Question

Iceberg Storage, a leading hard drive manufacturer, recently filed for bankruptcy. While most of Iceberg's competitors were shifting away from physical data storage devices toward online cloud storage services, Iceberg invested most of its retained earnings in the effort to improve its hard drives. Once the hard-drive market drastically declined, Iceberg Storage was unable to capitalize on the new technology. Which of the following does this scenario best illustrate?a. causal ambiguity
b. knowledge diffusion
c. social complexity
d. path dependence

Answer 1

Answer:

The correct answer is the option D: path dependence.

Explanation:

To begin with, the concept called as ''path dependence'' in the field of management and economics, is known for refering to the situation where the past decisions of a person affects the current situation that the person is going through and therefore it is said that the dependence is in the path that the person choose.

To sum up, the scenario illustrated in the case of Iceberg Storage relates to a case of path dependence due to the fact that its managers decided to invested in something that the competitors did not and therefore to take risks knowing that a possible damage can occur in the future, and eventually it did.

Answer 2

Answer:

The correct answer is option D) path dependence

Explanation:

What Is Path Dependency?

Path dependency explains the continued use of a product or practice based on historical preference or use. A company may persist in the use of a product or practice even if newer, more efficient alternatives are available. Path dependency occurs because it is often easier or more cost-effective to continue along an already set path than to create an entirely new one.

While most of Iceberg's competitors were shifting away from physical data storage devices toward online cloud storage services, Iceberg invested most of its retained earnings in the effort to improve its hard drives. Once the hard-drive market drastically declined, Iceberg Storage was unable to capitalize on the new technology.

This is a classic example of path dependence.