. People who used to be in close proximity would be separated by distances and
walls, making communication more difficult and time-consuming. Naturally the accountanting people don’t
like this change. Which form of resistance is this?

65. A manager making decisions about company opportunities must first understand his __________ for risk.

66. A top-level executive faces many possibilities in the marketplace. A competitor may introduce a new
product that makes his own obsolete. New competitors may enter the market. Customer preferences may
change. Each of these presents a _______ for the organization.
67. Indiana Manufacturing has options: It can extend its current product line; it can develop an entirely new
product, or it can purchase a company that makes complementary products. How can the top executives at
Indiana Manufacturing decide which option to choose?

68. What three actions can a firm take to reduce the costs associated with risk?

69. Robert has been asked to calculate the probability of a specific set of events occuring. Each event has costs
associated with it. Robert’s CEO will use this information when deciding among possible actions the company
might take. This type of analysis occurs during ____ __________.

70. `Why is it important for a company’s strategy to be aligned with both its internal and external
environments?
71. Explain the advantages of performing a SWOT analysis as part of the annual strategic planning process.

72. Explain the innovation process. Why is it necessary for a firm to manage this process?

73. Explain the differences between radical and incremental innovations, providing examples to support your
arguments.

74. Explain the effects of a reward system on innovation. Examples may be used to supprot your arguments.
75.
Three roles have been named as essential to intrapreneurship. Identify the three roles and explain their
purpose. Use examples to support your arguments.

76. Why must organizations experience change? What types of situations or events would cause an
organization to change? Examples may help illustrate your thoughts.

77. Identify and explain three reasons people resist change and the appropriate remedy for each particular
resistance.

78. Why is participation such a useful tool to overcome resistance to change? Why doesn’t it work in all
cases?
79. What are the benefits of education and communication when they are used to reduce resistance to
change? Give an esample of when this tactic should be used.

80. When considering force field analysis and resistance to change, which works better, increasing the forces
favoring change or decreasing the forces resisting change? Why do you think so?
Chapter 5: Conceptual Skills Key

1. CEO Sydney and his team of business unit presidents are meeting to discuss the organization’s goals for the
next five years. They are considering issues such as which markets to enter and exit, what products to develop
and which to drop, which business units to divest, whether to acquire small competitors, etc. Sydney’s team is
developing a:
A. goal.
B. strategy.
C. competence.
D. scope.
E. strength.

2. Miranda and her team are planning how to achieve the strategy they have spent weeks developing. These
people are working on the ______________ stage.
A. deploying
B. planning
C. formulation
D. implementation
E. creative

3. Thanks to its point-of-sale inventory control and purchasing system, WalMart is able to eliminate costs from
its processes and keep its prices lower than its competitors. This represents a _________ for WalMart.
A. strength
B. weakness
C. opportunity
D. threat
E. strategy

4. Harvey’s Hardware sells nuts, bolts, and many other common small parts. It also offers instruction in the
installation of copper water pipes which no other hardware store in its market does. For Harvey’s Hardware,
this represents a:
A. common strategy
B. common strength
C. competitive parirty
D. distinctive competence
E. strategic implementation
5. Millie’s Fabric Shop sells fabrics, patterns, and notions. So do JoAnn Fabrics, Hancock Fabrics, and just
about every other fabric shop. In this case Millie’s has:
A. a common strength.
B. competitive parity.
C. a distinctive competence.
D. a market advantage.
E. an internal weakness.

6. Tennessee Innovations seems to attract and retain employees with an exceptional amount of creative
genius. The company holds hundreds of patents for its inventions. Although other firms have tried to imitate
TI’s recruiting strategies and compensation packages, the best college graduates prefer TI. For Tennessee
Innovations, this represents:
A. a distinctive competence.
B. competitive parity.
C. operational strength.
D. a sustained competitive advantage.
E. insight.

7. JoAnn Fabrics, Hancock Fabrics, and many other fabric stores have begun to carry materials for craft projects
such as yarn crafts and flower arranging, and to offer classes in these crafts. Millie’s Fabrics does not carry
these products or offer any classes in crafts. Thus, Millie has a:
A. competitive weakness.
B. distinct disadvantage.
C. distinctive competence.
D. competitive parity.
E. competitive disadvantage.

