Deck 6: Developing Resources and Capabilities

Question 1

Can core competences become core rigidities?

Answer 1

This scenario can occur.
Leonard explained that when a firm develops core competencies, the very attributes of these core competencies can become obstacles to the adaptability of the organization to changes in the environment. This "core rigidities" effect can be specially intense if:
-the firm is successful with a particular combination of core competencies
-the competencies are highly complex, sophisticated or developed.
In fact, in that situation, the will and effort required to renew these competencies and to adapt to new conditions increase significantly.
However, the idea of potential rigidities within capabilities has been challenged in two directions:
a-Flexibility in organizational routines. Studies demonstrate that even basic operations display variations and the capacity to adapt, undermining the notion that routines are fixed patterns of interaction that function through automatic stimulus-response mechanisms
b-The notion of dynamic capabilities allows the firm to reconfigure its resources to adapt to change, and to modify its operating routines
The topic of core rigidities links to top management mental and cognitive processes and with strategic decision making concepts.
In a similar vein, mistakes such as complacency take place, as well.

Question 2

Why is capability management a difficult endeavor?

Answer 2

Capability management covers many different tasks.
A lot of difficulties face top managers who want to handle their capabilities and develop them. The ultimate objective is the construction of a sustainable competitive advantage.
First, we do not know much about the linkage between resources and capabilities. Resources are relatively well defined and identified, whereas capabilities appear more difficult to understand and capture. Moreover, capabilities cannot be reduced to the simple aggregation or concretion of the resources upon which they are based. Many other phenomena intervene in capability development.
Second, developing capabilities means entering into the complex world of the "internal side" of the organization, which is filled with a myriad of complex variables and relationships. As soon as we try to develop capability management, we attempt to disentangle this "variable knot", and therefore face the associated complexity.
Third, it has to be integrated into current managerial systems, which proves to be harder than expected.

Question 3

The Wall Street Journal report stating that the Saatchi & Saatchi director of knowledge management was "absorbing everything under the sun" was intended to:

A)Promote knowledge management
B)Discredit Saatchi & Saatchi's top managers
C)State a simple fact
D)Mock knowledge management

Answer 3

D

Question 4

The US army has a "lessons learned" process that distils the results of maneuvers into guidelines. This exemplifies:

A)Knowledge integration
B)Comparison of best internal results
C)Knowledge benchmarking
D)Knowledge identification

Question 5

Procter & Gamble's acquisition of Gillette was motivated by:

A)Gillette's new product development capability
B)Gillette's bleak financial situation
C)Gillette's top managers capabilities
D)Gillette's reputation

Question 6

Is knowledge management a valuable approach in strategic management?

Question 7

Is strategic alliance a good way to develop capabilities?

Question 8

McDonald's success could be explained by:

A)Luck and opportunism
B)Its potential for systematization and replication of the process
C)Excellent managerial skills
D)Assistance received from the State

Question 9

What are the consequences of the distinction between knowing about and know-how?

Question 10

What are some of the contextual or influencing variables associated with capability development?

Question 11

What is the paradox of "capability rigidity"?

Question 12

The lack of integration across MBA programs is a difficult issue to resolve, because:

A)MBA program directors are not convinced this weakness exists
B)Students disagree with this opinion
C)Faculty members are narrowly specialized and lack real cooperation across disciplines
D)Faculty members have only an annual coordination meeting

Question 13

How do firms develop new capabilities?

Question 14

In European football soccer, success is exactly related to:

A)The financial resources of a team
B)A team's capability for excellence
C)A team trainer's quality and experience
D)A team's luck and strength relative to other teams

Question 15

The case of Hyundai Motors illustrates:

A)The price war between Asian car manufacturers
B)The development of capabilities through product sequencing and compressed phases
C)The emergence of a new competitor in the automobile industry
D)Only very ordinary competitive rivalry

Question 16

Booz-Allen & Hamilton, and Accenture illustrate:

A)Knowledge storage and organization systems
B)Consulting firms involved in capability development
C)Answers a and b
D)None of the above

Question 17

What does the concept of knowledge conversion comprise?

Question 18

Knowledge generation and knowledge application are important concepts. Why?

