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True/False Questions 1. The term “innovations” refers primarily to inventions that use the latest technologies. Answer: False 2. Radical innovations are evolutionary applications of novel ideas within existing paradigms. Answer: False 3. As an industry matures, there are greater opportunities for change and so innovations tend to be more radical. Answer: False 4. Since the Balanced Scorecard makes no mention of innovation most firms do not need to innovate in order to improve performance and/or achieve competitive advantages. Answer: False 5. Process innovations are often associated with a low cost leadership strategy. Answer: True 6. The term “strategic envelope” refers to the scope of a firm's innovation efforts. Answer: True 7. In general, radical innovations occur quickly and incremental innovations take a long time to develop. Answer: False 8. Radical innovation often involves open-ended experimentation which can be very time consuming. Answer: True
Dess/Lumpkin, Strategic Management: Text & Cases, 2/e
A firm's innovation efforts rarely benefit from partnering with non-business entities such as universities and government agencies. Business incubators are designed to support fledgling entrepreneurial ventures until they can operate as stand-alone businesses. Answer: True 11. Strategic renewal and the pursuit of new venture opportunities are the two primary aims of corporate entrepreneurship. Answer: False 432 Dess/Lumpkin. Answer: False 10.” Answer: True 12.Chapter 12 Managing Innovation and Fostering Corporate Entrepreneurship 9. Corporate business incubators often provide physical space and business services to internal ventures. Answer: False 16. Answer: False 13. but not funding. Corporate venturing that is focused permeates all parts of the organization and involves every member of the organization. Corporate venture funding refers to special funds that are set aside to invest in the corporation's internal ventures. 2/e . Answer: True 14. Firms using a focused approach to corporate entrepreneurship typically separate corporate venturing activities from on-going operations of the firm. Answer: True 15. Corporate entrepreneurship is sometimes called “intrapreneurship. Strategic Management: Text & Cases.
Answer: False 24. Exit champions are often reluctant to gather hard data about a venture because it might kill the project. Answer: True 23. 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.Chapter 12 Managing Innovation and Fostering Corporate Entrepreneurship 17. Answer: True 18. According to the text. Only about 50 percent of corporate venturing efforts reach profitability within six years of their launch. 2/e 433 . Answer: True 21. Answer: True 22. Answer: True 20. Answer: False Dess/Lumpkin. Product champions are the employees who identify new product ideas or services. Answer: False 19. Strategic Management: Text & Cases. Real options logic is useful when corporations consider stock options as a way to finance entrepreneurial ventures.project definition and project impetus. Dispersed approaches to corporate entrepreneurship are often found in organizations with a strong spirit of entrepreneurship. new venture ideas must pass through two critical stages to be implemented by corporations -. The strategic goals of corporate entrepreneurship are often just as important as the financial goals.
Chapter 12 Managing Innovation and Fostering Corporate Entrepreneurship 25. Polaroid fell victim to the “innovator's dilemma. Answer: False 27. Business risk taking refers to the risk associated with entering untested markets or committing to unproven technologies. B) Whether to innovate radically or incrementally. but usually find it difficult to maintain early market share gains. Technological innovativeness refers to novelty in management systems. First movers in an industry often capture above-average profits. In the opening case. Competitive aggressiveness is a response to threats whereas proactiveness is a response to opportunities. control techniques. C) Becoming preoccupied with meeting current market needs and ignoring future innovation needs. Answer: False 29. Answer: True 30.” What does this refer to? A) Excessive borrowing in order to develop more radical innovations. Answer: True Multiple Choice Questions 31. The term “skunkworks” is used to refer to a type of in-house facility that corporations use to develop entrepreneurial ideas. and organizational structure. Answer: C 434 Dess/Lumpkin. D) Conflict over how to integrate product and process innovations. Answer: True 26. 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. 2/e . Answer: False 28. Strategic Management: Text & Cases.