8. Millie’s Fabrics has invested so much money in her inventory of fabrics and patterns that she has none left to
add craft materials to her product mix as many of her competitors have. Millie has identified a:
A. strength
B. weakness
C. opportunity
D. threat
E. distinctive competence
9. Harvey’s Hardware has noticed that many customers have asked about purchasing lawn mower blades
because theirs have become dull. Harvey knows these can be sharpened to extend their useful life but no one
nearby provides this service. Harvey knows how and can purchase the necessary equipment quickly and
inexpensively. Harvey has identified:
A. a threat.
B. a weakness.
C. an opportunity.
D. a competitive advantage.
E. a new career.

10. For years Andy’s Autos was the only used car dealer in town. Recently Candy’s Cars opened down the
block. Candy’s Cars represents a(n) ___________ to Andy.
A. strength
B. weakness
C. opportunity
D. threat
E. problem

11. Butch’s Butcher Shoppe is afraid to raise the price of T-bone steaks too much because his customers may
decide to buy chicken breasts instead. Which of Michael Porter’s five forces is Butch concerned about?
A. Level of competitive rivalry
B. Power of suppliers
C. Power of Buyers
D. Threat of substitutes
E. Threat of new entrants

12. Tennessee Innovations expects 30% of all revenues to be generated by products developed in the last five
years. Tennessee Innovations values:
A. strategic planning.
B. divergent thinking.
C. cognitive ability.
D. creativity.
E. competitive advantage

13. The English tutor has noticed that students coming into the learning lab for help with a variety of subjects
all have problems with the same issue: language arts. This tutor is using:
A. cognitive ability.
B. creative thinking.
C. convergent thinking
D. divergent thinking
E. innovation
14. “Sleep on it.” “If you have a tough problem to solve, think about it right before you fall asleep. You’ll
wake up with the answer.” This advice relies on :
A. divergent thinking.
B. convergent thinking.
C. cognitive ability.
D. intellect.
E. incubation.

15. “I wasn’t even thinking about it and the answer just came to me!” When this happens, we call this:
A. amazing.
B. common.
C. insight.
D. intuition.
E. genius.

16. The Food and Drug Administration requires pharmaceutical companies to test new drugs in lab animals then
in clinical trials to make sure the drug works as claimed and that the benefits outweigh the risks. This process
is called:
A. incubation.
B. preparation.
C. insight.
D. verification.
E. codification.

17. Before launching a new product, especially one with a long development time, a firm may built a set of
_____________ to test for engineering integrity and market interest.
A. concept models
B. prototypes
C. experimentals
D. incubators
E. mock-ups

18. Harvey called together his staff and asked them to brainstorm ideas that would increase customer traffic into
the store. As soon as one person expressed an idea, another would piggyback onto it with a modification to
make the idea even better. Which stage of the innovation process does this exemplify?
A. Development
B. Application
C. Launch
D. Growth
E. Maturity
19. More than a century ago, all tires for bicycles and buggies were solid rubber. Then a scientist figured out
that through a process called vulcanization, rubber could be “cooked” so it would be firmer and could hold its
shape. The bicycle tire was redesigned to hold an inner tube made of this vulcanized rubber. This process is an
example of which stage of the innovation process?
A. Development
B. Application
C. Launch
D. Growth
E. Maturity

20. Although the vulcanization process was discovered in 1839 by Charles Goodyear , it wasn’t until about
1898 that Frank Seiberling realized the market potential of pneumatic tires for bicycles. The question was,
would customers be willing to “ride on air” instead of on the solid rubber they were accustomed to? Which
state in the innovation process does this represent?
A. Development
B. Application
C. Launch
D. Maturity
E. Decline

21. Within a few years of the introduction of pneumatic tires for bicycles, Henry Ford was building cars in an
assembly line in Detroit. Cars need tires; drivers want a smooth ride. Enter Harvey Firestone in 1906 with the
pneumatic automobile tire. Before long, all tires were pneumatic, or “balloon” tires. This represents which
stage of the innovation process?
A. Introduction
B. Application
C. Launch
D. Growth
E. Decline