Question 19

Dell's difficulties in adapting its sales model to sell through retail outlets can be explained by:

A)The extent to which its direct sales model was developed
B)CEO Michael Dell's lack of will to do so
C)The cost of the change
D)Top managers' lack of change management capabilities

Question 20

Wal-Mart's success is founded on its excellence in logistics and cost cutting. What could explain this set of capabilities?

A)The personality and values of founder Sam Walton
B)Its origin as serving small rural South towns
C)Luck and coincidence
D)Answers a and b

Question 21

A firm may acquire capabilities through:

A)Importation of technologies
B)Internal or external sources
C)Technology transfer
D)Transfer of key executives across its divisions

Question 22

Resource leveraging means:

A)Adding key resources to enrich poor capabilities
B)Increasing the amount of resources within a focal capability
C)Generating economies of scope across different capabilities
D)Accumulating resources, and focusing people's efforts on priorities

Question 23

The integration of resources into capabilities requires:

A)Some rare resources, such as genuinely good leadership
B)Standard processes
C)Organization and management systems
D)Financial and human resources

Question 24

Managing strategic alliances:

A)Is itself a capability
B)Is prohibited by most Stock Exchanges
C)Gives only a temporary gain
D)Will attract the attention of competition authorities

Question 25

Whether a firm with highly developed capabilities, successfully adapts to innovation or exploitation of new opportunities depends on:

A) How strong the firm's market share is and its bargaining power
B) How strong these capabilities are
C) Whether the change enhances its capabilities or destroys them
D) Whether all members of the firm are aware of its capabilities

Question 26

A strategic alliance is:

A)A situation where strategic orientations are shared and accepted within the whole organization, achieving an alliance between the internal stakeholders
B)A relationship between players in the industry for the purposed of R&D
C)A cooperative relationship between rivals involving the sharing of resources in pursuit of common goals
D)A cooperative relationship between firms involving the sharing of resources in pursuit of common goals

Question 27

When venture capitalists ask about the "scalability" of a project, they are questioning:

A)Its attractiveness beyond rational facts
B)Its attractiveness in terms of cost and leveraging potential
C)Its potential to mine untapped markets with weak competition
D)The potential replication of knowledge from a craft-based enterprise to a larger operation

Question 28

A dynamic capability is

A)An ability that a firm develops slowly, over time
B)An ability to reconfigure and develop new capabilities quite quickly
C)An ability only developed by very charismatic leaders
D)An ability to do something quickly

Question 29

Dynamic capabilities and core rigidities can be the same:

A)Yes, they can
B)No, they cannot
C)This statement does not make sense
D)Only in exceptional circumstances

Question 30

Knowledge management:

A)Covers a lot of different practices
B)Covers many hidden traps
C)Is not well understood and diffused
D)Is not very useful

Question 31

It is more risky to seek to obtain new capabilities for your firm by:

A)Buying another firm, or its capabilities
B)Acquiring access to another firm's capabilities
C)Buying out the minority interests of a 90%-owned subsidiary
D)Developing capabilities in-house

Question 32

The idea of flexibility in routines means that:

A)Routines function through automatic stimulus-response mechanisms
B)Capabilities are rigid but resources have many uses
C)Even simple routines can effectively be flexed
D)Even simple routines must allow for variation and the capacity to display human creativity

Question 33

Having a good "relational capability" means?

A)Building trust, sharing routines, and establishing coordination mechanisms
B)Being able to discover your partner's deepest commercial secrets
C)Being able to deploy expertise in all aspects of HR
D)Building trust and sharing information

Question 34

The examples of IBM developing its PC and Lockheed's skunk work practice illustrate:

A)Examples of incubating capabilities in separate organizational units
B)Examples of technological innovations
C)Examples of tensions between the corporate headquarters and a specific organizational unit
D)Only a practice shared by many other firms

Question 35

The most fundamental distinction in knowledge management is between

A)What you know and what you think you know
B)Tacit knowledge and explicit knowledge
C)Tacit knowledge and implicit knowledge
D)Taciturn and explicit information systems

Question 36

The idea that capabilities result in rigidities:

A)Is widely accepted
B)Has withstood behaviorist attacks for half a century
C)Has been challenged because some firms have the capability to be flexible
D)Has been challenged because routines can be flexible, and some firms have the capability to quickly build new capabilities

Question 37

'Focusing' a business unit on specific priorities means :

A)Driving ruthlessly towards the corporate vision
B)Developing complex capabilities sequentially, a few in each time period
C)Excluding non-core activities
D)Acquiring key extra resources

