Ch. 13

The chapter Strategic Focus about competitiveness and innovation notes all of the following EXCEPT a. Firms in the U.S. have focused too much on producing short-term returns leading to an emphasis on incremental innovations. b. The U.S. is in danger of losing its lead in science and technology. c. Future technological breakthroughs in medical science, drugs, and information technology are likely to come from U.S. firms. d. In 2009, the U.S. continued to be ranked as the most competitive nation.

Future technological breakthroughs in medical science, drugs, and information technology are likely to come from U.S. firms.

____ involves internally developed incremental and radical innovations that result from deliberate efforts.

Internal corporate venturing

Since its innovations in Internet retailing, Amazon has implemented several innovations, especially in processes and approaches to marketing its products. Its most recent innovation, the Amazon Kindle, is described in the chapter Opening Case. Which of the following methods of generating innovations described in the chapter would the Kindle illustrate?

Internal innovation.

All of the following are correct about the Opening Case on Amazon's Kindle EXCEPT

Much of Amazon's success was attributable to Kindle being the first e-book.

According to the chapter Strategic Focus, entrepreneurs are identifying ways to use social networking sites such as Facebook for business purposes. All of the following are examples of these business purposes EXCEPT a. Identification of new and different markets for existing and new product ideas. b. To identify potential new employees. c. Provision of venture capital to new entrepreneurial firms. d. To provide access to new ideas and information that can be useful to solving problems and making strategic decisions.

Provision of venture capital to new entrepreneurial firms

____ is(are) critical in order for a firm to gain access to complementary resources from partners in a cooperative alliance.

Social capital

Commercialization of ideas is more difficult than idea creation as suggested by the fact that ____ percent of R&D occurs in large firms, yet the same firms produce fewer than ____ percent of patents.

80; 50

Which of the following can engage in entrepreneurial activities?

Corporations, municipalities, and nations

____ is one of the reasons for the differences in rates of entrepreneurship among different countries.

Culture

Isidore Security Services is a national provider of guard and security services for businesses. It has been in business for over 90 years, having been founded by one of Teddy Roosevelt's Rough Riders (Isidore O'Malley). Lately it has been losing clients to more aggressive and innovative firms offering remote security monitoring systems instead of a guard-based approach. The board of directors of Isidore Security Services is concerned that this downward trend may threaten the existence of this venerable firm and the jobs of its employees.

This is an example of an established firm neglecting the opportunity-seeking aspect of strategic entrepreneurship.

____ exist(s) when there is a need in the market that can be satisfied by new goods or services.

Entrepreneurial opportunities

____ are individuals, acting independently or as part of an organization, who see an opportunity and then take risks to develop an innovation to exploit it.

Entrepreneurs

Firms develop innovations in all the following ways EXCEPT

Via divestiture of low-performing units.

Research suggests that _________ is needed to encourage entrepreneurial behavior.

a balance between individualism and cooperative behavior

Which of the following is true? For firms to be entrepreneurial, they require a culture with

a balance of individualism and collectivism.

QuadroVax is investing heavily in research and development on new methods of vaccine development that would speed up the creation of vaccines for newly emerging viruses and to get these vaccines to the market rapidly. QuadroVax's shareholders can expect

a long wait for an uncertain payoff.

Value creation through internal innovation originates with

an entrepreneurial mind-set.

Induced strategic behavior is a process that fosters product innovations that

are aligned closely with current strategy and structure

Entrepreneurial opportunities

are conditions in which new goods or services can satisfy a need in the market.

Autonomous strategic behavior is a(an) ____ process in which product champions pursue new ideas.

bottom-up

Innovation creates a(an)

commercial product.

When an existing firm creates a new venture or develops an innovation, it is said to be engaging in

corporate entrepreneurship.

The primary goal of innovation is to

create wealth.

Since it replaces existing products and methods of production, entrepreneurship is a process of

creative destruction.

