Question 1

Pet Care Companion Connection (PCCC) is an organization that trains persons with mild to moderate mental disabilities to care for pets in a pet boarding facility. This organization has been successful in providing a quality service for pet owners and a supportive training environment for their trainees. The tuition charged to trainees is only somewhat higher than the fee which day-care providers would charge for these individuals. Graduates of the program are qualified for employment by commercial kennels. PCCC is an example of
A) taking advantage of a need in the marketplace.
B) creative destruction of existing services for pet boarding.
C) institutionalized entrepreneurship.
D) internal corporate venturing.

Accepted Answer

The answer of Pet Care Companion Connection (PCCC) is an...

Question 2

While smaller firms must use cooperative strategies as a means of producing innovations, larger firms with large R&D units such as P&G and 3M can produce most if not all innovations internally.

Accepted Answer

While larger firms may have the capacity to produce innovations internally, they still often use cooperative strategies such as partnerships and acquisitions to complement their internal R&D efforts and access new ideas and technologies.

Question 3

Acquisitions are a low risk approach to producing and managing innovation.

Accepted Answer

Acquisitions can be a high risk approach to producing and managing innovation as they involve significant financial investment and integration challenges. Additionally, it is also possible that the acquired company's innovation may not align with the acquiring company's goals or culture, leading to limited success or failure of the acquisition.

Question 4

The network of strategic alliances built by an organization is a form of intellectual capital from which the organization can draw to develop innovations.

Accepted Answer

Strategic alliances provide access to new technologies, knowledge, and resources that can be leveraged to develop innovative products, services, and processes. Therefore, they represent a valuable form of intellectual capital for organizations seeking to stay competitive in today's dynamic market environment.

Question 5

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

Accepted Answer

Cross-functional work teams require a more horizontal organizational structure where there is cross-departmental collaboration and communication, rather than a vertical structure where there is a clear hierarchy and siloed departments.

Question 6

Entrepreneurial ventures often produce more radical innovations than do their larger, more established counterparts.

Accepted Answer

Entrepreneurial ventures are usually more agile and less risk-averse than larger, established companies, which allows them to take bigger risks and pursue more radical innovations. They also often have less bureaucratic obstacles to creativity and innovation.

Question 7

Firms develop innovations in all the following ways EXCEPT
A) Through autonomous or induced strategic behavior.
B) By acquiring other companies.
C) Through cooperative strategies.
D) Via divestiture of low-performing units.

Accepted Answer

Divestiture of low-performing units is a way to streamline operations and improve financial performance, but it is not a typical way to develop innovations. Innovations are more likely to be developed through autonomous or induced strategic behavior, acquisition of other companies, and cooperative strategies.

Question 8

All of the following are paths to scout external opportunities to arrive at open innovation solutions EXCEPT (Chapter 13 Opening Case)
A) Engaging current and potential customers to better capture unarticulated needs.
B) Pursue breakthrough technology ideas and focus on incremental changes to solve unarticulated customer problems with a new technology.
C) Using product champions to develop radical innovations internally.
D) Continuously monitor customers and competitors, making incremental changes as a "fast follower" of a proven concept.

Accepted Answer

Using product champions to develop radical innovations internally is not a path to scout external opportunities as it involves internal innovation and does not involve external sources for innovation. The other three options involve engaging with external sources such as customers and competitors to arrive at open innovation solutions.

Question 9

The use or application of entrepreneurship within an established firm is called
A) corporate emergence.
B) transformational leadership.
C) exceptional R&D.
D) corporate entrepreneurship.

Accepted Answer

The use or application of entrepreneurship within an established firm is called corporate entrepreneurship.

Question 10

Acquisitions are a means of extending the company's product line and increasing revenues. The capital market values growth. Therefore, some firms make acquisitions to improve their standing in the capital markets.

