Management Fundamentals Concepts Applications and Skill Development 7th Edition Lussier Test Bank Download

Management Fundamentals Concepts
Applications and Skill Development

7th Edition Lussier Test Bank
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Chapter 06: Managing Change, Innovation, and Entrepreneurship

Test Bank
MULTIPLE CHOICE
1. What are the types of change that can occur in an organization?

a. Environment, technology cycles, and next generation
b. Incremental and discontinuous
c. Strategy, structure, technology, and people
d. Management, personnel, and policies
ANS: C PTS: 1 DIF: Medium REF: Types of Change
OBJ: 6-1. Identify the forces for change, the types of change, and the forms of change.
NAT: AACSB standard: Analytical Thinking CD: Knowledge
2. In 2007, Apple Inc. released the iPhone, which was a breakthrough in the cell phone market.
Today, competitors such as Samsung, Motorola, and HTC each have smartphones on the
market that closely resemble the iPhone in both form and functionality. What form of change
did the first iPhone demonstrate?
a. Organizational
b. Incremental
c. Structural
d. Discontinuous
ANS: D PTS: 1 DIF: Medium REF: Discontinuous Change
NAT: AACSB standard: Analytical Thinking CD: Comprehension
3. ___________ is the alteration of existing work routines and strategies that affect the whole
organization.
a. Organizational change
b. Incremental change
c. Structure change
d. Discontinuous change
ANS: A PTS: 1 DIF: Medium
REF: Creativity, Innovation, and Change
4. John is an owner of a franchise that produces custom signs and banners. Prior to the recession,
the majority of John’s business came in the form of walk-in and repeat customers. After the
recession, the amount of traffic to his shop dwindled and his business was suffering. John
decided to hire an outside salesperson to actively find new business rather than wait for new
business to come to him. What type of change did John implement?
a. Strategy
b. Structure
c. Technology
d. People
ANS: A PTS: 1 DIF: Hard REF: Changes in Strategy
NAT: AACSB standard: Analytical Thinking CD: Analysis
5. ___________ is a significant breakthrough in technology that leads to design competition and

a new technology cycle.
a. Strategic change
b. Discontinuous change
c. Technological change
d. Incremental change
ANS: B PTS: 1 DIF: Easy REF: Discontinuous Change
6. Online streaming and downloading of music have replaced the compact disc. Which of the
following is this an example of?
a. The environment
b. Technology cycles
c. Next generation
d. Innovation
ANS: B PTS: 1 DIF: Medium REF: Technology Cycles
7. Research in Motion (RIM) dominated the cell phone market for several years with their
popular BlackBerry smartphone. Complacent, RIM did not feel the need to adapt to a
changing cell phone market with the introduction of the Apple iPhone. Google later entered
the cell phone market with their line of Android smartphones. Today, both Apple and Google
dominate the market with 94% of the market share while RIM holds only 2.3%. What caused
RIM to lose their dominance of the cell phone market?
a. Technology adoption curve
b. Technology cycles
c. Failing to take risks
d. Lack of customers
ANS: C PTS: 1 DIF: Hard REF: Failing to Take Risk
8. ___________ is continual improvement that takes place within the existing technology cycle.
a. Strategic change
b. Discontinuous change
c. Technological change
d. Incremental change
ANS: D PTS: 1 DIF: Easy REF: Incremental Change
9. In 2006, Microsoft released the Xbox 360, which was capable of playing older Xbox games.
This is an example of __________.
a. technology cycle
b. next generation
c. failing to take risk
d. technology adoption curve
ANS: B PTS: 1 DIF: Easy REF: Next Generation
10. Two important types of innovation are _______________.

a. technology and process
b. product and people
c. product and process
d. process and people
ANS: C PTS: 1 DIF: Easy
11. ___________ is the implementation of a new idea.

a. Concentration
b. Creativity
c. Entrepreneurship
d. Innovation
ANS: D PTS: 1 DIF: Easy
12. When implementing innovative changes, one faces ______.

