Chapter 3

The major thrust of corporate entrepreneurship is to

encourage innovation.

In restructuring corporate thinking, top management should

promote entrepreneurship through experimentation

Which of the following terms refers the inaugural breakthroughs launched from experimentation and determined vision?

radical innovation

Which of the following is true of corporate venturing? a. It is the adding of new businesses or portions of new businesses via equity investments to the corporation. b. Exhibition of large-scale or otherwise highly consequential innovations that are adopted in the firm's pursuit of competitive advantage. c. May or may not result in new businesses for the corporation. d. Innovation can be in the firm's strategy, product offerings, served markets, internal organization or business model.

It is the adding of new businesses or portions of new businesses via equity investments to the corporation.

Transformational triggers in a corporate entrepreneurial environment initiates the need for

strategically adapting to change.

Which of the following practices is important for establishing innovation-driven organizations? a. punish failures to encourage learning b. emphasize team responsibility c. create a system of feedback and positive reinforcement d. allow innovation goals to remain broad and flexible

create a system of feedback and positive reinforcement

Clever bootlegging of ideas refers to secretly working on new ideas on company time as well as on personal time.

True; The clever bootlegging of ideas is secretly working on new ideas on company time as well as on personal time.

All of the following are reasons for the growth of corporate entrepreneurship except: a. a desire to dramatically increase profitability. b. a rapidly growing number of new and sophisticated competitors. c. a sense of distrust in the traditional methods of corporate management. d. an exodus of some of the best people out of corporations.

a desire to dramatically increase profitability.

Which of the following terms refers to the systematic evolution of a product or service into newer or larger markets?

incremental innovation

The first step in planning a strategy of entrepreneurship for enterprise is

sharing the vision of innovation.

The resources of the organization are irrelevant to the ability of the corporate entrepreneur to implement an idea.

False; Innovators need discretionary resources to explore and develop new ideas and while some companies give employees the freedom to use a percentage of their time on projects of their own choosing and set aside funds to explore new ideas when they occur, others control resources so tightly that nothing is available for the new and unexpected and the result is nothing new.

One reason that corporate entrepreneurship has become popular is because it allows corporations to tap the innovative talents of the personnel.

True; One reason corporate entrepreneurship has become so popular is that it allows corporations to tap the innovative talents of their own workers and managers.

Groups that function outside traditional lines of authority permitting rapid turnaround of new ideas as well as instilling a high level of group loyalty are called:

skunk work

Secretly working on new ideas on company time as well as on personal time is referred to as

bootlegging

Which of the following is an obstacle to corporate entrepreneurship?

traditional management techniques

Systematic evolution of a product or service into newer or larger markets is referred to as radical innovation.

False; Incremental innovation refers to the systematic evolution of a product or service into newer or larger markets.

Skunk works are project groups that work within the traditional lines of authority.

False; "Skunk Works" is a nickname given to small groups that work on their ideas outside of normal organizational time and structure which eliminates bureaucracy, permits rapid turnaround, and instills a high level of group identity and loyalty.

Firms do not need to alter management techniques to encourage corporate entrepreneurship since it tends to occur naturally.

False; The management structure itself encourages employees to believe that innovation is, in fact, part of the role set for all organization members and some of the specific conditions that reflect management support include quick adoption of employee ideas, recognition of people who bring ideas forward, support for small experimental projects, and seed money to get projects off the ground.

In the model of sustained corporate entrepreneurship discussed in the text, a transformational trigger can be internal or external to the company.

True; A transformational trigger is something external or internal to the company that causes a change to take place and initiates the need for strategic adaptation or change.

Individuals may avoid corporate entrepreneurial behavior due to the impact of traditional management techniques.

True; Although it is unintentional, the adverse impact of a particular traditional management technique can be so destructive that the individuals within an enterprise will tend to avoid corporate entrepreneurial behavior.

The first step in planning a strategy of corporate entrepreneurship is sharing the vision of innovation that executives wish to achieve.

True; The first step in planning a corporate entrepreneurship strategy for the enterprise is to share the vision of innovation that the corporate leaders wish to achieve.

Researchers have identified specific factors that organizations can concentrate on in helping individuals develop more entrepreneurial behavior.

True; Using the Corporate Entrepreneurship Assessment Instrument (CEAI), researchers have identified five factors critical to the internal environment of an organization that want to have managers pursue innovative activity including top management support, time availability, autonomy/work discretion, rewards/reinforcement, and organizational boundaries.

The second step in planning a strategy of entrepreneurship for the enterprise is

developing and encouraging innovation.

Collective entrepreneurship, as a concept, refers to

entrepreneurial thinking that is diffused throughout the company.

Identified by researchers, which of the following are specific factors identified by the Corporate Entrepreneurship Assessment Instrument (CEAI) that managers in organizations can concentrate on in structuring an entrepreneurial climate? a. radical innovation, incremental innovation, and vision b. skunk works, multiple approaches, and vision c. top management support, time, autonomy, rewards, and organizational boundaries d. rewards, resources, innovation, and vision

top management support, time, autonomy, rewards, and organizational boundaries