FINAL EXAM REVIEW_1

FINAL EXAM REVIEW_1 - FINAL EXAM REVIEW BUS350 Chapter 7...

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FINAL EXAM REVIEW BUS350 Chapter 7 INNOVATION AND CHANGE Learning Objectives 1 Explain why innovation matters to companies. Technology cycles typically follow an S-curve pattern of innovation. Early in the cycle, technological progress is slow, and improvements in technological performance are small. As a technology matures, however, performance improves quickly. Finally, as the limits of a technology are reached, only small improvements occur. At this point, significant improvements in performance must come from new technologies. The best way to protect a competitive advantage is to create a stream of innovative ideas and products. Innovation streams begin with technological discontinuities that create significant breakthroughs in performance or function. Technological discontinuities are followed by discontinuous change, in which customers purchase new technologies and companies compete to establish the new dominant design. Dominant designs emerge because of critical mass, because they solve a practical problem, or because of the negotiations of independent standards bodies. Because technological innovation is both competence enhancing and competence destroying, companies that bet on the wrong design often struggle, while companies that bet on the eventual dominant design usually prosper. Emergence of a dominant design leads to a focus on incremental change, lowering costs and making small, but steady improvements in the dominant design. This focus continues until the next technological discontinuity occurs. 2 Discuss the different methods that managers can use to effectively manage innovation in their organizations. To successfully manage innovation streams, companies must manage the sources of innovation  and learn to manage innovation during both discontinuous and incremental change. Since  innovation begins with creativity, companies can manage the sources of innovation by  supporting a creative work environment in which creative thoughts and ideas are welcomed,  valued, and encouraged. Creative work environments provide challenging work; offer  organizational, supervisory, and work group encouragement; allow significant freedom; and  remove organizational impediments to creativity. Companies that succeed in periods of discontinuous change typically follow an experiential  approach to innovation. The experiential approach assumes that intuition, flexible options, and  hands-on experience can reduce uncertainty and accelerate learning and understanding. A  compression approach to innovation works best during periods of incremental change. This  approach assumes that innovation can be planned using a series of steps and that compressing  the time it takes to complete those steps can speed up innovation. 
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3 Discuss why not changing can lead to organizational decline. The five-stage process of organizational decline begins when organizations don’t recognize the need for
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FINAL EXAM REVIEW_1 - FINAL EXAM REVIEW BUS350 Chapter 7...

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