a. adversity
b. pushback
c. risk
d. objections
ANS: C PTS: 1 DIF: Medium REF: Taking Risk
13. Amazon developed and released the Kindle TV Set-Top Box to compete with both the Apple
TV and Microsoft’s Xbox One. Which force for change is being demonstrated?
a. Technology cycles
b. The environment
c. Next generation
d. Strategy
ANS: B PTS: 1 DIF: Medium REF: The Environment
14. According to the technology adoption curve, the first group to adopt a new technology is
referred to as __________.
a. early adopters
b. innovators
c. fast movers
d. first buyers
ANS: B PTS: 1 DIF: Medium REF: Technology Adoption Curve
15. According to the technology adoption curve, the last group to adopt a new technology is
referred to as __________.
a. late majority
b. last movers
c. delayers
d. laggards
ANS: D PTS: 1 DIF: Medium REF: Technology Adoption Curve
16. Which of the following organizations is known to have a strong innovative culture?
a. Burger King
b. U.S. Postal Service
c. Google
d. Sears
ANS: C PTS: 1 DIF: Easy REF: Innovative Cultures
OBJ: 6-2. Contrast managing innovation during incremental and discontinuous change in terms of
approach, goals, and strategy. NAT: AACSB standard: Analytical Thinking
CD: Application
17. Innovative structures commonly share all of the following characteristics, except __________.
a. flexibility
b. specialist division of labor
c. limited bureaucracy
d. coordination with cross-functional teams
ANS: B PTS: 1 DIF: Hard REF: Innovative Structures
CD: Knowledge
18. A __________ project is one typically developed by a small and loosely structured group of
people who research and develop a project primarily for the sake of radical innovation.
a. greenfields
b. brownfields
c. skunkworks
d. changeworks
ANS: C PTS: 1 DIF: Hard REF: Innovative Structures
CD: Comprehension
19. The goal of the _____________________ is to lower costs and incrementally improve
performance and functions of the existing dominant design.
a. enhancement approach
b. compression approach
c. gradual approach
d. developmental approach
ANS: B PTS: 1 DIF: Easy
REF: Managing Innovation During Incremental Change: The Compression Approach
CD: Knowledge
20. During discontinuous change, one should manage innovation using ____________.
a. the generational change approach
b. the experimental approach
c. the compression approach
d. the trial approach
REF: Managing Innovation During Discontinuous Change: The Experimental Approach
CD: Comprehension
21. The goal of the _______________ is to make significant improvements in performance and to
establish a new dominant design.
a. generational change approach
b. technology cycle
c. experimental approach
d. incremental change approach
ANS: C PTS: 1 DIF: Medium
REF: Managing Innovation During Discontinuous Change: The Experimental Approach
CD: Knowledge
22. The strategy of the ______________ is to continue to improve the existing technology as
rapidly as possible while still allowing the use of the old technology.
a. compression approach
b. generational change approach
c. next-generation approach
d. technology change approach
ANS: A PTS: 1 DIF: Easy
REF: Managing Innovation During Incremental Change: The Compression Approach
CD: Knowledge
23. The four stages people tend to go through when facing change are ____________.
a. denial, resistance, consideration, and acceptance
b. questioning, fighting, hesitation, and acceptance
c. resistance, questioning, consideration, and commitment
d. denial, resistance, exploration, and commitment
ANS: D PTS: 1 DIF: Medium
REF: Stages in the Change Process
OBJ: 6-3. List the reasons employees resist change and suggest ways of overcoming such resistance.
24. The four-stage change process is ______________.

a. an ongoing process
b. a linear process
c. a singular cycle process
d. a forward motion process
25. Mitchel has worked for Smith’s Construction Company for eight years and loves his job.
Recently, a new manager was hired for his region and rumor has it that the new manager
wants to bring in all his own staff and plans on laying off most of the existing workers. Many
of Mitchel’s friends have begun looking for new jobs, but Mitchel believes that there is no
way he will be one of the ones to be let go. He is currently experiencing which stage of the
change process?
a. Resistance
b. Denial
c. Commitment
d. Fighting
ANS: B PTS: 1 DIF: Hard
26. A new policy at work requires Jaxon to wear slacks every day of the week. Previously, he
enjoyed wearing khakis or golf shorts to work on occasion. Since he works at a call center, he
is never face-to-face with customers and does not like or understand this new policy. He does
not understand the need for this new policy and is considering asking his management for
explanation. He hopes he can still find a way to wear whatever pants or shorts he wants. We
would consider Jaxon to be in which stage of the change process?
a. Resistance
b. Resentment
c. Questioning
d. Denial
ANS: A PTS: 1 DIF: Hard
27. The team at TeleCorp was very impressed by their competitor’s most recent release. They
found it intriguing and are worried about some of their current customers switching services
since they do not have a comparable product. They have begun doing their own research in
this new field and thinking about how to create their own offering. What stage of the change
process are they in?
a. Commitment
b. Resistance
c. Denial
d. Exploration
ANS: D PTS: 1 DIF: Hard
28. ___________________ is necessary in order to implement change.