A) Technological breakthroughs. 2/e 435 . new paradigms C) Incremental innovations. D) nearly always can be patented. B) usually represent technological breakthroughs. product-market breakthroughs B) New technologies. Polaroid was forced to declare bankruptcy after 30 years of strong financial performance.Chapter 12 Managing Innovation and Fostering Corporate Entrepreneurship 32. C) usually apply to products and processes simultaneously. incremental innovations Answer: D Dess/Lumpkin. Incremental innovations A) are usually highly disruptive. D) All of the above. radical innovations D) Radical innovations. In the opening case. Strategic Management: Text & Cases. ________________ produce fundamental changes that can transform a company or even revolutionize an industry. C) It was unwilling to borrow funds to invest in innovation. B) Its innovations were considered too radical. Answer: C 34. Answer: B 35. ___________________ enhance existing practices and often represent evolutionary applications of fundamental breakthroughs. Answer: A 33. B) often represent technological breakthroughs. Radical innovations A) often result in quick profits. C) are usually small improvements in products or processes. D) usually cannot be patented. What was the fundamental problem that led to Polaroid's downfall? A) It overestimated the value of its core business.
Chapter 12 Managing Innovation and Fostering Corporate Entrepreneurship 36. B) emphasizing marketing over management innovations. incremental innovation B) Breakthrough innovation. Answer: B 39. All of the following are dilemmas faced by corporations trying to manage the innovation process except A) launching incremental rather than “pre-emptive” innovations. Answer: A 436 Dess/Lumpkin. instrumental innovation C) Product innovation. ____________________________ are frequently an important aspect of a differentiation strategy. Strategic Management: Text & Cases. 2/e . A) process innovations. C) preferring experience over initiative. The innovation dilemma known as building capabilities versus collaborating refers to A) developing innovation skills internally versus partnering with qualified outsiders. service innovation Answer: C 37. _______________________________ refers to efforts to create designs and applications of technology to develop new products. A) Radical innovation. _______________________ refers to efforts to improve the efficiency of organizational systems such as manufacturing and operations. B) building innovative products in-house versus outsourcing. Whereas ________________________ are often associated with a low cost leader strategy. instrumental innovations D) marketing innovations. product innovations B) product innovations. management innovations Answer: A 38. C) building credibility by launching products ahead of potential collaboration partners. D) choosing internal rather than external staffing. D) all of the above. service innovations C) radical innovations. process innovation D) Product innovation.
B) defining its innovation efforts within the context of its “strategic envelope. 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) all of the above. 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 the above Answer: D Dess/Lumpkin. Answer: D 41. Strategic Management: Text & Cases. Answer: B 42. In a typical corporation.” C) radical innovation. This is an example of A) focusing on process rather than product innovation. DuPont used its knowledge of plastics to develop biodegradable plastic products. 2/e 437 . In the 1990s. The innovation dilemma known as seeds versus weeds refers to A) choosing to pursue radical rather than incremental innovations. D) public relations since plastics are not biodegradable. C) making managers clarify what an innovation project requires to be successful and who will accomplish it. The advantages of collaborating with strategic partners in order to innovate include A) obtaining skills and new knowledge from outside sources. Answer: D 43. D) none of the above. B) making firms identify their own strengths and weaknesses.Chapter 12 Managing Innovation and Fostering Corporate Entrepreneurship 40.
