Man. of Strat. All 13 chapter Ultimate Final Study Guide

Jupiter Tech Inc. has conducted a failure modes and effects analysis of a digital identification system that it developed. The scores are as follows: Severity = 4 Likelihood of occurrence = 2 Inability of controls to detect it = 3 What is the risk priority number of the digital identification system? A. 24 B. 6 C. 2.67 D. 9

A. 24

According to Michael Porter's model of a value chain, which of the following is a support activity? A. Accounting activities B. Outbound logistics C. Marketing D. Inbound logistics

A. Accounting activities

Which of the following would be an example of a tacit resource? A. An oddsmaker who works for a large casino in Las Vegas and is correct 95 percent of the time B. Hand-woven fabrics made by local shops C. Chipset manufacturing machine bought by an electronics company D. A distiller used to make malt liquor

A. An oddsmaker who works for a large casino in Las Vegas and is correct 95 percent of the time

Which of the following statements is true of component innovation? A. Component innovation does not significantly affect the overall configuration of a system. B. Component innovation is also called architectural innovation. C. For a firm to initiate component innovation, knowledge about the whole system is necessary. D. Component innovations have more far-reaching and complex influences on industry competitors and technology users than architectural innovations.

A. Component innovation does not significantly affect the overall configuration of a system.

Super Alarm Inc. makes customized door security systems, which it sells under its own brand name. These security systems require installation, extensive customer education, and regular services. _____ would be the most appropriate selling method for Super Alarm Inc. A. Employing a direct sales force B. Creating an online ordering system C. Using a mail-order catalog system D. Using a cannibalization strategy

A. Employing a direct sales force

Jupiter Inc., a software firm, is starting to face competition from the new entrant in its market, Coral Inc. Jupiter wants to prevent its existing customers from switching to Coral's newly developed software. Which of the following measures should Jupiter adopt to achieve its objective? A. Ensuring that customers find its software simpler and more convenient to use than that of Coral B. Keeping the initial cost of its software higher than that of Coral's C. Keeping the prices of the complements required for its software higher than that set by Coral D. Ensuring that fewer complementary products are available for its products in comparison to that for the products of Coral

A. Ensuring that customers find its software simpler and more convenient to use than that of Coral

_____ refer to the costs (or benefits) of technological innovations that are borne by individuals other than those responsible for creating them. A. Externalities B. Innovation funnels C. Opportunity costs D. Cultural lags

A. Externalities

Gerden Price Corp. and New Ware Systems Inc. formed an alliance to develop a new line of technologically advanced cooking stoves. Which of the following would be the most likely outcome of this alliance? A. Faster product delivery to the market B. Increased market development and penetration times C. Lesser opportunities to pursue other projects D. Reduced overall flexibility

A. Faster product delivery to the market

Which of the following is an advantage of heavyweight teams? A. Heavyweight teams have strong cross-functional coordination. B. The team structure of heavyweight teams increases the possibility of social loafing. C. Heavyweight teams are typically permanent. D. The team structure of heavyweight teams decreases the cross-fertilization of ideas.

A. Heavyweight teams have strong cross-functional coordination.

Theta Cleaning Corp. wants to use the house of quality matrix in designing and developing a new vacuum cleaner. What is the first step that Theta Cleaning should take? A. Identification of customer requirements B. Determination of the relative value or weight of customer requirements C. Identification of the engineering attributes that determine the performance of the vacuum cleaner D. Evaluation of the competing products to determine how well they meet customer needs

A. Identification of customer requirements

After much research, Angela has designed a new automobile tire with a unique polycarbonate exterior that cannot be punctured. In the context of U.S. patent law, which of the following statements would be true for this invention? A. It can be patented as it is useful, novel, and not obvious. B. It can only receive a plant patent. C. It cannot be patented because tires are intangible products. D. It cannot be patented as it is only eligible for a copyright protection.

A. It can be patented as it is useful, novel, and not obvious.

Which of the following statements is true of standardization? A. It can ensure that activities within a firm run smoothly and yield predictable outcomes. B. It is defined as the degree to which a firm utilizes rules, procedures, and written documentation to structure the behavior of employees. C. It involves the use of organic structures instead of mechanistic ones. D. It encourages the creativity and experimentation that leads to innovative ideas.

A. It can ensure that activities within a firm run smoothly and yield predictable outcomes.

Which of the following is an advantage of using the real options approach of evaluating a project? A. It results in better technology investment decisions than a cash flow analysis approach. B. It is useful as technology investment scenarios often conform to the same capital market assumptions upon which the approach is based. C. It is cheap to use in case of a firm undertaking solo new product development. D. It is valuable only when there is no uncertainty in technology trajectories.

A. It results in better technology investment decisions than a cash flow analysis approach.

_____ are individuals or organizations that transfer information from one domain to another in which it can be usefully applied. A. Knowledge brokers B. Incubation workers C. Complementors D. Category captains

A. Knowledge brokers

_____ offers a fast way for a firm to extend the reach of its technology that is nearly free and offers the potential for royalties. A. Licensing out a technology B. Forming a joint venture C. Solo internal development D. Vertical integration

A. Licensing out a technology

Money Club and Money Ball are online platforms that allow their members to get in touch with people from various businesses. They also facilitate business contracts between their members. Money Club has 6,000 members, whereas Money Ball has 3,500 members. This indicates that: A. Money Club has a larger installed base than Money Ball. B. Money Club has a lower positive consumption externality than Money Ball. C. Money Ball provides more complementary goods than Money Club. D. Money Ball does not use a dominant design.

A. Money Club has a larger installed base than Money Ball.

Which of the following measures assesses the ratio of a firm's total profits from new products to its total expenditures? A. Return on innovation B. Average cycle time of the innovation C. Percentage of development projects meeting deadlines D. Percentage of development projects within the estimated budget

A. Return on innovation

Which of the following is true of technological innovations? A. Technological innovations help increase a country's gross domestic product. B. Technological innovations decrease the amount of output achievable from a given quantity of labor and capital. C. Technological innovations slow down product obsolescence and lengthen the product development cycles. D. Technological innovations increase production costs and reduce product differentiation.

A. Technological innovations help increase a country's gross domestic product.

_____ specifies a minimum level of copyright protection for all member countries, and it requires member countries to offer the same protection to both its own citizens and foreign nationals. A. The Berne Convention B. Treaty of Easton C. The Patent Cooperation Treaty D. The Madrid Agreement

A. The Berne Convention

Which of the following is true of the internal rate of return of a project? A. The discounted cash flow estimates are only as accurate as the original estimates of the profit. B. It maximizes the net present value of the investment. C. It neglects the timing of investment and cash flows. D. It does not discriminate against projects that are long term or risky.

A. The discounted cash flow estimates are only as accurate as the original estimates of the profit.

M&P Inc., a consumer goods manufacturing firm, has subsidiaries throughout the globe that have to respond to varying local market requirements. Therefore, the firm has planned to adopt a local-for-local approach to innovation. Which of the following statement is true in this context? A. The subsidiaries of M&P and their R&D divisions will be highly autonomous. B. The subsidiaries will achieve abundance of scale in R&D activities. C. This approach will make diffusion of valuable innovations across the company simple. D. This approach will eliminate redundancy in activities.

A. The subsidiaries of M&P and their R&D divisions will be highly autonomous.

Which of the following is an advantage of a functional team? A. The team structure of a functional team is straightforward to implement. B. The team structure of a functional team allows for greater cross-functional coordination. C. The team structure of a functional team increases the cross-fertilization of ideas. D. The team structure of a functional team increases the possibility of social loafing.

A. The team structure of a functional team is straightforward to implement.

Singing Cards Corp. has decided to make the technology behind its musical cards open. Which of the following is most likely to be one of the advantages associated with this decision? A. The technology will accrue more rapid adoptions. B. The price of the technology will rise exponentially. C. The production of complementary goods will cease. D. The technology's installed base will accumulate much more slowly.

A. The technology will accrue more rapid adoptions.

Which of the following statements is true of learning effects? A. There are substantial differences in the rates at which organizations learn. B. The learning rate is impervious to organizational factors such as firm strategy. C. As a technology is adopted, further development and refining of the technology reduces. D. The cost of producing a unit rises as the number of units produced increases.

A. There are substantial differences in the rates at which organizations learn.

Which of the following statements is true of skunk works? A. They are isolated from the mainstream organization to which they belong. B. They have a mechanistic structure. C. They are bound by the demands of the rest of the organization. D. They are teams that face high degrees of centralization of authority and bureaucracy.

A. They are isolated from the mainstream organization to which they belong.

Which of the following is true of quantitative methods of analyzing new projects, particularly in rapidly changing environments? A. They enable managers to use rigorous statistical comparisons of projects. B. Their accuracy is unquestionable. C. Discounted cash flow methods are the least commonly used quantitative methods. D. They are particularly accurate in highly uncertain or rapidly changing environments.

A. They enable managers to use rigorous statistical comparisons of projects.

Which of the following is an advantage of flexible manufacturing technologies? A. They have made shorter production runs economical. B. They have increased the importance of production economies of scale. C. They eliminate the need for differentiation from competitors. D. They have reduced the importance of technological innovation in industries.

A. They have made shorter production runs economical.

The vice president of Sunflower Computers Inc. is trying to decide on the composition of a new product development team. If he chooses members who are from different backgrounds, he is most likely to reap the benefits of: A. a broader knowledge base. B. lesser cross-fertilization of ideas. C. homophily. D. social loafing.

A. a broader knowledge base.

Not-invented-here syndrome occurs when: A. a division of a firm is reluctant to adopt other divisions' innovations. B. a firm tends to adopt innovations developed by competitors. C. an innovation is openly accepted without testing its suitability. D. developers of a failed innovation refuse to take responsibility for its failure.

A. a division of a firm is reluctant to adopt other divisions' innovations.

Clear Vision Inc. has been the market leader for vision care products such as eyeglasses and lenses. It has also recently developed the use of laser technology to correct eye defects. Due to its prior related experiences, it has been successful in recognizing the value of new information and using it to develop new technologies ahead of others. This phenomenon is called: A. absorptive capacity. B. disintermediation. C. technology determinism. D. technology retardation.

A. absorptive capacity.

The benefits firms reap by locating in close geographical proximity to each other are known collectively as _____. A. agglomeration economies B. incubator economies C. virtual economies D. shadow economies

A. agglomeration economies

Scripts & Scrolls Corp. supplies printing paper to select publishing houses. When its customers asked for a discount in the cost of supplies, the company had to oblige fearing that the customers might withdraw pending contracts. This shows the increased: A. bargaining power of buyers. B. bargaining power of suppliers. C. threat of substitutes. D. vertical integration of buyers.

A. bargaining power of buyers.

New innovations typically tend to: A. be adopted very slowly at first. B. eliminate incumbent inertia for late entrants. C. eliminate monopoly rents when they are first introduced. D. reduce the effectiveness of future enabling technologies.

A. be adopted very slowly at first.

As firms develop complementary technologies to improve the productivity or ease of utilization of a core technology, the technology: A. becomes more attractive to other firms. B. loses its credibility in the market. C. loses its dominant design position in the industry. D. experiences a decrease in its installed base.

A. becomes more attractive to other firms.

A _____ of a product is an early working prototype of the product released to users for testing and feedback. A. beta version B. substitute C. spiral model D. sigma model

A. beta version

When Pearl Love Inc. introduced its new range of bodywash, consumers switched from using its soaps, being sold under the same brand name, to using the bodywash. As a result, the company experienced a sharp drop in its soap sales. This scenario represents: A. cannibalization. B. the vampire effect. C. the halo effect. D. vaporware.

A. cannibalization.

Tacit knowledge is best defined as the knowledge that: A. cannot be readily codified or transferred in written form. B. cannot be patented. C. has a very low degree of appropriability. D. is not eligible for copyright protection.

A. cannot be readily codified or transferred in written form.

The value of an electronic reader is related to the availability of books, journals, magazines, etc., in a format that can be read by the electronic reader. For an electronic reader, these are _____ goods. A. complementary B. substitute C. Giffen D. intermediate

A. complementary

At Tech Edge Inc., a special team is set up for making a robot capable of assisting blind people in going about their daily activities. The members of the team are taken from various areas of the firm, including R&D, marketing, manufacturing, and distribution. The new team is put under the charge of a senior manager. This team is most accurately an example of a: A. cross-functional team. B. laggard team. C. homogenous team. D. self-directed work team.