22. The first pneumatic tires were made with cotton cords inside to strengthen the rubber. These cords were in
layers, or plies, and criss-crossed each other to form an X; thus their name, bias-ply tires. For many decades all
cars coming off the assembly lines in Detroit sported bias-ply tires. At this point the pneumatic tires would be
in which stage of the innovation process?
A. Development
B. Launch
C. Growth
D. Maturity
E. Decline
23. In the mid-1940s Michelin commercialized the radial tire which provided better fuel economy and less road
slip. Within 25 years consumers were asking for radial tires for their new cars. By the mid-1970s bias-ply tires
were no longer popular for automobiles. This stage of the innovation process is called:
A. Development
B. Application
C. Growth
D. Maturity
E. Decline

24. The change from human welders to robot welders represents a(n) ______________ innovation.
A. managerial technical
B. incremental managerial
C. technical process
D. radical process
E. incremental product

25. The change from film cameras to digital photography represents a(n) _________________ innovation.
A. radical product
B. incremental product
C. technical process
D. managerial process
E. incremental technical

26. The change from painted cels to create cartoons to computerized animation represents a(n)
______________ innovation.
A. radical process
B. radical product
C. technical product
D. managerial process
E. incremental product

27. Generic drugs are copies of brand name drugs developed by large pharmaceutical companies. The
manufacturers of the generics sell their products at prices considerably less than the larger firms. They do no
research or development and so do not introduce new drugs. Which of the following explains why?
A. lack of initiative
B. lack of FDA approval
C. lack of resources
D. lack of opportunity
E. lack of innovation
28. When Max showed him the flat disk that could be thrown to another player like a flying saucer, Charles
thought the idea inane. He saw no market potential for such a device. Wham-O developed the product into the
Frisbee and made a fortune. What was Charles’ problem?
A. Failure to plan ahead
B. Lack of resources
C. Resistance to change
D. Failure to recognize opportunities
E. Lack of initiative

29. Mabel had been typing letters on her Smith-Corona for over 20 years, so when she was asked to switch to a
word processor, she respectfully declined to give up her beloved typewriter. It is apparent that Mabel:
A. lacks resources.
B. cannot see opportunities
C. is resistant to change.
D. should be retired.
E. does not welcome progress

30. 3M is known for its idea generation and the development of new and sometimes unusual products. The
corporate expectation is that a significant portion of its annual revenues will come from products that did not
exist five years ago. This has created a(n) _______________ that supports innovation.
A. mindset
B. reward system
C. internal structure
D. organizational culture
E. research and development department

31. An explosion at a magnesium diecast facility has damaged six of the eight diecast work
stations. Production schedules had to be modified and workers reassigned. This is an example of:
A. a contingency plan.
B. reactive change.
C. external forces.
D. planned change.
E. a catastrophe.

32. Every year the automakers introduce revised models, usually in September. Modifications may be minimal,
just enough to distinguish the new year’s models from the old year’s. This is an example of:
A. reactive change.
B. proactive change.
C. planned change.
D. external change.
E. customer preference change.
33. An injury at the Timbuktu plant resulted in a requirement from OSHA that all the firm’s plants equip the
machines with light curtains to prevent similar injuries. This is an example of:
A. retrofit change.
B. reasonable change.
C. reactive change.
D. required change.
E. responsibile change.

34. Months ahead of the actual recession, forecasters at Janus Mfg. anticipated that the economy was slowing
which would reduce the demand for its ATVs. Janus stopped producing its ATVs for inventory and instead
began production only when an ATV had been ordered by a dealer. This move allowed Janus to minimize the
impact on its employees and to survive the recession in better shape than its competitors. This is an example
of:
A. preparation.
B. planned change.
C. proactive change.
D. partial change.
E. prognostication.

35. Kurt Lewin’s model for change is:

A. anticipate, activate, celebrate.
B. plan, do, check, act.
C. ready, fire, aim.
D. thaw, take action, freeze.
E. unfreeze, change, refreeze.

