Chapter 13 Strategic Entrepreneurship PDF

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Chapter 13 Strategic Entrepreneurship TRUEFALSE

1. An organization engaging in strategic entrepreneurship focuses on identifying opportunities tha it can exploit through innovations. (A) True (B) False Answer : (A)

2. Most large, complex firms innovate through cooperative strategies or strategic alliances, but no through internal activities. (A) True (B) False Answer : (B)

3. Corporate entrepreneurship describes the opportunity seeking and exploitation of innovations i new start-up enterprises. (A) True (B) False Answer : (B)

4. Entrepreneurial opportunities exist because of competitive imperfections in the markets and among the factors of production. (A) True (B) False Answer : (A)

5. The essence of entrepreneurship is to capture most of the existing markets from less aggressive and innovative competitors. (A) True

(B) False Answer : (B)

6. Entrepreneurship is the economic engine driving national economic growth in many nations. (A) True (B) False Answer : (A)

7. Innovation is the means by which the entrepreneur creates wealth. (A) True (B) False Answer : (A)

8. Entrepreneurial opportunities are conditions in which new goods or services can satisfy a need the market. (A) True (B) False Answer : (A)

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

10. Invention is defined as the adoption of a similar innovation by different firms. (A) True (B) False Answer : (B)

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

(A) True (B) False

Answer : (A)

12. Evidence demonstrates that large firms with well-funded R&D operations are more effective a innovation than are smaller firms. (A) True (B) False Answer : (B)

13. Given the rapid rate of technological change, patents are not a useful gauge of a firm's entrepreneurial prowess. (A) True (B) False Answer : (B)

14. 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 f a business loan. Rosalie's significant other is complaining that she "sleeps, eats, and drinks" this concept. Rosalie has the entrepreneurial characteristic of passion. (A) True (B) False Answer : (A)

15. The entrepreneurial mind-set is found primarily among managerial and scientific employees. (A) True (B) False Answer : (B)

16. Bill Kroganski is the owner of a moderately successful industrial services firm. His reaction to the introduction of a new process technology that could be a direct competitor to the process his firm utilizes is fear. He spends his time considering ways to isolate his firm from this new technology. Bill has characteristics consistent with the entrepreneurial mind-set.

(A) True (B) False

Answer : (B)

17. If the company's workers have scant existing knowledge, their "absorptive capacity" to learn new knowledge will be limited. (A) True (B) False Answer : (A)

18. For firms to be entrepreneurial, they must stress individualism in their employees above all other characteristics. (A) True (B) False Answer : (B)

19. A society's cultural characteristics influence a nation's rate of entrepreneurship and its related practices. (A) True (B) False Answer : (A)

20. In order to be successful, a new entrepreneurial enterprise should be sheltered from the globa environment until it is firmly established in domestic markets. (A) True (B) False Answer : (B)

21. Research has shown that internationally diversified firms are generally more innovative. (A) True (B) False Answer : (A)

22. Larger, established firms, mainly those competing globally, use their R&D labs to create disruptive technologies and products.

(A) True (B) False Answer : (A)

23. Most innovations are incremental, not novel. (A) True (B) False Answer : (A)

24. Toyota's Prius, the first mass-produced hybrid-electric car is an example of a novel innovation that has changed the industry by providing new functionalities for users. (A) True (B) False Answer : (A)

25. A company with a need for immediate, large returns should invest in research and developmen (A) True (B) False Answer : (B)

26. While both incremental and novel innovations can create value, incremental innovations have the potential to contribute more significantly to a firm's efforts to earn above-average returns. (A) True (B) False Answer : (B)

27. A product champion should come from outside the organization in order to ensure that the entrepreneurial vision has the objective support it needs. (A) True (B) False

Answer : (B)

28. An innovation developed through autonomous strategic behavior will probably take the firm in new markets not addressed by its current strategy. (A) True (B) False Answer : (A)

29. Firms that continually change their strategic context and strategies because of the continuous changes in the current competitive landscape are in danger of losing sight of their main competitiv strengths. (A) True (B) False Answer : (B)

30. Induced strategic behavior does not result in true innovation because it is a top-down process rather than a bottom-up process. (A) True (B) False Answer : (B)

31. Autonomous strategic behavior results in internal innovations that are highly consistent with t firm's current strategy. (A) True (B) False Answer : (B)

32. The iPod likely resulted from autonomous strategic behavior at Apple, though the iPhone was more the result of induced strategic behavior. (A) True (B) False Answer : (A)

33. Cross-functional work teams are best supported by vertical organizational structures. (A) True

(B) False Answer : (B)

34. Political activity that is centered on the allocation of resources to the different functions may limit the effective use of cross-functional teams. (A) True (B) False Answer : (A)

35. An entrepreneurial mind-set, cross-functional product development teams, and shared values/leadership are the three ways that firms implement internal innovations. (A) True (B) False Answer : (A)