A. cross-functional team.

Breaking Ventures Inc. realized that most parents are worried about their teenage children going out on their own. Based on this information, the company developed a device that could be fixed into teenagers' cell phones, and it helped parents keep track of their children's location. This approach to research and development is referred to as _____. A. demand-pull B. supply-push C. science-push D. research-pull

A. demand-pull

Blue Water Publication Corp. is planning to sell its books solely through its Web site BlueWaterbooks.com. By doing so, it ceases to require wholesalers and retailers. This is most accurately an example of: A. disintermediation. B. backward compatibility. C. value added reselling. D. bundling arrangement.

A. disintermediation.

Piezo Tech Solutions supplies hospitals with software to track insurance claims. As insurance regulations and policies are always changing, its software needs to have the ability to be agile and responsive to change. In other words, the software needs: A. dynamic capabilities. B. tacit resources. C. rigid competencies. D. to be path dependent.

A. dynamic capabilities.

When each partner of an alliance contributes capital and owns a specified right to a percentage of the proceeds from the alliance, the collaborative relationship is referred to as _____. A. equity ownership B. relational governance C. alliance contracts D. solo internal development

A. equity ownership

If a firm has the option of investing in R&D, the cost of commercializing a new technology that is developed can be considered the: A. exercise price. B. price of a call option. C. benefit of exercising the option. D. the value of the option.

A. exercise price.

Doven Inc. pioneered software development in the 1970s and introduced its range of office tools well ahead of its competitors. According to the classification scheme of entrants, Doven would be classified as a(n) _____. A. first mover B. early follower C. early leader D. laggard

A. first mover

Allure Fabrics Corp. supplies cotton, linen, and silk fabrics to various designer wear boutiques in and around Florida. The firm has recently launched a boutique in Florida under its own brand name to sell women's fashion apparel. Allure Fabrics is practicing: A. forward vertical integration. B. backward vertical integration. C. horizontal integration. D. substitution.

A. forward vertical integration.

LiteShoes Inc. has recently obtained architectural control for its shoe glider technology. By doing so, the company has: A. improved its efficiency in controlling the rate at which the technology is upgraded or refined. B. limited its ability to measure the product's compatibility with the complements produced by others. C. limited its potential to influence other firms in the industry. D. eliminated the possibilities of "feature creep."

A. improved its efficiency in controlling the rate at which the technology is upgraded or refined.

Fashion Fair Corp., the first mover in the "all-year discount" stores market, lost its market share to a late entrant, Brand Fair Inc. Brand Fair operates its discount stores solely through the Internet, which saves a lot of expenses. Fashion Fair has been unable to replicate this strategy by adopting the online store business model due to its existing contracts with suppliers and heavy investment in retail stores. Fashion Fair has been experiencing: A. incumbent inertia. B. monopoly rents. C. path dependency. D. technology attrition.

A. incumbent inertia.

Maverick Systems Inc. is a leading company in the mobile phone market, and profits from its mobile phones are very high. Maverick Systems has developed a new generation of smartphones, which is better than its existing line of smartphones, and has decided to embrace cannibalization of its existing line of smartphones. This means that the company is going to: A. introduce the new technology right away and increase its market lead while taking away profits from its existing line of smartphones. B. delay introduction of the next generation product until profits have begun to significantly decrease for the existing line of smartphones. C. use up most of its financial resources in promoting the new phone. D. wait for the existing line of smartphones to become obsolete and then introduce the new generation of smartphones into the market.

A. introduce the new technology right away and increase its market lead while taking away profits from its existing line of smartphones.

Technology is, in its purest essence, _____. A. knowledge B. dissonance C. chaos D. guesswork

A. knowledge

Allured Cosmetics Corp. enters into a contractual agreement with Pure Cosmetics Inc., a manufacturing firm in the West Coast. According to the contract, Pure Cosmetics can use the manufacturing processes of Allured Cosmetics to produce cosmetics in return for a specific fee. Pure Cosmetics is bound to use the manufacturing process only to make complementary products for the cosmetics manufactured by Allured Cosmetics. This collaborative arrangement is most accurately classified as _____. A. licensing B. outsourcing C. a joint venture D. capability complementation

A. licensing

Virtual teams are best defined as teams in which members: A. may be situated at a great distance from each other and collaborate intensively via advanced information technologies. B. are drawn from multiple functional areas in the firm such as R&D, marketing, manufacturing, and distribution, and they work at the company headquarters. C. have the tendency to cooperate only with people whom they perceive as being similar to themselves. D. have the tendency of shirking their responsibilities and blaming one another for their poor performance.

A. may be situated at a great distance from each other and collaborate intensively via advanced information technologies.

Alpen Inc. is a manufacturing firm that holds the patent for a new food processing machine that is considerably safer and more efficient than the others available in the market. Being the only firm that manufactures this product, Alpen charges a very high price for it. This is referred to as _____. A. monopoly rent B. technology lag C. incumbent inertia D. absorptive capacity

A. monopoly rent

Alumplus Aluminum Company has come up with a new type of metal. However, producing it would take up 75 percent of its manufacturing capacity and would hinder its ability to continue producing its other products. Alumplus Aluminum hires LM Group of Manufacturers to manufacture the new type of metal. This collaborative arrangement is most likely to be classified as _____. A. outsourcing B. disintermediation C. capability complementation D. solo internal development

A. outsourcing

The first entrants to sell in a new product or service category are referred to as _____. A. pioneers B. early leaders C. early followers D. laggards

A. pioneers

Coolers Inc. has developed a new generation of air conditioners. It has upgraded the old technology by making the air conditioners work on voice sensors instead of remote control. Though the technology is new, Coolers has decided to introduce the product in the market at a low cost. This project is a(n) _____ project for Coolers Inc. A. platform B. derivative C. breakthrough D. advanced R&D

A. platform

Additive manufacturing refers to: A. printing a design by laying down thin horizontal cross sections of material. B. manually printing a new design that converges with an old design by adding details. C. constructing a model by injection molding. D. constructing a model by machining a mold.

A. printing a design by laying down thin horizontal cross sections of material.

As a result of the rapid pace of innovation: A. product life cycles have become short. B. product development cycles have become significantly longer. C. market segmentation has reduced. D. product obsolescence has slowed down.

A. product life cycles have become short.

Omega Cleaning Corp. wants to use the house of quality matrix in designing and developing a new vacuum cleaner. The use of house of quality is most likely to: A. provide a common language and framework for members of a project team to use. B. blur the relationship between product attributes and customer requirements. C. conceal the competitive shortcomings of the company's existing products. D. hide design trade-offs.

A. provide a common language and framework for members of a project team to use.

Socially complex resources are: A. resources or activities that emerge through the interaction of multiple individuals. B. resources that cannot be defined in terms of a numerical value. C. resources that require public sanction in order to be utilized for profit-making purposes. D. resources that are shared by different parties thereby making them easily imitable.

A. resources or activities that emerge through the interaction of multiple individuals.

Technological innovations increase: A. the gross domestic product of an economy. B. product life cycles. C. the time required for product development and introduction. D. the production costs of multiple product variations.

A. the gross domestic product of an economy.

Ceramic Customs Corp. required a specific type of ceramic to make its tiles. Since there was only one supplier for that particular ceramic, the firm was forced to source all of its supplies from it. The firm tried negotiating the price of the material but failed to get any reduction on the cost. This was because: A. the supplier had more bargaining power than the firm. B. the supply was unlimited. C. the supply exceeded the demand. D. the industry had barriers to entry.

A. the supplier had more bargaining power than the firm.

According to Porter's five-force model, if suppliers of a particular good are very abundant, _____. A. their bargaining power will be less B. their level of differentiation will be very high C. their level of vertical integration in the industry will be high D. their annual employee turnover rates will be less

A. their bargaining power will be less

If a country's GDP stands at $4,867 billion, it means that the country's _____ is worth $4,867 billion. A. total annual output B. investment on technological innovation C. savings with the World Bank D. negative variance in budget

A. total annual output

The difference between copyrights and trademark protection is that: A. trademark is an indicator used to distinguish the source of a good. B. trademarks are a form of protection granted to works of authorship. C. copyrights are established by the legitimate use of a product. D. copyrights can last as long as the copyright is in use.

A. trademark is an indicator used to distinguish the source of a good.

Companies that buy manufacturer's products in bulk and then resell them (often in smaller or more diverse bundles) to other supply channel members are referred to as _____. A. wholesalers B. manufacturers' representatives C. retailers D. value-added resellers

A. wholesalers

Walter is the new director of R&D at Good Health Inc., a pharmaceutical company. Which of the following statements, if made by Walter, would indicate that he believes in the concept of the innovation funnel? A. "Innovation is a freewheeling process that is unconstrained by rules and plans." B. "While there are many potential new product ideas going in the wide end, very few make it through the development process." C. "I believe that Good Health should limit new idea generation to save time and other resources." D. "I believe that Good Health should allow all new ideas generated in the company to make it to the development process."

B. "While there are many potential new product ideas going in the wide end, very few make it through the development process."

What is the net present value (NPV) of a project if the present value of cash inflow is $10,000 and the present value of cash outflows is $5,000? A. $2,000 B. $5,000 C. $10,000 D. $15,000

B. $5,000

In the United States, utility patent owners are granted a term of _____ years of protection. A. 35 B. 20 C. 90 D. 50

B. 20

Which of the following statements is true of core competencies? A. A firm's core competency refers to a single ability. B. A firm's core competency is more than just a core technology. C. An individual business unit has only one core competency. D. A firm's core competency is usually easy to imitate.

B. A firm's core competency is more than just a core technology.

_____ is the ability of an organization to recognize, assimilate, and utilize new knowledge. A. Cognitive dissonance B. Absorptive capacity C. Organizational obsolescence D. Built-in obsolescence

B. Absorptive capacity

The Corner Shop Corp. is a leading supermarket chain in Chicago. According to Michael Porter's model of a value chain, which of the following activities of the firm is a primary activity? A. A training session for the floor attendants at The Corner Shop outlets B. An advertising campaign for a new The Corner Shop outlet C. The accounting function at The Corner Shop outlets D. The hiring of lawyers to ensure that the firm adheres to labor laws

B. An advertising campaign for a new The Corner Shop outlet

Which of the following statements is true of the different types of innovations? A. Process innovations are more visible than product innovations. B. An innovation that was once considered radical may eventually be considered incremental as the knowledge base underlying the innovation becomes more common. C. An innovation is considered a component innovation if it significantly affects the overall configuration of the system of which it is a component. D. Architectural innovation is also called modular innovation.

B. An innovation that was once considered radical may eventually be considered incremental as the knowledge base underlying the innovation becomes more common.

Which of the following is most likely to create a positive externality for its neighboring community members? A. A coal mine B. An organic farm C. A petroleum refinery D. A dye manufacturing company

B. An organic farm

In the context of product development teams, which of the following statements is true? A. The larger a team is, the easier it is to foster a shared sense of identity among team members. B. As the size of a team increases, the potential for social loafing increases. C. Formation of cross-functional teams hinders the cross-fertilization of ideas. D. Increasing the diversity of team members eliminates the possibility of homophily.

B. As the size of a team increases, the potential for social loafing increases.

Which of the following is an advantage of making a new generation of technology backward compatible? A. Consumers will have to buy completely new complements. B. Consumer switching costs may be lower because they anticipate using their existing complements. C. It directly increases the sales of complementary goods for its new generation of technology. D. It is typically less expensive to make a new generation of technology backward compatible than to make it incompatible.

B. Consumer switching costs may be lower because they anticipate using their existing complements.

Sigma Cleaning Inc. wants to use the house of quality matrix in designing and developing a new vacuum cleaner. What is the last step that Sigma Cleaning will have to take? A. Determination of the relative value or weight of customer requirements B. Creation of a new design based on the design targets C. Identification of the engineering attributes that determine the performance of the vacuum cleaner D. Evaluation of the competing products to determine how well they meet customer needs

B. Creation of a new design based on the design targets

Which of the following is an advantage typically associated with cross-functional teams? A. A cross-functional interface ensures that cross-fertilization of ideas is reduced. B. Cross-functional teams allow a project to draw on a wider mix of information sources in the environment. C. Cross-functional teams usually reduce coordination and communication costs. D. Cross-functional teams are most efficient in eradicating homophily.

B. Cross-functional teams allow a project to draw on a wider mix of information sources in the environment.

_____ is a distributed problem-solving model whereby a design problem or production task is presented to people who voluntarily contribute their ideas and effort in exchange for compensation, intrinsic rewards, or a combination thereof. A. Championing B. Crowdsourcing C. Partly parallel development D. Sequential development

B. Crowdsourcing

Which of the following statements is true of customer preferences? A. The importance of technological features to customers stays constant over time. B. Customers can differ from producers in their understanding of a new technology. C. All pioneers of new-to-the-world technologies face customer uncertainty. D. Other things being equal, more customer uncertainty favors earlier timing of entry.