Question 38

Knowledge management encompasses:

A)An attempt to integrate all the information existing in a country
B)Only technological processes for managing information
C)Only beliefs and norms related to technology and knowledge
D)All ways of generating value from knowledge

Question 39

The more a firm's activities are outsourced to a network of partners:

A)The greater odds for it being successful
B)The more the need for system integration capabilities
C)The higher the risk that the firm is incurring
D)The fewer fixed assets the firm owns

Question 40

The integration of resources into capabilities requires:

A)A rigorous IT process
B)An Information system
C)A systematic set of processes and practices
D)A cultural process

Question 41

Nonaka's "knowledge spiral" is created when:

A)Knowledge is converted between tacit and explicit forms
B)Knowledge is converted between individual and organizational levels
C)Answers a and b
D)Knowledge is converted from large R&D firms to entire industries

Question 42

What is the "paradox of replication"?

A)A lose-lose game
B)A win-win game
C)A paradoxical situation where making knowledge more explicit and exploitable facilitates simultaneously its imitation by rivals
D)A paradoxical situation where a firm cannot simultaneously exploit existing knowledge and explore new knowledge fields

Question 43

Two factors determine the success of routines. They are:

A)Team efficiency and effectiveness
B)Organizational structure and learning
C)Organizational learning and culture
D)Operations managers' skills and motivational processes

Question 44

Knowledge exploration activities include:

A)Analysis, identification, assessment, and acquisition of knowledge
B)Drilling and extracting knowledge
C)Acquiring and benchmarking knowledge
D)Creating and acquiring knowledge

Question 45

Knowledge management theory assumes that :

A)Knowledge is the most important resource of the organization, and the foundation of organizational learning
B)Knowledge cannot be shared equally by all firms, in order to preserve organizational assets as "core capabilities"
C)Many firms already know how to manage their own knowledge
D)The ultimate knowledge of the universe will never be achieved by human beings

Question 46

Strategic intent:

A)Impacts performance through its influence on capability development
B)Often emerges from a business leader and his/her passion and commitment
C)Emerges from benchmarking a firm's rivals
D)Answers a and b

Question 47

What drives capability development most is:

A)Rewards and bonuses
B)Reputation and self-esteem
C)Individual employees' motivations
D)The drive and direction of the organization

Question 48

The main implication of the distinction between tacit and explicit knowledge relates to:

A)Knowledge transferability
B)Knowledge cost
C)The risk associated with this knowledge
D)The impact of knowledge on performance

Question 49

A "routine" refers to:

A)A boring pattern of activities
B)A simple organizational process
C)A repetitive pattern of activities
D)A complex organizational process

Question 50

Knowing about is:

A)Rooted in hard facts, theories, and sets of instructions
B)Based upon everyday information
C)Innate and intuitive
D)A nice expression without real significance, coined by the pioneers of knowledge management

Question 51

Tacit knowledge:

A)Can be directly articulated or codified
B)Can only be acquired through practice and observed through its application
C)Requires a fast, uncertain, and costly transfer
D)All of the above

Question 52

The knowledge-based view of the firm is a theoretical model of the firm as:

A)An assembly of knowledge assets which create value by deploying their knowledge
B)An assembly of human assets which create value by deploying their knowledge
C)An assembly of knowledge assets where value is created by information systems
D)An extension of the I/O model based on the deployment of knowledge assets

Question 53

Knowledge management's value lies in:

A)Providing a single view of all knowledge-related activities, and comparing them
B)Its ease and simplicity of use
C)The precision of the experiments used to test the theories
D)The fact that it is exempt from internal political tensions

Question 54

The difference between knowing how and knowing about is?