a. Exploration
b. Commitment
c. Resistance
d. Denial
29. Orchid Incorporated recently recognized that some changes needed to be implemented. Due to
this realization, an entirely new training program has been developed and is ready for
implementation. Continuing down the current path could be dangerous for the future of the
company, but this drastic change will not be easy. The staff has had some trouble adjusting,
but most agree that this is now the way things are. The stage of change being undergone here
is ________________.
a. experimentation
b. exploration
c. acceptance
d. commitment
30. You are upset that the company is implementing a new policy for swapping scheduled shifts.
The new policy requires employees to send a 48-hour notice when swapping scheduled shifts
and waiting for supervisor approval before an actual swap can occur. You feel that the current
policy in which employees can swap shifts at any time without supervisor approval is
sufficient and that a change is not necessary. You don’t see how the new policy can be
implemented without becoming an inconvenience to both employees and supervisors, causing
inefficiency in scheduling. What it at the core of your resistance to change?
a. Uncertainty
b. Learning anxiety
c. Self-interest
d. Fear of loss
ANS: A PTS: 1 DIF: Hard REF: Resistance to Change
31. Which of the following is not a way of overcoming change?

a. Create a win-win situation.
b. Create urgency.
c. Develop a united goal.
d. Develop a positive trust climate for change.
ANS: C PTS: 1 DIF: Medium
REF: How to Overcome Resistance to Change
NAT: AACSB standard: Analytical Thinking CD: Application
32. Which is not a major source of resistance to change?

a. Facts
b. Beliefs
c. Values
d. Attitudes
33. Amanda has worked for Parks City Library for over ten years and has grown to love her job
and her coworkers. Recently, there has been talk among the library workers that half of the
existing workers will be transferred to the new library on the other side of town. Amanda is
worried that Macy, her fellow worker of five years, will be one of the staff members moving
to the new library. She hopes that both she and Macy will stay at the same library. What is
Amanda’s reason for resisting change?
a. Learning anxiety
b. Self-interest
c. Fear of loss
d. Uncertainty
ANS: C PTS: 1 DIF: Hard REF: Resistance to Change
34. What is a major focus of resistance to change?

a. Work environment
b. Intensity
c. Beliefs
d. Employees
ANS: A PTS: 1 DIF: Easy REF: Focus
35. Sally was recently assigned to an important advertising campaign for WonderCorp’s new
project. She is usually the leader of cash operations and has not done any major advertising
since she graduated three years ago. Sally is scared she might ruin the advertisement and
create a bad name for the company. What is Sally’s reason for resisting change?
a. Learning anxiety
b. Self-interest
c. Fear of loss
d. Uncertainty
ANS: A PTS: 1 DIF: Hard REF: Resistance to Change
36. A new policy at work requires Jason to stay later on Wednesdays to attend mandatory project
meetings. Wednesdays are usually when Jason takes his daughter to soccer practice. Jason
would rather have the project meetings earlier in the morning on Wednesdays or stay later on
Thursdays so he can still make time for his daughter. What is Jason’s reason for resisting
change?
a. Learning anxiety
b. Self-interest
c. Fear of loss
d. Uncertainty
ANS: B PTS: 1 DIF: Hard REF: Resistance to Change
37. Mary is a new supervisor working with a preexisting staff that has resisted many of the new
policies she has put into place. Mary explains to the staff that the new policies are more
effective than the old ones because they save time and energy and allow the staff more time to
spend serving customers. How is Mary overcoming resistance with her staff?
a. By creating a win-win situation
b. By creating urgency
c. By clearly state why the change is needed and how it will affect employees
d. By developing a positive trust climate for change
ANS: C PTS: 1 DIF: Hard
38. Mary is a new supervisor working with a preexisting staff that has resisted many of the new
policies she has put into place. She realizes that she may have overstepped boundaries with
the staff and has made efforts to make sure the staff knows she has their best interests in mind.
She has encouraged staff members to suggest their own ideas and emphasizes that their input
is important in making decisions. How is Mary overcoming resistance with her staff?
39. David is discussing changes to the smoking policy at work. Though the company as a whole
wants to execute a work environment that is smoke-free, over half of David’s employees
prefer to smoke during their lunch breaks in the break room. After many complaints about the
new policy, David tries to appease these workers that want to smoke by redirecting them to
smoke outside the building in designated smoking zones. How is David overcoming resistance
with his staff?
ANS: A PTS: 1 DIF: Hard
40. Which of the major sources of resistance to change deals with what is important to us and
pertains to right and wrong to help establish priorities?
a. Facts
b. Beliefs
c. Values
d. Attitudes
ANS: C PTS: 1 DIF: Easy REF: Sources
41. Which of the following major focuses of resistance to change asks the question, “What will I
gain or lose?”
a. Self
b. Others
c. Work environment
d. Beliefs
ANS: A PTS: 1 DIF: Easy REF: Focus
42. Resistance to change varies in its ______, ______, and ______.

