chp 12 business strategy

Which of the following are guidelines for successfully competing in dynamic markets with high technology uncertainty?

Don't over commit, because it can lead to becoming entrenched in the technology that managers select. Change course quickly (pivot) once a mistake is realized. Consider staying in the market, even when betting on the wrong technology, so that the company does not miss out on future opportunities.

What is the purpose of real options analysis in entrepreneurship?

It is used to suggest a path that companies can use to manage the uncertainty associated with launching new ventures.

Which of the following statements about radical innovation are true?

It is usually due to technological change. It tends to be highly disruptive. It may lead to products or processes that can be patented.

Which of the following statements regarding the application of real options analysis to strategic decision making are true?

It works when companies are not obligated to make additional investments in a project. It can be applied to decisions where managers have flexibility in their decisions. There are key points where managers decide whether to provide additional funding, delay, or kill the project.

Which of the following statements about proactiveness are correct?

One technique is to introduce new products or technological capabilities ahead of competitors. It puts competitors in the position of having to respond to successful initiatives. It is a forward-looking strategy.

Which of the following statements about innovation are true?

There can be innovation made to human resources, marketing, and a firm's infrastructure. New technology is among the most important sources for innovation. It must involve using new knowledge.

Which of the following statements about process innovation are correct?

They are associated with an overall cost leadership strategy. Process innovation is likely to occur during later stages of the industry life cycle. Firms can often improve by drawing on new technologies and the organization's experience.

Which of the following statements about new venture groups are correct?

They are usually semiautonomous units with little formal structure. Their goal is to identify, evaluate, and cultivate venture opportunities. They typically have a larger mandate than an R&D department.

Which of the following statements regarding collaborating with innovation partners are correct?

Networks of partners can result in increased speed and ease when innovation is conducted. Innovation partners may come from many sources, including research universities. Firms must identify their strengths and weaknesses to ensure they select a partner that is complementary.

Which of the following are among the challenges to innovation?

internal versus external staffing seeds versus weeds experience versus Initiative

Biases, blind spots, and other human frailties that lead to poor managerial decisions fall under the concept of ______.

managerial conceit

Which of the following are considered focused approaches to corporate entrepreneurship?

Business incubators New venture groups

Which of the following statements regarding dispersed approaches to corporate entrepreneurship are correct?

Change is an important core capability. The entire organization is dedicated to the principles and practices of entrepreneurship. Stakeholders often bring new ideas or opportunities to anyone in the organization and expect that they will be well-received.

Which of the following refers to the strategy-making practices that businesses use in identifying and launching new ventures consisting of autonomy, innovativeness, proactiveness, competitive aggressiveness, and risk taking?

Entrepreneurial orientation

______ is an intense effort to outperform industry rivals characterized by a combative posture or an aggressive response aimed at improving position or overcoming a threat in a competitive marketplace.

Competitive aggressiveness

______ is the creation of new value for a company through investments that create either new sources of competitive advantage or renewal of the value proposition.

Corporate entrepreneurship

______ innovation is an innovation that enhances existing practices or makes small improvements in products and processes.

Incremental

Which of the following statements about innovativeness are correct?

Innovative companies continuously seek out new product or service offerings. It fosters creativity and experimentation. It requires companies to venture beyond the current state of the art.

Which of the following are examples of staffing practices for innovation that are counterproductive?

A team consisting of strong employees taken from the company's core business A team consisting of volunteers who want to work on projects they find interesting A climate where innovation teams are treated as second-class citizens

Which of the following statements regarding the internal versus external staffing challenges to innovation are correct?

Internal personnel may be inhibited from thinking outside the box due to their knowledge of their organization's culture and routines. Project managers must be able to justify the time required to hire, train, and help with relationship building for new personnel. People within the firm may have greater social capital and know the organization's culture and routines.

Which of the following statements about autonomy are correct?

It applies to both dispersed and focused entrepreneurial efforts. It refers to both individuals and teams that operate outside an organization's existing norms and strategies. It empowers employees to identify and leverage entrepreneurial opportunities.

Which of the following statements about competitive aggressiveness are correct?

It is a strategy best used in moderation. One technique is to enter markets with drastically lower prices. One technique is to find successful business models and copy them.

Which of the following statements about incremental innovations are correct?

It often extends or expands the firm's product line or manufacturing skills. It can be a source of competitive advantage. It enhances existing practices.

Which of the following regarding the challenges to innovation of experience versus initiative are correct?

Mid-level employees may not have as much experience but may be able to understand how an innovation would address specific problems. Senior managers have experience but may be too risk averse to lead an innovation product. Senior managers must determine who is best suited to lead an innovation project.

Which of the following are true about managing the pace of incremental innovation?

Milestones are often driven by stringent goals and deadlines. The project time may be six months to two years. Development is usually at a fast pace to get innovations out at a planned pace.

______ are groups of individuals or a division within a corporation that identifies, evaluates, and cultivates venture opportunities.

New venture groups

_______ is a forward-looking perspective characteristic of a marketplace leader that has the foresight to seize opportunities in anticipation of future demand.

Proactiveness

______ innovation refers to efforts to improve the efficiency of organizational processes, especially manufacturing systems and operations. Multiple choice question.

Process

______ innovation involves efforts to create product designs and applications of technology to develop new products for end users.

Product

Which of the following statements about managers being able to develop innovative products and services are correct?

Questioning, observing, experimenting, and networking play important roles in the innovative process. Creative intelligence is the key attribute that firms need to develop in their managers. Practicing these skills will make managers more innovative thinkers.

______ innovation is an innovation that fundamentally changes existing practices.

Radical

______ is a problem with investment decisions in which managers "game the system" to have a project meet investment approval criteria, even though the investment may not enhance firm value.

