ACCA Applied Knowledge · Business and Technology · Technological factors
A manufacturer's board is worried that its production systems could become obsolete as technology advances. Which action best helps the company manage the risk of technological obsolescence?
The best way to manage obsolescence risk is to monitor technology developments and build regular system reviews and upgrades into strategic planning. Leaving systems unchanged, waiting for rivals to fail, or cutting training would increase the risk of falling behind.
- AKeep all existing systems unchanged to avoid disruption
- BMonitor technology developments and include periodic system reviews and upgrades in its strategic planningCorrect
- CWait until competitors have gone out of business before investing in new technology
- DCancel all training so that costs are reduced
Explanation
Obsolescence risk is managed by scanning the technology environment and planning reviews and upgrades. Leaving systems unchanged or waiting passively increases the risk, and cutting training reduces the ability to use new technology.
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