36. The HR Manager noted that 12 employees had left the laminating department in the last three months,
which was an unusually high number. The HR manager is at the ______________ step in the change process.
A. recognition
B. goal-setting
C. diagnosing
D. selection
E. implementation

37. A 300% annual turnover rate was much too high for the industry for the laminating department. This
needed to be brought back down to about 25%. This is the __________ step in change management.
A. recognition
B. goal-setting
C. selection
D. implementation
E. evaluation
38. The HR manager wanted to know why the turnover in the laminatihn department had reached 300% so she
conducted exit interviews with the next several departing employees. Tney all mentioned, in negative context,
the newly appointed group leader. This is the ___________ step in change management.
A. goal setting
B. diagnosing
C. selection
D. implementation
E. evaluation

39. After discovering that several good employees had resigned because of a new group leader, the HR manager
met with the group leader. It became apparent his inexperience in supervision had contributed to the high
turnover. After a discussion of several options, the group leader agreed to enroll in business and supervision
courses at the local community college. This is the _____________ step in change management.
A. recognition
B. goal-setting
C. diagnosing
D. selection
E. implementation

40. As part of a corrective action plan, the group leader enrolled in an introductory business course and a
supervision course at the local community college. This is the _______________ step of change management.
A. reaction
B. diagnosis
C. selection
D. implementation
E. evaluation

41. At the end of his first semester, the group leader met again with the HR manager to discuss his
progress. Turnover in his department had dropped by 2/3 but was still not quite where it needed to be. This is
the ____________ step in change management.
A. recognition
B. statistical analysis
C. diagnosis
D. appraisal
E. evaluation
42. Rumors are flying like gnats at sunset. The plant will close, the plant will not close, employees will lose
their jobs, no one will get laid off, the company is being sold, the company is going public--no one knows what
is going to happen or how it will affect them. If changes were introduced now, what would be the likely cause
of resistance to it?
A. Feelings of loss
B. Fear
C. Uncertainty
D. Threatened self-interests
E. Different perceptions

43. “The competition has been increasing its market share thanks to the improvements they made in their
processing system. If we want to regain the customers we’ve lost, we need to figure how to take costs out of
our production methods.” So says the CEO. As his advisor, what would you suggest he do?
A. Keep the employees informed of the loss in sales.
B. Tell the employees about the competition.
C. Ask the employees for their ideas.
D. Announce the implementation of new production methods.
E. Lay workers off.

44. Sales people are trained to ask a prospective customer, “So, if we could overcome each of your objections,
you would be ready to buy, right?” This is an example of:
A. increasing the forces for change.
B. facilitating change.
C. communicating the need for change.
D. using manipulation to bring about change.
E. reducing the resistance to change.

45. There were no indications of problems. Then one day the plant manager called everyone together and
announced the plant would begin laying people off unless they accepted a cut in pay and forfeited some of their
benefits. The workforce was taken completely by surprise and the rumors began to fly. What tactic should
management use to reduce resistance to this change?
A. Participation
B. Education and Communication
C. Facilitation
D. Risk management
E. Manipulation
46.

1. The set of strategic alternatives from which an

organization chooses as it conducts business in a Strategic
particular industry management 3
2. The set of strategic alternatives from which an
organization chooses as it manages across several
industries and markets Strategy 8
3. A way of approaching business opportunities and Strategic
challenges leadership 9
4. An organization that competes in dozens of unrelated Effective
markets strategies 10
5. The range of markets in which an organization will Distinctive
compete competence 11
6. The process of creating strategies for an
organization Scope 5
7. The practice of duplicating another firm’s distinctive
competence Conglomerate 4
8. A comprehensive plan for accomplishing an Business-level
organization’s goals strategy 1
9. The capability to understand the complexities of both Corporate-level
the organization and its environment strategy 2
10. Strategies that promote a superior alignment Strategy
between the organization and its environment formulation 6
11. Something an organization does exceptionally well Strategic imitation 7

47.

