Question 1

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

Accepted Answer

Invention is the creation of a new product, process or service, while "diffusion" is the adoption of a similar innovation by different firms or individuals.

Question 2

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

Accepted Answer

The entrepreneurial mind-set is not limited to managerial or scientific employees. It can be found in individuals from various backgrounds and positions within a company, as well as in individuals who start their own businesses.

Question 3

Entrepreneurship is the economic engine driving national economic growth in many nations.

Accepted Answer

Entrepreneurship is often seen as a key driver of economic growth as it creates jobs, fosters innovation, and increases productivity. Many nations have implemented policies and programs to encourage entrepreneurship and support small businesses.

Question 4

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.

Accepted Answer

Entrepreneurship often involves innovation and the introduction of new products or methods, which may displace older products or methods. This concept of "creative destruction" was popularized by economist Joseph Schumpeter.

Question 5

According to the Chapter 13 Opening Case, "open innovation" is not a viable process for fostering innovations because competitors can easily copy a firm's competitive advantages.

Accepted Answer

The Chapter 13 Opening Case presents open innovation as a viable process for fostering innovations, even though it involves sharing information and ideas with external partners. The case argues that open innovation can be successful if managed appropriately and if the company has a strong innovation culture, and that it can lead to competitive advantages that are difficult for competitors to imitate.

Question 6

Entrepreneurial opportunities exist because of competitive imperfections in the markets and among the factors of production.

Accepted Answer

Entrepreneurial opportunities arise when there are gaps or inefficiencies in the market that can be addressed through innovative solutions or when there are untapped or underutilized resources that can be leveraged for competitive advantage. These imperfections could include incomplete information, barriers to entry, or lack of access to capital. By identifying and exploiting these gaps, entrepreneurs can create new businesses, products, and services, and generate value for themselves and society.

Question 7

Rosalie has become totally preoccupied by her idea for creating a business leasing horses to riders on the same principle as time-shares on condominiums. Rosalie is researching the legal, financial, and insurance aspects of her idea and is preparing a prospectus to take to banks to ask for a business loan. Rosalie's significant other is complaining that she "sleeps, eats, and drinks" this concept. Rosalie has the entrepreneurial characteristic of passion.

Accepted Answer

Rosalie's preoccupation and dedication to researching and building her business idea show that she has the entrepreneurial characteristic of passion.

Question 8

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

Accepted Answer

The answer of Evidence demonstrates that large firms with well-funded...

Question 9

Corporate entrepreneurship describes the opportunity seeking and exploitation of innovations in new start-up enterprises.

Accepted Answer

Corporate entrepreneurship refers to the opportunity seeking and exploitation of innovations within established corporations, rather than new start-up enterprises.

Question 10

P&G's CEO, A.G. Lafley, has a goal of 50% of P&G's new products to come from partnerships with customers, suppliers, other firms, inventors and universities. P&G has implemented a process of "open innovation" (Chapter 13 Opening Case).

Accepted Answer

This statement is true according to the opening case of Chapter 13 which discusses P&G's implementation of open innovation and the goal of having 50% of new products come from partnerships with external entities.

Question 11

The essence of entrepreneurship is to capture most of the existing markets from less aggressive and innovative competitors.

Accepted Answer

The essence of entrepreneurship is to create new markets or disrupt existing ones with innovative products or services, rather than simply taking market share from competitors.

Question 12

An organization engaging in strategic entrepreneurship focuses on identifying opportunities that it can exploit through innovations.

Accepted Answer

Strategic entrepreneurship refers to the identification and exploitation of opportunities through innovative strategies. Therefore, the statement is true.

Question 13

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.

Accepted Answer

The answer of A firm that innovates through imitation can...

Question 14

Given the rapid rate of technological change, patents are not a useful gauge of a firm's entrepreneurial prowess.

Accepted Answer

The answer of Given the rapid rate of technological change,...

Question 15

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

Accepted Answer

Joseph Schumpeter indeed proposed that firms engage in three types of innovative activity: imitation, invention, and innovation.

Question 16

Most large, complex firms innovate through cooperative strategies or strategic alliances, but not through internal activities.

Accepted Answer

While cooperative strategies and strategic alliances are common forms of innovation for large, complex firms, they also often engage in internal activities such as research and development, design thinking, and technology scouting to drive innovation. Internal innovation activities can be as important, if not more important, than external partnerships in driving a firm's innovation strategy.

Question 17

Innovation is the means by which the entrepreneur creates wealth.

Accepted Answer

Innovation allows entrepreneurs to create new products, services, and business models that can provide unique value to customers and create wealth for the entrepreneur.

Question 18

Tide Total care, a premium version of Tide detergent, was developed through Sweden's Lund University along with two small chemical companies. This is an example of open innovation where new products come from ideas external to the firm (Chapter 13 Opening Case).

Accepted Answer

This statement is true. The development of Tide Total Care involved collaboration with external partners and is therefore an example of open innovation.

Question 19

Entrepreneurial opportunities are conditions in which new goods or services can satisfy a need in the market.

Accepted Answer

Entrepreneurial opportunities arise when there is an unmet need or demand in the market that can be met by a new product or service.

Question 20

The open innovation approach is consistent only with the alliance and acquisition approaches discussed in the chapter and not with the internal innovation approaches (Chapter 13 Opening Case).

Accepted Answer

The open innovation approach can also be used in internal innovation approaches, such as promoting collaboration and idea-sharing within a company's departments or teams.

Quiz 13: Strategic Entrepreneurship