More MCQs

[Liz McCarron]

The progress of management has almost come to complete stagnation
after experiencing astounding growth over the 20th century. Which of
the following is NOT a proposed reason for the current predicament
management is facing today in respect to this lack of progress?

a) The pursuit of efficiency above all other goals
b) High-earning management’s vested interests in maintaining their
authoritative positions and, in turn, the power they currently possess
c) The concept of management has been around for such an extensive
amount of time that further progress is difficult to attain****
d) Still using the same process for manufacturing as was established
in the beginning of the 20th century
e) Increased velocity at which companies change their competitive
advantages


Answer: C is the correct answer to this question. If compared to
democracy, which has been around since ancient Greek times, the
concept of management is relatively new. Although democracy has been
around for such a long time, it is obvious that the system is not
perfect, and it is well known that changes need to be made regularly
to meet the demands of society. Therefore, management should also be
held to this standard and should evolve with the needs of society.



IBM, a formidable player in the technology industry during the latter
portion of the 20th century, faced tremendous set-backs as its top-
line growth alarmingly slowed near the end of the 1990s. What was
determined to be the leading factor to their lack of growth?

a. Inflating share prices by purchasing back stock***
b. Investing in projects that ultimately failed
c. Concentrating on creating new technologies over cutting back on
company costs
d. An inability to maintain a core competency within their industry
e. Using profits to create numerous new businesses that ultimately
failed


Answer: a because IBM concentrated on inflating their share prices to
give them a good standing in the eyes of the investors, thus, taking
funds away from investing in new businesses. According to this portion
of the chapter, if a company wants to be adaptable it must be able to
quickly create new businesses. IBM did not do this, which caused their
top line to remain stagnant and revenues lacked growth.


In the Video on disruptive innovation, Clay Christensen discusses his
insights into this theory. All of the following are important to
defining a disruptive innovation, except:

a. it transforms a product so that it is available to a larger market

b. a breakthrough innovation that makes good products a lot better****

c. allows concentration in new markets due to the item becoming so
affordable your current customers would not buy it

d. often forces you to choose between making better products that can
be sold for better profits or sell "worse" products that would make
better margins

e. involves evolution of a product or business model