D) student interns. A) collaboration partners. C) a top-down approach to supporting entrepreneurial behavior. Intel has invested $8 billion in several e-business start-ups. Answer: C 45.Chapter 12 Managing Innovation and Fostering Corporate Entrepreneurship 44. 2/e . C) funding. Answer: A 438 Dess/Lumpkin. new venture groups C) product champions. D) focus groups and business incubators. C) business incubators and new venture groups. B) social capital and collaboration capital. Answer: D 48. This is an example of A) strategic renewal. strategic partners B) business incubators. B) mentoring. upper-level managers Answer: B 46. C) mergers and acquisitions. According to the text. B) internal development. ________________________ which support fledgling startups are often used to pursue specific entrepreneurial ventures developed by _________________________. Corporate business incubators typically provide all of the following functions except A) physical space. Two common forms of a focused approach to corporate entrepreneurship include A) internal collaboration and internal venturing. D) an entrepreneurial culture. B) a strong spirit of entrepreneurship. D) corporate venture funding. Answer: D 47. Strategic Management: Text & Cases. corporate venture capitalists D) lower-level managers. Common features of a dispersed approach to corporate entrepreneurship include all of the following except A) semi-autonomous new venture groups.
B) is considered a core capability.Chapter 12 Managing Innovation and Fostering Corporate Entrepreneurship 49. Answer: C 51. impetus C) reward. Product champions A) are typically senior executives. Project ____________ involves justifying whether an opportunity is attractive in the marketplace . A) impetus. C) often leads to instability. 2/e 439 . Answer: B 50. Financial reasons for undertaking internal corporate venturing include A) strengthening competitive position. definition B) definition. C) scavenge for resources and encourage others to back promising new ideas. focus Answer: B 52. the willingness and ability to change A) is imposed from the top down. B) obtaining above average returns C) adding to the corporation's resource base D) all of the above Answer: B Dess/Lumpkin. approximately what percentage of corporate ventures reach profitability after six years? A) 80 percent B) 65 percent C) 50 percent D) 35 percent Answer: C 53. D) often worries stakeholders such as suppliers and creditors. project ______________ involves evaluating the strategic and economic impact of a new venture. B) are usually inventors of some sort. development D) development. In corporations with a strong entrepreneurial culture. On average. Strategic Management: Text & Cases. D) are strong supporters of the status quo.
To evaluate whether to get into automobile sales. C) rising star. Strategic reasons for undertaking a corporate venture include which of the following: A) entering into new markets. this action reflects a form of A) bottom-up corporate venturing. C) building the corporation's base of resources. Answer: B 57. B) exit champion. All of the following are questions that should be answered when evaluating the performance of corporate venturing efforts except 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? Answer: A 56. According to the text. D) mentor. D) environmental scanning. B) expanding capabilities by acquiring new knowledge. A manager whose role is to question the viability of corporate venture projects is know as a(n) A) product champion. Strategic Management: Text & Cases. B) real options logic. Answer: B 440 Dess/Lumpkin. C) financial planning. 2/e . D) all of the above Answer: D 55. Wal-Mart recently invested in just four auto sales operations on a trial basis to assess consumer reaction.Chapter 12 Managing Innovation and Fostering Corporate Entrepreneurship 54.
financial managers C) exit champions. C) they refer to a specialized type of outside contractor that corporations use to develop entrepreneurial ideas. This was necessary because such teams A) often lack coordination. D) all of the above Answer: D Dess/Lumpkin. product champions D) product champions. A) senior managers. Strategic Management: Text & Cases. B) they are used to encourage creative thinking and brainstorming. C) sometimes create inefficiencies through duplication of effort. exit champions Answer: D 59. recently eliminated the autonomous teams being used to develop new wireless phones. Answer: C 61. ___________________________ gather hard data and develop a strong case for why a project should be killed. 2/e 441 . D) they help managers set aside their usual routines and practices. Which of the following is not one of the dimensions of entrepreneurial orientation? A) proactiveness B) risk taking C) autonomy D) opportunism Answer: D 60. Which of the following statements about skunkworks is false? A) they are independent work units.Chapter 12 Managing Innovation and Fostering Corporate Entrepreneurship 58. Chris Galvin. Whereas ________________________ are willing to violate procedures and operate outside normal channels. entrepreneurial leaders B) strategic managers. B) sometimes waste resources on projects with questionable feasibility. After 15 teams created 128 different phones. CEO of Motorola.