1. Skills and capabilities that enable an organization to

create and implement strategies Deliberate strategy 9
2. The result of exploiting a distinctive competence Emergent strategy 7
3. A strength possessed by only a small number of
competing firms SWOT analysis 5
4. The failure of an organization to implement strategies Organizational
its competitors are implementing strengths 1
5. The careful evaluation of an organization’s internal
strengths and weaknesses and its external opportunities
and threats Common strength 8
6. The situation that exists when large numbers of
competing firms are able to implement the same
strategy Competitive parity 6
7. A pattern of action that develops over time in the Distinctive
absence of mission and goals competence 3
8. An organizational capability possessed by a large Competitive
number of competing firms advantage 2
Competitive
9. A plan chosen to support specific goals disadvantage 4
48.

1. A skill that allows people to see similarities among Organizational

situations threats 6
2. A skill that allows people to see differences among Convergent
situations thinking 1
3. A spontaneous breakthrough in which the creative
person achieves a new understanding of some Organizational
problem or situation opportunities 9
4. The ability of an individual to generate new ideas Incubation 10
5. A product built just to see if the ideas behind the
new product actually work Prototype 5
6. An external condition that increases the difficulty
of an organization’s performing at a high level Divergent thinking 2
7. An individual’s power to think intelligently and to
analyze situations and data effectively Innovation 8
8. The managed effort of an organization to develop
new products or services Insight 3
9. An external condition that may generate high
performance Cognitive ability 7
10. A period of less-intense conscious concentration
during which knowledge and ideas mature and
develop Creativity 4

49. Michael Porter’s five forces are:

Level of competitive rivalry

Power of suppliers
Power of buyers
Threat of substitutes
Threat of new entrants

50. _____________ _____________ involves the evaluation, modification, and improvement of creative ideas.

Innovation development

51. The shift from horse-drawn wagons to self-propelled automobiles would be a(n) ____________ innovation.

radical or product
52. The change from bias ply tires to radial tires would be a(n) ____________ innovation.

incremental

53. Reel-to-reel tape players are now considered museum items. Today we listen to music on a digital device
such as an iPod. This represents a(n) ________________ innovation.

radical or product

54. The evolution of tires from solid rubber to bias ply to radial would be a(n) _____________ change.

incremental

55. TVs have changed quite a bit from the 1940s when a huge box sat in the living room. From black-and-
white to color to projection to LCD to LED, these changes have been ____________.

incremental

56. In the 1950s, a telephone was a device that hung on the wall. Neighbors shared a party line. Today many
homes don’t even have a land line. Instead, the residents communicate using a cell phone. This change
represents a(n) ______________ innovation.

radical or product

57. In the days before computers, letters were typed on a typewriter. Today they are created using a word
processor on a personal computer. This represents a _____________ innovation.

technical or process

58. Televisions used to be made on a production line by assembling the necessary parts into a cabinet. After
assembly was complete, an inspector would plug the set in and turn it on. If it worked, it shipped. If it didn’t
work, it was scrapped. Then Zenith came up with a better idea. Workers tested the parts before putting them
into the set, spawning the slogan, “The quality goes in before the name goes on.” This represents a
_________________ innovation.

managerial or process
59. At automotive plants, people used to weld parts of the body together. Now robots do the work. This type
of change would be considered a ______________ innovation

radical process

60. List three reasons that organizations may fail to innovate.

Lack of resources
Failure to recognize opportunities
Resistance to change

61. An oarganization’s ____________ is the set of values, beliefs, and symbols that help guide its behavior.

culture

62. Donald is head of accounting at ABC Company, which has just been purchased by XYZ
Corporation. Knowing that the new combined company will not need two accounting heads, Donald is afraid
he might lose his job. Which of the types of resistance to change is at work here?

Threatened Self-Interests

63. Furniture just isn’t selling this year like it did last year. The store’s interior designer thinks it is because the
styles are outdated and has recommended a near-total replacement of traditional styles with contemporary styles
more to her liking. The store owner thinks it is because the interior designer isn’t promoting the furniture in the
store and wants her to increase her efforts to sell the existing inventory. What kind of resistance to change do
we see here?

Different perceptions

64. In the old building, the accounting people were together in a large, open area with only aisles separating
their work spaces. The plans for the new building provide for offices shared by two people, scattered
throughout the second floor. People who used to be in close proximity would be separated by distances and
walls, making communication more difficult and time-consuming. Naturally the accountanting people don’t
like this change. Which form of resistance is this?

