Mova Electronics, a leading pager manufacturer, recently declared itself bankrupt. This was attributed to a decision the company made in the past. While most of Mova's competitors were shifting their research focus toward cell phones, Mova invested most of its retained earnings on improving its pagers. Once the pager market drastically declined, Mova Electronics was unable to capitalize on the new technology. Which of the following does this scenario best illustrate?

A) Knowledge diffusion
B) Path dependence
C) Causal ambiguity
D) Social complexity

Path Dependency

Explanation:What Is Path Dependency?

Path dependency refers to how a continuation of a product or practice is driven by historical preference. A company may continue to use a certain product even when they are newly presented one which may be more efficient but because there is a historic use and preference of their current product they will hold on to it .

Sometimes this is because it is easier to deal with something that you already know how to manage then to start something new

B

Explanation:

Path Dependence

Path dependency explains the continuation of the 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. Mova Electronics continued with a pager instead of capitalizing on the new technology this best illustrates path dependency.

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