B. Customers can differ from producers in their understanding of a new technology.

Fabmark Consultancy was asked by a client to evaluate the attractiveness of a potential project to develop a new product line. The data provided by the client included cash flow estimates (in dollars), ranking of marketability by the sales force, and ranking of different product attributes from a potential customer focus group. Which of the following methods would allow Fabmark Consultancy to combine this information and analyze it? A. Q-sort B. Data envelopment analysis C. Attribute ranking D. Breakeven analysis

B. Data envelopment analysis

Which of the following statements is true of a firm entering a market too early? A. Distribution channels required for the firm's products will be well established prior to its entry. B. Enabling technologies and complements available to the firm will be immature. C. The firm's competitors would have already captured controlling shares of the market. D. The firm will not be able to reap the advantages of monopoly rent.

B. Enabling technologies and complements available to the firm will be immature.

Which of the following statements is true of first movers in comparison with early followers and late entrants? A. Cost of developing necessary production processes and complementary goods is lower for first movers. B. First movers are in a better position to exploit buyer switching costs and also to reap increasing returns advantages. C. First movers, being incumbents, have greater ability than later entrants to respond to changes in the industry environment and adopt newer production processes. D. First movers fail to capture scarce resources such as key locations, government permits, access to distribution channels, and relationships with suppliers.

B. First movers are in a better position to exploit buyer switching costs and also to reap increasing returns advantages.

Felix has designed a pair of sunglasses that can be folded and put into a case that easily fits into a shirt or pant pocket. Felix wants to know if he can receive a patent on this invention. Which of the following responses would be most accurate according to U.S. patent law? A. He cannot receive a patent as the invention is only eligible for a copyright protection. B. He cannot receive a patent since he is merely making the sunglasses more portable. C. He cannot receive a patent as the invention is not useful. D. He can receive a patent as the invention is a tangible product.

B. He cannot receive a patent since he is merely making the sunglasses more portable.

The vice president of Biomedics Inc. is trying to decide on the composition of a new product development team. If she chooses members from multiple functional areas in the firm, which of the following disadvantages is she most likely to experience? A. Increase in instances of whistle-blowing B. Increase in communication and coordination costs C. Lesser cross-fertilization of ideas D. Lesser instances of social loafing

B. Increase in communication and coordination costs

Which of the following is true of interfirm collaborative research and development networks? A. Collaborative research networks are not important or viable in high-technology sectors. B. Interfirm networks can enable firms to achieve much more than they could achieve individually. C. The flow of information and other resources through a network is independent of the network's size. D. Information diffusion is fairly slow and limited in collaborative research networks with dense structures and many paths for information to travel.

B. Interfirm networks can enable firms to achieve much more than they could achieve individually.

Which of the following statements is true about the Bayh-Dole Act of 1980? A. It made university technology transfer activities illegal and unethical. B. It allowed universities to collect royalties on inventions funded with taxpayer dollars. C. It restricted provision of patents for inventions developed at universities. D. It made investment in research and technology mandatory for public companies.

B. It allowed universities to collect royalties on inventions funded with taxpayer dollars.

Which of the following is an advantage of collaborating at the development stage of a technology? A. It increases asset commitment to obsolete products. B. It ensures cooperation in the commercialization stage. C. It increases a product's cycle time. D. It facilitates the emergence of multiple competing standards for a product.

B. It ensures cooperation in the commercialization stage.

Which of the following statements is true about a firm with a long development cycle time? A. It can quickly revise or upgrade its product offering. B. It is more likely to have a high cost of capital. C. It can take advantage of both first-mover and second-mover advantages. D. It is more likely to be able to fully amortize the fixed costs of development before that generation becomes obsolete.

B. It is more likely to have a high cost of capital.

Under U.S. patent law, which of the following is one of the mandatory requirements to be met by a new invention in order to be eligible for patent protection? A. It must be obvious. B. It must be novel. C. It must substitute one material for another. D. It must substitute an element for an equivalent element.

B. It must be novel.

Easymake Corp. developed a new Web design software to build Web pages for its clients. However, Easymake soon realized it could make more money by selling this software to those who wish to quickly build Web pages to sell their products. Which of the following would be the most appropriate strategy for Easymake? A. It should not sell the Web design software as it will give rise to competition on the Internet. B. It should become a licensor of the new Web design software. C. It should become a licensee of the new Web design software. D. It should make the Web design software available to users as open source software.

B. It should become a licensor of the new Web design software.

Trekker Inc. has developed a product with a very short product development cycle. Which of the following can it typically expect? A. The product's sales will be slow as consumers would already be committed to other products. B. It will be able to provide complementary goods to enhance the attractiveness of its product. C. It will be unable to fully amortize the fixed costs of development before the product becomes obsolete. D. It will not be able to upgrade its product.

B. It will be able to provide complementary goods to enhance the attractiveness of its product.

Virtual Inc., a manufacturing company, has recently entered the cell phone industry. This industry is characterized by rapid technological innovations. Which of the following is most likely to be true for Virtual? A. The life cycle of its cell phones will be very long. B. It will face rapid product obsolescence. C. It will face low market segmentation in the cell phone industry. D. It will have a lower need for product differentiation.

B. It will face rapid product obsolescence.

Which of the following collaborative arrangements is the most appropriate when firms place great importance on access to other firms' competencies? A. Licensing in B. Joint venture C. Licensing out D. Sole internal development

B. Joint venture

Which of the following is an advantage of being a late entrant into a market? A. Late entrants are the first to capture scarce resources. B. Late entrants often do not have to invest in exploratory research. C. Late entrants often are most likely to capitalize on monopoly rents. D. Late entrants are unaffected by switching costs.

B. Late entrants often do not have to invest in exploratory research.

Unicorn Medicines Inc., a pharmaceutical company based in the United States, has its research and development units spread across the globe. Lately, these research and development units have not been receiving adequate financial support. Which of the following is most likely to be the cause for such a situation? A. Technical innovation leads to lower market segmentation and slower product obsolescence. B. Most innovative ideas do not become successful new products. C. The product development cycle in the pharmaceutical industry is short. D. The cost associated with pharmaceutical research and development is low.

B. Most innovative ideas do not become successful new products.

_____ require multiple stages of a new product development process to occur simultaneously. A. Incumbent development processes B. Parallel development processes C. Monopoly development processes D. Slow-cycle development processes

B. Parallel development processes

Which of the following is an example of user innovation? A. Samuel has invented a detachable bicycle in order to make profits by selling it to a reputed bicycle manufacturing firm. B. Sandra, an engineer, has developed a device that helps track the location of her teenage daughter's car. C. Jessica, an ace designer for a clothing brand, has been asked to work on a dyeing technique that changes fabric color according to the room temperature. D. Ivan, a scientist at a reputed pharmaceutical company, has developed an anti-inflammatory drug for the company to commercialize.

B. Sandra, an engineer, has developed a device that helps track the location of her teenage daughter's car.

Which of the following is the correct sequence of steps for the science-push approach to research and development? A. Customers express an unmet need, R&D develops the product to meet that need, the product is manufactured, and finally the marketing team promotes the product. B. Scientific discovery leads to an invention, the engineering team designs the product, it is manufactured, and finally the marketing team promotes it. C. Marketing discovers a need, R&D comes up with the product concept that is refined by engineering, the manufacturing team produces it, and finally the product is sold. D. Manufacturing sees a way to improve a product, the engineering team redesigns it, and finally the marketing team creates awareness about the improved product.

B. Scientific discovery leads to an invention, the engineering team designs the product, it is manufactured, and finally the marketing team promotes it.

A marketing research company categorized Jane as an early adopter. Which of the following would be true of Jane in this context? A. She does not adopt an innovation until she feels pressure from her peers. B. She is well integrated into her social system. C. She has a skeptical attitude toward new ideas. D. She has a low potential for opinion leadership.

B. She is well integrated into her social system.

_____ refers to the degree to which partners have compatible objectives and styles. A. Resource fit B. Strategic fit C. Capability complementation D. Contractual fit

B. Strategic fit

With respect to a research and development (R&D) program, which of the following can be considered the exercise price? A. The cost of the R&D program B. The cost of future investment required to capitalize on the R&D program C. The returns to the R&D investment D. The returns to the R&D investment minus the cost of the R&D program

B. The cost of future investment required to capitalize on the R&D program

Which of the following statements is true of functional teams? A. Functional teams consist of members from multiple areas in the firm such as R&D, marketing, manufacturing, distribution, and so on. B. The functional team structure provides little opportunity for cross-functional coordination. C. Functional teams are not appropriate for derivative projects that affect only a single function. D. Functional teams are usually permanent.

B. The functional team structure provides little opportunity for cross-functional coordination.

Which of the following statements is true of loosely coupled organizational structures? A. In loosely coupled structures, development and production activities achieve coordination through their adherence to shared objectives. B. The possibility of achieving synergies is very high in loosely coupled structures. C. They are most useful in organizations characterized by activities that require the frequent exchange of complex or tacit knowledge. D. They provide mechanisms for resolving conflict that are more effective or less expensive than those available in the market.

B. The possibility of achieving synergies is very high in loosely coupled structures.

Which of the following statements is true of a monopoly cost curve? A. Monopoly costs to market share curve is more s-shaped than network externality returns to market share curve. B. The steepness of the monopoly cost curve is largely a function of a firm's discretionary behavior. C. It is not possible for a network externality returns curve to cross a monopoly cost curve. D. A firm choosing to exploit its monopoly power is flattening its monopoly costs curve.

B. The steepness of the monopoly cost curve is largely a function of a firm's discretionary behavior.

Which of the following statements is true of innovators and early adopters? A. They are unwilling to take risks and to pay high prices. B. They may demand considerable customization and technical support. C. They are more likely to respond to marketing that communicates the product's completeness. D. For this market segment, detailed technical information is not as important as using market channels with high reach and high credibility.

B. They may demand considerable customization and technical support.

The CEO of a pharmaceutical company asked his consultant if it was a good idea to implement the s-curve model to predict when a technology would reach its limits. The consultant identified a limitation in the use of the model. Which of the following is most likely the limitation identified by the consultant? A. Firms cannot influence the shape of the s-curve through their developmental activities. B. Unexpected changes in the market can alter the shape of a technology's s-curve. C. S-curve models cannot be applied in the pharmaceutical industry. D. S-curve models are outdated and unrealistic.

B. Unexpected changes in the market can alter the shape of a technology's s-curve.

Beta Cleaning Equipment Corp. has started the actual design and development of a new floor buffing machine. It has the details of manufacturing, marketing, and operations of the new product as well. According to the stage-gate process, what is the next stage of this project? A. Launch of the product by producing it commercially and selling it B. Verification and validation of the new product, and its marketing and production C. Formation a focus group to make sure the product meets user expectations D. Development of a business case to justify the project

B. Verification and validation of the new product, and its marketing and production

_____ marketing is an attempt to capitalize on the social networks of individuals to stimulate word-of-mouth advertising. A. Ambush B. Viral C. Test D. Real-time

B. Viral

Sally has come up with a unique recipe for cookies and is selling them through exclusive outlets all across Atlanta. As the sales skyrocket, her friends tell her to patent the recipe. However, she is so protective of her recipe that she does not even want to reveal her secret ingredients to a government agency. Is there anything she can do to keep the recipe legally protected? A. No, she cannot protect her recipe unless she is willing to get her recipe patented. B. Yes, her recipe can be considered a trade secret and she can legally prevent others from benefiting from her recipe without her permission. C. Yes, she can declare her recipe to be a trade secret and register it with the U.S. Trade Secret Agency. D. No, the recipe is not a tangible product and therefore cannot be protected.

B. Yes, her recipe can be considered a trade secret and she can legally prevent others from benefiting from her recipe without her permission.

Electronic waste results from the disposal of technological goods. This is an example of: A. the Solow Residual. B. a negative externality. C. a negative variance. D. the innovation funnel.

B. a negative externality.

In the context of project development, an "antichampion" is: A. a person who wishes to sabotage a new project. B. a person who plays the role of the "devil's advocate." C. a person who uses subjective criteria to evaluate a new project. D. a person in a competing firm who sabotages market tests by promoting his company's products more heavily than normal.