Feelings of loss
65. A manager making decisions about company opportunities must first understand his __________ for risk.

propensity

66. A top-level executive faces many possibilities in the marketplace. A competitor may introduce a new
product that makes his own obsolete. New competitors may enter the market. Customer preferences may
change. Each of these presents a _______ for the organization.

risk

67. Indiana Manufacturing has options: It can extend its current product line; it can develop an entirely new
product, or it can purchase a company that makes complementary products. How can the top executives at
Indiana Manufacturing decide which option to choose?

Students’ answers may vary but should include an analysis of the costs and benefits of each option.

68. What three actions can a firm take to reduce the costs associated with risk?

1. Reduce the probability of the risk occurring.

2. Shift some of the costs of the risk to others through insurance or a joint venture.
3. Avoid the activity that includes the risky event.

69. Robert has been asked to calculate the probability of a specific set of events occuring. Each event has costs
associated with it. Robert’s CEO will use this information when deciding among possible actions the company
might take. This type of analysis occurs during ____ __________.

risk management

70. `Why is it important for a company’s strategy to be aligned with both its internal and external
environments?

Students’ answers will vary. Key points include:

A firm’s strengths should address opportunities in its competitive environment to maximize the chances for
success. A misalignment would allow a competitor to take advantage of the situation, which could cause the
firm to lose sales and market share. Misalignment could also cause a poor deployment of scarce resources that
could prevent the firm from taking advantage of other lucrative opportunities. An example is General Motors,
whose investment in the Chevrolet Volt electric car took resources away from the development and production
of other models more popular with new car buyers. Eventually the production of the Volt was halted for lack of
sales but only after years of costs and an infusion of money from the government.
71. Explain the advantages of performing a SWOT analysis as part of the annual strategic planning process.

Students’ answers will vary. Main points include:

Over time, customer preferences change. New products are introduced and other products become
obsolete. These changes can represent either opportunities or threats, depending on whether the organization
can adapt. Failing to analyze both internal and external environments could result in a misalignment of
resources. Every organization should determine whether its past strengths are still strengths or whether it
should develop new strengths to address changing market conditions. Those who can adapt survive; those who
don’t even check may be caught unaware and suffer at the hands of competitors.

72. Explain the innovation process. Why is it necessary for a firm to manage this process?

Students’ answers will vary. The process includes the steps of development, application, launch, growth,
maturity, and decline.

As with any process, a firm cannot allow the innovation process to proceed without the four functions of
management: planning, organizing, leading, and controlling. Ideas with market potential must be championed
and nurtured as they compete with other ideas for company resources. The firm must marshall the resources
allocated to the selected idea so it is not starved in infancy. After the decision is made, the organizational
structure is designed to support the idea through development and launch. As the product passes through
maturity into decline, the leaders must decide whether to improve the existing product or divert funds to other
company endeavors and allow this idea to die. For any firm to be successful, these decisions require conscious
thought; without a plan, the chances for success diminish exponentially.

73. Explain the differences between radical and incremental innovations, providing examples to support your
arguments.

Students’ answers will vary.

Radical innovations are new products, services, or technologies developed by an organization that completely
replace those that already exist in an industry. Incremental innovations are new peoducts or processes that
modify existing ones. Firms that implement radical innovations fundamentally shift the nature of competitioun
and the interaction of firms within their environment. Firms that implement incremental innovations alter, but
do not fundamentally change, competitive interaction in an industry.

An example of incremental innovation would be a bakery that used a conveyor system to bake its bread rather
than a stationary oven. This bakery would be able to speed up the baking process by having a continual stream
of bread in the ovens rather than having to wait for an empty oven to bake another loaf. Competitors without
this technology would be put at a disadvantage because without increasing the number of its ovens, it could not
produce as many loaves in a day.

A radical innovation would be the introduction of digital photography, making film and the cameras that use
them obsolete.
74. Explain the effects of a reward system on innovation. Examples may be used to supprot your arguments.