36. Innovations can only be produced by actions and activities within the firm. (A) True (B) False Answer : (B)

37. While smaller firms must use cooperative strategies as a means of producing innovations, larg firms with large R&D units such as P&G and 3M can produce most if not all innovations internally (A) True (B) False Answer : (B)

38. Acquisitions are a means of extending the company's product line and increasing revenues. Th capital market values growth. Therefore, some firms make acquisitions to improve their standing i the capital markets. (A) True (B) False

Answer : (A)

39. Acquisitions are a low-risk approach to producing and managing innovation. (A) True (B) False Answer : (B)

40. A key risk of acquisitions is that a firm may substitute an ability to buy innovations for an abili to produce innovations internally. (A) True (B) False Answer : (A)

41. Entrepreneurial ventures often produce more novel innovations than do their larger, more established counterparts. (A) True (B) False Answer : (A)

MULTICHOICE 42. 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. Answer : (D)

43. Pet Care Companion Connection (PCCC) is an organization that trains persons with mild-t-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-car 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. Answer : (A)

44. Isidore Security Services is a national provider of guard and security services for businesses. I 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. Which one of the following is true? (A) This is an example of an established firm neglecting the opportunity-seeking aspect of strategi 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. Answer : (A)

45. 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. Answer : (D)

46. Entrepreneurship is the process by which individuals or groups identify and pursue ____ witho being immediately constrained by the ____ they currently control. (A) opportunities; resources (B) opportunities; core competencies (C) threats; resources

(D) threats; core competencies Answer : (A)

47. ____ 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 Answer : (C)

48. Because it replaces existing products and methods of production, entrepreneurship is a proces of: (A) harnessing the human potential. (B) creative destruction. (C) creation of opportunity. (D) exploitation of innovation. Answer : (B)

49. GreenBox, a company that recycles paper products to make cardboard cartons, has introduced new product that resists damage by moisture. GreenBox can expect that: (A) this innovation will resist competitors' attempts to imitate it.

(B) its investors will react positively to the introduction of the new product because of the potentia for higher returns. (C) its investors will react negatively because of the risk and cost entailed in introducing a new product. (D) this will be recognized in the industry as a radical innovation. Answer : (B)

50. Innovation creates a(n): (A) opportunity for a new product or process. (B) new product or process. (C) commercial product.

(D) idea for potential exploitation. Answer : (C)

51. According to Peter Drucker,the primary goal of innovation is to: (A) promote social well-being. (B) increase the number of jobs. (C) create wealth. (D) support national economies. Answer : (C)

52. The three types of innovative activity include all of the following EXCEPT: (A) invention. (B) imitation. (C) implementation. (D) innovation. Answer : (C)

53. Products developed through ______ are often offered at lower prices without as many features products developed through ______. (A) innovation; imitation (B) imitation; invention (C) imitation; innovation (D) innovation; invention Answer : (C)

54. The number of patents held by an organization is a rough guide to the: (A) effective use of organizational politics. (B) future success of an initial public offering. (C) amount of venture capital a firm will be able to attract. (D) level of innovation in a firm. Answer : (D)

55. 3M's Cubitron II, described as "an industrial abrasive that cuts faster, lasts longer, sharpens itself, and requires less elbow grease than any other abrasive on the market" is an example of:

(A) imitation of a competitor's product. (B) a novel innovation. (C) an incremental innovation. (D) a(n) innovation created through a cooperative strategy. Answer : (C)

56. ____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 Answer : (C)

57. Entrepreneurs tend to have all the following characteristics EXCEPT: (A) willing to take responsibility for projects. (B) passion. (C) preference for certainly about projects. (D) optimism. Answer : (C)

58. Roland has developed and patented an inexpensive and organic way to enhance the fertility of clay soils without the addition of chemical fertilizers. But established agricultural chemical companies have rejected his proposals. After 6 months of promoting his invention during his time from his regular job, Roland has decided to set his dream aside. Roland lacks a key characteristic successful entrepreneurs, which is: (A) the ability to identify opportunities. (B) a corporate sponsor. (C) financial slack. (D) passion for his invention.

Answer : (D)

59. If the firm's current employees are well-trained in their jobs, but also have other knowledge, skills, and abilities, these employees have: (A) social capital. (B) entrepreneurial capabilities. (C) high absorptive capacity to learn. (D) intellectual slack. Answer : (C)

60. Knowledge must be transferred to others in the firm to enhance the entrepreneurial competen of the firm. This requires that: (A) the receiving party has adequate absorptive capacity to learn. (B) the communication process be highly intensive. (C) the knowledge be broken into the smallest comprehensible units. (D) training consultants be involved in every step of transference. Answer : (A)

61. The risks of international entrepreneurship include all the following EXCEPT: (A) unstable foreign currencies. (B) problems with market efficiencies. (C) limitations on market size. (D) strong "buy-domestic" programs. Answer : (D)

62. Research shows that internationally diversified firms tend to be ____ than domestic-only firms. (A) less profitable (B) more innovative (C) less technologically advanced (D) more likely to have an individualistic culture...