MANA chapter 12

Corporate entrepreneurship is sometimes called "intrapreneurship."

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Process innovations are often associated with a low cost leadership strategy.

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All of the following are questions that should be answered when evaluating the performance of corporate venturing efforts EXCEPT which of these? A. Is the venture attracting external venture funding? B. Is the venture considered to be a market success? C. Does the venture add to the worth of the firm internally? D. Does the value proposition offered by the venture insulate it from competitive attack?

A. Is the venture attracting external venture funding?

All of the following are characteristics of a disruptive innovation EXCEPT A. It is usually more sophisticated technologically. B. It appeals to less demanding customers. C. It is typically a less expensive solution for meeting a need. D. It usually takes root in a new market or the low-end of an existing market.

A. It is usually more sophisticated technologically.

All of the following statements about innovativeness are true EXCEPT which of these? A. It refers to making decisions and taking risks without certain knowledge of probable outcomes. B. It refers to a firm's efforts to find new opportunities and novel solutions. C. It involves creativity and experimentation. D. It is aimed at developing new products, services, and processes.

A. It refers to making decisions and taking risks without certain knowledge of probable outcomes.

The W. L. Gore organization, a highly innovative company, uses several approaches and "rules of thumb" to encourage innovation. Which of the following is NOT one of them? A. It requests that all risk-taking activities have a financial pay-off within one year. B. It celebrates failure rather than condemning it. C. It promotes person-to-person communications rather than e-mails. D. It uses small teams to promote creativity and autonomy.

A. It requests that all risk-taking activities have a financial pay-off within one year.

Individuals with highly innovative DNA traits have the ability to connect seemingly unrelated questions, problems, and ideas from different fields, allowing them the opportunity to creatively see opportunities others miss. In the text, this is referred to as A. associating. B. integrating. C. visioning. D. allocating.

A. associating.

The innovation dilemma known as building capabilities versus collaborating refers to A. developing innovation skills internally versus partnering with qualified outsiders. B. building innovative products in-house versus outsourcing. C. building credibility by launching products ahead of potential collaboration partners. D. all of these.

A. developing innovation skills internally versus partnering with qualified outsiders.

According to the text, firms that want to enhance their entrepreneurial position by being competitively aggressive should A. enter markets with drastically lower prices. B. foster creativity and experimentation. C. continuously seek out new products or services. D. research risk factors to minimize uncertainty.

A. enter markets with drastically lower prices.

Which of the following dimensions of entrepreneurial orientation is described as "a forward-looking perspective characteristic of a marketplace leader that has the foresight to seize opportunities"? A. proactiveness B. risk taking C. autonomy D. competitive aggressiveness

A. proactiveness

Whereas __________ are often associated with a low cost leader strategy, __________ are frequently an important aspect of a differentiation strategy. A. process innovations; product innovations B. product innovations; service innovations C. radical innovations; instrumental innovations D. marketing innovations; management innovations

A. process innovations; product innovations

Common features of a dispersed approach to corporate entrepreneurship include all of the following EXCEPT A. semi-autonomous new venture groups. B. use of product champions. C. a top-down approach to supporting entrepreneurial behavior. D. an entrepreneurial culture.

A. semi-autonomous new venture groups.

According to the text, __________, which support fledgling startups are often used to pursue specific entrepreneurial ventures developed by __________. A. collaboration partners; strategic partners B. business incubators; new venture groups C. product champions; corporate venture capitalists D. lower-level managers; upper-level managers

B. business incubators; new venture groups

In the 1990s, DuPont used its knowledge of plastics to develop biodegradable plastic products. This is an example of A. focusing on process rather than product innovation. B. defining its innovation efforts within the context of its "strategic envelope." C. radical innovation. D. public relations, since plastics are not biodegradable.

B. defining its innovation efforts within the context of its "strategic envelope."

Project __________ involves justifying whether an opportunity is attractive in the marketplace; project __________ involves evaluating the strategic and economic impact of a new venture. A. impetus; definition B. definition; impetus C. reward; development D. development; focus

B. definition; impetus

All of the following are dilemmas faced by corporations trying to manage the innovation process EXCEPT A. launching incremental rather than "preemptive" innovations. B. emphasizing marketing over management innovations. C. preferring experience over initiative. D. choosing internal rather than external staffing.

B. emphasizing marketing over management innovations.

A manager whose role is to question the viability of corporate venture projects is known as a(n) A. product champion. B. exit champion. C. rising star. D. mentor.

B. exit champion.

Which kind of risk taking requires that a company borrow heavily or commit a large portion of its resources in order to grow? A. business risk taking B. financial risk taking C. personal risk taking D. technological risk taking

B. financial risk taking

In corporations with a strong entrepreneurial culture, the willingness and ability to change A. is imposed from the top-down. B. is considered a core capability. C. often leads to instability. D. often worries stakeholders such as suppliers and creditors.