a. intensity, attitude, facts
b. intensity, source, focus
c. urgency, source, commitment
d. focus, urgency, facts
REF: A Model for Identifying and Overcoming Resistance to Change
43. Lucy has asked her staff to think of an idea for the company to have the competitive
advantage in social media. Despite staff complaints, Lucy feels the need to take action and has
encouraged staff members to make social media a high priority in development before another
company takes the advantage. How is Mary overcoming resistance with her staff?
ANS: B PTS: 1 DIF: Hard
44. The _______________ is often responsible for organizational development throughout an

organization while the ___________ is responsible for implementing an organizational
change effort.
a. change agent; human resources management department
b. human resources management department; change agent
c. change agent; process consultant
d. process consultant; human recourses management department
ANS: B PTS: 1 DIF: Medium REF: Organizational Development
OBJ: 6-4. Define organizational development and identify the steps in the Lewin and comprehensive
change models. NAT: AACSB standard: Analytical Thinking
CD: Knowledge
45. What is the commonly used method of managing planned change?

a. Organizational consideration
b. Creating urgency
c. Organizational development
d. Discontinuous change
ANS: C PTS: 1 DIF: Easy REF: Organizational Development
CD: Knowledge
46. Lewin’s change model includes all of the following steps, except __________.
a. Freezing
b. Unfreezing
c. Refreezing
d. Moving
ANS: A PTS: 1 DIF: Easy REF: Lewin’s Change Model
CD: Comprehension
47. Diego is a manager at a local retro game shop. He has recently had to overhaul the firm’s
process of acquiring certain merchandise. In order to accomplish this new process, the entire
staff had to be retrained. Although the change was initially met with some resistance, it is now
becoming the standard within the company. At what stage in Lewin’s change model is
Diego’s game shop in?
a. Freezing
b. Unfreezing
c. Refreezing
d. Moving
ANS: C PTS: 1 DIF: Medium REF: Lewin’s Change Model
CD: Analysis
48. Eric is a manager at a local café. Eric frequently receives complaints about his staff and the
overall customer satisfaction is low. Eric recognizes the need for change, but fears that his
staff will be hesitant to embrace a change in the culture they have created. At what stage in
Lewin’s change model is Eric’s cafe in?
a. Freezing
b. Unfreezing
c. Refreezing
d. Moving
ANS: B PTS: 1 DIF: Medium REF: Lewin’s Change Model
CD: Analysis
49. Kenzie is a manager at a golf course. She frequently receives complaints about the condition
of the greens and realizes the procedure for maintaining the greens is no longer adequate. She
is currently retraining the maintenance staff to correct the problem. At what stage in Lewin’s
change model is Kenzie’s golf course in?
a. Freezing
b. Unfreezing
c. Refreezing
d. Moving
ANS: D PTS: 1 DIF: Medium REF: Lewin’s Change Model
CD: Analysis
50. The first step in the comprehensive model for change is to __________.
a. recognize the need for change
b. plan the change interventions
c. identify possible resistance to the change
d. control the change
ANS: A PTS: 1 DIF: Easy
REF: A Comprehensive Change Model
CD: Knowledge
51. The last step in the comprehensive change model is to __________.

a. implement the change interventions
b. plan the change interventions
c. identify possible resistance to the change
d. control the change
CD: Knowledge
52. The step in Lewin’s change model that includes reducing the forces maintaining the status quo
is __________.
a. freezing
b. unfreezing
c. refreezing
d. moving
CD: Comprehension
53. The step in the comprehensive model that includes identifying possible resistance to the
change and planning how to overcome it correlates to which step in Lewin’s change model?
a. Freezing
b. Unfreezing
c. Refreezing
d. Moving
CD: Comprehension
54. The step in the comprehensive model that includes planning and implementing the change
interventions correlates to which step in Lewin’s change model?
a. Freezing
b. Unfreezing
c. Refreezing
d. Moving
ANS: D PTS: 1 DIF: Hard REF: Lewin’s Change Model
CD: Comprehension
55. The step in the comprehensive model that includes following up to ensure that the change is
implemented and maintained correlates to which step in Lewin’s change model?
a. Freezing
b. Unfreezing
c. Refreezing
d. Moving
ANS: C PTS: 1 DIF: Hard REF: Lewin’s Change Model
CD: Comprehension
56. The step in Lewin’s change model that includes the change process in which employees learn
new, desirable behaviors, skills, values, and attitudes is __________.
a. freezing
b. unfreezing
c. refreezing
d. moving
ANS: D PTS: 1 DIF: Easy REF: Lewin’s Change Model
CD: Comprehension
57. Forcefield analysis is ____________.
a. an organizational development intervention technique that brings together
participants from all parts of the organization to problem solve or take advantage
of opportunities
b. an organizational development intervention that diagrams the current level of
performance, the forces hindering change, and the forces driving toward change
c. an organizational development intervention that uses a questionnaire to gather data
to use as the basis for change
d. an organizational development intervention in which the change agent makes a
direct recommendation for change
ANS: B PTS: 1 DIF: Easy REF: Forcefield Analysis
CD: Knowledge
58. Survey feedback is ___________.