In the chapter Strategic Focus, which of the following best characterizes Exxon-Mobil's approach to innovation?

development of incremental innovations

When used effectively, cross-functional teams will often bring about

faster product development processes.

A cross-functional work team is having difficulties in operating smoothly and friction has developed among some of the members. Many of the strongest complaints are from the representatives of management who complain that the research scientists are disorganized, haphazard, and undisciplined. Managers complain the scientists do not adhere to any fixed rules or procedures. On the other hand, the research scientists complain that the managerial representatives are excessively rule-oriented bureaucrats, and have no flexibility or spontaneity. The main problem with this team seems to be centered around differences in

formality of structure.

AgroPharm is searching for a top-level executive. AgroPharm has marketed its products only to U.S. farmers and agribusinesses in the past. Now, the company plans to expand operations to Mexico and Central America in the next two years. To maximize the chances of success it is critical that the new executive

have international experience.

If the firm's current employees are well-trained in their jobs, but also have other knowledge, skills, and abilities, these employees have

high absorptive capacity to learn.

Informal (often invisible) processes are best supported through ____ organizational structures.

horizontal

New entrepreneurial firms are better than larger established firms at

identification of entrepreneurial opportunities.

Products developed through ____ are often offered at lower prices without as many features than products developed through ____.

imitation, innovation

The three types of innovative activity include all of the following EXCEPT

implementation.

Panera Bread has innovated to improve the quality of its distribution system, to improve the quality of its bread dough, and to introduce new menu items. These are examples of

incremental innovation.

According to the chapter Strategic Focus, firms based in the U.S. have tended to overemphasize _____________.

incremental innovations

A successful ____ innovation will be less risky but less profitable than a successful ____ innovation.

incremental, radical

Cross-functional teams are useful in developing and commercializing new products because each team member brings his or her special competencies to the project. Each team member brings his/her point of view from his/his experience and background. On the other hand, these ____ may cause barriers to effective communication among team members.

independent frames of reference

A major barrier to the use of cross-functional teams is

independent frames of reference of team members.

Nokia and Intel have specific goals in the development of new products to support their strategies. Intel has had a strategic interest in the smartphone market, and Nokia is trying to overcome Apple's lead in this market with the iPhone. This is an example of

induced strategic behavior.

A large, but declining, city in the Midwest is trying to lure businesses to relocate there and to encourage local entrepreneurs to start new businesses. In order to do this, the city has changed its tax laws and regulations concerning business creation and operations. This is an example of

institutional entrepreneurship.

WayWard Products has a deliberate strategy to encourage internal innovations. It has established processes to support autonomous strategic behavior as well as induced strategic behavior. WayWard Products is involved in

internal corporate venturing.

Blixin Concrete Products, an established firm, is seeking a technologically-advanced partner for a strategic alliance. If the potential partner is a new entrepreneurial venture, the main benefit the Blixin Concrete can offer is probably

investment capital

Regarding partnering in cooperative alliances, entrepreneurial new companies may seek ____ while more established companies may need ____.

investment capital, new technological knowledge

Innovations that involve significant technological breakthroughs and create new knowledge

involve substantial uncertainty and risk.

One of the distinguishing differences between the two sources of internal corporate venturing (autonomous strategic behavior and induced strategic behavior) is whether the innovation process

is encouraged through a bottom-up or top-down process.

GreenBox, a company that recycles paper products to make cardboard cartons, has introduced a new product that resists damage by moisture. GreenBox can expect that

its investors will react positively to the introduction of the new product because of the potential for higher returns.

The number of patents held by an organization is a rough guide to the

level of innovation in a firm.

Research shows that internationally diversified firms tend to be ____ than domestic-only firms.

more innovative

The main risk in a strategic alliance is that

one partner will use the other partner's knowledge and use it to enhance its own competitive abilities.