A)Knowing about is implicit or tacit knowledge
B)Know-how is implicit or tacit knowledge and includes performance skills
C)Know-how is explicit knowledge about facts, instructions and theories
D)Know-how and knowing about are just semantic differences

Question 55

The foundation of knowledge management can be stated as:

A)Knowledge available to human beings is growing exponentially
B)All resources can be viewed as a form of knowledge
C)All members of the organization share knowledge
D)Knowledge is present in every human activity

Question 56

Basic aspects of knowledge application and exploitation include:

A)Knowledge identification, measurement, sharing replication, and integration
B)Knowledge assessment, replication, integration, and transfer
C)Knowledge imitation
D)Knowledge identification, measurement, technological benchmarking, and application to new products and services

Question 57

Swatch's Nicolas Hayek and Samsung Electronics's Jong-Yong Yun showed how a good leader could:

A)Motivate their firm to upgrade its capabilities
B)Raise their employees' performance aspirations
C)Foster a spirit of community and achievement
D)All of the above

Question 58

One of the greatest challenges for a firm, is knowledge integration. This is:

A)The melding of various resources to optimize the physical production system of a firm
B)Integrating widely-held expertise to supply goods or services effectively
C)Managing employees' multiple skills and capabilities to their highest levels possible
D)The only measure of success

Question 59

Explicit knowledge:

A)Can be communicated at a negligible marginal cost between individuals
B)Can be communicated at a negligible marginal cost across space and time
C)Has the characteristic of a public good
D)All of the above

Question 60

"All firms do two things simultaneously they: specialize and they coordinate". Capabilities:

A)Coordinate resources into an ability to do something more than each resource on its own could do
B)Show how specialized a firm's labor has become
C)Require specialized resources if they are to be distinctive
D)Coordinate only specialized resources

Question 61

The effectiveness of a team depends on its culture and ability to learn by doing

Question 62

Firms can acquire capabilities outside or develop them in-house

Question 63

"Strategic intent" simply means "big, hairy, and ambitious goals"

Question 64

Studies show that a common feature of distinctive capabilities, or core competence, is:

A)That their development generates tensions within a firm
B)They are difficult to develop
C)They take a long time to develop
D)They cost a lot to develop

Question 65

We possess a large arsenal of tools for:

A)Identifying capabilities
B)Developing capabilities
C)Developing resources
D)Designing a managerial process to manage resources and capabilities

Question 66

"Communities of practice" are informal networks designed to transfer experiential knowledge

Question 67

Capabilities are:

A)The technology a firm is able to effectively deploy
B)The financial muscle a firm is able to deploy
C)Managers' tacit knowledge
D)More than the sum of the resources upon which each capability is based

Question 68

Renewing a firm's competitive advantage requires:

A)Developing its resources
B)Extending its capabilities
C)Developing and extending all its resources and capabilities
D)Developing and extending all its resources and capabilities, and creating new ones

Question 69

Managing an alliance relationship cannot be itself an organizational capability, because it is built over time and through organizational learning

Question 70

Managing capabilities is harder than managing resources because:

A)We know much more about resources
B)We know little about resources
C)Firms are frightened to explore their own capabilities
D)Top managers are not interested in a topic considered "theoretical" and not actionable

Question 71

Specialists of knowledge management make a major distinction between know-how (implicit knowledge) and knowing-about (explicit knowledge)

Question 72

For a firm, maintaining its competitive advantages implies that it is:

A)Appraising and deploying capabilities
B)Developing current capabilities
C)Creating new capabilities
D)All of the above

Question 73

Within the knowledge management terminology, "Exploration" involves knowledge creation whereas "Exploitation" refers to knowledge acquisition

Question 74

The biggest difficulty in understanding capabilities is:

A)The conceptual distinction between resources and capabilities is unclear
B)One cannot measure capabilities
C)We don't understand all the links between resources and capabilities
D)In practice many businesses don't use the concepts of resources and capabilities

Question 75

Which resource appears to be critical for the development of capabilities?

A)Explicit knowledge systems
B)Good top-level executives
C)Experienced line managers
D)Managerial skills, experience, and will

Question 76

Resource leveraging requires a firm to focus its core resources on specific priorities and divest non-core resources

Question 77

Tools such as job design, motivation, training, and appraisal illustrate the knowledge that firms and scholars have accumulated about:

A)Human resources
B)Organizational structure
C)Hiring processes
D)Organizational culture

Question 78

For an organic entity, such as a firm,, path-dependency means that:

A)That this firm's capabilities today are the result of its history
B)This firm's way forward depends on decisions to be made at future crossroads
C)This firm's history is dependent upon it developing a clear path forward
D)There is only one path for this firm to evolve over time

Question 79

Knowledge management is the systematic practice of generating value from knowledge

Question 80

The example of Soichiro Honda and the Isle of Man motorcycle race shows that a leader's sincere and strong commitment can raise a firm's aspirations and so motivate employees to improve the firm's capabilities