B. a person who plays the role of the "devil's advocate."

When Fun Bun Inc., an international fast-food chain, first moved into China, it had to teach farmers how to grow a particular variety of potatoes, and bakers had to be taught how to make hamburger buns. This is an example of: A. corporate social responsibility. B. an undeveloped supply channel. C. incumbent inertia. D. monopoly rents.

B. an undeveloped supply channel.

Genetech Inc. has produced a new generation of video game consoles. The new product can be used to run the games used in the previous generation of the video game console as well. In this context, Genetech is most accurately applying the concept of: A. backward integration. B. backward compatibility. C. backward linkage. D. backward traceability.

B. backward compatibility.

Perfecto Espresso Corp. is a chain of coffee shops in the United States. Earlier it used to source its coffee from several coffee suppliers. However, recently it started its own coffee plantation to supply its coffee shops. This is an example of: A. forward vertical integration. B. backward vertical integration. C. horizontal integration. D. substitution.

B. backward vertical integration.

Since larger companies tend to have more bureaucracy, fixed costs, and commitments to large numbers of employees, customers, and suppliers than smaller firms, you can expect it to _____. A. gamble more on big changes B. be less responsive to technological changes C. find it much simpler to monitor employees and reward them for their effort or success at innovation D. experience higher rates of new product success

B. be less responsive to technological changes

Combining the capabilities and other resources of partner firms but not necessarily transferring those resources between the partners is referred to as _____. A. capability transfer B. capability complementation C. resource modification D. disintermediation

B. capability complementation

The relationship between a _____ resource and the outcome it produces is poorly understood. A. socially complex B. causally ambiguous C. logistically outbound D. logistically inbound

B. causally ambiguous

S-curves in technology diffusion are obtained by plotting the: A. capacity of a technology against time. B. cumulative number of adopters of a technology against time. C. performance speed of a technology against effort. D. performance power of a technology against effort.

B. cumulative number of adopters of a technology against time.

Magnitude Inc. was the first company to introduce a video gaming console in the market. However, consumers were uncertain about the product, and its high costs discouraged consumers from purchasing it. Eventually, Magnitude withdrew the product from the market. A few years later, Mantel Corp. and Adventura Inc. came up with their respective gaming consoles and successfully established their products. In this scenario, Mantel and Adventura would be considered: A. pioneers. B. early followers. C. laggards. D. late movers.

B. early followers.

In the context of s-curve in technological improvement, plotting performance against time will result in the same characteristic curve as plotting performance against effort only if: A. speed, a function of performance, is relatively constant over time. B. effort is relatively constant over time. C. power, a function of performance, is relatively inconsistent over time. D. effort varies over time.

B. effort is relatively constant over time.

If the aspects that customers have come to expect in a technology are difficult for competitors to imitate, being the technology leader will: A. result in an inability to preemptively capture scarce assets. B. enable it to yield sustained monopoly rents. C. result in lower bargaining power over suppliers. D. mean negligible research and development costs.

B. enable it to yield sustained monopoly rents.

A delayed entry into a market with a new technology is preferred if: A. support by complementary goods providers is high. B. enabling technologies are less mature. C. customer uncertainty is low. D. the scope for improving over previous technologies is high.

B. enabling technologies are less mature.

Mr. Crunchy Inc. is a firm experiencing severe losses. However, with large initial investment in manufacturing equipment and infrastructure, the firm is finding it difficult to abandon the industry. According to Porter's five-force model, the company is facing a(n): A. vertical integration. B. exit barrier. C. horizontal integration. D. substitute threat.

B. exit barrier.

Greyer Corp. has developed a special drug that kills cancer cells. While the scientists at Greyer have the knowledge, they are short on equipment, money, and marketing know-how. In this situation, the most appropriate step for Greyer would be to: A. give up the idea of selling the drugs altogether. B. find a partner to collaborate with to sell the drug. C. forge forward and develop the drug on its own. D. come up with a completely new drug.

B. find a partner to collaborate with to sell the drug.

Urban Fashions Corp. has become very successful in the last few years and now employs a large number of people. Serena, the owner of the firm, had been very informal in running the company. However, because of the increase in the size of the firm, she now feels that the informal ways of management have become ineffective. In order to structure the behavior of employees, Serena wants to introduce written codes of conduct and regulations into the firm. This change being introduced in the company by Serena is referred to as _____. A. disintermediation B. formalization C. nationalization D. decentralization

B. formalization

The _____ of an economy is its total annual output as measured by its final purchase price. A. balance of payment B. gross domestic product C. cash reserve ratio D. net national income

B. gross domestic product

According to Porter's five-force model, if a buyer can threaten to backward vertically integrate, it will: A. decrease the buyer's bargaining power. B. increase the buyer's bargaining power. C. increase the supplier's bargaining power. D. lower the threat of entry into the industry.

B. increase the buyer's bargaining power.

Stevenson, a U.S. citizen, wrote a book called The Ten Commandments of Leadership. He gave away copies of the book to the people who attended his workshops on leadership. The copyright protection for this book: A. is nonexistent unless Stevenson registers it with the Copyright Office. B. is in effect from the time the book was created and fixed in a copy. C. will be valid for only 20 years since the publication of the book. D. will be valid till Stevenson dies.

B. is in effect from the time the book was created and fixed in a copy.

Speeding Horse Inc., a leader in the video game console market, is making its new generation consoles backward compatible with its previous games. This means that: A. it is giving away its own installed base or complementary goods advantages to competitors. B. it is providing a significant incentive to the owners of its previously developed consoles to buy the new console. C. the transition of customers through product generations will become impossible. D. a large range of complementary goods of the previous generations, mainly the games, will lose its existing value and utility.

B. it is providing a significant incentive to the owners of its previously developed consoles to buy the new console.

Allured Architecture Inc. collaborated with Maze & Matiz Corp. to form a new architecture firm called AllureAmaze Inc. Both the firms had a significant equity stake in the new entity. This collaboration would most accurately be termed a(n) _____. A. licensing project B. joint venture C. outsourcing maneuver D. contract alliance

B. joint venture

Members of a virtual team: A. must be located in the same office. B. may live great distances apart. C. are always collocated. D. must belong to the same country.

B. may live great distances apart.

The discounted cash inflows of a project minus the discounted cash outflows is referred to as the _____. A. internal rate of return B. net present value C. real option D. screening value

B. net present value

Sandy lives in a country that is a member of the Madrid Union. She has registered her trademark within her country. Her trademark is now protected: A. throughout the world. B. only in the countries that Sandy chooses among the members of the Madrid Union. C. only in her own country. D. only in the countries where products with the trademark are manufactured.

B. only in the countries that Sandy chooses among the members of the Madrid Union.

Gemini Car Inc. buys car components from various manufacturers and assembles them into cars, which it sells under its own brand name. From the given information, Gemini Car is most accurately an example of a(n): A. pirate operator. B. original equipment manufacturer. C. disintermediation factor. D. category captain.

B. original equipment manufacturer.

If a business builds a park in a community, it creates a(n) _____ for the community members. A. social cost B. positive externality C. opportunity cost D. negative variance

B. positive externality

Josh is the executive vice president of a bank. The president of the bank has recently asked Josh to use his influence to ensure that the bank's online banking project is developed and implemented. Paul has been asked to be a(n): A. devil's advocate. B. project champion. C. entrepreneur. D. mentor.

B. project champion.

Earth Love Electronics Inc. has developed a lawn mower that runs on solar power. The lawn mowers are available in all local supermarkets and several electronic stores. According to the Buyer Utility Map, the company is trying to offer convenience utility in the _____ stage. A. supplements B. purchase C. disposal D. maintenance

B. purchase

Kroters Inc. decides to set up its manufacturing plant near Woodsville, a small community of farmers. Kroters is most likely to create a positive externality for the community members of Woodsville if it: A. increases its product life cycle based on consumer demand. B. sets up an organic farm near Woodsville. C. follows the Solow Residual. D. reduces the rate of product obsolescence for Woodsville residents.

B. sets up an organic farm near Woodsville.

Liam, an employee of Centaurs Inc., is part of a new product development team that operates in a completely different manner from its parent organization. Within the team, there is considerable decentralization of authority and limited bureaucracy. It also has its own unique culture. Liam's team can be most accurately referred to as: A. a mechanistic team. B. skunk works. C. an inorganic group. D. a mainstream circle.

B. skunk works.

When Faslow Medical Center in Exeter County changed its name to Faslow Hospital, it also unveiled a plan to build a medical tower that would double its physical facilities by 100 percent within the next 10 years. It also announced that its goal was to not only serve Exeter County but also the entire region including the five contiguous counties. This is most accurately an expression of: A. vertical integration. B. strategic intent. C. monopoly rent. D. supplier bargaining power.

B. strategic intent.

In the context of qualitative methods for choosing projects, screening questions are used mainly to: A. increase the rate of employee attrition. B. structure the discussion about project details like potential costs and benefits. C. increase employee turnover rates. D. choose the best consulting firm to analyze a potential project.

B. structure the discussion about project details like potential costs and benefits.

A variety of rice created by Biocrop Inc. through recombinant DNA technology was found to be rich in both carbohydrates and proteins. After the success of this rice variety, recombinant DNA technology was implemented by less-developed countries to increase the nutrient levels of fruits, pulses, and greens in order to feed their malnourished children. This is an example of _____. A. technological dissonance B. technological spillover C. technological retardation D. technological determinism

B. technological spillover

The path a technology follows through time is termed as _____. A. technology map B. technology trajectory C. technology cluster D. technology transfer

B. technology trajectory

In the context of a firm's product diffusion curve, when there is a chasm between early adopters and early majority customers: A. the firm must reduce its production capacity. B. the firm should improve its efficiency to target the mass market. C. the early majority market becomes saturated. D. the early majority market is ready to buy the product.

B. the firm should improve its efficiency to target the mass market.

Joe's Burgers Corp. is a famous fast-food chain that uses a picture of a cook in a red hat as its symbol. It would not be legal for you to sell hamburgers with the same identification picture as that of Joe's Burgers because that would be a(n): A. patent violation. B. trademark violation. C. embargo violation. D. trade secret violation.

B. trademark violation.

Oswen Technologies Inc., a software development company, spent a lot of money in advertising software products that were not in the market. However, the firm hoped to bring these products to the market at a later date. The software products advertised before their availability are termed _____. A. puffery B. vaporware C. first refusal units D. advertising rollouts

B. vaporware

Which of the following statements is true of technology diffusion? A. S-curves in technology diffusion are obtained by plotting performance against time. B. Technology diffusion is much faster than information diffusion. C. A drop in the price of a new technology can accelerate technology diffusion. D. Adoption is initially fast when a new technology is introduced to the market.

C. A drop in the price of a new technology can accelerate technology diffusion.

Erison Group, an advertising company, wants to hire someone as its creative head. Who among the following would be best suited for this position? A. An individual who completely adheres to the existing logic and paradigms and has extensive knowledge of the field B. An individual who has low tolerance for ambiguity and avoids taking risks C. An individual who has a moderate degree of knowledge of the field but is intrinsically motivated D. An individual who prefers to look at problems in conventional ways

C. An individual who has a moderate degree of knowledge of the field but is intrinsically motivated

Which of the following statements is true of the autonomous team structure? A. In autonomous teams, individuals may spend less than 10 percent of their time working on team-related activities. B. In autonomous teams, the potential for conflict between team and functions is very low. C. In autonomous teams, team members are collocated with a senior project manager. D. The project manager of an autonomous team is not given full control over resources.

C. In autonomous teams, team members are collocated with a senior project manager.

Which of the following statements is true of heavyweight teams? A. Project managers of heavyweight teams lack the authority to command resources. B. Heavyweight teams are always temporary. C. In heavyweight teams, members are collocated with the project manager. D. Heavyweight teams are considered inappropriate for platform projects.

C. In heavyweight teams, members are collocated with the project manager.

Which of the following statements is true of a patent? A. The laws governing patent protection are universal and do not differ from country to country. B. A patent granted in one country provides protection in all other countries as well. C. In the United States, an inventor can publish an invention up to a year before applying for the patent. D. Discovery of scientific principles that pertain to natural laws can be patented.

C. In the United States, an inventor can publish an invention up to a year before applying for the patent.

Silk Work Inc., a manufacturer of silk garments, is planning to replace hand weaving with some modern machines that run on fuel. Which of the following consequences of this measure can be categorized as a negative externality? A. Increased amount of output achievable from the given quantity of labor B. Increase in the quality of the silk garments C. Increased pollution as a result of the new technology D. Increased need for investment to finance the modernization

C. Increased pollution as a result of the new technology

Which of the following is a disadvantage of using internal rate of return for assessing a project? A. It fails to take into account the time value of money and risk. B. It cannot be calculated by trial and error. C. It discriminates heavily against long-term and risky projects. D. It fails to provide concrete financial estimates.