B. is considered a core capability.

Financial reasons for undertaking internal corporate venturing include A. strengthening competitive position. B. obtaining above average returns. C. adding to the corporation's resource base. D. all of these.

B. obtaining above average returns.

Radical innovations A. often result in quick profits. B. often represent technological breakthroughs. C. usually apply to products and processes simultaneously. D. usually cannot be patented.

B. often represent technological breakthroughs.

Sony Corporation's mission statement says, "We should always be the pioneers with our products, out front leading the market." This is an example of A. innovativeness. B. proactiveness. C. competitive aggressiveness. D. autonomy.

B. proactiveness.

Options exist when the owner of the option has A. the obligation, but not the right to engage in a transaction. B. the right, but not the obligation to engage in a transaction. C. the right and obligation to engage in a transaction. D. neither the right, nor the obligation to engage in a transaction.

B. the right, but not the obligation to engage in a transaction.

On average, approximately what percentage of corporate ventures reaches profitability within six years? A. 80 percent. B. 65 percent. C. 50 percent. D. 35 percent.

C. 50 percent.

__________ refers to efforts to create designs and applications of technology to develop new products, while __________ refers to efforts to improve the efficiency of organizational systems such as manufacturing and operations. A. Radical innovation; incremental innovation B. Breakthrough innovation; instrumental innovation C. Product innovation; process innovation D. Product innovation; service innovation

C. Product innovation; process innovation

Which of the following statements about skunkworks is FALSE? A. They are independent work units. B. They are used to encourage creative thinking and brainstorming. C. They refer to a specialized type of outside contractor that corporations use to develop entrepreneurial ideas. D. They help managers set aside their usual routines and practices.

C. They refer to a specialized type of outside contractor that corporations use to develop entrepreneurial ideas.

Real options analysis is most appropriate when A. the total investment required is small, but the environment is uncertain. B. the investment required can be justified by Discounted Cash Flow (DCF) techniques. C. a small investment up front can be followed by a series of subsequent investments. D. there is no prospect of obtaining additional knowledge before making subsequent investments.

C. a small investment up front can be followed by a series of subsequent investments.

Incremental innovations A. are usually highly disruptive. B. usually represent technological breakthroughs. C. are usually small improvements in products and processes. D. nearly always can be patented.

C. are usually small improvements in products and processes.

Two common forms of a focused approach to corporate entrepreneurship include A. internal collaboration and internal venturing. B. social capital and collaboration capital. C. business incubators and new venture groups. D. focus groups and business incubators.

C. business incubators and new venture groups.

According to the text, which of the following is NOT one of the methods companies can use to enhance their competitive position via innovativeness? A. fostering creativity and experimentation B. investing in new technology, R&D, and continuous improvement C. copying the business practices or techniques of successful competitors D. departing from existing technologies to develop products and practices that go beyond the current state of the art

C. copying the business practices or techniques of successful competitors

The benefits gained by firms that are the first to enter new markets, establish brand identity, and/or adopt new technologies are known as A. competitive aggressiveness. B. technological capabilities. C. first mover advantages. D. breakthrough innovations.

C. first mover advantages.

Creative intelligence involves the ability to see patterns in data, integrating data, and making insights. The four patterns of actions that help build creative intelligence are A. observing, experimenting, cataloging, and networking. B. questioning, observing, integrating, and networking. C. questioning, observing, experimenting, and networking. D. observing, experimenting, cataloging, and integrating.

C. questioning, observing, experimenting, and networking.

Product champions A. are typically senior executives. B. are usually inventors of some sort. C. scavenge for resources and encourage others to back promising new ideas. D. are strong supporters of the status quo.

C. scavenge for resources and encourage others to back promising new ideas.

__________ produce fundamental changes that can transform a company or even revolutionize an industry, while __________ enhance existing practices and often represent evolutionary applications of fundamental breakthroughs. A. Technological breakthroughs; product-market breakthroughs B. New technologies; new paradigms C. Incremental innovations; radical innovations D. Radical innovations; incremental innovations

D. Radical innovations; incremental innovations

One of the pitfalls of real options analysis is that managers may have an incentive and know-how to "game the system" and "back-solve" a formula to get a proposal approved. This can give rise to A. managerial conceit. B. the illusion of control. C. escalation of commitment. D. agency problems.

D. agency problems.

In a typical corporation, which of the following impact how the people within the corporation recognize entrepreneurial opportunities? A. structural features that guide and constrain action B. corporate culture C. organizational systems that foster learning and manage rewards D. all of these

D. all of these

Strategic reasons for undertaking a corporate venture include which of the following? A. entering into new markets B. expanding capabilities by acquiring new knowledge C. building the corporation's base of resources D. all of these

D. all of these

A culture of entrepreneurship is one in which A. the search for venture opportunities permeates every part of the organization. B. every value chain activity is viewed as a source of entrepreneurial value creation. C. employees at every level are attuned to opportunities to help create new businesses. D. all of these occur.

