Innovation: Evaluation and Control

MULTIPLE CHOICE

1. One of the key reasons for evaluation and control is:

a.
leaders of firms change
b.
boards of directors change
c.
environments change
d.
mid-level managers change
e.
goals change

ANS: C PTS: 1

2. Evaluation can be defined as:

a.
Determining how well the organization is meeting its goals
b.
Annual reviews of employees’ work efforts
c.
Correcting problems within the company
d.
Monitoring the use of technology
e.
Predicting this year’s sales figures

ANS: A PTS: 1

3. Control can be defined as:

a.
where we are compared to where we want to be
b.
the determination of how well the organization is meeting its goals
c.
determining what actions to take to change the firm’s results
d.
re-thinking the business process
e.
changing the compensation system so the firm is better networked

ANS: C PTS: 1

4. Cybernetic control is drawn from:

a.
finance literature
b.
accounting literature
c.
European conceptualization
d.
biology literature
e.
marketing literature

ANS: D PTS: 1

5. Evaluation and control should occur ____ as organizations monitor their current performance and make adjustments as needed or necessary to ensure accomplishment of performance goals in the organization.

a.
Periodically
b.
Constantly
c.
Sporadically
d.
Never
e.
Once in awhile

ANS: B PTS: 1

6. Asking the where we are now compared to where we want to be, what lies ahead that can affect us either positively or negatively, and where we will end up if we continue on this path is used to conduct:

a.
control
b.
the setting of tactical goals
c.
strategic analysis
d.
gap analysis
e.
rewards for employees

ANS: D PTS: 1

7. The evaluation between goals and outcomes is often referred to as a(n) ____ between desired outcomes and actual results.

a.
gap analysis
b.
control
c.
control and evaluation
d.
innovation
e.
first mover

ANS: A PTS: 1

8. To understand what lies ahead for a firm as part of the innovation evaluation and control effort the firm:

a.
scans the environment
b.
sticks to the strategic plan
c.
establishes performance trends
d.
compares current performance to predicted
e.
conducts a gap analysis

ANS: A PTS: 1

9. An emergent strategy is one:

a.
that relates to emergent markets such as China
b.
that occurs when a firm sees an unexpected opportunity and takes advantage of it
c.
where the firm meets every week and updates the strategy from prior meeting
d.
that is not written down, but instead comes through the actions of people
e.
that is a strategy generated through a retreat in which managers meet until they develop a strategy

ANS: B PTS: 1

10. For the firm deviation from the strategic plan should be viewed as ____.

a.
negative
b.
positive
c.
depends on the nature of the deviation and the general environment
d.
not something that means anything
e.
something that is monitored but not followed up on until a consistent pattern is established

ANS: C PTS: 1

11. The key question for the control effort for a firm undertaking an innovation strategy is:

a.
What do we do now?
b.
Where do we want to be?
c.
What do we need to change?
d.
Where are we going?
e.
What on-coming train is coming?

ANS: C PTS: 1

12. The easiest gap analysis to perform is:

a.
financial
b.
strategic
c.
cultural
d.
structural
e.
mission

ANS: A PTS: 1

13. The most difficult controls for a technology focused company to implement are:

a.
financial
b.
strategic
c.
cultural
d.
structural
e.
mission

ANS: C PTS: 1

14. Cultural controls refer to:

a.
the culture of the nation in which the firm is located
b.
the culture the CEO
c.
the ability of the firm to support the cultural standards of the community
d.
the ability to get individuals to act in the manner desired
e.
the ability of the firm to support cultural activities such as a major art museum

ANS: D PTS: 1

15. The strength of cultural controls comes from:

a.
the goals of the firm
b.
the relationships among people in the firm
c.
the ability to perform a gap analysis
d.
the reward/performance connection
e.
the level of support of the CEO

ANS: B PTS: 1

16. Focus on gaps between the desired financial outcomes and those actually produced by the firm occurs as part of ____.

a.
strategic controls
b.
financial controls
c.
accounting controls
d.
financial analysis
e.
profit techniques

ANS: B PTS: 1

17. The three areas where evaluation of gaps typically occurs are:

a.
financial, planning, or cultural
b.
planning, financial, or strategic
c.
financial, strategic, or cultural
d.
planning, strategic, cultural
e.
financial, implementation, or strategic

