Ch.13
31. 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 a. incremental innovation. b. invention. c. imitation. d. the use of social capital.
A
35. A successful ____ innovation will be less risky but less profitable than a successful ____ innovation. a. incremental, radical b. radical, incremental c. alliance-generated, acquisition-generated d. acquisition-generated, alliance-generated
A
62. The competition for resources among those representing different organizational functions within a firm often leads to a. erosion of social capital. b. heightened communication. c. organizational politics. d. empowerment of organizational members.
C
63. The firm's culture promotes unity of purpose for cross-functional work teams through a. a collectivist structure. b. an entrepreneurial mind-set. c. shared values. d. resource allocation.
C
8. ____ exist(s) when there is a need in the market that can be satisfied by new goods or services. a. Potentiality b. Market readiness c. Entrepreneurial opportunities d. Critical core competencies
C
42. Autonomous strategic behavior is a(an) ____ process in which product champions pursue new ideas. a. top-down b. horizontal c. integrated d. bottom-up
D
1. All of the following are correct about the Opening Case on Amazon's Kindle EXCEPT a. Much of Amazon's success was attributable to Kindle being the first e-book. b. Amazon's success in the first quarter of 2009 (a 24% increase in earnings) was attributed to the Kindle. c. The Kindle technology is likely easily imitable and Sony already has a competitor e-reader on the market. d. Amazon also earns a return from selling content for use on the Kindle in the form of e-books and other electronic content.
A
16. Innovation by imitation damages the existing product's competitive advantage by reducing its a. rarity. b. target market. c. intrinsic worth. d. usefulness to the consumer.
A
22. Knowledge must be transferred to others in the firm to enhance the entrepreneurial competence of the firm. This requires that a. the receiving party have adequate absorptive capacity to learn. b. the communication process be highly intensive. c. the knowledge be broken into the smallest comprehensible units. d. training consultants be involved in every step of transference.
A
38. ____ involves internally developed incremental and radical innovations that result from deliberate efforts. a. Internal corporate venturing b. Autonomous strategic behaviors c. Bottom-up strategic behaviors d. Product championing
A
4. 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 a. taking advantage of a need in the marketplace. b. creative destruction of existing services for pet boarding. c. institutionalized entrepreneurship. d. internal corporate venturing.
A
41. 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 a. is encouraged through a bottom-up or top-down process. b. is encouraged by a product champion or an entrepreneur external to the organization. c. relies on internal structure or existing strategy to encourage innovation. d. is in a large or small organization.
A
43. 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 a. product champions. b. joint ventures. c. strategic leadership. d. cross-functional teams.
A
49. To be successful, an autonomous process for developing new products relies on a. the diffusion of tacit knowledge. b. the acquisition of innovative firms. c. strategic alliances with other firms. d. internal corporate venturing.
A
5. 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. a. This is an example of an established firm neglecting the opportunity-seeking aspect of strategic entrepreneurship. b. This example shows the dysfunctional aspects of unrestricted entrepreneurialism. c. This is an example of the lack of human capital hampering internal innovation. d. Isidore Security Services is suffering from the "novelty effect" wherein new firms are more attractive to clients/customers merely because they are new and not because they add value.
A
57. When used effectively, cross-functional teams will often bring about a. faster product development processes. b. an increased need for additional information. c. conflicting information about the business environment. d. future cooperative alliances.
A
59. 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. a. independent frames of reference b. entrepreneurial mind-sets c. professional rivalries d. politicized points of view
A
66. Value creation through internal innovation originates with a. an entrepreneurial mind-set. b. cross-product development teams. c. shared values and entrepreneurial leadership. d. innovation.
A
67. 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 a. investment capital. b. management expertise. c. research and development competencies. d. social networks.
A
7. Entrepreneurship is the process by which individuals or groups identify and pursue ____ without being immediately constrained by the ____ they currently control. a. opportunities; resources b. opportunities; core competencies c. threats; resources d. threats; core competencies
A
73. ____ is(are) critical in order for a firm to gain access to complementary resources from partners in a cooperative alliance. a. Social capital b. Shared values c. An entrepreneurial mind-set d. Compatible organizational cultures
A
74. 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 a. institutional entrepreneurship. b. autonomous strategic behavior. c. induced strategic behavior. d. corporate entrepreneurship.
A
10. Since it replaces existing products and methods of production, entrepreneurship is a process of a. harnessing the human potential. b. creative destruction. c. creation of opportunity. d. exploitation of innovation.
