UNIVERSITY EXAMINATIONS UNIVERSITEITSEKSAMENS UNISA Saree MNE3702 October/November 2012 CORPORATE ENTREPRENEURSHIP Duraton 2 Hours 70 Marks EXAMINERS : FIRST MISS T COHEN SECOND MRS MJ PHILLIPS EXTERNAL MRPJ RAS Use of a non-programmable pocket calculator is permissible Closed book examination ‘This examination question paper remains the property of the University of South Africa and may not be removed from the examination venue This paper consists of 6 pages (including this cover page) This paper may be answered in English or Afnkaans This paper compnses of two sections, Section A and Section B. Section A is a compulsory section which you have to answer. Section B consists of three questions. You may choose any two of the three questions to answer (you must NOT answer all three questions in Section B). Ensure that the following information appears on the cover of your answer book: + Your student number + The module code (MNE3702) + The numbers of the questions you have answered ‘Answer the questions in the answer book provided to you Please indicate the SECTION and the NUMBER of the question clearly when answering. [TURN OVER]MNE3702 Oct Nov 2012 SECTION A ‘SECTION AIS COMPULSORY. ANSWER ALL THE QUESTIONS IN THIS SECTION. Read the case study and answer the questions that follow. What Does the Future Hold for the Blackberry? Innovation knows no boundaries or borders This 1s the opening statement on the home Web page of the Canadian company Research in Motion (RIM). This is the company responsible for developing the popular mobile device known as the BlackBerry. Onginally a mobile device used to access e-mail, the company has helped to turn wireless e-mail into a must-have for people on the go achieving cultural status by being incorporated into its users’ lexicon “blackberrying” now means to e-mail from a mobile phone. The presence of these BlackBerry devices was everywhere in the corporate environment and the compulsive use of its ability to quickly send and receive e-mails eared it the nickname “Crackberry” in a reference to users feeling they ‘cannot live without it RIM announced in February 2009 that they were expanding their global ‘operations by opening an office and training facility in Australia increasing their total workforce to 12,000 worldwide The BlackBerry product line celebrated its 10” annwersary, while RIM celebrated 25 years as a company. In 10 years RIM has sold over 50 millon wireless handset units worldwide, making it the second best-selling smartphone in the world In 2009, Fortune Magazine named RIM as the fastest growing company in the world with a growth of 84% in profits over three years despite the recession. In spite of all this success, the ever changing technological market leaves even the very best companies behind the innovation curve quickly The company that popularised the ‘smartphone (BlackBerry) as the must have tool for the twenty first-century worker 1s now quickly losing ground to Apple’s iPhone, and a slew of devices based on Google's Android mobile ‘operating system Unless it can find new ways to innovate their own brand, RIM could end up ona list of “former dominant tech companies” such as Palm or Motorola that are struggling today to survive. Even more disturbing 1s a recent study by a marketing research company which found that nearly 40% of BlackBerry users would switch to Apple's iPhone as their next ‘smartphone purchase, and 83% of them would switch to an Android phone if given the option Not exactly a loyal customer base. ‘To make matters worse, it seems that Apple's iPhone will be offered by the nation’s No. 1 wireless camer Verizon And it has been reported the Apple now controls a majorty of mobile developer's mindshare with the latest 3,000 mobile app projects registennng 67% for iPhones and 22% for iPads. As Apple has shown an application ecosystem for devices is equally important, especially one that can bndge work and play. That type of ecosystem barely exists for BlackBerry today so their innovations must take that into account. Somehow, RIM in its focus on enterprise customers missed that it was the consumer driving the smartphone market. ‘With Apple and other companies providing innovative android operated devices (extending beyond just phones, into Pads and tablets for your car and TV, etc), can RIM innovate fast enough to keep a hold on the market share they had bul up so fast in ten years Even though their website opens with, “/nnovation knows no boundanes or borders,” RIM has found that sustaining innovative leadership