ANS: A PTS: 1

18. All of the following are the most common adjustments a firm makes except:

a.
Rethink business processes
b.
Look for improvements and redesign the innovation process
c.
Exit the industry
d.
Determine if the goals do not match capabilities and develop new goals
e.
Empower people involved in process

ANS: C PTS: 1

19. Who is elected to supervise a publicly traded firm’s managers for the shareholders?

a.
Chairman of the Board
b.
Board of Directors
c.
Securities and Exchange Commission
d.
Federal Trade Commission
e.
National Association of Securities Dealers

ANS: B PTS: 1

20. The Board of Directors should focus on:

a.
operational issues at a given plant
b.
functional issues such as marketing
c.
business level concerns
d.
strategic issues
e.
macro environmental issues such as lobbying

ANS: D PTS: 1

21. Dr. Edward Deming got his initial success on quality management in:

a.
Japan
b.
United States
c.
Canada
d.
United Kingdom
e.
France

ANS: A PTS: 1

22. All of the following are points in Deming’s 14 points about quality except:

a.
cease dependence on inspection
b.
institute leadership
c.
drive out fear
d.
ensure management by objective is implemented consistently
e.
remove barriers to pride of ownership

ANS: D PTS: 1

23. Evaluation and control ____ as the organization grows larger.

a.
are easier
b.
are harder
c.
do not change
d.
depend more on the SBU
e.
depend less on the SBU

ANS: B PTS: 1

24. Evaluation and control typically emphasizes all of the following except:

a.
accurate information
b.
removal of the individual(s) responsible for the gap
c.
identification of what you are measuring in the gap
d.
making required adjustments
e.
sharing of information

ANS: B PTS: 1

25. A unique structure that results in reporting to two managers is:

a.
divisional structure
b.
matrix structure
c.
functional structure
d.
simple structure
e.
business structure

ANS: B PTS: 1

26. In what organizational structure are workers organized into professional domains such as accounting, marketing, or manufacturing?

a.
Simple
b.
Matrix
c.
Network
d.
Divisional
e.
Functional

ANS: E PTS: 1

27. As the organization grows, an entrepreneurial firm typically moves to a ____ structure.

a.
hybrid
b.
complex organizational
c.
functional
d.
divisional
e.
matrix

ANS: C PTS: 1

28. All of the following should influence the decision on the organizational structure that is employed except:

a.
size of firm
b.
centralization
c.
top management preferences
d.
level of standardization
e.
formalization in the organization

ANS: C PTS: 1

29. An organizational structure in which a corporation groups its divisions into coherent groups is called ____.

a.
hybrid
b.
strategic business unit
c.
functional
d.
divisional
e.
matrix

ANS: B PTS: 1

30. As organizations grow:

a.
their structure becomes simpler since it has greater specificity
b.
functional control becomes critical
c.
the CEO has greater control
d.
their structure becomes more complex
e.
their structure is less of a focus

ANS: D PTS: 1

31. All of the following are decisions that are made to ensure that the firm does not get mired in an innovative strategy except:

a.
communicate goals so they are understood and management supports them
b.
assess employee skills and assign them to the right jobs
c.
don’t underestimate internal culture and external environment
d.
develop a set of procedure for every situation that is to be followed precisely
e.
monitor current situations by setting up a system to do so

ANS: D PTS: 1

32. When an SBU is created all of the following occurs except:

a.
A new layer of management is inserted into the organization
b.
The organization places less of focus on the entire corporation since the SBUs are now the focus
c.
Businesses that are grouped together in the SBU have a reasonable foundation for that grouping
d.
The head of each business reports to the SBU head not to the CEO directly
e.
Greater bureaucracy is created

ANS: B PTS: 1

33. A firm that builds social capital by being socially responsible:

a.
is wasting shareholders value
b.
is creating a direct value for the firm
c.
is responding typically to its competitions
d.
has no impact on firm
e.
is creating indirect value

ANS: E PTS: 1

34. Analyzing best practices is:

a.
the hardest part of evaluation and control
b.
the easiest part of evaluation and control
c.
internally focused
d.
externally focused
e.
typically not done

ANS: D PTS: 1

35. In developing the evaluation and control activities for the firm using an innovation strategy it is important that:

a.
managers use agency theory to promote the primary agents agenda
b.
information is closely guarded in the organization
c.
the goals are built on last year’s goals with a small percentage growth built in
d.
there is a balance among various approaches to analysis and correction
e.
objectives are left vague to take advantage of emergent opportunities

ANS: D PTS: 1

TRUE/FALSE

1. The competitive advantage of an innovative strategy is directly related to management capability and the knowledge developed and shared.