C. It discriminates heavily against long-term and risky projects.

Which of the following statements is true of contract manufacturing? A. It requires companies to increase its labor force to meet the scale of market demand. B. It requires firms to meet the scale of market demand by committing to long-term capital investments. C. It enables a firm to tap the greater economies of scale. D. It decreases organizational responsiveness to the environment.

C. It enables a firm to tap the greater economies of scale.

Which of the following is an advantage of collaborating? A. It increases the in-house development time for projects. B. It increases a product's cycle time. C. It gives firms more flexibility. D. It causes firms to commit to assets that will rapidly become obsolete.

C. It gives firms more flexibility.

Which of the following statements is true of design for manufacturing (DFM) methods? A. It lengthens the development cycle time for products. B. It increases the cost of production by reducing the number of parts involved in the manufacturing process. C. It is a method of facilitating integration between engineering and manufacturing. D. It is a method by which firms identify potential failures in a system and classify them according to their severity.

C. It is a method of facilitating integration between engineering and manufacturing.

Which of the following is a disadvantage associated with autonomous teams? A. The project manager of an autonomous team does not have any control over resources contributed from different functional departments. B. The autonomous team structure does not accommodate cross-functional integration. C. It is hard for autonomous teams to fold back into the parent organization when a project is completed. D. Autonomous teams do not have project managers, because of which they face a lot of coordination problems.

C. It is hard for autonomous teams to fold back into the parent organization when a project is completed.

Which of the following statements is true of Porter's five-force model? A. It states that the attractiveness of an industry is unaffected by the industry's degree of rivalry. B. It fails to acknowledge the role of substitutes for customers. C. It is often used in practice to assess a specific firm's external environment. D. It states that oligopolistic industries are less competitive if firms choose to engage in price wars.

C. It is often used in practice to assess a specific firm's external environment.

Which of the following statements is true of partly parallel development processes? A. It enhances the probability that R&D will design products that are difficult to manufacture. B. It requires costly iterations between design stages. C. It shortens overall cycle time. D. It initiates product design after concept development is complete.

C. It shortens overall cycle time.

Iris is quite skeptical about new innovations and is most likely to adopt something new only after experiencing peer pressure to adopt the new innovation. However, she is not so risk averse that she will wait until all uncertainty of a new technology has been resolved; she is willing to accept a little uncertainty if her peers already use the product. Which of the following adopter categories does Iris belong to? A. Early adopters B. Innovators C. Late majority D. Laggards

C. Late majority

Altair Inc., a large firm in the electronics market, is facing stiff competition from a relatively smaller firm, Cygnus Corp. Which of the following is an advantage that Cygnus has over Altair due its size? A. Larger fixed-asset bases B. More layers of administration C. More flexible and entrepreneurial culture D. Greater bureaucratic inertia due to well-developed policies and procedures

C. More flexible and entrepreneurial culture

Neon Electronics Inc. is an electronics manufacturing company. It has adopted a dominant design for its television audio speakers. Which of the following statements is most likely to be true in this scenario? A. Neon Electronics will have to invest heavily in R&D to come up with new designs for the audio speakers. B. Neon Electronics will face decreasing returns to its adoption of the dominant design. C. Neon Electronics will have increased opportunities to develop complementary assets. D. The design adopted by Neon Electronics will be unpopular among most of the other manufacturers.

C. Neon Electronics will have increased opportunities to develop complementary assets.

When Green Water Publication publishes professional books, it donates or sends a number of these new books to university libraries and professors. Which of the following strategies is the firm using to accelerate distribution? A. Bundling relationship B. Product modularity C. Sponsorship D. Consignment arrangement

C. Sponsorship

_____ is a positive externality from R&D resulting from the spread of knowledge across organizational or regional boundaries. A. Technological discombobulation B. Technological determinism C. Technological spillover D. Technological dissonance

C. Technological spillover

BioMark Lifesystems Inc. wanted to enhance the adoption of its new diagnostic substances by medical laboratories. It made an agreement with the dominant producer of syringes and test tubes to have its diagnostic substances sold to laboratories in a package along with the syringes and tubes. Such an arrangement is known as: A. sponsorship. B. product modularity. C. a bundling relationship. D. disintermediation.

C. a bundling relationship.

BioSense Prosthetics Inc. was a leader in the prosthetics market and was earning very high profits. The firm developed a new computerized prosthetic arm that would render its previous models obsolete. It decided to withhold the new computerized prosthetic arm from the market. This would allow the firm to: A. minimize its return on investment in developing each generation of the product. B. make its products backward compatible. C. avoid cannibalization of the sales of its current prosthetics. D. build a smaller installed base for the new computerized prosthetics.

C. avoid cannibalization of the sales of its current prosthetics.

Large and hierarchical firms disaggregate in order to: A. lengthen new product development cycles. B. prevent large-scale downsizing. C. become more responsive to technological changes. D. curb the entrepreneurial culture within them.

C. become more responsive to technological changes.

Astech Inc. has been developing a new graphic design software. The firm has released a functional version of the software and has sent it to several lead users for testing. Based on the feedback from the lead users, the firm is going to improve the design of the product and begin commercial production. This initial version of the product is referred to as the _____. A. spiral model B. substitute product C. beta version D. theta model

C. beta version

NewDigger Inc. makes backhoes for digging ditches and trenches. It has developed an acid that, when poured on the ground, reduces the time and labor required to dig trenches of various depths, depending on how much is applied. The firm has recently started using this product commercially. This would most probably be considered a(n) _____ project for NewDigger. A. derivative B. platform C. breakthrough D. additive

C. breakthrough

TechToTeach Co. has developed and sold a product that can be used by students to take faster notes in a classroom as the teacher speaks. The device automatically records the teacher's voice and converts it into a text format. This new technology has been widely accepted by various universities and has been appreciated by students, thus increasing the company's inflow. This technology can be most accurately described as a(n) _____ project by TechToTeach. A. advanced R&D B. platform C. breakthrough D. derivative

C. breakthrough

Organizations that manufacture products such as light bulbs for lamps or DVDs for DVD players are examples of _____. A. moderators B. lead users C. complementors D. incubators

C. complementors

The U.S. Postal Service now offers a "Click-N-Ship" online service where users can buy and print postage and labels online. According to the Buyer Utility Map, the U.S. Postal Service is offering the _____ utility lever, during the _____ stage of buyer experience cycle. A. risk; use B. fun and image; maintenance C. convenience; purchase D. environmental friendliness; disposal

C. convenience; purchase

According to the stage-gate process developed by Robert G. Cooper, _____ are the results of the previous stage and are the inputs for the gate review. A. criteria B. outputs C. deliverables D. beta versions

C. deliverables

The time elapsed from project initiation to product launch, usually measured in months or years, is referred to as _____. A. diffusion of innovation time B. technology trajectory C. development cycle time D. the Six Sigma period

C. development cycle time

When gutter shields were developed, they replaced gutter cleaning services hired by homeowners to keep leaves and debris out of their gutters. In other words, the same need was met by an entirely new technology. This is an example of a(n) _____ technology. A. complementary B. component C. discontinuous D. incremental

C. discontinuous

Marine Systems was the first company to develop an inventory management software specifically for hotels and restaurants. Soon after Marine Systems launched its product, Unicorn Systems developed a similar software. The software developed by Unicorn Systems outperformed the one developed by Marine Systems, and it eventually became the market leader. In this scenario, Unicorn Systems is an example of a(n) _____. A. first pioneer B. late mover C. early follower D. eccentric laggard

C. early follower

Pioneer Athletics Inc. wants to provide better landing mats for gymnasts. It therefore asks its foam suppliers to use a new innovative process to manufacture higher quality, durable foam for use in its mats. This new process used to develop the foam represents a(n) _____ for Pioneer Athletics. A. network externality B. preemption rent C. enabling technology D. incumbent rent

C. enabling technology

Alpha Information Inc. is a firm that manufactures desktop computers and wireless network hardware components. The company is spending heavily on R&D to experiment with new designs for wireless networks instead of trying to refine how well they make their current wireless network hardware components. The firm is going through a period of ambiguity and anxiety. Alpha Information Inc. is in the: A. dominant design phase. B. era of incremental change. C. era of ferment. D. specific phase.

C. era of ferment.

Pioneer Systems Inc. has a high degree of formalization. Employees in Pioneer Systems are more likely to: A. exhibit high levels creativity and experimentation. B. feel empowered to implement new solutions. C. face morale and motivation problems. D. face ambiguity as a result of a lack of formal rules and procedures.

C. face morale and motivation problems.

According to Anderson and Tushman, in the era of incremental change, firms: A. attempt to achieve lower market segmentation by offering different models and price points. B. undergo a period of turbulence and uncertainty. C. focus on efficiency and market penetration. D. focus on altering the architecture rather than improving components.

C. focus on efficiency and market penetration.

Karen's supervisor, while discussing about her participation in a new product development team, tells her that she has been engaging in social loafing. This means that Karen: A. has been involved in whistle-blowing activities. B. has been discriminating against colleagues belonging to minority groups. C. has not been putting much effort into the team's work. D. has stolen office property.

C. has not been putting much effort into the team's work.

Ruth works in the advertising department of her company. It was observed that she interacted more frequently and more intensely with team members who shared her interests and social background, but ignored others. This phenomenon exhibited by Ruth is referred to as: A. free riding. B. social loafing. C. homophily. D. groupthink.

C. homophily.

An efficiency frontier is the range of _____ that optimize a combination of features of a potential project. A. product features B. attribute arrangements C. hypothetical configurations D. conjoint dimensions

C. hypothetical configurations

The Solow Residual refers to the: A. obsolete products left in a market due to accelerated product life cycles. B. less developed nations of the world being left behind due to their obsolete technology. C. increased amount of output achievable from a given quantity of labor and capital due to technological innovation. D. process of dumping goods in developing and underdeveloped countries at a price lower than the home-market price.

C. increased amount of output achievable from a given quantity of labor and capital due to technological innovation.

Institutions designed to nurture the development of new businesses that might otherwise lack access to adequate funding or advices are called _____. A. complementors B. research collaboration offices C. incubators D. technology clusters

C. incubators

The tendency of existing firms to be slow to respond to changes in the industry environment due to their large size, established routines, or prior strategic commitments to existing suppliers and customers is known as: A. monopoly costs. B. path dependency. C. incumbent inertia. D. technology trajectory.

C. incumbent inertia.

Donald is always ready to buy recently launched gadgets and gizmos. Since he has sufficient financial resources to invest in these products, he is unconcerned about the risks and uncertainties involved in buying new products. Based on this description, Donald most likely belongs to the group of: A. early majority. B. early adopters. C. innovators. D. laggards.

C. innovators.

Ron is highly skeptical about new ideas and products. He has not yet bought a satellite television subscription for his home because he is still unsure of its benefits. Ron is also concerned about the expense of getting such a connection. According to this description, Ron: A. is an innovator. B. belongs to the early majority. C. is a laggard. D. is an early adopter.

C. is a laggard.

A resource can be extremely difficult to imitate if: A. it can be readily codified in written form. B. it is not path dependent. C. it arises through the complex interaction of multiple people. D. it is clear how the resource gives rise to value.

C. it arises through the complex interaction of multiple people.

A new technology is most likely to be successful in displacing an existing technology when: A. its installed base is significantly less than that of the existing technology. B. the new technology competes only on the value of its stand-alone utility. C. it eclipses the combined value of the existing technology's stand-alone utility, its installed base, and its complementary goods. D. the new technology's perceived and anticipated components of value are lower than its actual components of value.

C. it eclipses the combined value of the existing technology's stand-alone utility, its installed base, and its complementary goods.

As a firm grows bigger, it becomes: A. more effective in monitoring and motivating employees. B. less vulnerable to bureaucratic inertia. C. less efficient in R&D due to loss of managerial control. D. increasingly easy for individual scientists to appropriate the returns of their efforts.

C. less efficient in R&D due to loss of managerial control.

Greyer Corp. manufactures surgical instruments. Systems Medico Inc. enters into a contractual arrangement with Greyer that allows it to use Greyer manufacturing methods and management structure to produce and sell surgical instruments. Systems Medico must pay a yearly fee to Greyer for the use of its manufacturing processes. In this scenario, Systems Medico is the _____. A. licensor B. contract manufacturer C. licensee D. intrapreneur

C. licensee

Future Electronics Inc.'s body scanning machine has been adopted by majority of the healthcare market. As a result, the company demands a high price from its customers, which mainly include hospitals. It is not investing much on innovation and its product variety is also very low. This cost borne by the users in this case is referred to as: A. marginal cost. B. social cost. C. monopoly cost. D. deferred cost.

