Deck 14: Strategic Entrepreneurship Emea Edition

Question 1

Corporate entrepreneurship has become critical to survival and success of established organisations

Answer 1

True

Question 2

The essence of entrepreneurship is to identify and exploit entrepreneurial opportunities that others do not see, or for which they do not recognize the commercial potential.

Answer 2

True

Question 3

Managers at Virgin group use the concept of innovation to inspire employees to be creative as well as competitive.

Answer 3

True

Question 4

The destructive character of induced strategic behaviour together with the incremental nature of its innovations makes it ideal for companies protecting vested interests.

Question 5

Strategic entrepreneurship is the process of taking entrepreneurial actions using a strategic management perspective.

Question 6

Nokia has consistently shown its potential in terms of devising entrepreneurial solutions in response to environmental requirements.

Question 7

Cross-functional work teams are best supported by vertical organizational structures.

Question 8

Joseph Schumpeter suggested that firms engage in three types of innovative activity when managing the innovation process: imitation, invention, and innovation.

Question 9

At Henkel, a German-based company, some of its brightest employees are placed in dedicated innovation units that enjoy high levels of autonomy and are placed relatively outside company boundaries to ensure restrictions to entrepreneurial efforts are low.

Question 10

A product champion should come from outside the organization in order to ensure that the entrepreneurial vision has the objective support it needs.

Question 11

The entrepreneurial mind-set is found primarily among managerial and scientific employees.

Question 12

Induced strategic behavior does not result in true innovation because it is a top-down process rather than a bottom-up process.

Question 13

While both incremental and radical innovations can create value, incremental innovations have the potential to contribute more significantly to a firm's efforts to earn above-average returns.

Question 14

Evidence demonstrates that large firms with well-funded R&D operations are more effective at innovation than are smaller firms.

Question 15

Invention is defined as the adoption of a similar innovation by different firms.

Question 16

A firm that innovates through imitation can expect to produce a product for a niche market, since the general market for the standardized product will be dominated by early adopters.

Question 17

An innovation developed through autonomous strategic behavior will probably take the firm into new markets not addressed by its current strategy.

Question 18

Political activity that is centered on the allocation of resources to the different functions may limit the effective use of cross-functional teams.

Question 19

An autonomous process for developing new products requires that new knowledge is contained within discrete parts of the firm.

Question 20

As a process, entrepreneurship results in the "creative destruction" of existing products (goods or services) or methods of producing them and replaces them with new products and production methods.

Question 21

Start-up ventures typically explore new territory within given industries.

Question 22

____ exist(s) when there is a need in the market that can be satisfied by new goods or services.

A) Potentiality
B) Market readiness
C) Entrepreneurial opportunities
D) Critical core competencies

Question 23

Virgin can be considered an entrepreneurial company for all expect one of the following reasons

A) Attacks weak spots of traditional service providers
B) Continuous renewal
C) Risks taking
D) Remains within industry boundaries

Question 24

The three types of innovative activity include all of the following EXCEPT

A) invention.
B) imitation.
C) implementation.
D) innovation.

Question 25

Innovation by imitation damages the existing product's competitive advantage by reducing its

A) rarity.
B) target market.
C) intrinsic worth.
D) usefulness to the consumer.

Question 26

Entrepreneurship is the process by which individuals or groups identify and pursue ____ without being immediately constrained by the ____ they currently control.

A) opportunities; resources
B) opportunities; core competencies
C) threats; resources
D) threats; core competencies

Question 27

As well as internal corporate venturing there are also two important types of strategic entrepreneurship: start-up entrepreneurship and venture capital.

Question 28

Entrepreneurs are always individuals who perceive an entrepreneurial opportunity and then take the risk to exploit it.

Question 29

Larger established firms are often more effective than newer entrepreneurial firms in the identification of entrepreneurial opportunities.

Question 30

Venture capitalists invest in companies and projects they believe will at least break even.

Question 31

A good example of a firm that has been relying on venture capital is Octoplus, a pharmaceutical company specializing in the development of drugs that enable a more fluent distribution of medicines through the human body.

Question 32

An entrepreneurial mind-set, cross-functional product development teams, and shared values/leadership are the three ways that firms implement internal innovations.

Question 33

Since it replaces existing products and methods of production, entrepreneurship is a process of

A) harnessing the human potential.
B) creative destruction.
C) creation of opportunity.
D) exploitation of innovation.

Question 34

Innovation creates a(an)

A) opportunity for a new product or process.
B) new product or process.
C) commercial product.
D) idea for potential exploitation.

Question 35

Commercialization of ideas is more difficult than idea creation as suggested by the fact that ____ percent of R&D occurs in large firms, yet the same firms produce fewer than ____ percent of patents.

A) 50; 50
B) 50; 80
C) 80; 50
D) 80; 80

Question 36

As a start-up company, BehavioSec plays an important role in renewing the realm of Internet security and offers incumbent firms a chance to increase their Internet security.

Question 37

When an existing firm creates a new venture or develops an innovation, it is said to be engaging in

A) corporate emergence.
B) transformational leadership.
C) exceptional R&D.
D) corporate entrepreneurship.

Question 38

Research has shown start-up entrepreneurship does not add significantly to the level of competitiveness and innovativeness of countries.

Question 39

To be entrepreneurial, social capital is critical for access to complementary resources from partners in order to compete effectively in domestic and international markets.

Question 40

A successful ____ innovation will be less risky but less profitable than a successful ____ innovation.

