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Exam 12: Managing Innovation and Fostering Corporate Entrepreneurship

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Question 21

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Financial risk taking involves the risk an executive assumes in taking a stand in favor of a strategic course of action.

A) True
B) False

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Question 22

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One of the potential pitfalls of real options analysis is that managers may have the incentive and know-how to game the system.

A) True
B) False

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Question 23

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Business risk taking refers to the risk associated with entering untested markets or committing to unproven technologies.

Walmart has an aggressive pricing structure that has forced smaller, local retailers out of business in many markets. Local cities responded with regulations that make it difficult forWalmart to move into or expand operations in these areas. This is an example of

A manager might insist that separating a decision into multiple parts will guarantee that the decisions made will turn out well. This allows for an assessment of the project at each stage,lessening the likelihood the project will fall prey to which of the following?

Real options analysis is most appropriate when

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

Intel uses a forecasting model for potential demand for its chip designs in which they calculate the likelihood of a range of potential demand levels and they established a computer simulation of a production plant. From these models, they gather the information to identify what equipment they definitely will need to order. This helps with pricing as well. What kind of investment analysis tool are they using?

According to the characterization of innovations by Professor Clayton Christensen, the rise of the smartphone was ________ innovation rather than ________ innovation.

Dispersed approaches to corporate entrepreneurship are often found in organizations with a strong spirit of entrepreneurship.

Proctor and Gamble has centralized 20 to 30 percent of its research efforts in a new corporate-level business creation and innovation unit. They believe that this will assist them onlywithdeveloping incremental innovations that will help the overall bottom line.

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?

Strategic reasons for undertaking a corporate venture do not include

Process innovations are often associated with a low-cost leadership strategy.

McGrath and Keil researched the types of human resource management practices that effective firms use to capture value from their innovation efforts. Which of the following is not oneof their findings?

Corporate ventures that use real options logic in decision making tend to keep total investment low in order to minimize the downside risk of a project.

What do Taco Bell, Mondelez, General Electric, Tyco, and MasterCard have in common as they work to be innovative?

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

Radical innovations are evolutionary applications of novel ideas within existing paradigms.

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