is a continuous challenge in today's world SOURCE Kuratko, DF, Mors, MH. & Covin, J.G. 2011. Corporate innovation and entrepreneurship. Canada. South-Western Cengage [TURN OVER]MNE3702 Oct Nov 2012 QUESTION 1 11 Itts clear that innovation and entrepreneurship plays an important role at Research in 1.2 13 14 Motion (RIM), therefore developing a corporate strategy that 1s entrepreneunal 1s essential. What s an entrepreneurial strategy? @) Entrepreneurial imperatives are those aspects of strategic leadership that are mherently entrepreneunal in that they relate to the recognition and/or explottation of opportunity. Discuss five entrepreneurial imperatives of strategic leadership and indicate how the executives at RIM are tasked with this, (10) Whi every organisation 1s unique, patterns have been identified in the ways companies ‘evolve and observers have described these stages in different ways Explain Griener’s organisational life cycle stages and indicate in your answers FM's evolvement. (10) Research in Motion has been confronted with dynamic, threatening, and complex changes in the external environment, and has been forced to adapt There are four flexible rules which enhance a venture's chance of remaining adaptive and innovative, both through and beyond the growth stage. List and briefly explain each of these rules and highlight how these rules relate to RIM . [30] [TURN OVER]MNE3702 (Oct Nov 2012 QUESTION 2 24 22 23 Entrepreneurship 1s a phenomenon that can occur in a variety of different organisational contexts. Entrepreneurship (also known as start-up entrepreneurship) is often confused with corporate entrepreneurship. 2.2.1 Define the concept corporate entrepreneurship. (6) 2.22 While there are many similanties, there are also major differences between entrepreneurship and corporate entrepreneurship. List three of the major differences between these two types of entrepreneurship. @) ‘As a champion of innovation at a major information technology (IT) firm, you are trying to convince your directors to adopt an open innovation model as a vehicle for corporate entrepreneurship Discuss four reasons why your company should consider pursuing an open mnovation model. (8) Joseph manages a team in the Research and Development Department at DigiMagic Solutions. At DigiMagic, entrepreneunal leadership 1s encouraged to take place at all levels within the company. In order for middle management to contnbute to the entrepreneunal process, what roles would Joseph play? Descnbe the four roles of middle management. @ [20] [TURN OVER]MNE3702 Oct Nov 2012 QUESTION 3 3.1 In business, the question 1s often asked, “Where can one find entrepreneurship within a 32 33 company” There are seven ways in which entrepreneurship is fostered in established firms Descnbe any four of these ways 4 Companies are social environments, with tribal habits, well-defined cultural roles for individuals, and vanous strategies for determining inclusion, reinforcing identity, and adapting to change. Moreover, their cultures will evolve and will generally be related to one of four generic culture types (also referred to as prototypes) which have a direct and measurable impact on strategy and performance. Discuss the four prototypes of genenc culture. / @ While entrepreneurship does not happen without individuals, it also does not happen without teams. Individualism versus collectivism is a value that exists in most ‘companies, even when management 1s unaware of it. 3.31 Define the concepts of Individualism and Collectivism. (2) 3.32 Give the merits of Individualism versus Collectism by indicating three positive aspects and three negative aspects of each. You may use a table to structure your answer (6) [20} (TURN OVER]‘MNE3702 Oct Nov 2012 QUESTION 4 44 42 43 Organisational slack 1s a key feature of organisational control Explain what the concept slack implies and why managing slack involves a fine balancing act. (8) tts important for an entrepreneur to develop an understanding of methods that can be used to gain influence and shape behaviour How can an entrepreneur use the following methods to overcome obstacles and constraints? Building social capital (2) Gaining legitimacy (2) Political tacties @) Resource acquisition (4) (10) Step II (two) of the Entrepreneunal Health Audit 1s Diagnosing the Climate for Corporate Entrepreneurship. Dunng this step, a Corporate Entrepreneurship Climate instrument (CEC!) is used. Descnbe the five key antecedents which the CECI 1s designed around. 6) [20] TOTAL [70] ° UNISA 2012