A) incremental, radical
B) radical, incremental
C) alliance-generated, acquisition-generated
D) acquisition-generated, alliance-generated

Question 41

All except one of the following statements describes start-up entrepreneurship

A) It is seen as one of the most important drivers of economic growth
B) Research has shown it to add significantly to the level of competitiveness and innovativeness of countries
C) Can arise only with the support of a parent company
D) Typically surrounded by more uncertainty than corporate venturing activities

Question 42

____ involves internally developed incremental and radical innovations that result from deliberate efforts.

A) Internal corporate venturing
B) Autonomous strategic behaviors
C) Bottom-up strategic behaviors
D) Product championing

Question 43

Which of the following is one of the barriers to effectiveness when using cross-functional teams to integrate organizational functions?

A) dissension within the top management team
B) informal organizational processes within the firm
C) the firm's strategic orientation
D) organizational politics

Question 44

____ are individuals, acting independently or as part of an organization, who see an opportunity and then take risks to develop an innovation to exploit it.

A) Leaders
B) Innovators
C) Entrepreneurs
D) Transformative leaders

Question 45

The idea that it is "vital to sell the ideas to others in the organization so that innovations will be commercialized" is the rationale behind the use of

A) product champions.
B) joint ventures.
C) strategic leadership.
D) cross-functional teams.

Question 46

The firm's culture promotes unity of purpose for cross-functional work teams through

A) a collectivist structure.
B) an entrepreneurial mind-set.
C) shared values.
D) resource allocation.

Question 47

Innovations that involve significant technological breakthroughs and create new knowledge

A) build incrementally on the firm's existing technologies and knowledge.
B) are the most common type of innovation.
C) involve substantial uncertainty and risk.
D) typically have clear market opportunities.

Question 48

A major barrier to the use of cross-functional teams is

A) excessive individualism of creative people.
B) lack of communication skills of technical people.
C) independent frames of reference of team members.
D) lack of social capital by team members.

Question 49

Independent frames of reference and organizational politics are the two primary barriers to cross-functional team integration. Two methods to facilitate cross-functional integration are _________ and ___________.

A) autonomous strategic behavior; induced strategic behavior
B) incremental innovations; radical innovations
C) bottom-up integration; top-down integration
D) shared values; effective leadership

Question 50

Through the work of cross-functional teams, product development stages are grouped into ____ processes.

A) short-term and long-term
B) parallel or overlapping
C) serially ordered
D) complementary

Question 51

All except one of the following statements may describe the major oil companies such as Exxon, Mobil, Shell and BP

A) Have huge oil supplies all over the world and their value has to be protected from more novel solutions to energy supply
B) Have been active in their investments towards new energy solutions
C) Major innovations remained few in number
D) Have shown small changes in areas such as fuel composition (for example Shell "fuel save" and BP "ultimate") and increasing interest for carbon dioxide storage

Question 52

Induced strategic behavior as a form of internal innovation is a(an) ____ process.

A) bottom-up
B) top-down
C) free-flowing
D) external

Question 53

The development of the original personal computer (PC) was a(n) ____ innovation at the time, whereas adding a different kind of whitening agent to a soap detergent in an example of a(n) ____ innovation.

A) incremental; radical
B) radical; incremental
C) concentric; radical
D) radical; concentric

Question 54

Informal (often invisible) processes are best supported through ____ organizational structures.

A) vertical
B) horizontal
C) functionally-oriented
D) multidivisional

Question 55

All except one of the following statements are true of venture capitalists

A) Have a significant role for established firms and start-up companies
B) More free than incumbent firms who are bound by major vested interests
C) Can provide skilled management of selected ventures
D) Are bound by existing activities and/or sunk costs

Question 56

Autonomous strategic behavior is a(an) ____ process in which product champions pursue new ideas.

A) top-down
B) horizontal
C) integrated
D) bottom-up

Question 57

One of the distinguishing differences between the two sources of internal corporate venturing (autonomous strategic behavior and induced strategic behavior) is whether the innovation process

A) is encouraged through a bottom-up or top-down process.
B) is encouraged by a product champion or an entrepreneur external to the organization.
C) relies on internal structure or existing strategy to encourage innovation.
D) is in a large or small organization.

Question 58

Induced strategic behavior is a process that fosters product innovations that

A) are likely to change a firm's strategic intent and mission.
B) will lead to greater financial returns.
C) are aligned closely with current strategy and structure.
D) will come to market in a short period of time.

Question 59

Which of the following statements is not true about the Dutch pharmaceutical company Octoplus

A) Specializes in the development of drugs that enable a more fluent distribution of medicines through the human body
B) After years of excellent results, they now have several drugs approved by the European and American food and drug administration
C) Before establishing their IPO (initial public offering), they were jointly owned by a consortium of internationally diverse venture capital firms
D) The use of venture capital helped the initial research efforts and later stages of development and expansion

Question 60

To be successful, an autonomous process for developing new products relies on

A) the diffusion of tacit knowledge.
B) the acquisition of innovative firms.
C) strategic alliances with other firms.
D) internal corporate venturing.

Question 61

Describe the nature and function of start-up entrepreneurship

Question 62

Discuss the methods an organization can use to facilitate cross-functional integration.

Question 63

Define the three types of innovative activity. Which is the most critical activity for U.S. firms?

Question 64

Describe venture capital as a form of strategic entrepreneurship

Question 65

Discuss the differences between autonomous strategic behavior and induced strategic behavior.