Question 1

Which of the following is not part of a culture of entrepreneurship?

Accepted Answer

A culture of entrepreneurship is one in which the search for venture opportunities permeates every part of the organization. The key to creating value successfully is viewing every value-chain activity as a source of competitive advantage. In companies with an entrepreneurial culture, everyone in the organization is attuned to opportunities to help create new businesses.

Question 2

Which of the following do corporate business incubators typically not provide?

Accepted Answer

Incubators typically provide some or all of the following five functions: funding, physical space, business services, mentoring, and networking.

Question 3

A manager whose role is to question the viability of corporate venture projects is known as a(n)

Accepted Answer

In contrast to product champions and other entrepreneurial enthusiasts within the corporation, exit champions are willing to question the viability of a venture project. By demanding hard evidence and challenging the belief system that is carrying an idea forward, exit champions hold the line on ventures that appear shaky.

Question 4

Whereas ______________ are willing to violate procedures and operate outside normal channels, ______________ gather hard data and develop a strong case for why a project should be killed.

Accepted Answer

Product champions are often thought to be willing to violate procedures and operate outside normal channels. Exit champions reduce ambiguity by gathering hard data and developing a strong case for why a project should be killed.

Question 5

In corporations with a strong entrepreneurial culture, the willingness and ability to change

Accepted Answer

With the dispersed approach to entrepreneurship, the ability to change is considered to be a core capability. This leads to a second advantage. Because of the entrepreneurial reputation of the firm, stakeholders such as vendors, customers, or alliance partners can bring new ideas or venture opportunities to anyone in the organization and expect them to be well-received. Such opportunities make it possible for the firm to stay ahead of the competition.

Question 6

Common features of a dispersed approach to corporate entrepreneurship include all of the following except

Accepted Answer

A new venture group is characteristic of a focused approach to entrepreneurship, while the dispersed approach often utilizes an entrepreneurial culture and the use of product champions. The latter may also use a top-down approach to provide support and incentives for entrepreneurship.

Question 7

On average, approximately what percentage of corporate ventures reaches profitability within six years?

Accepted Answer

Not all corporate venturing efforts are financially rewarding. In terms of financial performance, slightly more than 50 percent of corporate venturing efforts reach profitability (measured by ROI) within six years of their launch.

Question 8

Financial reasons for undertaking internal corporate venturing include

Accepted Answer

Corporations expect a higher return from corporate venturing projects than from normal operations. But there are other important strategic considerations as well that are not financial. These include undertaking a corporate venture to strengthen the competitive position, enter into new markets, expand capabilities by learning and acquiring new knowledge, and build the base of corporation resources and experience.

Question 9

Whereas _________ often emerge as heroes, _________ run the risk of losing status by opposing popular projects.

Accepted Answer

Whereas product champions often emerge as heroes, exit champions run the risk of losing status by opposing popular projects.

Question 10

One of the following is not a question that should be answered when evaluating the performance of corporate venturing efforts. Which is it?

Accepted Answer

Three questions should be used to assess the effectiveness of the venturing initiatives of the firm: Are the products or services offered by the venture accepted in the marketplace?; Are the contributions of the venture to the internal competencies and experience of the corporation valuable?; Is the venture able to sustain its basis of competitive advantage? External funding may not be critical to success.

Question 11

Another way to evaluate a corporate venture is in terms of the four criteria from the balanced scorecard. Which of the following is not one of those criteria?

Accepted Answer

The balanced scorecard is a method of evaluating company performance using performance measures from the customer, internal, innovation and learning, and financial perspectives.

Question 12

The costly Motorola global satellite telecom project known as Iridium provides a useful illustration of the _________. Even though problems with the project existed during the lengthy development process, Motorola refused to pull the plug. Only after investing 5 billion USD and years of effort was the project abandoned.

Accepted Answer

An exit champion is an individual working within a corporation who is willing to question the viability of a venture project by demanding hard evidence of venture success and challenging the belief system that carries a venture forward. Motorola did not have an exit champion and therefore wasted resources long past the time that the project needed to end.

Question 13

Two common forms of a focused approach to corporate entrepreneurship include ______________ and _____________.

Accepted Answer

Firms using a focused approach typically separate the corporate venturing activity from the other ongoing operations of the firm. CE is usually the domain of autonomous work groups that pursue entrepreneurial aims independent of the rest of the firm. Two forms, new venture groups (NVGs) and business incubators, are among the most common types of focused approaches.

Question 14

Building entrepreneurial businesses within existing corporations is known as

Accepted Answer

Corporate new venture creation was labeled intrapreneuring by Gifford Pinchot because it refers to building entrepreneurial businesses within existing corporations. In order to engage in corporate entrepreneurship that yields above-average returns and contributes to sustainable advantages, it must be done effectively.

Question 15

Strategic reasons for undertaking a corporate venture do not include

Accepted Answer

Corporations expect a higher return from corporate venturing projects than from normal operations. But there are other important strategic considerations as well that are not financial. These include undertaking a corporate venture to strengthen the competitive position, enter into new markets, expand capabilities by learning and acquiring new knowledge, and build the base of resources and experience of the corporation.

Question 16

Product champions

Accepted Answer

Product (or project) champions are those individuals working within a corporation who bring entrepreneurial ideas forward, identify what kind of market exists for the product or service, find resources to support the venture, and promote the venture concept to upper management.

Question 17

Project ______________ involves justifying whether an opportunity is attractive in the marketplace; project ______________ involves evaluating the strategic and economic impact of a new venture.

Accepted Answer

In the project definition stage, an opportunity has to be justified in terms of its attractiveness in the marketplace and how well it fits with the other strategic objectives of the corporation. For a project to gain impetus, its strategic and economic impact must be supported by senior managers who have experience with similar projects. It then becomes an embryonic business with its own organization and budget.

Question 18

Microsoft has difficulty increasing its innovativeness. One of the challenges has been that the conservatism of the culture of the firm has led to a focus on _____________ over innovation.

Accepted Answer

Many fast-growing young corporations also attribute much of their success to an entrepreneurial culture. But other successful firms struggle in their efforts to remain entrepreneurial. For example, Microsoft has great difficulty increasing its innovativeness. One of the challenges has been that the conservatism of the firm's culture has led to a focus on short-term profitability over innovation.

Question 19

Characteristics of the NVG that Taco Bell used to develop its Waffle Taco include all of the following except:

Accepted Answer

Corporations often form new venture groups (NVGs) whose goal is to identify, evaluate, and cultivate venture opportunities. These groups typically function as semiautonomous units with little formal structure. NVGs usually have a substantial amount of freedom to take risks and a supply of resources to do it with. New venture groups usually have a larger mandate than a typical research and development department. Their involvement extends beyond innovation and experimentation to coordinating with other corporate divisions, identifying potential venture partners, gathering resources, and actually launching the venture.

Question 20

According to the text, _____________, which support fledgling startups are often used to pursue specific entrepreneurial ventures developed by _____________.

Accepted Answer

Business incubators are designed to hatch new businesses. They are a type of corporate new venture group with a somewhat more specialized purpose, to support and nurture fledgling entrepreneurial ventures until they can thrive on their own as stand-alone businesses.

Quiz 12: Managing Innovation and Fostering Corporate Entrepreneurship