B
11. 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 a. this innovation will resist competitors' attempts to imitate it. b. its investors will react positively to the introduction of the new product because of the potential for higher returns. c. its investors will react negatively because of the risk and cost entailed in introducing a new product. d. this will be recognized in the industry as a radical innovation.
B
2. 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? a. Innovation through international joint venture. b. Internal innovation. c. Innovation through cooperative strategies. d. Innovation through acquisitions.
B
24. Research shows that internationally diversified firms tend to be ____ than domestic-only firms. a. less profitable b. more innovative c. less technologically advanced d. more likely to have an individualistic culture
B
27. Research suggests that _________ is needed to encourage entrepreneurial behavior. a. individualism rather than collectivism b. a balance between individualism and cooperative behavior c. collectivism rather than individualism d. limited autonomy and incentives
B
28. 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 a. be of Hispanic descent. b. have international experience. c. possess an advanced degree in animal science. d. have a background in managing agribusiness firms.
B
30. Successfully creating innovations through internal means requires a. a highly individualistic culture. b. significant spending on R&D. c. acquisitions of innovative firms. d. venture capital.
B
34. 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. immediate wealth creation. b. a long wait for an uncertain payoff. c. a long wait for a high probability payoff. d. a large payoff in the short-term with rapidly decreasing wealth generation in the longer run.
B
37. 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. a. incremental; radical b. radical; incremental c. concentric; radical d. radical; concentric
B
44. A negative effect of acquiring other firms for the purpose of innovation is a. innovations cannot be transferred between organizations. b. the effect it can have on the firm's own ability to produce innovations. c. innovations may not actually be present in the firm after the purchase is completed. d. the acquired firm's employees usually leave.
B
45. 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 a. uses the induced strategic behavior form of internal corporate venturing. b. uses the autonomous strategic behavior form of internal corporate venturing. c. makes significant investment in research and development. d. focuses on an acquisition strategy for gaining innovative ideas.
B
51. Induced strategic behavior as a form of internal innovation is a(an) ____ process. a. bottom-up b. top-down c. free-flowing d. external
B
52. 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 a. managerial hubris. b. induced strategic behavior. c. incremental innovation. d. an innovation "born global."
B
53. Through the work of cross-functional teams, product development stages are grouped into ____ processes. a. short-term and long-term b. parallel or overlapping c. serially ordered d. complementary
B
54. Informal (often invisible) processes are best supported through ____ organizational structures. a. vertical b. horizontal c. functionally-oriented d. multidivisional
B
70. Why have large pharmaceutical companies been forming alliances with biotechnology companies? a. to evade legislative restrictions on drug research in the U.S. b. to develop new products and bring them to market c. because both firms had declining profitability and needed cash infusions from other firms d. in order to gain absorptive capacity
B
75. The fastest growing group of entrepreneurs in the U.S. are a. Baby Boomers leaving corporate jobs. b. women. c. recent immigrants. d. ethnic minorities.
B
12. Innovation creates a(an) a. opportunity for a new product or process. b. new product or process. c. commercial product. d. idea for potential exploitation.
C
13. The primary goal of innovation is to a. promote social well being. b. increase the number of jobs. c. create wealth. d. support national economies.
C
14. The three types of innovative activity include all of the following EXCEPT a. invention. b. imitation. c. implementation. d. innovation.
C
15. Products developed through ____ are often offered at lower prices without as many features than products developed through ____. a. innovation, imitation b. imitation, invention c. imitation, innovation d. innovation, invention
C
17. 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. a. 50; 50 b. 50; 80 c. 80; 50 d. 80; 80
C
18. ____ 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. a. Leaders b. Innovators c. Entrepreneurs d. Transformative leaders
C
19. 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.
C
21. If the firm's current employees are well-trained in their jobs, but also have other knowledge, skills, and abilities, these employees have a. social capital. b. entrepreneurial capabilities. c. high absorptive capacity to learn. d. intellectual slack.
C
25. The level of entrepreneurial activity in a nation is ____ the nation's level of economic development. a. negatively related to b. independent of c. positively related to d. weakly related to
C
26. ____ is one of the reasons for the differences in rates of entrepreneurship among different countries. a. Climate b. Competitiveness c. Culture d. Constitution
C
29. Which of the following is true? For firms to be entrepreneurial, they require a culture with a. an emphasis on individualism in Western nations and an emphasis on collectivism in Eastern nations. b. an exceptionally high level of collectivism. c. a balance of individualism and collectivism. d. an exceptionally high level of individualism.