C. monopoly cost.

Software whose code is made freely available to others for use, augmentation, and resale is referred to as: A. wholly proprietary systems. B. patented software. C. open source software. D. copyright protected systems.

C. open source software.

In 2001, Shanghai's municipal government set aside 13 square kilometers of land near the Huangpu River for university laboratories and start-up firms in microelectronics, digital technology, and life sciences. The project aimed to foster research in microelectronics, the development of a technologically advanced labor pool, and the creation of new industries in Shanghai. This project would be best termed a _____. A. complementor B. strategic unit C. science park D. free trade area

C. science park

Ample Espresso Corp. is a coffeehouse located across from Tian's Kitchen, a restaurant. According to Porter's five-force model, the services and products provided by both are most accurately classified as: A. complements. B. competitors. C. substitutes. D. intermediates.

C. substitutes.

A(n) _____ price strategy is a short-run strategy that prices goods to cover variable costs and some fixed costs, and it is used by firms in industries plagued with intense price competition. A. market skimming B. penetration C. survival D. economy

C. survival

When Sports 360, a sports bar in New York, saw yet another sports bar open up across the street, it knew that it would have to lower its price again to stay in business. The city already had too many sports bars, and Sports 360 intended on being one of those left after the inevitable shake out. In this situation, the best pricing strategy for Sports 360 would be: A. premium pricing. B. market skimming. C. survival pricing. D. a freemium program.

C. survival pricing.

When the first personal computers were introduced, Bill started using a spreadsheet program to maintain his accounts. Bill discovered that this new method of maintaining his accounts caused his work to become much slower and that if he typed in the wrong data, it led to more mistakes. This scenario illustrates that: A. effort invested in an existing technology reaps higher returns than effort invested in a new technology. B. effort invested in an incumbent technology is much higher than effort invested in a new technology. C. technological discontinuity may initially have lower performance than the incumbent technology. D. component innovations are more effective than architectural innovations.

C. technological discontinuity may initially have lower performance than the incumbent technology.

The president of Mountain Home University has been asked by the board of trustees to set up a separate unit to facilitate the commercialization of technology developed by the research students at the university. Such a unit is typically called a _____. A. strategic business unit B. commercialization office C. technology transfer office D. science park

C. technology transfer office

The more a technology is adopted: A. the less valuable it becomes on account of market saturation. B. the more susceptible it becomes to decreasing returns of adoption. C. the greater are the opportunities for development of complementary assets. D. the lesser are the possibilities for improvements in the technology and its applications.

C. the greater are the opportunities for development of complementary assets.

To ensure that companies do not receive patents in countries where they do not intend to set up production of the invention, some countries have a "working requirement," according to which: A. if the product is not profitable, it will not be granted a patent. B. patents in a country will only be granted to people who have been working in the country for at least one year. C. the invention must be manufactured in the country where the patent was granted within a specified period of time. D. the workers who manufacture the product must be from the country where the patent was granted.

C. the invention must be manufactured in the country where the patent was granted within a specified period of time.

When technology is progressing rapidly, firms are more likely to: A. commit themselves to fixed assets that will rapidly become obsolete. B. avoid forming alliances for projects that are risky and complex. C. use linkages with other specialized firms to access resources they do not possess. D. avoid becoming more narrowly specialized.

C. use linkages with other specialized firms to access resources they do not possess.

A firm that invests heavily in derivative projects that may be immediately commercialized with little risk: A. will have greater long-term strategic momentum. B. will be on the leading edge of technology. C. will likely be unable to compete when the market shifts to a newer technology. D. will have poor returns on its R&D investment in the short run.

C. will likely be unable to compete when the market shifts to a newer technology.

In a locally leveraged strategy to innovation, the R&D divisions _____. A. are completely centralized B. play different roles in the company's overall R&D strategy C. work on the full scope of development activities relevant to their business unit D. do not share creative resources and innovative developments

C. work on the full scope of development activities relevant to their business unit

Angelo has designed a license plate holder for automobiles that makes theft of the license plate practically impossible. He has filed an application for a patent through the Patent Cooperation Treaty (PCT) office, and it has been approved. How long is this application going to protect his right to file for patent protection in the member countries of the PCT? A. 3 days B. 6 months C. 1 year D. 2 ½ years

D. 2 ½ years

Which of the following statements is true of using marketing to shape perceptions and expectations? A. Preannouncements reduce excitement about a product before its release. B. A firm that aggressively promotes its products loses its actual installed base and its perceived installed base. C. A firm should avoid using vaporware if other vendors beat the firm to market and the firm fears that customers may select a dominant design. D. A firm can signal its commitment to an industry by making substantial investments that would be difficult to reverse.

D. A firm can signal its commitment to an industry by making substantial investments that would be difficult to reverse.

Which of the following statements is true of dominant design? A. It is not possible to have legally induced adherence to a dominant design. B. When a firm's technology is locked in as the dominant design of a market, it earns low rewards. C. A firm that supports a technology that is chosen as the dominant design is in a poor position to shape the evolution of the industry. D. A firm may find itself locked out of the market if it is unable to adopt the dominant technology.

D. A firm may find itself locked out of the market if it is unable to adopt the dominant technology.

Which of the following can be protected by a copyright? A. Familiar symbols B. Names of people C. An improvisational speech that has not been recorded D. A novel

D. A novel

Which of the following is a defining characteristic of autonomous teams? A. Autonomous teams are not held accountable for the success of a project. B. Autonomous teams do not have a project manager, which leads to constant problems with coordination of activities. C. The degree of cross-functional integration is low in autonomous teams. D. Autonomous teams often do not conform to the operating procedures of the rest of the organization.

D. Autonomous teams often do not conform to the operating procedures of the rest of the organization.

_____ refers to the allocation of a finite quantity of resources over different possible uses. A. Systematic enrollment B. Translational funding C. Organizational appropriation D. Capital rationing

D. Capital rationing

Which of the following is true of externalities? A. All externalities are negative in nature. B. They are only borne by individuals responsible for creating them. C. Technological innovation results in complete eradication of negative externalities. D. Externalities can be in the form of benefits reaped by individuals.

D. Externalities can be in the form of benefits reaped by individuals.

In the 1980s and 1990s, Neon Corp. was the most successful firm in the television market. The firm believed that its competitors would never be able to produce televisions comparable to its quality and cost. As a result, it was unable to respond to the new generations of television with which its Japanese competitors had begun to infiltrate the market. Eventually, Neon lost its market leadership to its competitors. This scenario most clearly exemplifies the _____. A. Giffen effect B. Hawthorne effect C. Idiosyncrasy Credit D. Icarus Paradox

D. Icarus Paradox

Which of the following statements is true of a collective research organization? A. It does not help firms to leverage their competencies. B. It is a short-term commitment. C. It is an effort to rapidly access capabilities or technology. D. It allows a firm to share the cost and risk of basic research.

D. It allows a firm to share the cost and risk of basic research.

Which of the following statements is true of outsourcing? A. It involves significantly low amounts of transaction costs. B. It is the most viable option for companies seeking to avoid becoming hollow. C. It is the best way for a company to develop in-house manufacturing capabilities. D. It carries a risk of proprietary technology being expropriated by the contract manufacturer.

D. It carries a risk of proprietary technology being expropriated by the contract manufacturer.

Which of the following is a feature of joint venture that differentiates it from other forms of alliances? A. It usually does not result in the creation of a new business entity. B. It increases asset commitment to products that will become rapidly obsolete. C. It increases cycle time of a technology. D. It involves a significant equity stake by the partners.

D. It involves a significant equity stake by the partners.

Which of the following is an advantage of lightweight teams? A. Lightweight teams are more stable as they are permanent in nature. B. Lightweight teams do not have dedicated liaison personnel, and the members have more decision-making authority. C. The team structure of lightweight teams increases the possibility of homophily. D. It is easier to coordinate activities in a lightweight team than in a functional team.

D. It is easier to coordinate activities in a lightweight team than in a functional team.

Which of the following statements is true of conjoint analysis? A. It is a simple method for ranking objects or ideas on a number of different dimensions. B. It is used by managers to compare their desired balance of projects with their actual balance of projects. C. It requires the creation of a hypothetical efficiency frontier. D. It is most commonly used to assess the relative importance to customers of different product attributes.

D. It is most commonly used to assess the relative importance to customers of different product attributes.

Which of the following statements is true of lightweight teams? A. Lightweight teams are typically permanent. B. Lightweight teams do not have dedicated liaison personnel. C. Lightweight teams are most appropriate for projects where high levels of coordination are required. D. Lightweight teams are comprised of members who still reside in their functional departments.

D. Lightweight teams are comprised of members who still reside in their functional departments.

Which of the following calls for an early entry into a market? A. Immature enabling technologies B. Unavailability of complementary goods C. High customer uncertainty D. Low entry barriers

D. Low entry barriers

Which of the following statements is true of geographical clustering? A. The proximity of many competitors serving a local market leads to competition that increases their pricing power in their relationships with both buyers and suppliers. B. Close proximity of firms eliminates the likelihood of a firm's competitors gaining access to the firm's proprietary knowledge. C. Clustering invariably leads to lower concentration of pollution and inordinately low housing costs. D. Proximate firms have an advantage in sharing information that can lead to greater innovation productivity.

D. Proximate firms have an advantage in sharing information that can lead to greater innovation productivity.

In the _____ method, in order to establish scales of customer preferences, individuals in a group are each given a stack of cards with an object or idea on each card. A. derivative B. conceptual C. DEA D. Q-sort

D. Q-sort

In the context of failure modes and effects analysis, which of the following formulas is used to calculate the risk priority number? A. Risk priority number = total profits from new products/total expenditures B. Risk priority number = total profits from new products - total expenditures C. Risk priority number = successful projects/total project portfolio D. Risk priority number = severity × likelihood of occurrence × inability of controls to detect

D. Risk priority number = severity × likelihood of occurrence × inability of controls to detect

_____ are regional groups of firms that have a connection to a common technology and may engage in buyer, supplier, and complementor relationships, as well as research collaboration. A. Technology transfer offices B. Technology incubators C. Strategic business units D. Technology clusters

D. Technology clusters

Which of the following statements is true of s-curves in technological improvement? A. They are obtained by plotting the cumulative number of adopters of the technology against time. B. They typically show that technology goes through initial accelerated improvement, then diminishing improvement, then slow improvement. C. S-curves in technology diffusion and s-curves in technology performance are fundamentally the same process. D. The s-curves flatten when the cost of each marginal improvement increases and diminishing returns to effort begin to set in.

D. The s-curves flatten when the cost of each marginal improvement increases and diminishing returns to effort begin to set in.

Albert has put together a new product development team based on the functional team structure. Which of the following statements is most likely to be true about this team? A. Team members will spend up to 50 percent of their time on team-related activities. B. The team will typically require dedicated liaison personnel. C. The team will have a high degree of cross-functional integration. D. The team structure will be straightforward to implement.

D. The team structure will be straightforward to implement.

Which of the following statements is true of ambidextrous organizations? A. They have uniform incentive plans for all employees within the organization. B. They achieve long-term innovation, but not short-term efficiency. C. They fail to tolerate varying cultures and different sets of behavior from employees. D. They have a complex organizational form that is composed of multiple internally inconsistent architectures.

D. They have a complex organizational form that is composed of multiple internally inconsistent architectures.

Which of the following is a characteristic of most successful inventors? A. They specialize solely in a single field rather than several fields simultaneously. B. They are curious and more interested in solutions than in problems. C. They blindly accept the assumptions made in previous works in their field. D. They seek global solutions rather than local solutions.

D. They seek global solutions rather than local solutions.

When are winner-take-all markets good for consumers? A. When monopoly costs exceed the value of network externality returns B. When monopoly costs exceed the value of technological utility C. When the monopoly cost curve is extremely steep D. When the value of technology utility and network externality returns exceeds monopoly costs

D. When the value of technology utility and network externality returns exceeds monopoly costs

When users are comparing the value of a new technology to an existing technology, they are said to be using objective information when the comparison is based on: A. anticipated technological benefits. B. future prediction regarding the availability of complementary goods. C. perceived installed base. D. actual technological benefits.

