Deck 10: Organizing for Innovation

Question 1

Advances in information technology have hindered the growth of loosely coupled organizational structures.

Answer 1

False

Question 2

The Bobcat Machinery Company has a high degree of formalization and requires standardization of procedures with many rules dictated.Bobcat will find that this regulation leads to disciplined thinking which in turn fosters innovation.

Answer 2

False

Question 3

The not-invented-here syndrome encourages companies to try innovations from divisions in other countries because persons who live in another country are more often seen as experts.

Answer 3

False

Question 4

A loosely coupled structure is better suited for activities that involve the exchange of tacit knowledge.

Question 5

Frankie's Chicken Shack wants to ensure better consistency and quality.To accomplish this Frankie needs to make her procedures more standardized.

Question 6

Standardization refers to the degree to which activities are performed in a uniform way.

Question 7

For the transnational approach to R&D to work,the organization must balance its identity between national brands and global image.

Question 8

Coalitions of small firms often have well-defined systems of authority and control.

Question 9

Formalization refers to the degree to which a firm's decision-making authority is retained only at high levels of the firm's hierarchy.

Question 10

The locally leveraged and globally linked R&D strategies are the same.

Question 11

A modular product is one that "modifies" or enhances another product.

Question 12

The International Cyberspace Corporation is a very large firm.It can overcome its size barriers to creativity if it has the internal structures with the incentives and behaviors of small firms.

Question 13

The transnational approach to R&D leverages resources and capabilities that exist anywhere within the firm and deploys them when and where an opportunity to do so exists.

Question 14

The Peedle Chocolate Company is headquartered in Belgium.In the United States,it uses manufacturing techniques from France and marketing techniques from Great Britain.It seems to be using the locally leveraged R&D strategy.

Question 15

When large companies break up into networks of small,often more autonomous divisions of independent firms it is called the Icarus Paradox.

Question 16

According to research,consumer product companies tend to use the centralized R&D structure to better meet individual market needs.

Question 17

The globally linked R&D strategy is great for global coordination,but it is expensive.

Question 18

An ambidextrous organization is one with a complex organizational form that is composed of multiple internally inconsistent architectures that can collectively achieve both short-term efficiency and long-term innovation.

Question 19

Firms which have multiple product divisions generally implement a common structure across all the divisions.

Question 20

A firm's organization structure can both help and hinder the firm's efforts at innovation.

Question 21

Which of the following is true regarding ambidextrous organizations?

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

Question 22

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

A) mechanistic
B) formalized
C) standardized
D) organic

Question 23

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

A) can lead to products that better satisfy customer needs.
B) can enable greater division of labor.
C) it leads to a sense of ownership and empowerment among employees.
D) leads to higher sales revenues.

Question 24

Schumpeter said that large firms are likely to have

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

Question 25

In loosely coupled organization structures

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

Question 26

Which of the following statements is true about small firms?

A) They face difficulties in monitoring employees.
B) Rewarding employees is much more difficult for them.
C) They tend to be more entrepreneurial.
D) They are likely to have lower rates of new product success.

Question 27

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

A) When customers want office chairs with rubber wheels
B) When customers want office chairs with lumbar support
C) When customers want office chairs with headrests
D) When some customers want office chairs with rubber wheels and lumbar support while the remaining prefer headrests only.

Question 28

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

A) modularity.
B) architecture.
C) transparent substitution.
D) organic innovation.

Question 29

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

A) better capabilities to take on larger innovation projects.
B) fewer rules and regulations than smaller firms.
C) increasingly effective governance systems.
D) foolproof communication systems.

Question 30

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

A) achieve greater economies of scale.
B) eliminate the duplication of efforts.
C) benefit more from the learning curve.
D) result in development projects that take advantage of the diversity of knowledge and market contacts that may exist in different divisions.

Question 31

Quasiformal structures

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

Question 32

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

A) a modular team.
B) skunk works.
C) an inorganic group.
D) a loosely coupled team.

Question 33

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

A) law of diminishing returns
B) principle of disaggregation
C) Icarus Paradox
D) research of Porter

Question 34

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

A) organic technology.
B) loose coupling.
C) functional preference.
D) default designing.

Question 35

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

A) creativity.
B) formalization.
C) delegation.
D) decentralization.

Question 36

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

A) more responsive to change
B) less responsive to change
C) oblivious to change
D) unaffected by change

Question 37

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

A) decentralized
B) centralized
C) spaghetti
D) homogenized

Question 38

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

A) Customer contact
B) Waste
C) Creativity and experimentation
D) The company's cost advantage

Question 39

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

A) less creativity.
B) more creativity.
C) disgruntled employees because they do not know what to expect.
D) more flexibility in responding to fashion trends.

Question 40

A large company might want to disaggregate in order to

A) lengthen development cycles.
B) reduce costs.
C) become more responsive.
D) improve the rate of product adoption.

Question 41

Biogyn produces tissues and diagnostics substances for three market segments: hospitals,universities,pharmaceutical companies.Jasper,a member of the upper management team,is trying to decide whether to decentralize its R&D activities by division or not.You have been called in as a consultant to explain the advantages and disadvantages of such a move.What will you say?

Question 42

The Frankfurt Clock Company has subsidiaries in several different countries that are highly autonomous.The clock markets in these countries are very diverse and the needs of the local markets vary greatly.The _____ or _____ strategies for R&D are most appropriate for this situation.

A) center-for-global or globally linked
B) local-for-local or locally leveraged
C) locally leveraged or globally linked
D) globally linked or local-for-local

Question 43

Gerusa is a company that uses Photodynamic Therapy to treat cancer and has major divisions in Germany,Russia,and the U.S.The scientists in Russia develop the cancer treatment methods,the Germans organize treatment clinics,and the U.S.division gathers the financing and markets the treatment methods.What type of strategy is this and what are the advantages and disadvantages of this type of strategy?

Question 44

Cromwell Electronics would like to integrate its world wide operations in order to enhance its adaptability and flexibility to environmental situations.Essentially,Cromwell would like to be able to leverage its resources and capabilities whenever and wherever an opportunity arises.What would you recommend that Cromwell do?

A) Encourage divisions to function as independent silos by developing their own specific capabilities and competencies.
B) Utilize division-spanning teams.
C) Focus on its global image instead of its national brands.
D) Strictly adhere to a decentralized structure.

Question 45

In the locally leverage strategy the R&D divisions _____ while in the globally linked strategy the R&D divisions _____.

A) are decentralized; work on all development activities relevant to the region where they operate.
B) specialize in a particular development activity; are decentralized.
C) work on the full scope of development activities relevant to their business unit; take advantage of the diversity of resources and knowledge.
D) are decentralized; are centralized.

Question 46

What are some of the advantages and disadvantages of large firms in terms of R&D?

Question 47

Explain why a mechanistic organizational structure can stifle creativity.

Question 48

The International Framing Company wants to tightly control R&D and achieve specialization and economies of scale.At the same time it wants to protect its core competencies and spread its innovations throughout the company.The _____ strategy would help achieve this goal.

A) center-for-global
B) local-for-local
C) locally leveraged
D) globally linked

Question 49

The Kaibash Motor Company is considering using the loosely-coupled organizational structure.They have asked you for your evaluation of such a structure and whether you would recommend it for an automobile manufacturer.Provide your answer.

Question 50

Gerusa is a company with major divisions in Germany,Russia,and the U.S.(hence the name).The scientists in Russia develop cancer treatment methods.The Germans organize treatment clinics.The U.S.division gathers the financing and markets the treatment methods.This is an example of a _____ strategy.

A) center-for-global
B) local-for-local
C) locally leveraged
D) globally linked