D. all of these occur.

After 15 teams created 128 different phones, Chris Galvin, former CEO of Motorola, recently eliminated the autonomous teams being used to develop new wireless phones. This was necessary because such teams A. often lack coordination. B. sometimes waste resources on projects with questionable feasibility. C. sometimes create inefficiencies through duplication of effort. D. all of these.

D. all of these.

The advantages of collaborating with strategic partners in order to innovate include A. obtaining skills and new knowledge from outside sources. B. making firms identify their own strengths and weaknesses. C. managers clarifying what an innovation project requires to be successful and who will accomplish it. D. all of these.

D. all of these.

The innovation dilemma known as seeds versus weeds refers to A. choosing to pursue radical rather than incremental innovations. B. choosing to pursue product rather than process innovations. C. promoting organizational stars onto innovation teams rather than involving all employees in innovation efforts. D. none of these.

D. none of these.

Which of the following is NOT one of the dimensions of entrepreneurial orientation? A. proactiveness B. risk taking C. autonomy D. opportunism

D. opportunism

Whereas __________ are willing to violate procedures and operate outside normal channels, __________ gather hard data and develop a strong case for why a project should be killed. A. senior managers; entrepreneurial leaders B. strategic managers; financial managers C. exit champions; product champions D. product champions; exit champions

D. product champions; exit champions

All of the following are types of risks that executives must address EXCEPT A. business risk taking. B. financial risk taking. C. personal risk taking. D. product-market risk taking.

D. product-market risk taking.

Corporate business incubators typically provide some or all of the following functions EXCEPT A. physical space. B. mentoring. C. funding. D. student interns.

D. student interns.

Innovations that extend sales in an existing market, usually by enabling new products or services to be sold at higher margins are known as A. radical innovations. B. disruptive innovations. C. technology innovations. D. sustaining innovations.

D. sustaining innovations.

A firm's innovation efforts rarely benefit from partnering with non-business entities such as universities and government agencies.

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As an industry matures, there are greater opportunities for change and so innovations tend to be more radical.

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Corporate business incubators often provide physical space and business services to internal ventures, but not funding.

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Corporate venturing that is focused permeates all parts of the organization and involves every member of the organization.

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Exit champions are often reluctant to gather hard data about a venture because it might kill the project.

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First movers in an industry often capture above-average profits, but usually find it difficult to maintain early market share gains.

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Product champions are the employees who identify new product ideas or services.

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Radical innovations are evolutionary applications of novel ideas within existing paradigms.

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Real options analysis helps managers make investment decisions involving large irreversible commitments of financial resources.

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Real options logic is useful when corporations consider stock options as a way to finance entrepreneurial ventures

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The term "innovation" refers primarily to an invention that uses the latest technologies.

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The term "skunkworks" is used to refer to a type of in-house facility that corporations use to develop entrepreneurial ideas.

f

According to the text, new venture ideas must pass through two critical stages to be implemented by corporations—project definition and project impetus.

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Business incubators are designed to support fledgling entrepreneurial ventures until they can operate as stand-alone businesses.

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Business risk taking refers to the risk associated with entering untested markets or committing to unproven technologies.

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Competitive aggressiveness is a response to threats whereas proactiveness is a response to opportunities.

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Corporate ventures that use real options logic in decision making tend to keep total investment low in order to minimize the downside risk of a project.

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Dispersed approaches to corporate entrepreneurship are often found in organizations with a strong spirit of entrepreneurship.

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Disruptive innovations are those that overturn markets by providing an altogether new approach to meeting customer needs.

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Firms using a focused approach to corporate entrepreneurship typically separate corporate venturing activities from ongoing operations of the firm.

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For innovation team members to work enthusiastically on innovation projects, it is important to separate the performance of individual team members from the performance of the innovation itself.

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One of the potential pitfalls of real options analysis is that managers may have the incentive and know-how to "game the system."

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Only about 50 percent of corporate venturing efforts reach profitability within six years of their launch.

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Product champions are critical during the period after a new venture project has been defined but before it has gained momentum and achieved project impetus.

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Radical innovation often involves open-ended experimentation which can be very time consuming.

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Research indicates that leaders of innovative firms spend 50 percent more time on discovery activities than the leaders of less innovative firms.

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Strategic renewal and the pursuit of new venture opportunities are the two primary aims of corporate entrepreneurship.

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The strategic goals of corporate entrepreneurship are often just as important as the financial goals.

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The term "strategic envelope" refers to the scope of a firm's innovation efforts.

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