MGMT 583 - Unit 2 Quiz Questions

T/F: A firm cannot collaborate with its competitor.

False

T/F: From a real options perspective, the value of a call stock option is zero as long as the price of the stock is more than the exercise price.

False

T/F: In real options, the assets that underlie the value of the option are financial resources.

False

Given the assumptions made in calculating its costs and cash inflows, if the net present value of a project is greater than zero, then the a) Project cannot be carried out as the cash outflow is too high. b) Present value of cash outflows is higher than the present value of cash inflow. c) Project will require five years to break even. d) Project generates wealth.

d) Project generates wealth.

T/F: A firm's emphasis on a scientific discipline that is central to its core competency can make the firm less attractive to individuals from other disciplines.

True

T/F: A service mark distinguishes the provider of a service rather than a product.

True

T/F: Collective research organizations can take the form of trade associations.

True

T/F: Through a strategic alliance, firms can establish a limited stake in a venture while maintaining the flexibility to either increase their commitment later or shift these resources to another opportunity.

True

Angelo has designed a license plate holder for automobiles that makes theft of the license plate practically impossible. He has filed an application for a patent through the Patent Cooperation Treaty (PCT) office, and it has been approved. How long is this application going to protect his right to file for patent protection in the member countries of the PCT? a) Three days b) Six months c) One-and-half years d) Two-and-half years

d) Two-and-half years

T/F: It is unusual for a company to lack certain complementary assets required to transform a body of technological knowledge into a commercial product.

False

T/F: Low exit barriers intensify rivalry by making firms reluctant to abandon the industry.

False

T/F: Options are valuable when there is uncertainty, and because technology trajectories are uncertain, an options approach may be useful.

True

T/F: Product life cycles shorten with high-speed technological changes.

True

T/F: Solo development has the advantage of allowing firms to save time or money if they believe development efforts are crucial in building and renewing capabilities.

True

T/F: The accuracy of estimates in quantitative methods is questionable because the quality of the comparison ultimately depends upon the quality of the original estimates.

True

T/F: The balanced scorecard is a measurement system that encourages the firm to consider its goals from multiple perspectives (financial, customer, business process, and innovation and learning), and establish measures that correspond to each of those perspectives.

True

T/F: While the value of a stock is independent of the call holder's behavior, the value of an R&D investment is not independent of the investor's behavior.

True

When technology is progressing rapidly, firms are more likely to a) Commit themselves to fixed assets that will rapidly become obsolete. b) Avoid forming alliances for projects that are risky and complex. c) Use linkages with other specialized firms to access resources they do not possess. d) Avoid becoming more narrowly specialized.

c) Use linkages with other specialized firms to access resources they do not possess.

Which of the following can be protected by a copyright? a) Familiar symbols b) Names of people c) An improvisational speech that has not been recorded d) A novel

d) A novel

Which of the following statements is true of a collective research organization? a) It does not help firms to leverage their competencies. b) It is a short-term commitment. c) It is an effort to rapidly access capabilities or technology. d) It allows a firm to share the cost and risk of basic research.

d) It allows a firm to share the cost and risk of basic research.

Which of the following is a feature of a joint venture that differentiates it from other forms of alliances? a) It usually does not result in the creation of a new business entity. b) It increases asset commitment to products that will become rapidly obsolete. c) It increases cycle time of a technology. d) It involves a significant equity stake by the partners.

d) It involves a significant equity stake by the partners.

Which of the following is a feature of the blue ocean strategy? a) In this strategy, the competition occurs in existing market spaces. b) Under this strategy, existing demand is exploited. c) The focus of the strategy is to make the value-cost trade-off. d) The strategy lays emphasis on making the competition irrelevant.

d) The strategy lays emphasis on making the competition irrelevant.

Tacit knowledge is best defined as the knowledge that a) Cannot be readily codified or transferred in written form. b) Cannot be patented. c) Has a very low degree of appropriability. d) Is not eligible for copyright protection.

a) Cannot be readily codified or transferred in written form.

