Corporate Entrepreneurship

Innovativeness

A continuous priority placed on developing and launching new prod- ucts, services, processes, markets, and technologies, and on leading the marketplace

Opportunity

A favorable set of circumstances creating a need or an opening for a new business, concept, or approach

Business Concept

An innovative approach for capitalizing on an opportunity

Corporate Entrepreneurship

Entrepreneurial behavior inside established mid-sized and large organizations

External Environment

Everything outside the company, including the competitive, customer, technological, economic, regulatory, social, labor, and supplier environments.

Jet Blue is the only airline that has managed to compete successfully with Southwest on a head-to-head basis.

False

The fundamental problem in innovation is a lack of good ideas.

False

To be highly successful, companies should approach corporate entrepreneurship as Babe Ruth approached baseball: swing for a home run every time.

False

While it is important not to stigmatize failure, it is equally important not to recognize it as having a positive outcome; failure should thus be downplayed as much as possible.

False

Labor Environment

Growing scarcity of skilled workers; employees more mobile and less loyal; higher employee benefit costs; reliance on contract labor

Internal Environment

Includes the structures, systems, processes, and culture that make up the climate within which people do the work of a company.

Resource Environment

Increasing resource scarcity; resources increasingly specialized; unknown sources of supply; more rapid resource obsolescence Customer Environment- More demanding and complex customers; markets that are more fragmented and more narrowly segmented; emphasis on investing in and capturing a customer's life time value

Legal and Regulatory

More aggressive regulation; virtually unlimited product liability; Environmental regulatory compliance costs; growing emphasis on free and fair trade; increasing environmental regulation and associated compliance costs; mandated employee benefits costs

Global Environment

Real-time communication, production, and distribution virtually anywhere in the world; more sophisticated suppliers, customers, and competitors located around the world; competitive ad- vantage achieved through global outsourcing and international strategic alliances

Speed

The ability to act quickly on emerging opportunities, to develop new pro- ducts and services more rapidly, and to make critical operational decisions without lengthy deliberations

Adaptability

The ability to adjust, on a timely basis, to new technologies, new cus- tomer needs, new regulatory rules, and other changes in conditions without losing focus or causing significant disruption of core operations and commitments

Of all the elements necessary for successful corporate entrepreneurship, the individual champion is most critical.

True

Where senior managers attempt to personally select individuals to be "champions", the results are typically disappointing.

True

Ad hoc venture teams tend to do well when given a specific mission, but are not so successful at developing a continuous stream of innovative ideas.

Tue

Economic Environment

Unpredictability of prices, costs, exchange rates, interest rates, tax incentives, business cycles

Competitive Advantage

Above average industry profitability

Technological Environment

Accelerated development of new technologies; rapid product obsolescence; greater difficulty in protecting intellectual property

Competitive Environment

Aggressive "take no prisoners" competition; highly innovative competitors; competition from non-traditional sources with non- traditional tactics; threats from niche players; competitors who are also customers or partners

Aggressiveness

An intense, focused, and proactive approach to eliminating competi- tors, delighting customers, and growing employees

A 2003 survey by Bain & Co. revealed a high level of managerial satisfaction with the overall results of corporate venturing activity.

False

A primary motive for pursuing an internal corporate venture appears to be the provison of "insurance" for the corporate parent in the event that its core businesses fail to yield desired results.

False

According to Porter (1996), strategy involves the development of core competencies that allow a company to perform similar activities better than competitors perform them.

False

An entrepreneur's primary focus should be on the efficient and effective utilization of the resources currently under his or her control

False

An example of the Experimenter persona is that of the 3M employee responsible for the development of masking tape.

False

As currently designed, reward and measurement systems within public sector organizations serve as effective mechanisms for the encouragement of entrepreneurial behavior.

False

Because "entrepreneurship" is a relatively new term (less than 100 years old), most scholars agree on it's precise definition.

False

Bill O'Brien and Pete Nielsen's primary reason for leaving GTE to form Starlight Communications was to capitalize on the potentially greater financial rewards realizable from ownership of an enterprise.

False

Chaos theory describes systems with outcomes that are governed by linear differential equations.

False

Due to the ongoing global entrepreneurial revolution, none of the traditional theories and principles that previously guided good business practice any longer applies.

False

Entrepreneurship is an attribute exhibited only by small, creative start-up companies; or by highly successful firms in R&D-intensive industries.

False

Improved financial performance in a nonprofit organization invariably leads to improved social performance.

False

In order to maximize long-term success rates and minimize downside risks, it is imperative that managers fully commit all necessary resources when commencing any given project of innovation.

False

Involvement in organizational politics only distracts the corporate entrepreneur from the achievement of his or her goals, and thus should be avoided as much as possible.

False

Large financial rewards always have more impact on produciing a desired behavior than any other type of compensation or recognition.

False

Most public sector managers strongly agree with the statement "entrepreneurship does not really apply to organizations such as mine".

False

Most researchers agree that entrepreneurs have a strong external locus of control.

False

Not all people are inherently creative.

False

Nucor's dramatic re-shaping of the steel industry justifies its placement in the Revolutionary segment of the entrepreneurial grid.

False

Once set, a company's dominant logic should not change, as it provides the "lens" through which the firm views and interprets the environment.

False

Public sector organizations do not have to contend with the risk of failure, as bankruptcy is not a threat.

False

Research clearly indicates that managers who are less entrepreneurial in their behavior have a positive impact on their subordinates' satisfaction.

False

Sear's attempt to re-position itself as a more high-end, branded merchandiser constitutes an example of Organizational Rejuvenation.

False

Senior management has direct control over all the factors that influence the work environment.

False

Technology strategy should follow from and help to operationalize business strategy.

False

The creative process can be designed in such a way as to reach an innovative solution in an orderly and linear succession of logical steps.