The back-solver dilemma

Product innovation tends to be more common during which stage of the industry life cycle?

The introduction stage

Which of the following are the aims of corporate entrepreneurship (CE)?

The pursuit of new venture opportunities Strategic renewal within the company

True or false: Companies are often reluctant to invest time and other resources into activities with an unknown future.

True

True or false: Real options analysis is suitable for strategic decisions for investments that give a company the right, but not the obligation, to make subsequent investments.

True

Corporate entrepreneurship in which a dedication to the principles and policies of entrepreneurship is spread throughout the organization is known as the ______ to corporate entrepreneurship.

dispersed approach

Business risk taking of an organization involves ______.

entering untested markets or committing to unproven technology

A(n) ______ culture is one in which change and renewal are a constant focus of attention.

entrepreneurial

Focusing a firm's innovation efforts to a strategic _______ limits the scope of the firm's efforts and helps avoid wasting resources on the project.

envelope

Which of the following refers to a willingness to introduce novelty through experimentation and creative processes aimed at developing new products and services as well as new processes?

innovativeness

Collaborating on innovation projects with other companies is ______.

often the best means to achieve success, since new skills and insights are needed.

In companies with many innovative ideas, deciding which ideas to cultivate and which to cast aside is known as ______.

seeds versus weeds

Which of the following refers to a firm-specific view of innovation that defines how a firm can create new knowledge and learn from an innovation initiative even if the project fails?

strategic envelope

Which of the following statements about business incubators are correct?

They are a type of corporate new venture group that has a specialized purpose. They are designed to hatch new businesses. They provide some or all of the following functions: funding, physical space, business services, mentoring, and networking.

Guidelines for competing in a dynamic, innovative market in which a winning technology has not yet become dominant include which of the following?

Apply knowledge gained from an innovation that has failed to new market opportunities. Be aware that making initial correct innovation choices does not prevent later mistakes. Be cautious about overcommitting in an attempt to be seen as a leader in the market.

Which of the following refers to a willingness to act independently in order to carry forward an entrepreneurial vision or opportunity?

Autonomy

______ are corporate new venture groups that support and nurture fledgling entrepreneurial ventures until they can thrive on their own as stand-alone businesses.

Business incubators

Which of the following statements about corporate venturing efforts are correct?

Companies expect higher returns from new corporate ventures than normal operations. Just over 50% are financially successful. In terms of a risk-return trade-off new corporate ventures often fall short of expectations.

Which of the following statements about the seeds versus weeds challenge to innovation are correct?

Companies need to develop a mechanism with which they can select among various opportunities. Some projects require a considerable level of investment before their worth can be evaluated.

Which of the following statements regarding risk taking are true?

Entrepreneurial managers will forgo methods or products that have worked in the past. Entrepreneurial firms often will assume higher levels of debt in order to introduce new products into new markets. Corporate entrepreneurs often choose riskier alternatives in order to be successful.

Which of the following statements about an entrepreneurial culture are true?

Everyone in the organization is on the lookout for new opportunities. Senior managers must support programs and provide incentives that foster an entrepreneurial climate. Many of the best ideas for new ventures come from functional-level employees.

Innovation by managers requires creative intelligence, which is driven by which of the following?

Experimenting Associating Observing

______ is the use of new knowledge to transform organizational processes or create commercially viable products and services.

Innovation

Which of the following explain when managerial conceit occurs?

It happens when managers pay less attention to small decisions because they assume real options will alert them to any potential problems. It happens when decision makers who have made successful choices in the past believe they have superior expertise for managing uncertainty.

Which of the following statements about entrepreneurial orientation are correct?

It has five dimensions that permeate the decision-making styles and practices of firm's members. Its dimensions are autonomy, innovativeness, proactiveness, competitive aggressiveness, and risk taking. The five factors work together to enhance a firm's entrepreneurial performance.

______ is an investment analysis tool that suggests a path that a company can follow to manage the uncertainty of launching a new venture.

Real options analysis

Which of the following are among the human resources management practices that help firms to capture value from innovation efforts?

Require employees to serve in the new venture group as part of their career ladder. Create innovation teams with experienced members who know how to deal with ambiguity. Separate an individual's performance from the innovation project's performance.

Which of the following are strategic reasons for undertaking a corporate venture?

To strengthen the firm's competitive position To enter into new markets To expand the firm's capabilities by learning and acquiring new knowledge To build the firm's base of resources and experience

A(n) ______ champion is an individual working within a corporation who is willing to question the viability of a venture project by demanding hard evidence of venture success and challenging the belief system that carries a venture forward.

exit

Firms that use a focused approach to entrepreneurship typically ______.

separate the venturing activities from the rest of the ongoing operations

Which of the following are potential pitfalls of real options analysis?

irrational escalation of commitment back-solver dilemma overconfidence and the illusion of control

A(n) ______ is an individual working within a corporation who brings entrepreneurial ideas forward, identities what kind of market exists for the product or service, finds resources to support the venture, and promotes the venture concept to upper management.

product champion

Which of the following are true about managing the pace of radical innovation?

It has long periods of exploration in which experimentation makes strict timelines unrealistic. There is often open-ended experimentation with time-consuming mistakes. The project timeline is typically as long as 10 years or more.

______ is making decisions and taking action without certain knowledge of probable outcomes.

Risk taking

Which of the following statements about product champions are true?

They help find resources for new product ideas. They are needed to bring entrepreneurial ideas forward. They help promote the concept to upper management.

Which of the following statements about exit champions are true?

They put their reputations on the line. They reduce ambiguity by gathering hard data and develop a strong case for why the project should be ended. They must stand up for what they believe.