Which of the following can be classified as an internal perspective and its defining measure under the balanced scorecard approach? a) Having a goal such as meeting shareholders' expectations and its defining measure such as return on capital b) Having a goal such as improving the inventory management system and its defining measure such as inventory costs c) Having a goal such as accelerating and improving new product development and its defining measure such as the average length of the new product development cycleIncorrect d) Having a goal such as improving customer satisfaction and its defining measure such as customer satisfaction surveys

b) Having a goal such as improving the inventory management system and its defining measure such as inventory costs

Under the U.S. patent law, which of the following is one of the mandatory requirements to be met by a new invention in order to be eligible for patent protection? a) It must be obvious. b) It must be novel. c) It must substitute one material for another. d) It must substitute an element for an equivalent element.

b) It must be novel.

In the context of a research and development (R&D) program, which of the following can be considered the exercise price? a) The cost of the R&D program b) The cost of future investment required to capitalize on the R&D program C) The returns to the R&D investment D) The returns to the R&D investment minus the cost of the R&D program

b) The cost of future investment required to capitalize on the R&D program

T/F: Formulating a technological innovation strategy first requires an accurate appraisal of where the firm currently is.

True

T/F: In general, the more firms competing that are of comparable size, the more competitive the industry will be.

True

T/F: According to Prahalad and Hamel's model, it is possible for a firm to develop core competencies to a set of abilities that enable it to quickly reconfigure its organizational structure and routines in response to new opportunities.

True

T/F: Data envelopment analysis (DEA) utilizes linear programming.

True

T/F: External development efforts typically lack the coordination of internal development.

True

Allure Fabrics Corporation supplies cotton, linen, and silk fabrics to various designer wear boutiques in and around Florida. The firm has recently launched a boutique in Florida under its own brand name to sell women's fashion apparel. Allure Fabrics is practicing: a) Forward vertical integration b) Backward vertical integration c) Horizontal integration d) Substitution

a) Forward vertical integration

Socially complex resources are a) Resources or activities that emerge through the interaction of multiple individuals. b) Resources that cannot be defined in terms of a numerical value. c) Resources that require public sanction in order to be utilized for profit-making purposes. d) Resources that are shared by different parties, thereby making them easily imitable.

a) Resources or activities that emerge through the interaction of multiple individuals.

Shirley, a U.S. citizen, has invented a solar-powered amplifier that can be used in small speakers, such as Bluetooth speakers, to increase the volume up to five times. She decides to apply for a patent for this device in the United States. If she receives approval for the patent, what would be the duration of patent protection? a) 35 years b) 20 years c) 2.5 years d) lifelong

b) 20 years

_____ are legally binding contractual arrangements to ensure that partners are fully aware of their rights and obligations in the collaboration and have legal remedies available if a partner should violate the agreement. a) Void contracts b) Alliance contracts c) Corporate charters d) Articles of association

b) Alliance contracts

Combining the capabilities and other resources of partner firms but not necessarily transferring those resources between the partners is referred to as ________ a) Capability transfer b) Capability complementation c) Resource modification d) Disintermediation

b) Capability complementation

Easymake Corporation developed a new Web design software to build Web pages for its clients. However, Easymake soon realized it could make more money by selling this software to those who wish to quickly build Web pages to sell their products. Which of the following would be the most appropriate strategy for Easymake? a) It should not sell the Web design software as it will give rise to competition on the Internet. b) It should become a licensor of the new Web design software. c) It should become a licensee of the new Web design software. d) It should make the Web design software available to users as open-source software.

b) It should become a licensor of the new Web design software.

Which of the following statements is true of angel investors? a) They are usually listed in public directories. b) They typically fund projects that are $50 million or more. c) They are often wealthy individuals who have been very successful in business. d) They avoid funding start-ups because of the high risks involved in these businesses.

c) They are often wealthy individuals who have been very successful in business.

NewDigger Incorporated makes backhoes for digging ditches and trenches. It has developed an environmental-friendly liquid that, when poured on the ground, reduces the time and labor required to dig trenches of various depths, depending on how much is applied. The firm has recently started using this product commercially. This would most probably be considered a(n) ________ a) Derivative b) Platform c) Breakthrough d) Additive

c) Breakthrough

Software whose code is made freely available to others for use, augmentation, and resale is referred to as a) Wholly proprietary systems. b) Patented software. c) Open-source software. d) Copyright-protected systems.

c) Open-source software.