D. actual technological benefits.

Dalton discovered that using garlic salt on a regular hamburger made the hamburger taste more like steak. He could then use a less expensive meat in the "smoked steak" sandwiches that he sold. This is an example of a(n) _____ innovation. A. radical B. discontinuous C. architectural D. component

D. component

In a survey, Sam was asked to rank, on a scale of 1 to 5, how important different cell phone features were to him. The result was then used by the surveying firm to assess the different attributes of the ranking. This survey would most accurately be termed a _____ analysis. A. figurative B. translational C. fictional D. conjoint

D. conjoint

Digital cameras replaced film cameras. Therefore, digital cameras are an example of _____. A. modular innovation B. incremental technology C. component innovation D. discontinuous technology

D. discontinuous technology

TechSense, an electronics manufacturing firm, allows its customers to resell old TechSense products at its retail outlets. The firm reuses the metal, wires, and plastic—extracted from these old products—in its new products. This way the company has been able to take waste management to a whole new level. According to the Buyer Utility Map, the firm is applying environmental friendliness utility lever in the _____ stage of buyer experience cycle. A. supplements B. purchase C. use D. disposal

D. disposal

Firms that develop new technologies ahead of others often try a number of unsuccessful techniques before finding a solution that works well. This experimentation: A. lowers the firm's ability to recognize the value of new information. B. lowers the firm's ability to develop and enhance technologies. C. makes it difficult for the firm to develop related technologies. D. enables the firm to find related solutions and alternatives that work well.

D. enables the firm to find related solutions and alternatives that work well.

Component technologies that are necessary for the performance or desirability of a given innovation are referred to as _____. A. architectural technologies B. diffused technologies C. primary technologies D. enabling technologies

D. enabling technologies

The Rocketingbusiness.com Web site offers large volumes of business research information for no cost. If a user is interested in more comprehensive information and business consultation, the site offers these services for a premium fee. This is typically an example of _____ pricing model. A. penetration B. market skimming C. survival D. freemium

D. freemium

Oxygenic Inc. is a company with major decentralized divisions in Germany, Russia, and the United States. The scientists in Russia develop cancer treatment methods. Treatment clinics are organized in Germany. The U.S. division gathers finance and markets the treatment methods. The activities of the different divisions are coordinated by the central office of the firm to meet companywide objectives. This is most clearly an example of a _____ strategy. A. center-for-global B. local-for-local C. locally leveraged D. globally linked

D. globally linked

The scientists at Brainstorm Inc., a private medical research firm, have come up with a remarkable method for curing cancer. This cancer treatment technology is well protected and cannot be easily duplicated. Based on this information, it would be most accurate to say that this technology: A. cannot be patented. B. is easily imitable. C. is not socially complex. D. has a high degree of appropriability.

D. has a high degree of appropriability.

Jordan, the CEO of Early Bird Corp., believes that it is important to focus on the quantity of new product ideas generated rather than the quality of ideas generated. He encourages everyone in the company to come up with product ideas, and those that seem feasible are further developed. According to him, it takes several raw ideas to develop one successful new product. Jordan's views reflect the concept of: A. innovation adolescence. B. innovation diffusion. C. innovation readiness. D. innovation funnel.

D. innovation funnel.

ErgoWorld Inc. manufactures office furniture. The company is considering adopting a modular production system. A modular system would offer greater value to ErgoWorld if: A. most customers are likely to agree on a single product configuration. B. its customers prefer to upgrade their products by replacing their entire system. C. its customers are willing to pay a premium price for extreme customization and personalization. D. its customers have heterogeneous demands that need to be met in a cost-effective way.

D. its customers have heterogeneous demands that need to be met in a cost-effective way.

Customers who face the same general needs of the marketplace but are likely to experience them months or years earlier than the rest of the market and stand to benefit disproportionately from solutions to those needs are referred to as _____. A. laggards B. intrapreneurs C. early followers D. lead users

D. lead users

A firm choosing to decentralize its R&D by divisions rather than centralizing it will have a greater possibility of: A. maximizing economies of scale in R&D. B. preventing redundant R&D activities from being performed in multiple divisions. C. benefiting from the learning-curve effects. D. matching new products to the requirements of the customers served.

D. matching new products to the requirements of the customers served.

According to Schoonhoven and Jelinek, quasiformal structures are: A. slow to respond to the need for changes. B. most useful in fostering interactions based on hierarchy. C. less problem-focused than other structures of companies. D. not part of the formal reporting structure.

D. not part of the formal reporting structure.

Since much innovation arises from experimentation and improvisation, the _____ organization structure is typically considered better suited to creativity and innovation. A. mechanistic B. formalized C. standardized D. organic

D. organic

The demand-pull approach to research and development refers to research and development that: A. focuses on developing products that are expected to increase demand in a particular market segment. B. begins by examining the outcomes of the firm's basic research and the potential commercial applications that may be constructed from those outcomes. C. focuses on developing products that are expected to decrease the demand for their substitute products. D. originates as a response to the specific problems or suggestions of customers.

D. originates as a response to the specific problems or suggestions of customers.

Increasing returns to adoption imply that technology trajectories are characterized by _____, meaning that relatively small historical events may have a great impact on the final outcome. A. the ratchet effect B. the funnel effect C. corrugated anomalies D. path dependency

D. path dependency

A bicycle manufacturing company adopted a new type of inventory management system. This inventory system improved the productivity of its manufacturing unit and the quality of its bicycles. This is an example of _____ innovation. A. virtual B. regressive C. archaic D. process

D. process

If the net present value of a project is greater than zero, then the: A. project cannot be carried out as the cash outflow is too high. B. present value of cash outflows is higher than present value of cash inflow. C. project will require 5 years to break even. D. project generates wealth.

D. project generates wealth.

Self-enforcing norms based on goodwill, trust, and reputation of the partners is known as _____. A. capability complement B. alliance contract C. equity ownership D. relational governance

D. relational governance

Regional districts, typically set up by government, to foster R&D collaboration between government, universities, and private firms are called _____. A. technological trajectories B. free trade areas C. complementors D. science parks

D. science parks

Sam's Sugar Corp., a leading cane sugar manufacturer, faces a threat of going out of business when a rival company introduces a zero-calorie sweetener to replace the high-calorie cane sugar. According to Porter's five-force model, the two products are: A. complements. B. supplements. C. intermediates. D. substitutes.

D. substitutes.

Factors that make it difficult or expensive to change suppliers or buyers are referred to as _____. A. transactional costs B. monopoly costs C. marginal costs D. switching costs

D. switching costs

June is a member of a new product development team. Her supervisor asks her about her experience in the team, and she replies, "Our team seems to be suffering from homophily." This statement means that: A. team members are not exerting the expected amount of effort. B. team members spend all their time chatting about their personal issues. C. team members are only interested in talking to people who are senior to them. D. team members only like other people whom they perceive as being similar to themselves.

D. team members only like other people whom they perceive as being similar to themselves.

Once a new product design becomes a dominant design: A. the product is no longer profitable. B. it becomes difficult for competitors to imitate. C. the architecture on which the industry can focus its efforts is destabilized. D. the product design is adopted by the majority of producers.

D. the product design is adopted by the majority of producers.

The innovation process is often conceived of as a funnel because: A. most innovative ideas become successful new products. B. it decreases the amount of output achievable from a given quantity of labor and capital. C. it increases the importance of production economies of scale. D. there are many potential new product ideas and only a few make it through the development process.

D. there are many potential new product ideas and only a few make it through the development process.

David and Sons Corp., a firm that manufactures home appliances, uses a symbol resembling a lightning strike to distinguish its products from other similar products in the market. This symbol is an example of a(n): A. patent. B. embargo. C. statute. D. trademark.

D. trademark.

Arica Software Inc. is trying to estimate the installed base for its software. It is trying to assess the number of: A. substitutes available for its software. B. developers working on its software. C. areas in which its software can be applied. D. users of its software.

D. users of its software.

Preadvertised products that are not actually on the market yet and may not even exist are referred to as _____. A. substitute products B. value-added products C. consignments D. vaporware

D. vaporware

A common set of international copyright laws automatically protects an author's work throughout the world. True False

False

A contract book must be developed before a project charter can be written. True False

False

A cross-functional team is one that has members of different ethnic backgrounds in a single functional area. True False

False

A disadvantage of using parallel development processes is that it greatly lengthens the new product development time. True False

False

A firm cannot collaborate with its competitor. True False

False

A firm intending to refine an earlier entrant's technology should avoid fast-cycle development processes. True False

False

A firm's effectiveness at managing its collaborations will increase with the number of collaborations to which it is committed. True False

False

A firm's organizational structure and control systems have no influence on the generation of innovative ideas. True False

False

A firm's prior success in the market increases its ability to respond to new technological generations. This is known as an Icarus Paradox. True False

False

A high degree of formalization and standardization in firms results in organic structures. True False

False

A legally induced adherence to a dominant design is not possible. True False

False

A loosely coupled structure is best suited for activities that involve exchange of tacit knowledge. True False

False

A modular innovation significantly affects the overall configuration of a system. True False

False

A sequential process has an early warning system to indicate that planned features are not manufacturable. True False

False

A strategic stakeholder analysis emphasizes the stakeholder management issues a firm ought to attend to due to their ethical or moral implications. True False

False

According to Joseph Schumpeter, small firms are likely to have better-developed complementary activities such as marketing or financial planning that enable them to be more effective innovators than larger firms. True False

False

According to Porter's value chain model, firm infrastructure is a primary activity. True False

False

According to the concept of innovation funnel, the number of successful products launched will be greater than the number of raw ideas generated. True False

False

According to the concept of the innovation funnel, one new idea is usually responsible for several new products. True False

False

According to the net present value method of discounted cash flow analysis, the time required to break even on a project using discounted cash flows is known as period of return. True False

False

All pioneers face customer uncertainty. True False

False

An organization's overall creativity level is a simple aggregate of the creativity of the individuals it employs. True False

False

As firms develop complementary technologies to improve the productivity or ease of utilization of the core technology, the technology becomes less attractive to other firms. True False

False

As the size of a team increases, the potential for social loafing decreases. True False

False

Both net present value and internal rate of return techniques provide concrete financial estimates that facilitate strategic planning and trade-off decisions. True False

False

Cannibalization is the process by which a firm's sales of one product diminish due to a substitute product offering by a competitor. True False

False

Coalitions of small firms typically have a well-defined system of authority and control. True False

False

Collaborative research is prohibited in high-technology sectors. True False

False

Derivative projects offer fundamental improvements in the cost, quality, and performance of a technology over preceding generations. True False

False

Discovery of scientific principles that pertain to natural laws can be patented. True False

False

Early followers enter the market only after a product begins to penetrate the mass market. True False

False

Early leaders are firms that are the first to enter a market. True False

False

Firms always make decisions about projects on the basis of marketing criteria. True False

False

Firms cannot influence the shape of the s-curve through their development activities. True False

False

Firms intending to maximize market share typically use market skimming pricing strategy. True False

False

Firms should always be racing to launch their products as early as possible. True False

False

Flexible manufacturing technologies have increased the importance of production economies of scale. True False

False

For a firm to adopt a component innovation, it requires architectural knowledge about the way components link and integrate to form a whole system. True False

False

From a real options perspective, the value of a call stock option is zero as long as the price of the stock is more than the exercise price. True False

False

Functional teams typically have a project manager or dedicated liaison personnel. True False

False

GDP does not directly relate to the amount of goods consumers can purchase. True False

False

Globalization of markets has reduced the importance of innovation. True False

False

Heavyweight teams are typically permanent in nature. True False

False

Homogeneous teams should possess more information, on average, than heterogeneous groups. True False

False

If multiple firms benefit from a technology's success, the developer of that technology has a much greater incentive to invest in further developing the technology. True False

False

If the knowledge underlying a particular technology is tacit, competitors will typically find it very easy to duplicate. True False

False

If you live in a country that is a member of the Madrid Union and you register a trademark in your country, that trademark is protected throughout the world. True False

False

In a loosely coupled structure, development and production activities achieve coordination through tight integration. True False

False

In a market characterized by network externalities, the benefit from using a good decreases with an increase in the number of other users of the same good. True False

False

In crafting an advertising message, firms must focus more on making the advertisements entertaining and memorable than on providing a significant quantity of informative content. True False

False

In failure modes and effects analysis (FMEA), potential problems in a system are classified according to the time at which they occurred. True False

False

In heavyweight teams, the long-term career development of individual members rests with their project managers rather than their functional managers. True False

False

In industries characterized by network externalities, the value of a technological innovation to users will be a function only of its stand-alone benefits and cost. True False