C
32. Panera Bread develops and produces its own dough-based products, but it works with manufacturing partners to create new soups. Panera Bread is therefore a. increasing its costs and reducing its potential to succeed. b. engaged in internal corporate venturing. c. pursuing innovation through both internal and cooperative strategies. d. not an innovative company.
C
36. Innovations that involve significant technological breakthroughs and create new knowledge a. build incrementally on the firm's existing technologies and knowledge. b. are the most common type of innovation. c. involve substantial uncertainty and risk. d. typically have clear market opportunities.
C
39. Internal corporate venturing does NOT involve a. autonomous strategic behavior. b. induced strategic behavior. c. strategic alliances. d. product champions.
C
40. 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 a. entrepreneurial incubation. b. creative destruction. c. internal corporate venturing. d. cooperative innovation strategies.
C
46. 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.
C
50. Induced strategic behavior is a process that fosters product innovations that a. are likely to change a firm's strategic intent and mission. b. will lead to greater financial returns. c. are aligned closely with current strategy and structure. d. will come to market in a short period of time.
C
55. A major barrier to the use of cross-functional teams is a. excessive individualism of creative people. b. lack of communication skills of technical people. c. independent frames of reference of team members. d. lack of social capital by team members.
C
61. The dimensions on which functional departments can vary include all the following EXCEPT ____ orientation. a. time b. customer c. technological d. interpersonal
C
65. 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. a. intellectual b. institutional c. social d. technological
C
69. The main risk in a strategic alliance is that a. the alliance will not result in a successful innovation. b. critical employees will be hired away by the strategic partner. c. one partner will use the other partner's knowledge and use it to enhance its own competitive abilities. d. the partners will lose control over their internal processes.
C
71. 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.
C
20. 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 a. the ability to identify opportunities. b. a corporate sponsor. c. financial slack. d. passion for his invention.
D
23. 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.
D
3. Firms develop innovations in all the following ways EXCEPT a. Through autonomous or induced strategic behavior. b. By acquiring other companies. c. Through cooperative strategies. d. Via divestiture of low-performing units.
D
33. The number of patents held by an organization is a rough guide to the a. effective use of organizational politics. b. future success of an initial public offering. c. amount of venture capital a firm will be able to attract. d. level of innovation in a firm.
D
47. According to the chapter Strategic Focus, firms based in the U.S. have tended to overemphasize _____________. a. autonomous strategic behavior b. the use of product champions c. radical innovations d. incremental innovations
D
48. In the chapter Strategic Focus, which of the following best characterizes Exxon-Mobil's approach to innovation? a. the use of autonomous strategic behavior b. the use of product champions c. development of radical innovations d. development of incremental innovations
D
56. 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 a. engage in creative destruction. b. recommend that the product be sold at a loss in order to create a new market. c. turn over the product evaluation to a new product-development team which may have more passion for the product. d. recommend that the project be set aside.
D
58. Which of the following is one of the barriers to effectiveness when using cross-functional teams to integrate organizational functions? a. dissension within the top management team b. informal organizational processes within the firm c. the firm's strategic orientation d. organizational politics
D
6. When an existing firm creates a new venture or develops an innovation, it is said to be engaging in a. corporate emergence. b. transformational leadership. c. exceptional R&D. d. corporate entrepreneurship.
D
60. 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 a. interpersonal orientation. b. time orientation. c. goal orientation. d. formality of structure.
D
64. Independent 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 ___________. a. autonomous strategic behavior; induced strategic behavior b. incremental innovations; radical innovations c. bottom-up integration; top-down integration d. shared values; effective leadership
D
68. Regarding partnering in cooperative alliances, entrepreneurial new companies may seek ____ while more established companies may need ____. a. distribution channels, tacit knowledge b. deep technological expertise, distribution channels c. social capital, technical capital d. investment capital, new technological knowledge
D
72. New entrepreneurial firms are better than larger established firms at a. implementing innovations. b. gaining competitive advantage. c. making alliances. d. identification of entrepreneurial opportunities.
D
76. Which of the following can engage in entrepreneurial activities? a. Corporations b. Municipalities c. Nations d. Corporations, municipalities, and nations
D
9. Entrepreneurial opportunities a. present the potential for a firm to leverage existing products or services into new markets. b. present risk to the firm and should be avoided. c. are conditions contrary to a firm's established strategy and segments served. d. are conditions in which new goods or services can satisfy a need in the market.
D