False

The evidence in recent research is inconclusive in regards to whether or not entrepreneurship has any impact on the performance of nonprofits.

False

The evidence is quite clear that the first-mover always has the advantage in regards to dominating a new product category.

False

The organizational conditions leading to the accusation that Microsoft's heirarchy has frustrated the efforts of it's innovators are best described by the "crisis of autonomy" that theoretically occurs as "Growth through Direction" slows.

False

The possibility of revolutionary change comes only with the acceptance of high risk.

False

The primary source of most of Walmart's entrepreneurial growth has been through traditional R&D.

False

The purpose of "creative abrasion" is to create a "colloseum" of ideas, in which colliding viewpoints battle to the death; with one winning out or dominating, and the other losing and being discarded.

False

The three dimensions of entrepreneurship are highly correlated with each other.

False

The ultimate purpose of the various techniques and methods available for use in the creative process is to increase the quantity of creative ideas generated.

False

Flexibility

The ability to design company strategies, processes, and operational ap- proaches that can simultaneously meet the diverse and evolving requirements of customers, distributors, suppliers, financiers, regulators, and other key stakeholders

Entrepreneurship

The process of creative value by bringing together a unique combinations of resources to exploit an opportunity

Management

The process of setting objectives and coordinating resources, including people, in order to attain those objectives

3M does not focus on technologies as products, but as means to addressing customer or societal needs.

True

A primary goal of introducing entrepreneurship into public sector organizations is to shift the emphasis from the "process" of government programs to the "outcomes" of government programs.

True

Access to financial capital is the key to success in an entrepreneurial venture.

True

According to Greiner (1972), companies enter the "Growth through Coordination" stage; prosper until they encounter "a crisis of red tape"; and then must either find a way to enter the "Growth through Collaboration" stage, or fall into decline and failure.

True

According to the Domain Framework, corporate entrepreneurship involves two innovative processes: the creation of new businesses within existing organizations and the transformation of organizations through the design of revolutionary corporate initiatives.

True

Alternative terms used to describe the concept of "corporate entrepreneurship" include "intrapreneurship" and "corporate venturing".

True

An important element of corporate entrepreneurship is recognizing when the product is "good enough": perfection is unnecessary.

True

Any process that attempts to move a traditional hierarchical company to the point that sustainable entrepreneurship becomes a meaningful and important component of the organization will necessarily be long and complicated.

True

As Google's "idea gatekeeper", Marissa Mayer's primary duty is to function as a bottleneck, keeping commercially unfeasible ideas from consuming any company resources.

True

Given their intangible nature and the ease with which they can be replicated, services are prime candidates for continuous innovation.

True

Highly innovative companies tend to manage multiple projects simultaneously, utilizing a systematic and well-defined process.

True

Interactions among tactical components of the business model can make it very difficult for competitors to imitate.

True

It is impossible to evaluate the success or failure of a corporate venture without a clear understanding of the venture's initial goals.

True

It is not clear that companies can sustain a high rate of entrepreneurial intensity over prolonged periods of time; it is conceivable that they cycle between periods of high intensity and periods of less intensity.

True

Management must be proactive in regards to change, so that the ongoing healthy business forms a "protective bubble" in which to experiment with new methods.

True

Many of the studies on the psychological and sociological makeup of entrepreneurs suffer from major methodological problems.

True

Of all the decision areas that can affect the work environment, HRM is perhaps the most vital.

True

Performance appraisals should be conducted at intermittent and irregular time intervals, and tailored to the life cycle of an entrepreneurial project.

True

Social entrepreneurs seek opportunities that will allow them to attack the primary causes of needs, rather than merely remedying symptoms.

True

The amount of control that any given firm can possibly exert over its external environment is extremely limited.

True

The basic six steps of the entrepreneurial process found in the corporate context are no different in a nonprofit or public sector context.

True

The corporate entrepreneur is insulated from turbulence in the external environment to a far greater degree than is the start-up entrepreneur.

True

The essence of proactiveness lies in the commitment displayed towards the successful, widespread implementation and adoption of an entrepreneurial concept.

True

The establishment of intermediate, achievable goals is an essential element of the successful implementation of an entrepreneurial business concept.

True

The formulation of plans for the effective management of external opportunities and threats in light of a company's internal strengths and weaknesses is a major component of strategic management.

True

The higher the degree of bureaucratization, the greater the potential conflict with entrepreneurship.

True

The marketplace usually wants a new product that is good enough, not the best possible.

True

The most appropriate way to approach employee recruitment and selection decisions depends upon whether organizations are pursuing an entrepreneurial-based strategy or an efficiency-based strategy.

True

The popularity of corporate venture capital investment activity appears to be correlated with the strength of the IPO market.

True

The reason that most innovations succeed is that most innovations are incremental in nature; failure rates increase dramatically for discontinous or revolutionary ventures.

True

The same type of thinking that allows a person to function efficiently on a day-to-day basis becomes a major constraint when trying to be creative.

True

The shortage in most companies is not of dreamers, but of doers.

True

The two most precious words in the organization should be "what if?"

True

The viewpoint of the authors of this textbook is that the core source of sustainable competitive advantage is entrepreneurship.

True

There are fundamental questions as to whether or not entrepreneurship has any legitimate role to play in public enterprises.

True

Two companies that exhibit the same overall level of entrepreneurial intensity can differ significantly in how entrepreneurship is manifested.

True

Virtually anyone is capable of being entrepreneurial, and many people manage to be entrepreneurial on a continuous basis.

True

Walmart's early growth was due to succesful domain redefinition, in that it redrew the boundaries of the mass retail industry and made its current competiton moot.

True

When outcomes meet or exceed expectations, entrepreneurial behavior is positively reinforced, and vice versa.

True