Business in a Changing World — Module Assessment

Question 1

What best describes a disruptive innovation, as Clayton Christensen used the term?

Accepted Answer

A cheaper or simpler offering that first appeals to overlooked customers, then improves until it takes the mainstream

Answer

A large one-off invention that immediately outperforms everything on the market

Answer

Any new product released by a market-leading company

Answer

A steady yearly improvement to an existing product for the firm's best customers

Question 2

According to the innovator's dilemma, why do successful firms often fail to adapt to disruption?

Accepted Answer

Listening to their best customers and protecting their best margins rationally steers them away from the disruptive option until it is too late

Answer

Their managers are usually incompetent and ignore the market

Answer

They lack the money needed to invest in any new technology

Answer

Government regulation prevents them from changing their products

Question 3

Which of the following best captures a network effect in a platform business?

Accepted Answer

The service becomes more valuable to each user as more users join it

Answer

The company's costs fall automatically every year it operates

Answer

The platform owns more physical assets than its competitors

Answer

Customers are legally locked into a long-term contract

Question 4

A shop moves its paper records online and lets customers order through a website, but still buys, stocks, and sells the same goods the same way. This is best described as:

Accepted Answer

Digitising existing tasks rather than transforming the business model

Answer

A network effect taking hold

Answer

Building a two-sided platform

Answer

Treating data as a strategic asset

Question 5

In his 1970 essay, Milton Friedman argued that the social responsibility of business is to increase its profits. Which qualification did he attach to that claim?

Accepted Answer

The pursuit of profit must stay within the law and ethical custom.

Answer

Profits should be maximised by any means that avoids detection.

Answer

Firms should ignore the law where it reduces returns to owners.

Answer

Managers should donate a fixed share of profits to charity.

Question 6

What is the clearest reason an ethical lapse can destroy more value than it appears to save?

Accepted Answer

Trust is slow to build and fast to lose, so customers, staff and regulators all react at once.

Answer

Ethical firms are legally exempt from most regulation.

Answer

Lapses are always discovered immediately by auditors.

Answer

Customers are indifferent to how a company behaves.

Question 7

Which statement best reflects John Elkington's own later view of the triple bottom line he coined in 1994?

Accepted Answer

In 2018 he called for a rethink, worried it had become box-ticking rather than real change.

Answer

He argued profit should be the only account that businesses measure.

Answer

He said the framework had proven perfect and needed no revision.

Answer

He claimed the concept was too radical for any firm to adopt.

Question 8

Volkswagen's "clean diesel" scandal (Dieselgate, 2015) is best described as which of the following?

Accepted Answer

Greenwashing and fraud, marketing cars as clean while software cheated emissions tests.

Answer

A genuine sustainability upgrade that regulators wrongly punished.

Answer

An honest accounting error in the firm's ESG report.

Answer

A minor labelling dispute with no environmental impact.

Question 9

A country can produce both cars and grain using less labour than its neighbour. According to comparative advantage, what should it do?

Accepted Answer

Specialise in whichever good has the lower opportunity cost and trade for the other.

Answer

Produce both goods itself and stop trading, since it is more efficient at everything.

Answer

Specialise in whichever good it makes with the fewest labour-hours in absolute terms.

Answer

Trade only if its neighbour is better at one of the two goods.

Question 10

Which statement best captures the globalization-versus-localization debate as presented in the lesson?

Accepted Answer

It is a genuine trade-off, weighing the efficiency and scale of global trade against the resilience of shorter, closer supply chains.

Answer

Localization is always safer because shorter supply chains never fail.

Answer

Globalization is always cheaper, so localization is simply inefficient.

Answer

The debate was settled by Ricardo in 1817 in favour of full globalization.

Question 11

A business is deciding where to focus its limited risk-management effort. What is the most sound basis for prioritising?

Accepted Answer

Rank each risk by likelihood combined with impact, and address the high-likelihood, high-impact ones first.

Answer

Focus on whichever risk was most recently in the news, since it is clearly on people's minds.

Answer

Spread effort evenly across every risk so none is neglected.

Answer

Address only risks the business can eliminate completely.

Question 12

Why is Johnson & Johnson's 1982 Tylenol recall widely taught as a model crisis response?

Accepted Answer

Because it acted quickly to put public safety first, recalling the product and adding tamper-evident packaging, which preserved long-term trust.

Answer

Because the company proved it was not at fault and avoided any financial loss.

Answer

Because it used advertising to reassure customers without changing the product.

Answer

Because it delayed action until investigators had fully solved the case.

Question 13

According to research led by Stanford's Nicholas Bloom and the WFH Research team, how did the share of US paid workdays done at home change from 2019 to the spring 2020 lockdowns?

Accepted Answer

It rose from around 5 to 7 percent to roughly 60 percent

Answer

It stayed roughly flat at about 30 percent throughout

Answer

It fell from about 40 percent to under 10 percent

Answer

It has never been reliably measured

Question 14

Why is it more accurate to describe automation's effect on jobs as an open debate rather than a settled outcome?

Accepted Answer

Because credible studies reach different conclusions — the 2013 Oxford estimate of about 47 percent at risk contrasts with the OECD's task-based 9 to 14 percent

Answer

Because no researchers have ever studied the question

Answer

Because a single study proved automation destroys no jobs

Answer

Because the government has banned automation research