Professional Documents
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CH06JJ
CH06JJ
4. Innovation must involve the attempted commercialisation of a new invention, or new idea.
@Pages and References: Pages 198-199
*a. T
b. F
6. Those firms who spend more on research and development are nearly always more successful at
making profit from innovation.
@Pages and References: Pages 199-204
a. T
*b. F
7. An innovation which comes to dominate the market does not always lead to superior profits for
the innovator.
@Pages and References: Pages 199-204
*a. T
b. F
8. The "regime of appropriability" refers to the extent to which the innovator can appropriate value
i.e. make a profit.
@Pages and References: Pages 199-204
*a. T
b. F
9. The main factors in determining whether the innovator can make a good profit from an innovation
are luck, and good timing.
@Pages and References: Pages 199-204
a. T
*b. F
10. Property rights in innovation mainly include; patents, trademarks and copyright.
12. Having a patent is not much use if a rival is expert enough to quickly come up with an alternative
way to achieve the same thing.
@Pages and References: Pages 199-204
*a. T
b. F
13. Regarding innovations, complementary resources are all the other things apart from the
invention or idea necessary to achieve commercial success.
@Pages and References: Pages 199-204
*a. T
b. F
14. Which exploitation strategy is best for an innovation depends entirely on whether the innovator
prefers to licence out the underlying patent or copyright.
@Pages and References: Pages 204-206
a. T
*b. F
15. A major constraint for start-up innovators is that they are unlikely to possess sufficient
complementary resources for exploiting their innovation.
@Pages and References: Pages 204-206
*a. T
b. F
16. Advantages are likely to accrue to accrue to a firm that is a first mover in a market where
technical standards are important
@pages and References: Pages 206-208
*a. T
b. F
17. The risk of failure of an innovation is a combination of technological risk and market risk.
@Pages and References: Pages 209-210
*a. T
b. F
18. Close co-operation with a major potential customer during innovation development is
inadvisable, in case they copy the innovation themselves.
@Pages and References: Pages 209-210
a. T
*b. F
20. It's wise to manage the creative departments in a firm separately from the operational
departments.
@Pages and References: Pages 215-219
*a. T
b. F
28. Innovation no guarantee of success and fortune for the innovator because:
@Pages and References: Pages 199-204
a. Success depends on the value created
b. Implementation of innovation may be a failure due to internal organizational factors
*c. Success depends on sufficient value being created and a sufficient portion of that value being
appropriated by the innovator
d. Nothing is guaranteed in the corporate world and in life in general
31. To determine the amount of the value created by an innovation that can be appropriated by the
innovator, four factors are critical:
@Pages and References: Pages 199-204
a. Complementary resources, the tacitness and complexity of the technology, corporate culture, and
human resource management
*b. Property rights, the tacitness and complexity of the technology, lead-time, and complementary
resources
c. The tacitness and complexity of technology, lead-time, excellence of top management teams, and
luck
d. Lead-time, complementary resources, relative bargaining power, and structure of the industry
32. The main examples of property rights with regard to innovations are:
@Pages and References: Pages 199-204
*a. Copyrights, patents, and trademarks
b. Patents, goodwill, and trademarks
c. Know-how, skills, and trade secrets
d. Trademarks, copyrights, and tangible assets
36. If complementary resources are provided by third-parties, then the level of profit accruing to the
innovator:
@Pages and References: Pages 204-209
a. Depends on how reliable the outsource companies are
b. Depends on how commercially aggressive the innovator is
*c. Depends on how non-specialised the outsourced functions can be
d. Depends on a good contracts negotiator, preferably a lawyer
42. The determinants of the choice between a leader versus a follower strategy are:
@Pages and References: Pages 206-209
a. The extent of protection of the innovation, the nature of the knowledge involved, and the
potential to establish a standard
b. The development cost of the innovation, the importance of complementary resources, and the
shape of the economy
*c. The extent of the protection of the innovation, the potential to establish a standard, and the
importance of complementary resources
d. The potential to establish a standard, the relative powers of the other players in the industry, and
the development cost of the innovation
43. When complementary resources are critical to the market success of an innovation:
@Pages and References: Pages 206-209
a. The technical risks are relatively unimportant
b. The costs and risks are amplified
c. A larger firm with established complementary resources is better placed than a start-up
*d. Answers b and c
44. Small start-up firms without complementary resources often forge ahead as first-movers anyway
because:
@Pages and References: Pages 206-209
a. They are naïve and foolhardy
*b. They often have no choice
c. By definition they are risk-takers
d. They are backed by huge amounts of venture capital funding
53. A classic example of positive network externalities, illustrating that the value of a product is a
direct function of the number of users, is:
55. Where they exist, network externalities are critical phenomena because:
@Pages and References: Pages 210-215
*a. They create positive feedback which often leads to a winner-takes-all situation
b. They create a winner-takes-all situation which is unfair from a competition standpoint
c. Technological innovations tend to be resilient
d. Governments are more and more concerned with supporting networks
57. The difference between “evolutionary” and “revolutionary” standards strategies is:
@Pages and References: Pages 210-215
a. Revolutionary strategies are more dramatic, and so more effective
*b. Evolutionary strategies maintain compatibility with what went before
c. Revolutionary strategies are more likely to gain investor attention
d. Revolutionary strategies show greater determination and commitment
60. Creative activities require different organizational structures and management systems than
operational activities so balancing creativity with commercial success is best achieved by :