Deck 23: Organizational Architecture and the Process of Management Innovation

Question 1

The text makes it clear that the management innovations of the 1980s and 1990s:

A) were almost all instant successes.
B) waxed and waned in use and popularity.
C) were instantly mostly failures.
D) were creations of the press and were never implemented in business.

Answer 1

B

Question 2

Evidence suggests that, "many business may waste millions of dollars a year on quality-improvement strategies that don't improve their performance and may even hamper it". Based on this, evaluate the practice of management innovation within an architecture critically.

Answer 2

Most of the time management goes about coining terms lime TQM, reengineering, just-in-time production, quality circles, economic value added, activity based costing, benchmarking, hunchmarking, outsourcing, critical mass. Obviously management itself is totally clueless about market uncertainty and the stock value. Management does not have a complete picture of the future and is constantly groping in the dark to survive on a quarter-to-quarter basis. Somehow it has to convince the workers, the shareholders and others that it is doing a good job. So the best way is to generate busy work and spend enormous hours developing terms that add practically no value towards reducing the said uncertainty. Obviously, after floating one idea (aka innovation) for a while, management quickly comes up with another with the help of a consultant (and is incorporated in a brochure). Since many of the said innovations (aka terms) are random, their success is also random. If a particular quarter generates high market value for the firm, everyone is happy. On the other hand if the quarterly earnings fall, management soon picks another random term and goes about convincing everyone that they have "redefined themselves" and that it is only natural for the "architecture to constantly evolve and change in a dynamic global economy". Whatever works in the short run and placates the subordinates is the standard manifesto, which is why the study uncovers too much waste in the system, with very little satisfaction among the participants.

Question 3

A key factor in TQM is the:

A) reduction of defects.
B) increase in management inspection stations.
C) reduction of the price of supplies.
D) movement away from technology advance and a reliance on simple production techniques.

Answer 3

A

Question 4

Provide some examples of management innovations that came and went.

Question 5

If a management innovation is going to be successful, it needs to address:

A) decision making should rest with the CEO
B) incentive and reward systems.
C) shareholders' concerns.
D) the rights of the Board of Directors

Question 6

What changes in the marketplace and in technology have spurred the movement toward TQM-like architecture changes in modern corporations?

Question 7

Of the three components of a good organizational architecture, what management technique - popular during the 1990s - seems to use all three?

A) Benchmarking.
B) TQM.
C) Economic Value Added.
D) Just-In-Time Production and Inventory Control.

Question 8

In pushing decision rights down to the people with the knowledge about processes or customer preferences, it is important that companies:

A) use their reward system to reinforce their performance/evaluation systems.
B) integrate production management with production control.
C) keep their reward system independent of other factors.
D) keep issues of organizational architecture out of the picture.

Question 9

Outsourcing is a management innovation that emphasizes:

A) vertical integration of production and service.
B) assignment of management and production responsibilities to another firm.
C) reduction of purchases of resources to the bare essentials.
D) hiring only managers educated in another state.

Question 10

When a management successfully implements innovations it usually makes more than one change in the corporation's organizational structure. It is important to remember that the changes are:

A) mostly dysfunctional.
B) substitutes for one another.
C) complementary.
D) not important to the potential for success.

Question 11

JIT stands for:

A) juried information technology systems.
B) just improved transportation systems.
C) just in time production/inventory control systems.
D) justice, integrity, and transcendence in management ethics.

Question 12

Phillip Crosby asserts that, "Quality is free". Is he right?

Question 13

In the Humana Hospital case study, the hospital, before reorganization, devoted _____ of its resources to direct patient care.

A) 5 percent
B) 16 percent
C) 35 percent
D) 63 percent

Question 14

"Market forces determine the success of any management innovation". Do you agree?

Question 15

Just-In-Time production and inventory control can result in:

A) complete dependence on one supplier.
B) large excess inventories that mess up production schedule.
C) a lack of coordination between supplier and assembler.
D) decreased risk bearing on the part of the assembler.

Question 16

A key to understanding the difference between TQM and other management innovations is TQM's emphasis on:

A) one-time reengineering of production processes.
B) a reorganization of inventory control.
C) outsourcing.
D) continuous improvement.

Question 17

Economic Value Added is a technique that attempts to make the idea of residual income the basis for:

A) decision-making authority
B) risk-bearing capacity
C) incentive compensation
D) activity-based costing

Question 18

The text expends considerable effort detailing the reengineering of a hospital service company. At the end of the case study, the text notes that changes in process and structure inside the hospital were complementary. In the context of organizational architecture, what does that mean?

Question 19

Why do innovations in management techniques fail so often?

Question 20

Why do management innovations fail?

Question 21

Economic Value Added:

A) is used to reward the top-management fairly.
B) is used to reward the small shareholders fairly.
C) can backfire if top-level managers do not add any value.
D) can backfire if the rewards do not trickle all the way down.

Question 22

In flatter organizations:

A) reengineering reduces ABC opportunities.
B) reengineering reduces replacement opportunities.
C) reengineering increases advancement opportunities.
D) reengineering reduces advancement opportunities.

Question 23

TQM and other management innovations fail because:

A) workers don't underestimate the costs of change.
B) management estimates the costs of change correctly but workers don't.
C) management overestimates the costs of change.
D) management underestimates the costs of change.

Question 24

Changes in an organizational architecture must be:

A) coordinated and done randomly starting with the solvable problems.
B) coordinated and done sequentially starting with the minor problems.
C) coordinated and done all at once.
D) coordinated and done sequentially starting with the major problems.

Question 25

Value maximizing managers will undertake quality improvements only where:

A) the total benefits exceed total costs of enhancement.
B) the incremental benefits equal the incremental costs of enhancement.
C) the incremental benefits fall below the incremental costs of enhancement.
D) the incremental benefits exceed the incremental costs of enhancement.

Question 26

Economic Value Added attempts to make:

A) adds value to the firm's shareholders.
B) the performance evaluation fair and credible.
C) the concept of activity based costing more credible.
D) the concept of residual income the basis for incentive compensation.

Question 27

Monetary and non-monetary incentives are:

A) basically the same things.
B) perfect substitutes.
C) mutually exclusive.
D) not mutually exclusive.

Question 28

If costs rise more quickly than quality, then firm value will:

A) be maximized before total quality is achieved.
B) be minimized before total quality is achieved.
C) be maximized after total quality is achieved.
D) always decline.

Question 29

ABC:

A) has been very successful in recent years and is adopted widely.
B) has been very successful in recent years but is not adopted widely.
C) has been very unsuccessful but is still adopted because of legal requirements.
D) has been very unsuccessful and has been replaced with traditional methods.

Question 30

A cost of reengineering programs is that they change:

A) performance-evaluation systems but not decision rights.
B) decision rights but not performance-evaluation systems.
C) the external market forces as well as the organizational architecture.
D) the measures used to evaluate high-level executives.

Question 31

The relation between quality and firm value is:

A) a vertical line.
B) a flat line.
C) an inverted U-shape.
D) U-shaped.

Question 32

ABC:

A) has been very successful because the interests of those who undertake it and those that are being evaluated are aligned.
B) has been very successful because the interests of those who undertake it and those that are being evaluated are not perfectly aligned.
C) has been very unsuccessful because the interests of those who undertake it and those that are being evaluated are aligned.
D) has been very unsuccessful because those who undertake it are those that are being evaluated.