a. an organizational development intervention technique that brings together
participants from all parts of the organization to problem solve or take advantage
of opportunities
b. an organizational development intervention that diagrams the current level of
performance, the forces hindering change, and the forces driving toward change
c. an organizational development intervention that uses a questionnaire to gather data
to use as the basis for change
d. an organizational development intervention in which the change agent makes a
direct recommendation for change
ANS: C PTS: 1 DIF: Easy REF: Survey Feedback
CD: Knowledge
59. ___________ is the most widely used organizational development intervention technique
today.
a. Sensitivity training
b. Process consultation
c. Forcefield analysis
d. Team building
ANS: D PTS: 1 DIF: Easy REF: Team Building
CD: Knowledge
60. Jen is a member of a team within her company that needs to solve the problem of why their
customer base is decreasing. The team is small, with only seven members, including her.
After Jen’s boss gives the team their assignment, they begin to determine why their customer
base is shrinking. They decide to make a diagram. Jen’s group is using which organizational
development intervention?
a. Process consultation
b. Survey feedback
d. Work design
ANS: C PTS: 1 DIF: Medium REF: Forcefield Analysis
CD: Analysis
61. Marla works for Direct Consulting, a consulting firm that specializes in direct feedback. She
has been hired by “Find Your Car” to find out why their customer base is shrinking. In order
to utilize direct feedback organizational development intervention, Marla __________.
a. suggests a change for “Find Your Car” to make
b. brings in members from all areas of “Find Your Car” to help her problem solve
c. issues questionnaires to all customers in “Find Your Car’s” database
d. creates a forcefield analysis for “Find Your Car”
ANS: A PTS: 1 DIF: Hard REF: Direct Feedback
CD: Application
62. Which of the following forms of organizational development intervention is the oldest and
most popular technique at the department, division, and organizational levels?
a. Team building
b. Survey feedback
d. Process consultation
ANS: B PTS: 1 DIF: Medium REF: Survey Feedback
CD: Comprehension
63. Which of the following forms of organizational development intervention is focused only on
the individual?
a. Work design
b. Direct feedback
c. Survey feedback
d. Training and development
ANS: D PTS: 1 DIF: Easy REF: Training and Development
CD: Knowledge
64. ___________ fuel the economy, since they create as much as 80% of new jobs.
a. Large businesses
b. Small businesses
c. Corporations
d. Franchises
REF: Small-Businesses Entrepreneurs
OBJ: 6-5. Compare an entrepreneur and an intrapreneur and discuss the entrepreneurial process.
65. Large businesses that innovate and change have an _____________.

a. entrepreneurial frame
b. entrepreneurial orientation
c. intrapreneurial frame
d. intrapreneurial orientation
REF: Large Businesses Intrapreneurs
66. What is the first step to take after selecting a new business venture?
a. Begin purchasing inventory.
b. Look at real estate properties to locate the office.
c. Hire employees to divide the workload.
d. Write a business plan.
ANS: D PTS: 1 DIF: Easy REF: Planning the New Venture
67. Josh works for H4, a company that encourages employees to create new products. Josh was
just assigned to a project where he will create a product their company currently does not sell.
If his project gets picked, he will become the manager of the product’s line. If Josh gets the
product, he will be a(n) __________.
a. franchisee
b. entrepreneur
c. change agent
d. intrapreneur
REF: Entrepreneurs Versus Intrapreneurs and Franchisees
68. Intrapreneurs are also called __________.