Students’ answers will vary. Here are some suggestions:

In any organization, rewards and punishment are used to direct employee behavior toward desired
ends. Rewards serve to perpetuate a specific behavior; punishment terminates the behavior. In short, what gets
rewarded gets repeated. Companies that reward creativity and innovation are likely to get more of them
provided that failures are not punished. Ideas that don’t result in a marketable product can and should tolerated
if lessons are learned from them. In this way even non-productive innovation can be rewarded, thus
demonstrating the desirability of creative thinking. The most effective rewards are not monetary but include
recognition, a sense of achievement, and challenging work.

Several inventors tried to develop an incandescent light bulb. Thomas Edison was the most persistent. He
once said, “I have not failed 1,000 times. I have successfully discovered 1,000 ways to NOT make a light
bulb.” This kind of corporate attitude toward innovation encourages experimentation. The more experiments,
the more likely that one will be a hit.

75.
Three roles have been named as essential to intrapreneurship. Identify the three roles and explain their
purpose. Use examples to support your arguments.

Students’ answers will vary. The three roles are inventor, product champion, and sponsor.

The purpose of the inventor is obvious: to generate an idea for a new product or service or an improvement to
an existing one. The product champion carries the torch for this idea to upper managers to overcome
organizational resistance to it and shepherd the idea through the adoption (application) process. The sponsor
provides the funding and political support for the idea so it can survive the rest of the innovation process to
become a marketable product or service.

76. Why must organizations experience change? What types of situations or events would cause an
organization to change? Examples may help illustrate your thoughts.

Students’ answers will vary.

The basic reason for change is that something relevant to the organization in either the internal or external
environments has changed or is likely to change. New competitors may enter the market; existing competitors
may leave or develop a new product that consumers find more desirable. Technology may change, rendering
the organization’s processes expensive or obsolete. Customer preferences change. Government regulations
change. Resources are exhausted and/or substitutes are developed. Key employees may leave the
organization. The economy may suddenly slide into recession, decreasing demand for the organization’s
product. Labor may become too expensive.
77. Identify and explain three reasons people resist change and the appropriate remedy for each particular
resistance.

Students’ answers will vary.

Causes of resistance include uncertainty, threatened self-interests, different perceptions, and feelings of loss.

Methods to overcome resistance include participation, education and communication, and facilitation.

It is important the student select the proper method for the causes s/he has selected.

78. Why is participation such a useful tool to overcome resistance to change? Why doesn’t it work in all
cases?

Students’ answers will vary.

People will support what they help create. Participation allows employees to understand the need for change, to
offer suggestions about what the changes should be and how to implement them. This gives them time to
prepare for the change. Uncertainty is reduced. Other perspectives are discussed and differences can be
resolved. Important relationships can be preserved when they are known, such as the need for proximity of
departments or individuals in a process. By the time the change is fully implemented, resistance has been
reduced and the change is likely to progress more quickly with fewer snags.

If the cause of resistance is not a lack of participation, increasing participation will not solve the problem.

79. What are the benefits of education and communication when they are used to reduce resistance to
change? Give an esample of when this tactic should be used.

Students’ answers will vary. Education and communication reduce uncertainty and can squelch the
inaccuracies in the rumor mills. When employees know what to expect, they can prepare for it both
psychologically and physically. Much of the resistance stems from a dislike of surprises. Removing the
element of surprise removes the resistance. Any information that is disseminated by management must be
accurate and as complete as possible. Apprising the employees of the need for change and the dire
consequences of not changing can go far in reducing resistance.
80. When considering force field analysis and resistance to change, which works better, increasing the forces
favoring change or decreasing the forces resisting change? Why do you think so?

Students’ answers will vary. Here is a parable that may help students to understand:

The sun and the wind saw a man walking across an open plain. The wind bragged that he could get the coat off
the man faster than the sun. The sun dared him to try. So the wind blew and blew, stronger, harder, and
colder. But the man simply drew his coat more tightly around him. After several tries, the wind finally gave
up. Then he dared the sun to give it a try. The sun did nothing but smile down on the man, shining gently and
warmly. In short order the man removed his coat.

The moral of the story is that the harder someone tries to force change, the stronger the resistance to it
becomes. But when the resistance is removed, the change happens.