ANS: T PTS: 1

2. Evaluation is the determination of how well the organization is meeting its goals.

ANS: T PTS: 1

3. Control is the determination of how well the organization is meeting its goals.

ANS: F PTS: 1

4. The evaluation of gaps between goals and performance typically occurs in three areas – financial, strategic, and cultural.

ANS: T PTS: 1

5. When evaluating a firm’s innovation strategy, managers should ask “Where will we end up if we change nothing and continue on our current path?”

ANS: T PTS: 1

6. Gap analysis evaluates whether goals and objectives are being met by outcomes.

ANS: T PTS: 1

7. A unique structure that high technology firms occasionally follow is a matrix structure.

ANS: T PTS: 1

8. Clarity on what to measure is critical in evaluating whether goals are being met.

ANS: T PTS: 1

9. A new organization typically employs a complex structure.

ANS: F PTS: 1

10. Cultural controls refer to the ability to get individuals to act in the manner desired within the firm.

ANS: T PTS: 1

11. While an organization can be innovative and build a new product or develop a new process, the market will determine if the product or process will have a useful life.

ANS: T PTS: 1

12. The environment plays a critical role in the evaluation and control phase.

ANS: T PTS: 1

13. As an organizations grows larger and larger, its evaluation and control becomes easier and easier.

ANS: F PTS: 1

14. Performance requires multiple measures to accurately evaluate.

ANS: T PTS: 1

15. Evaluating goals and outcomes is all that is needed in the firm’s evaluation and control effort.

ANS: F PTS: 1

SHORT ANSWER

1. The evaluation stage of a firm’s actions are built around what three key questions?

ANS:

·
Where are now compared to where we want to be.
·
What lies ahead that can affect us either positively or negatively.
·
Where we will end up if we continue on this path.

PTS: 1

2. The three broad types of measures that should be considered in the innovation strategy evaluation and control effort are?

ANS:

·
measures of specific outcomes identified to produce a competitive advantage in the future
·
measures of outcomes that impact future competitiveness
·
measures of future strategic capabilities

PTS: 1

3. If there are gaps found in goals and performance the common adjustments that can be made include:

ANS:

·
rethink business processes
·
look for improvements by redesigning processes
·
empower those involved in innovation process to make key decisions
·
determine if the capabilities do not match goals what would be appropriate goals

PTS: 1

4. List and explain the three areas where evaluations of gaps typically focus.

ANS:

·
Financial – most easily measured, focus on gaps between the desired financial outcomes and those actually produced by the firm
·
Strategic – more qualitative, more difficult to measure, focus on the firm’s meeting of strategic goals
·
Cultural – most important, refer to the ability to get individuals to act in the manner desired by the firm

PTS: 1

5. Discuss the critical decisions that must be made during implementation to ensure the firm does not get mired in an innovative strategy that leads to disaster.

ANS:

·
Ensure that management support and project goals are clearly understood and in the forefront of the organizing effort
·
Assess the skills needed so the right people to meet the project objectives are involved with the process
·
Set-up the infrastructure for the most likely scenario; but have contingencies for other strong possibilities
·
Don’t underestimate the influence of the internal culture and the external environment
·
Set up a monitoring system that is an integral part of implementation and addresses potential technical and market risks

PTS: 1

6. When an organization chooses an innovative strategy the organization must then plan, implement, evaluate, and control activities. Describe each of these steps.

ANS:

·
Planning – taking steps to know where you are going and understanding how to get there
·
Implementation – acting upon your planning in order to get where you want to go
·
Evaluation – Monitoring your progress to make sure you are heading in the correct direction
·
Control – Make changes to strategy if you notice you aren’t heading the right way

PTS: 1

7. Discuss Deming’s 14 points and their implications.

ANS:

·
create constancy of purpose (have a long term view)
·
adapt a new philosophy (have a substantive commitment to quality)
·
cease dependence on inspection
·
move toward a single supplier
·
improve constantly
·
institute leadership (problems are not with workers but system)
·
institute training
·
drive out fear
·
break down barriers between departments
·
eliminate slogans
·
eliminate management by objective
·
remove barriers to pride of ownership
·
institute education
·
transformation is everyone’s job