False

In industries that have increasing returns to adoption due to network externalities, allowing competitors to get a head start in building an installed base is the safest strategy. True False

False

In marketing a new product to the late majority and laggards, a company should emphasize the advanced technological features of the new product. True False

False

In the United States, there are no laws to protect trade secrets. True False

False

In the context of s-curves in technological improvement, as a technology begins to reach its inherent limits, the cost of each marginal improvement decreases, and the s-curve flattens. True False

False

In the context of s-curves in technological improvement, performance improvement in the early stages of a technology is rapid if the fundamentals of the technology are poorly understood. True False

False

In the product development process, expenditures increase as uncertainty increases. True False

False

Incubators are regional districts, typically set up by government, to foster R&D collaboration between government, universities, and private firms. True False

False

Innovation and new technologies have led to longer product life cycles and slower product obsolescence. True False

False

It is unusual for a company to lack certain complementary assets required to transform a body of technological knowledge into a commercial product. True False

False

Joint ventures are less appropriate than strategic alliances when a firm places great importance on access to other firms' competencies. True False

False

Knowledge that cannot be readily codified is called explicit knowledge. True False

False

Knowledge that is explicit requires more frequent and close interaction to be meaningfully exchanged than knowledge that is tacit. True False

False

Late entrants typically bear the bulk of the research and development expenses for their product or service technologies. True False

False

Licensing a technology from another firm is typically more expensive for a licensee than developing a new technology in-house. True False

False

Low exit barriers intensify rivalry by making firms reluctant to abandon the industry. True False

False

Network externalities cannot arise in markets that do not have physical networks. True False

False

Obtaining some of the necessary capabilities or resources from a partner rather than building them in-house will increase a firm's asset commitment. True False

False

Parallel development processes are universally endorsed. True False

False

Patent laws do not vary from country to country. True False

False

Path dependency refers to the abilities that make a firm more agile and responsive to change. True False

False

Product innovations are more important than process innovations to organizations because they are less visible than process innovations. True False

False

Project managers of heavyweight teams are typically junior managers. True False

False

Quasiformal structures foster interactions based on hierarchy rather than on interests. True False

False

Resources of a tangible nature that can be readily codified are called tacit resources. True False

False

Solo internal development is, on average, a relatively fast and inexpensive way of developing a technology. True False

False

Technological innovation decreases the amount of output achievable from a given quantity of labor and capital. True False

False

Technological innovation results in complete eradication of negative externalities. True False

False

Technologies always get the opportunity to reach their performance limits before being replaced by a new technology. True False

False

Technology diffusion and information diffusion take the same amount of time. True False

False

Technology diffusion curve is s-shaped because adoption is initially fast when a new technology is introduced to the market. True False

False

The ability of an organization to recognize, assimilate, and utilize new knowledge is referred to as learning trajectory. True False

False

The allocation of a finite quantity of resources over different possible uses is known as research rationing. True False

False

The degree to which innovative activities are geographically clustered is independent of the national differences in the way technology development is funded or protected. True False

False

The drawback to data envelopment analysis (DEA) is that it does not allow comparisons of projects using multiple kinds of measures. True False

False

The innovation process is often conceived of as a funnel because most potential new product ideas make it through the development process. True False

False

The learning curve indicates that the more units a company produces of an item, the more each unit will cost. True False

False

The majority of all new product development projects result in an economic return. True False

False

The majority of effort and money invested in technological innovation comes from nonindustrial firms. True False

False

The ratio of R&D expenditures to sales is known as R&D trajectory. True False

False

The science-push approach to research and development argued that innovation was driven by the perceived demand of potential users. True False

False

The use of executive sponsors reduces the effectiveness of a development process. True False

False

The value of a technological innovation is solely determined by what the technology can do. True False

False

Titles and names can be copyrighted. True False

False

Using computer-aided design (CAD) to build and test product design increases cycle time. True False

False

Weekly News Inc. bought the paper mill that supplied paper for printing its magazine. This is an example of horizontal integration. True False

False

When a market is characterized by mature enabling technologies, a firm should enter the market late. True False

False

When an industry has network externalities, the value of a good to a user is more likely to go up linearly rather than increase in an s-shape. True False

False

When demand is increasing, there is less revenue to go around and firms will experience more competitive pressure. True False

False

While mavens with a valuable piece of information are likely to expose it to a great number and diversity of people, connectors are likely to convey the information to fewer people but in more detail. True False

False

With advances in information technology, loosely coupled organizational structures are losing their popularity. True False

False

A company with a short development cycle can quickly revise or upgrade its offering as design flaws are revealed or technology advances. True False

True

A contract book is an important mechanism for establishing team commitment to a project and a sense of ownership over the project. True False

True

A firm can benefit from developing "antichampions." True False

True

A firm can signal its commitment to an industry by making substantial investments that would be difficult to reverse. True False

True

A firm's emphasis on a scientific discipline that is central to its core competency can make the firm less attractive to individuals from other disciplines. True False

True

A joint venture between two companies often results in a new separate company. True False

True

A lack of cross-functional communication can lead to a poor fit between product attributes and customer requirements. True False

True

A service mark distinguishes the provider of a service rather than a product. True False

True

According to Porter's five-force model, the degree to which a firm relies on one or a few suppliers will influence its ability to negotiate good terms. True False

True

According to Porter's five-force model, the threat of potential entrants is influenced by the height of entry barriers. True False

True

According to Prahalad and Hamel's model, it is possible for a firm to develop core competencies to a set of abilities that enable it to quickly reconfigure its organizational structure and routines in response to new opportunities. True False

True

After licensing a technology, a firm typically has limited discretion over what it can do with the technology. True False

True

Ammunition can be considered a complement for firearms. True False

True

An innovation can be competence enhancing to one firm, while competence destroying for another. True False

True

As a firm grows, it becomes more difficult to exercise direct managerial oversight. True False

True

Breakthrough projects involve development of products that incorporate revolutionary new product and process technologies. True False

True

Calculating the internal rate of return of a project typically must be done by trial and error. True False

True

Collective research organizations can take the form of trade associations. True False

True

Computer-aided manufacturing (CAM) is faster and more flexible than traditional methods of manufacturing. True False

True

Data envelopment analysis (DEA) utilizes linear programming. True False

True

Dynamic capabilities enable firms to quickly adapt to emerging markets or major technological discontinuities. True False

True

External development efforts typically lack the coordination of internal development. True False

True

Externalities are costs that are borne by individuals other than those responsible for creating them. True False

True

Firms can accelerate distribution of a new technology by bundling it with another product that is already in wide use. True False

True

Firms can use strategic alliances to exploit their own capabilities by leveraging them in another firm's development efforts. True False

True

Firms in industries characterized by increasing returns will often use the objective of maximizing market share and a penetration pricing strategy. True False

True

Firms often find it is difficult to make the transition between successfully selling to early adopters versus the early majority. True False

True

Firms often form alliances with competitors to jointly work on an innovation project or to exchange information in pursuit of innovation. True False

True

First movers typically invest more in exploratory research than late entrants. True False

True

For technologies in which standardization and compatibility are important, maintaining the integrity of the core product is absolutely essential. True False

True

Formulating a technological innovation strategy first requires an accurate appraisal of where the firm currently is. True False

True

From a real options perspective, the exercise price associated with commercializing a new technology would include the cost of manufacturing, marketing, and distributing the technology. True False

True

Heavyweight teams are suitable for platform projects. True False

True

If a business discharges untreated chemical waste into the local water bodies of a community, it imposes a negative externality on the community members. True False

True

If a firm codifies all of its activities with detailed procedures, it may stifle employee creativity. True False

True

If a firm wishes to avoid giving away its own installed base or complementary goods advantages to others, it may protect them by ensuring its products are incompatible with those of future entrants. True False

True

If a firm's objective is maximum market skimming, it will initially set a high price on new products. True False

True

If an individual knows a field too well, it can stifle his ability to come up with solutions that require an alternative perspective. True False

True

In a functional team approach to new product development, team members remain in their functional departments and may meet periodically to discuss the project. True False

True

In an industry characterized by increasing returns to adoption, there can be powerful advantages to being an early provider. True False

True

In general, the more firms competing that are of comparable size, the more competitive the industry will be. True False

True

In the context of design rules for fabricated assembly products, minimizing the number of parts for a product reduces direct labor and material handling costs. True False

True

In the context of innovation productivity, a firm's overall size is not an easy-to-manipulate attribute of the firm. True False

True

Increasing returns to adoption means that the more a technology is adopted, the more valuable it becomes. True False

True

Innovation often originates with those who create solutions for their own needs. True False

True

Investing in process innovation helps firms lower their costs. True False

True

It is possible for a firm that follows an s-curve model too closely to end up switching technologies later than it should. True False

True

It is possible for organizations to have a highly decentralized mechanistic structure. True False

True

Lightweight teams are appropriate for derivative projects where high levels of coordination and communication are not required. True False

True

Managers of lightweight teams are normally junior or middle management employees. True False

True

Many firms use beta testing to get customer input early in the development process. True False

True

Many start-up firms demise because new innovations tend to be adopted very slowly at first. True False

True

Marketing channels that enable high content and selective reach are appropriate for innovators and early adopters. True False

True

Modular products become more valuable when customers have heterogeneous demands and there are diverse options for meeting them. True False

True

Most innovative ideas do not become successful new products. True False

True

Network externality returns refers to the value customers reap as a larger portion of the market adopts the same good. True False

True

Not all innovations require complementary goods. True False

True

Other things being equal, an entrant with a strong reputation can attract adoptions earlier than entrants without strong reputations. True False

True

Other things being equal, less customer uncertainty favors earlier timing of entry. True False

True

Product life cycles shorten with high-speed technological changes. True False

True

Products that have a large installed base are likely to attract more developers of complementary goods. True False

True

Proximity and frequent interaction help teams to develop shared norms and a dialect for communicating about a project. True False

True

Proximity and interaction can directly influence firms' ability and willingness to exchange knowledge. True False

True

S-curves in technology performance and s-curves in technology diffusion are fundamentally different processes. True False

True

S-curves of technology diffusion are in part a function of the s-curves in technology improvement. True False

True

Since perceived or expected installed base may drive subsequent adoptions, a large perceived or expected installed base can lead to a large actual installed base. True False

True

Some collaboration agreements include provisions for periodic auditing either by the partner organizations or by a third party. True False

True

Some firms avoid collaboration for fear of giving up their proprietary technologies. True False

True

Sometimes, monetary rewards undermine creativity by encouraging employees to focus on extrinsic rather than intrinsic motivation. True False

True

Standard discounted cash flow analysis has the potential to severely undervalue a development project's contribution to a firm. True False

True

Suppliers can contribute ideas for product improvement or increased development efficiency. True False

True

Technologically superior products do not always win in the market. True False

True

Technology trajectories are path dependent. True False

True

The customization of products and processes to a local market makes them particularly difficult to transfer to divisions serving different markets. True False

True

The decline in the government share of spending on R&D is largely due to the rapid increase in industry R&D funding rather than a real decline in the absolute amount spent by the government. True False

True

The influence of a dominant design can extend beyond its own technology cycle. True False

True

The initial cost of a good itself can be a switching cost. True False

True

The investor is an active driver of the value of an investment. True False

True

The most common use of conjoint analysis is to assess the relative importance of different product attributes to customers. True False

True

The path a technology follows through time is termed as technology trajectory. True False

True

The pooling of supplementary resources can enable partners to achieve market power. True False

True

The terms research and development represent different kinds of investment in innovation-related activities. True False

True

The transnational approach to R&D leverages resources and capabilities that exist anywhere within a firm and deploys them when and where any opportunity arises. True False

True

Though learning curves are found in a wide range of organizational processes, there are substantial differences in the rates at which organizations learn. True False

True

Three-dimensional printing can generate a model in a few hours. True False

True

Trademarks must be registered before a suit can be brought in federal court against an infringement of the mark. True False

True

Typically, the intellectual property policies of a university embrace both patentable and unpatentable innovations. True False

True

Viral marketing is based on the fact that people are more receptive to, or have greater faith in, information that comes through personal contacts. True False

True

When a technology's performance is plotted against the amount of effort and money invested in the technology, it typically shows slow initial improvement, then accelerated improvement, then diminishing improvement. True False

True

When multiple firms can produce a technology, losing money on the technology in the short term to promote it as a standard is highly risky. True False

True

While the value of a stock is independent of the call holder's behavior, the value of a R&D investment is not independent of the investor's behavior. True False

True

Wholly open systems are usually quickly commoditized and provide little appropriability of rents to their developers. True False

True