a. corporate entrepreneurs
b. semi-independent innovators
c. venture initiators
d. innovation agents
69. A(n) __________ is a business that is independently owned and operated, with a small
number of employees and a relatively low volume of sales.
a. entrepreneurial venture
b. independent operation
c. franchise
d. small business
70. According to the Department of Labor, a small business employs fewer than __________
workers.
a. 25
b. 50
c. 75
d. 100
71. According to the Department of Labor, a small to medium-size enterprise is one that employs
fewer than __________ workers.
a. 250
b. 500
c. 750
d. 1,000
ANS: B PTS: 1 DIF: Medium
72. Both the Small Business Administration and the Department of Labor define a business as
large if it has __________ or more employees.
a. 250
b. 500
c. 750
d. 1,000
REF: Large Businesses Intrapreneurs
73. __________ advantage exists when an entrepreneur is able to offer a product or service with
unique customer value before competitors do so.
a. First to market
b. First-mover
c. Market-leader
d. Innovator
ANS: B PTS: 1 DIF: Medium REF: Selecting the New Venture
74. One of the factors that contributes to a higher degree of entrepreneurship in emerging
economies is __________.
a. lack of education
b. lack of job opportunities
c. lack of capital
d. lack of competition
REF: Trends and Issues in Management
75. __________ entrepreneurs start new businesses with the goal of changing the world while
making a profit.
a. Activist
b. Ethical
c. Social
d. Compassionate
ANS: C PTS: 1 DIF: Hard
TRUE/FALSE
76. Forces for change include the environment, technology cycles, and next generation.
ANS: T PTS: 1 DIF: Easy REF: Forces for Change

77. New machines and equipment, information processing, and automation are examples of
changes based on technology.
ANS: T PTS: 1 DIF: Easy REF: Changes in Technology

78. There are four types of change.
ANS: T PTS: 1 DIF: Easy REF: Types of Change

79. When tasks change, people’s compensation and job titles must change.
ANS: F PTS: 1 DIF: Medium REF: Changes in People

CD: Comprehension
80. Incremental change occurs when there is a significant breakthrough in technology that leads to
design competition and a new technology cycle.
ANS: F PTS: 1 DIF: Easy REF: Incremental Change

CD: Knowledge
81. When faced with change, people always go through the four stages of the change process in a
linear fashion.
ANS: F PTS: 1 DIF: Easy

82. The facts about an impending change are often circulated through the grapevine.
ANS: T PTS: 1 DIF: Easy REF: Sources

83. The three major sources of resistance to change are beliefs, values, and work environment.
ANS: F PTS: 1 DIF: Easy REF: Sources

84. We are more commonly concerned about the interests of the organization than about our best
interests when it comes to change.
ANS: F PTS: 1 DIF: Easy REF: Self-interest

85. The comprehensive change model is an organizational development intervention.
ANS: F PTS: 1 DIF: Easy

REF: Organizational Development Interventions
CD: Knowledge
86. Lewin’s change model presents a change-stability paradox, going from refreezing to
unfreezing.
ANS: F PTS: 1 DIF: Easy REF: Lewin’s Change Model

CD: Knowledge
87. In the comprehensive model, controlling the change involves following up to ensure that the
change is implemented and maintained.
ANS: T PTS: 1 DIF: Easy

CD: Comprehension
88. The comprehensive change model is a five-step process that is more detailed than Lewin’s
change model.
ANS: T PTS: 1 DIF: Easy

CD: Comprehension
89. Franchisees are not considered by some to be real entrepreneurs or intrapreneurs.
ANS: T PTS: 1 DIF: Medium

90. A new venture is a new business or a new line of business.
ANS: T PTS: 1 DIF: Easy REF: New Ventures

91. Approximately half of new businesses survive less than five years.

REF: Risk Taking by Entrepreneurs and Intrapreneurs
92. When surveyed, most entrepreneurs reported that they started businesses that offered products
or services that already existed and that were on par with existing offerings.
ANS: F PTS: 1 DIF: Medium

REF: Opportunity Recognition and Exploration
93. In terms of innovation, the United States ranks in the top 5 countries.
ANS: F PTS: 1 DIF: Medium

94. More males start businesses than females.

95. The survival rate for businesses founded by Asians in the United States is significantly higher
than that of other groups.

ESSAY
96. How do the four management functions relate to change?
ANS:
When managers organize and delegate tasks, they often require employees to make some
changes in their regular routine. When managers hire, orient, train, and evaluate performance,
change is required. Leadership calls for influencing employees, often to change in some way,
and control may require the use of new methods or techniques.
PTS: 1 DIF: Hard REF: The Management Functions and Change

97. What are the two forms of change and how do they differ from each other? Give an example
of each.
ANS:
Incremental change is continual improvement that takes place within the existing technology
cycle. Discontinuous change is a significant breakthrough in technology that leads to design
competition and a new technology cycle. The difference between the two forms of change is
that incremental changes occur within the current technology cycle whereas discontinuous
change starts a new technology cycle. An example of incremental change can be when
software companies provide updates and enhancements to a current computer operating
system. An example of discontinuous change is when there is a breakthrough in technology
such as the advent of the high-definition television.
PTS: 1 DIF: Hard REF: Forms of Change