Accepted Answer

Acquisitions can indeed help a company extend its product line and increase revenues, which can improve its standing in the capital markets. The capital markets value growth, and if a company is seen as growing and expanding through strategic acquisitions, it may be viewed more favorably by investors and analysts.

Question 11

The fastest-growing group of entrepreneurs in the U.S. is women.

Accepted Answer

According to a report by American Express, the number of women-owned businesses increased by 58% between 2007 and 2018, which is nearly double the rate of all businesses (which increased by 12%). Therefore, the fastest-growing group of entrepreneurs in the U.S. is women.

Question 12

As noted in the Chapter 13 Strategic Focus, social networking sites such as Facebook are primarily used for employees to communicate, but are of limited value in identifying new and different markets for existing and new product ideas.

Accepted Answer

This statement is incorrect. Social networking sites can be valuable for identifying new and different markets for existing and new product ideas through targeted advertising and data analysis.

Question 13

Tide Total Care, a premium version of Tide detergent, was developed through Sweden's Lund University along with two small chemical companies as partners. Which of the following methods of generating innovations does Tide Total Care illustrate (Chapter 13 Opening Case)?
A) Induced strategic behavior
B) Autonomous strategic behavior
C) Open innovation
D) Innovation through acquisitions

Accepted Answer

Tide Total Care was developed through open innovation, which involves collaborating with external partners or crowdsourcing ideas and knowledge from customers, suppliers, and other stakeholders. Lund University and two small chemical companies were involved in the development of Tide Total Care, which is an example of open innovation.

Question 14

Larger and well-established firms often have more resources and capabilities to produce more radical innovations than do smaller entrepreneurial firms.

Accepted Answer

The answer of Larger and well-established firms often have more...

Question 15

According to the Chapter 13 Strategic Focus, businesses can use social networking sites such as Facebook to facilitate innovation.

Accepted Answer

Businesses can use social networking sites like Facebook to connect with customers and gather feedback, ideas, and suggestions for new products or features, thus facilitating innovation.

Question 16

A key risk of acquisitions is that a firm may substitute an ability to buy innovations for an ability to produce innovations internally.

Accepted Answer

When a firm relies too heavily on acquiring other companies to bring in new ideas and technology, they may lose the capability to develop those innovations in-house. This can make the firm less adaptable and less competitive in the long term.

Question 17

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

Accepted Answer

These are indeed three ways that firms implement internal innovations.

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.

Accepted Answer

Political activity centered on resource allocation can lead to favoritism, which can limit the effectiveness of cross-functional teams by giving certain departments or teams an unfair advantage, affecting cooperation and communication among teams.

Question 19

Isidore Security Services is a national provider of guard and security services for businesses. It has been in business for over 90 years, having been founded by one of Teddy Roosevelt's Rough Riders (Isidore O'Malley). Lately it has been losing clients to more aggressive and innovative firms offering remote security monitoring systems instead of a guard-based approach. The board of directors of Isidore Security Services is concerned that this downward trend may threaten the existence of this venerable firm and the jobs of its employees.
A) This is an example of an established firm neglecting the opportunity-seeking aspect of strategic entrepreneurship.
B) This example shows the dysfunctional aspects of unrestricted entrepreneurialism.
C) This is an example of the lack of human capital hampering internal innovation.
D) Isidore Security Services is suffering from the "novelty effect" wherein new firms are more attractive to clients/customers merely because they are new and not because they add value.

Accepted Answer

Isidore Security Services is an established firm that has been in business for over 90 years. However, it has been losing clients to more innovative firms offering remote security monitoring systems. This indicates that Isidore Security Services has neglected the opportunity-seeking aspect of strategic entrepreneurship, which involves identifying and pursuing new opportunities to improve its products/services and gain a competitive advantage in the market.

Question 20

Innovations can only be produced by actions and activities within the firm.

Accepted Answer

Innovations can also come from external sources such as partnerships, collaborations, and acquisitions.

Quiz 13: Entrepreneurial Implications for Strategy