and processes.Chapter 12 Managing Innovation and Fostering Corporate Entrepreneurship 62. one of the most highly innovative companies. 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 Answer: C 442 Dess/Lumpkin. D) invite customers to brainstorm about new product concepts. 2/e . Strategic Management: Text & Cases. D) it is aimed at developing new products. Which of the following is not one of them? A) ensure that all risk-taking activities have a financial pay-off within one year. services. C) it involves creativity and experimentation. Answer: A 65. B) encourage experimentation and risk-taking by tolerating failure. B) it refers to a firms efforts to find new opportunities and novel solutions. Answer: A 64. R&D. 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 Answer: A 63. 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. C) reward the champions of successful new product ideas. The 3M Corporation. All of the following statements about innovativeness are true except A) it refers to making decisions and taking risks without certain knowledge of probable outcomes. uses several approaches and “rules-of-thumb” to encourage innovation.
establish brand identity.” This is an example of A) innovativeness. B) technological capabilities. Strategic Management: Text & Cases. D) autonomy. Answer: A 69. B) proactiveness.out front leading the market. B) financial risk taking. and/or adopt new technologies are known as A) competitive aggressiveness. firms that want to enhance their entrepreneurial position by being competitively aggressive should A) enter markets with drastically lower prices. The benefits gained by firms that are the first to enter new markets. All of the following are types of risks that executives must address except A) business risk taking. B) foster creativity and experimentation. Answer: B 68. D) product-market risk taking Answer: D Dess/Lumpkin. Sony Corporation's mission statement says. 2/e 443 . C) competitive aggressiveness. D) research risk factors to minimize uncertainty. According to the text. C) personal risk taking. C) continuously seek out new products or services.Chapter 12 Managing Innovation and Fostering Corporate Entrepreneurship 66. Answer: C 67. C) first-mover advantages. D) breakthrough innovations. “We should always be the pioneers with our products -.
Describe the advantages and disadvantages of each type of innovation and provide examples. Provide examples of each approach. 2/e . What are the five types of support that corporate business incubators provide to entrepreneurial ventures? Page: 406 .399 72.Chapter 12 Managing Innovation and Fostering Corporate Entrepreneurship 70. What is meant by the terms “radical” innovation and “incremental” innovation.400 73.410 75. What are the five dilemmas that most firms face when trying to determine the best way to manage the innovation process? Page: 400 . Strategic Management: Text & Cases.410 444 Dess/Lumpkin.407 76. What is a product champion and why are they important to corporate entrepreneurship? Page: 408 . 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 Answer: B Short Answer Questions 71. Compare and contrast the concepts of focused versus dispersed approaches to corporate entrepreneurship. Page: 405 . Page: 398 . What are the differences between product and process innovation? What are the strategic implications of each approach to innovation? Page: 399 .401 74.
Is corporate venturing worth it? Discuss the advantages and disadvantages of internal venturing in relation to the extent of its financial success.412 79. 2/e 445 . What is an exit champion and how do they further the internal corporate venturing process? Page: 412 80. Page: 410 . Provide examples of each type of objective and discuss their benefits and/or costs. By some accounts. What are the benefits and risks associated with using each of these? Page: 414 .423 Dess/Lumpkin. Compare and contrast the financial and strategic objectives of corporate entrepreneurship.412 78. only about 50 percent of corporate ventures reach profitability after six years.Chapter 12 Managing Innovation and Fostering Corporate Entrepreneurship 77. Strategic Management: Text & Cases. Discuss how real options logic can be applied in the context of corporate entrepreneurship. Are there any disadvantages to using this approach to make decision about launching corporate ventures? Page: 413 81. Page: 410 . Discuss the five dimensions of entrepreneurial orientation.
Chapter 12 Managing Innovation and Fostering Corporate Entrepreneurship 446 Dess/Lumpkin. Strategic Management: Text & Cases. 2/e .
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