98. List and describe the common characteristics of innovative cultures.
ANS:
Encouragement of risk taking: Getting employees to voice creative ideas helps lead to
innovation. Innovative cultures encourage and reward employees for taking risks without fear
of punishment if they fail.
Flexibility: Employees are more innovative when they are empowered to do things their own
way. They have a sense of ownership and control over their ideas and work, and they can
make changes to their work without having to get permission, as they are not micromanaged.
Open systems: With an open system, you seek innovation from within and outside the firm.
Many companies today are turning to their customers, suppliers, and others in their supply
chain for innovation.
PTS: 1 DIF: Hard REF: Innovative Cultures

CD: Knowledge
99. Due to unfortunate economic conditions, you find out that your position is being eliminated.
Please discuss the four stages of the change process in relation to your current situation.
ANS:
Answers to this question will vary but should include elements of the following:
Denial: When changes are difficult to understand or accept, the employee may deny that the
change will affect him or perhaps deny the fact that he is being let go. The employee in this
situation may feel that a mistake has been made.
Resistance: Once over the shock, he may resist the change. The employee, who is obviously
upset, may speak to his direct supervisor or HR manager, pleading the case of why his
position should not be eliminated.
Exploration: Exploration occurs when you begin to understand how this change will affect
you and begin to try to adapt. Realizing that the position will indeed be eliminated, the
employee begins to come to terms with the change and begins to weigh his options for the
future.
Commitment: After some exploration, the employee identifies his level of determination to
make change a success. The employee at this point realizes that he now needs to line up a new
job and begins to submit applications and resumes and to schedule interviews with new
would-be employers.
PTS: 1 DIF: Hard REF: Stages in the Change Process

100. List and describe the five reasons employees resist change.
ANS:
Uncertainty: Employees react defensively and rationalize that change is not really needed
because they fear the unknown outcome and potential failure.
Learning anxiety: Employees resist change because they are scared that they may not be
successful in learning something new and may look bad in front of their peers.
Self-interest: Employees feel that they are personally threatened by the change and are more
concerned with their best interests rather than those of the organization.
Fear of loss: Employees fear some sort of economic loss or loss of social relationships due to
the change.
Fear of loss of control: Employees fear loss of power, status, security, or control due to the
change.
PTS: 1 DIF: Hard REF: Resistance to Change

101. List and describe four ways to overcome resistance to change.
ANS:
Answers to this question will vary but should include elements of the following:
Develop a positive trust climate for change: Leaders maintain good relationships with
employees and make them comfortable in suggesting ideas and involving themselves in
change.
Plan: Leaders plan for resistance and look at change from the employee’s perspective so they
know what objectives to clarify when implementing change.
Clearly state why the change is needed and how it will affect employees: Give employees the
“why” when it comes to change. It is important to be honest and communicate with
employees about why a policy is changing and how it will positively and negatively affect
them.
Create a win-win situation: Let employees know what is in it for them. They will be more
willing to accept change when they see that they are being benefited.
Involve employees: A commitment to change is usually critical to its successful
implementation. Employees who participate in developing changes are more committed to
them than employees who have changes dictated to them. To get involvement and a
commitment to change, phrase your own ideas as if someone else said them.
Provide support and evaluation: Employees need to know that managers are there to help
them cope with the changes. You need to make the learning process as painless as possible by
providing training and other support. Managers must also provide feedback and evaluation
during the learning process to increase the employees’ efficiency and effectiveness in
implementing the change.
Create urgency: When you decide on a change, you have to move fast. Many people
procrastinate making changes. A feeling of urgency is the primary driver toward taking action.
If something is perceived as urgent, it is given a high priority and is usually done
immediately.
PTS: 1 DIF: Hard REF: How to Overcome Resistance to Change

102. List every stage in the comprehensive change model and briefly summarize what each stage
entails.
ANS:
Recognize the need for change: State the change needed and set objectives. Consider all
aspects of proposed change.
Identify possible resistance to change, and plan how to overcome it.
Plan the change interventions: The change agent should select the appropriate intervention
based on the diagnosis of the problem.
Implement the change interventions: The change agent, or someone he or she designates,
conducts the intervention to bring about the desired change.
Control the change: Follow up to ensure that the desired change has been accomplished; if
not, then implement corrective action.
PTS: 1 DIF: Hard REF: A Comprehensive Change Model

