Complacency-Not Asking Questions

question 34

Essay

Complacency-Not asking questions. See Table 3.3 for additional information. Also, students should provide an appropriate example for each conceptual block.
Mini-Case: The Minivan Story. In the May 30, 1994, edition of Fortune magazine, the story of the minivan was told. In the earlier years of the passenger vans, only hippies seemed to appreciate the attributes of the van. However, in the 1970s, all three U.S. automakers began to study ways to modernize and broaden the appeal of their vans. Listening to customers helped Chrysler avoid two crucial design errors: (1) it rejected the long, wedge-shaped nose design and (2) it rejected the design that placed the engine under a hump in the floor (blocking passage from front to back seats). Also, while Chrysler continued to push for front-wheel drive, both Ford and GM handed responsibility of the minivan to the truck divisions, which continued to focus on rear-wheel drive. GM's problems were compounded by the fact that in 1985 station wagons were a significant part of its sales. In the 1990s, both GM and Ford developed front-wheel drive minivans and neither were housed in the truck division. Learning from their mistakes, both GM and Ford devised a new-product development process.
-Several conceptual blocks are evident in this story of the minivan. For each of the following situations, indicate the conceptual block that most likely occurred. Provide support for your response.
Situation #1: GM's and Ford's decisions to place development of the minivan in the truck division because the minivan and the truck were similarly designed and creating a new division for an unproven product seemed unwise is an example of which type of conceptual block?
Situation #2: What type of conceptual block would be illustrated if GM and Ford had decided to place the minivan development in the truck division because the smaller vehicle would help their truck divisions meet federal fuel-economy regulations?
Situation #3: Because station wagons were a significant part of sales, assume GM's failure to see the benefit of the minivan was due to its unwillingness to ask questions or obtain more data. This would be closely linked with which type of conceptual block?
Situation #4: In 1989, GM produced a front-drive minivan, the plastic-bodied APV, one of the great product fiascoes of the past 10 years, according to Fortune. Its wedge-shaped nose and expansive windshield made the driver feel uncomfortable. What type of conceptual block(s) did GM experience in this situation?
Situation #5: If GM or Ford had decided that designs of their vans should go to the truck divisions because the truck division had designed their vans in the past and there was no reason to deviate from prior procedure, which conceptual block would GM or Ford be practicing?

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Definitions:

Output

The total amount of goods and services produced by an economy, business, or machine in a given period.

MC Equals MR

A condition in economics where the marginal cost of producing an additional unit is equal to the marginal revenue received from selling that unit, often used to determine the optimal level of production in perfectly competitive markets.

Demand Curve

A graph showing the relationship between the price of a good or service and the quantity demanded by consumers.

Monopoly

A market structure characterized by a single seller who has exclusive control over the supply of a good or service, often leading to reduced competition.