chapter 10

Question 1

Icarus Paradox

Answer 1

the phenomenon of businesses failing abruptly after a period of apparent success, where this failure is brough about by the very elements that led to their initial success.

Question 2

disaggregation

Answer 2

occurs when something is separated into its constituent parts.

Question 3

centralisation

Answer 3

the degree to which decision-making authority is kept at top levels of management. it can refer both to the geographical location of activities and to where power and authority over activities are located.

Question 4

decentralisation

Answer 4

the degree to which decision-making authority is pushed down to lower levels of the firm.

Question 5

formalisation

Answer 5

the degree to which the firm utilises rules, procedures, and written documentation to structure the behaviour of individuals or groups within the organisation. the rules and procedures employed can facilitate standardisation of firm activities and help regulate employee behaviour by providing clear expectations of behaviour and decision-making criteria.

Question 6

standardisation

Answer 6

the degree to which activities are performed in a uniform matter. by minimising variation, it can limit the creativity and experimentation that leads to innovative ideas.

Question 7

mechanistic structure

Answer 7

an organisation structure characterised by a high degree of formalisation and standardisation, causing operations to be almost automatic or mechanical. they are often associated with greater operational efficieny, particulary in large-volume production settings, and with high centralisation. they are often deemed unsuitable for fostering innovation.

Question 8

organic structure

Answer 8

an organisation structure characterised by a low degree of formalisation and standardisation. employees may not have well-defined job responsibilities and operations may be characterised by a high degree of variation.

Question 9

ambidextrous organisation

Answer 9

the ability of an organisation to behave almost as two different kinds of companies at once. different divisions of the firm may have different structures and control systems, enabling them to have different cultures and patterns of operations.

Question 10

skunk works

Answer 10

refers to new product development teams that operate nearly autonomously from the parent organisation, with considerable decentralisation of authority and little bureaucracy.

Question 11

modularity

Answer 11

the degree to which a system’s component may be separated and recombined. by standardising a number of common components and using flexible manufacturing technologies, companies can produce a wide variety of product models just by changing the combination of components while still achieving economies of scale and efficiency in individual components.

Question 12

loosely coupled structure

Answer 12

organisation can be made modular through the adoption of structures that enable loose coupling. the development production and production activities are not tightly integrated by rather achieve coordination through their adherence to shared objectives and common standards.

Question 13

information technology

Answer 13

can enable a firm to access and process more information at a lower cost, vastly increasing the firm’s options for development configurations. it enables loosely coupled organisation structures to become more common.

Question 14

center-for-global

Answer 14

occurs when all innovation activities are conducted at a central hub and innovation are then diffused throughout the company.

Question 15

local-for-local strategy

Answer 15

occurs when each division or subdivision of the firm conducts its own R&D activities for the needs of the local market. it takes advantage of access to diverse information and resources and customises innovation for the needs and tastes of the local market.

Question 16

locally leveraged strategy

Answer 16

occurs when each division or subsidiary of the firm conducts its own R&D activities but the firm attempts to leverage resulting innovations throughout the company, taking advantage of the diverse ideas, resources, and innovative developments from the divisions and deploying them across the company. the divisions are largely dependent on each other and work on the full scope of development activities relevant to the regional business unit in which they operate.

Question 17

foreign markets

Answer 17

offer highly diverse sources of information and other resources. they may also have highly diverse product needs and different operating norms.

Question 18

globally linked strategy

Answer 18

occurs when innovation activities are decentralised but also coordinated for the global needs of the corporation. in locally leveraged and globally leveraged, R&D divisions are decentralised and linked to each other. the difference is the mission of the R&D divisions.

Question 19

general multinational firm’s objective

Answer 19

to make centralised innovation activities more effective while making decentralised innovation activities more efficient.
firms should take a transnational approach wherein resources and capabilities can be leveraged and deployed to exploit any opportunity that arises in any geographic market.