CD: Knowledge
103. List the stages in Lewin’s change model and briefly summarize what each stage entails.
ANS:
Unfreezing: This step usually involves reducing forces that are maintaining status quo.
Recognize the need for change and identify the possible resistance and how to overcome it.
Moving: Employees learn new skills relative to the desired change. Plan the change
interventions and implement the change interventions.
Refreezing: The desirable performance becomes the permanent way of doing things. Control
the change.
PTS: 1 DIF: Hard REF: Lewin’s Change Model

CD: Knowledge
104. State and describe the difference between forcefield analysis and survey feedback.
ANS:
Forcefield analysis is used by a small group to diagnose and solve a specific problem. Survey
feedback uses a questionnaire filled out by a large group to identify problems; the group does
not work together to solve a problem.
PTS: 1 DIF: Hard REF: Organizational Development Interventions

CD: Comprehension
105. List and describe the differences in risks entrepreneurs and intrapreneurs have.
ANS:
Entrepreneurs pursue opportunities without regard to the resources they currently own and
take risks in acquiring resources from external sources. They do not receive a real paycheck;
only profits and losses. They usually risk personal assets and can lose everything, including
their job, if the business fails. Intrapreneurs usually do not risk personal assets because the
large company provides financing. They receive their salary and usually a portion of the new
business’s profits. If the business fails, they can usually return to their prior position in their
company.
PTS: 1 DIF: Hard REF: Risk Taking by Entrepreneurs and Intrapreneurs


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Chapter 06: Managing Change, Innovation, and Entrepreneurship

1. What are the types of change that can occur in an organization?

5. ___________ is a significant breakthrough in technology that leads to design competition and

10. Two important types of innovation are _______________.

11. ___________ is the implementation of a new idea.

12. When implementing innovative changes, one faces ______.

24. The four-stage change process is ______________.

28. ___________________ is necessary in order to implement change.

31. Which of the following is not a way of overcoming change?

32. Which is not a major source of resistance to change?

34. What is a major focus of resistance to change?

42. Resistance to change varies in its ______, ______, and ______.

44. The _______________ is often responsible for organizational development throughout an

45. What is the commonly used method of managing planned change?

51. The last step in the comprehensive change model is to __________.

58. Survey feedback is ___________.

65. Large businesses that innovate and change have an _____________.

68. Intrapreneurs are also called __________.

ANS: T PTS: 1 DIF: Easy REF: Forces for Change

ANS: T PTS: 1 DIF: Easy REF: Changes in Technology

78. There are four types of change.

ANS: T PTS: 1 DIF: Easy REF: Types of Change

ANS: F PTS: 1 DIF: Medium REF: Changes in People

ANS: F PTS: 1 DIF: Easy REF: Incremental Change

ANS: F PTS: 1 DIF: Easy

ANS: T PTS: 1 DIF: Easy REF: Sources

ANS: F PTS: 1 DIF: Easy REF: Sources

ANS: F PTS: 1 DIF: Easy REF: Self-interest

85. The comprehensive change model is an organizational development intervention.

ANS: F PTS: 1 DIF: Easy

ANS: F PTS: 1 DIF: Easy REF: Lewin’s Change Model

ANS: T PTS: 1 DIF: Easy

ANS: T PTS: 1 DIF: Easy

89. Franchisees are not considered by some to be real entrepreneurs or intrapreneurs.

ANS: T PTS: 1 DIF: Medium

90. A new venture is a new business or a new line of business.

ANS: T PTS: 1 DIF: Easy REF: New Ventures

ANS: T PTS: 1 DIF: Medium

ANS: F PTS: 1 DIF: Medium

ANS: F PTS: 1 DIF: Medium

ANS: T PTS: 1 DIF: Medium

ANS: T PTS: 1 DIF: Medium

96. How do the four management functions relate to change?

PTS: 1 DIF: Hard REF: The Management Functions and Change

PTS: 1 DIF: Hard REF: Forms of Change

98. List and describe the common characteristics of innovative cultures.

PTS: 1 DIF: Hard REF: Innovative Cultures

PTS: 1 DIF: Hard REF: Stages in the Change Process

PTS: 1 DIF: Hard REF: Resistance to Change

101. List and describe four ways to overcome resistance to change.

PTS: 1 DIF: Hard REF: How to Overcome Resistance to Change

PTS: 1 DIF: Hard REF: A Comprehensive Change Model

PTS: 1 DIF: Hard REF: Lewin’s Change Model

PTS: 1 DIF: Hard REF: Organizational Development Interventions

PTS: 1 DIF: Hard REF: Risk Taking by Entrepreneurs and Intrapreneurs

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42. Resistance to change varies in its , , and __.