Entrepreneurship is the process by which individuals or groups identify and pursue ____ without being immediately constrained by the ____ they currently control.

opportunities; resources

Which of the following is one of the barriers to effectiveness when using cross-functional teams to integrate organizational functions?

organizational politics

The competition for resources among those representing different organizational functions within a firm often leads to

organizational politics.

Through the work of cross-functional teams, product development stages are grouped into ____ processes.

parallel or overlapping

Roland has developed and patented an inexpensive and organic way to enhance the fertility of clay soils without the addition of chemical fertilizers. But established agricultural chemical companies have rejected his proposals. After six months of promoting his invention during his time off from his regular job, Roland has decided to set his dream aside. Roland lacks a key characteristic of successful entrepreneurs, which is

passion for his invention.

The level of entrepreneurial activity in a nation is ____ the nation's level of economic development.

positively related to

Entrepreneurs tend to have all the following characteristics EXCEPT a. willing to take responsibility for projects. b. passionate. c. prefer certainly about projects. d. optimistic.

prefer certainly about projects.

The idea that it is "vital to sell the ideas to others in the organization so that innovations will be commercialized" is the rationale behind the use of

product champions.

Panera Bread develops and produces its own dough-based products, but it works with manufacturing partners to create new soups. Panera Bread is therefore

pursuing innovation through both internal and cooperative strategies.

The development of the original personal computer (PC) was a(n) ____ innovation at the time, whereas adding a different kind of whitening agent to a soap detergent in an example of a(n) ____ innovation.

radical; incremental

Innovation by imitation damages the existing product's competitive advantage by reducing its

rarity

A cross-functional product development team has been examining a proposed new product intensively for six months. The team has decided that although the product is unique and technologically-advanced, the cost of production will exceed the price that the consumer would be willing to pay. At this point, the product development team should

recommend that the project be set aside.

The firm's culture promotes unity of purpose for cross-functional work teams through

shared values

ndependent frames of reference and organizational politics are the two primary barriers to cross-functional team integration. Two methods to facilitate cross-functional integration are _________ and ___________.

shared values; effective leadership

Successfully creating innovations through internal means requires

significant spending on R&D.

PracticalSolutions is a small firm providing employee assistance programs for companies with troubled employees. PracticalSolutions frequently partners with other consulting firms to provide creative solutions for companies with personnel problems. This history of partnering has developed ____ capital for PracticalSolutions.

social

Internal corporate venturing does NOT involve

strategic alliances.

The risks of international entrepreneurship include all the following EXCEPT a. unstable foreign currencies. b. problems with market efficiencies. c. limitations on market size. d. strong "buy-domestic" programs.

strong "buy-domestic" programs.

Pet Care Companion Connection (PCCC) is an organization that trains persons with mild to moderate mental disabilities to care for pets in a pet boarding facility. This organization has been successful in providing a quality service for pet owners and a supportive training environment for their trainees. The tuition charged to trainees is only somewhat higher than the fee which day-care providers would charge for these individuals. Graduates of the program are qualified for employment by commercial kennels. PCCC is an example of

taking advantage of a need in the marketplace.

61. The dimensions on which functional departments can vary include all the following EXCEPT ____ orientation. a. time b. customer c. technological d. interpersonal

technological

To be successful, an autonomous process for developing new products relies on

the diffusion of tacit knowledge.

A negative effect of acquiring other firms for the purpose of innovation is

the effect it can have on the firm's own ability to produce innovations.

Knowledge must be transferred to others in the firm to enhance the entrepreneurial competence of the firm. This requires that

the receiving party have adequate absorptive capacity to learn.

Why have large pharmaceutical companies been forming alliances with biotechnology companies?

to develop new products and bring them to market

Induced strategic behavior as a form of internal innovation is a(an) ____ process.

top-down

Charles is a customer service representative for a home improvement store. He has creative ideas about how to increase customer satisfaction. Charles's talents will be most likely to be used in a firm that

uses the autonomous strategic behavior form of internal corporate venturing.