100. 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.
101. 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.
102. Value creation through internal innovation originates with
a. an entrepreneurial mind-set.
b. cross-product development teams.
c. shared values and entrepreneurial leadership.
d. innovation.
103. PracticalSolutions is a small firm providing employee assistance programs for companies with troubled employees.
PracticalSolutions frequently partners with other consulting firms to provide creative solutions for companies with
personnel problems. This history of partnering exemplifies
a. intellectual capital.
b. institutional capital.
c. alignment of complementary assets.
d. technological capital.
104. Blixin Concrete Products, an established firm, is seeking a technologically advanced partner for a strategic alliance.
If the potential partner is a new entrepreneurial venture, the main benefit the Blixin Concrete can offer is probably
a. investment capital.
b. management expertise.
c. research and development competencies.
d. social networks.
105. Regarding partnering in cooperative alliances, entrepreneurial new companies may seek
established companies may need
a. distribution channels; tacit knowledge.
b. deep technological expertise; distribution channels.
c. social capital; technical capital.
d. investment capital; new technological knowledge.
while more
106. The main risk in a strategic alliance is that
a. the alliance will not result in a successful innovation.
b. critical employees will be hired away by the strategic partner.
c. one partner will use the other partner’s knowledge and use it to enhance its own competitive abilities.
d. the partners will lose control over their internal processes.
107. Why have large pharmaceutical companies been forming alliances with biotechnology companies?
a. to evade legislative restrictions on drug research in the United States
b. to develop new products and bring them to market
c. because both firms had declining profitability and needed cash infusions from other firms
d. in order to gain absorptive capacity
108. New entrepreneurial firms are better than larger established firms at
a. implementing innovations.
b. gaining competitive advantage.
c. making alliances.
d. identifying entrepreneurial opportunities.
109. is(are) critical in order for a firm to gain access to resources from partners in a cooperative alliance.
a. Complementary strategic goals
b. Shared values
c. An entrepreneurial mind–set
d. Compatible organizational cultures
Essay
110. Define the three types of innovative activity. Which is the most critical activity for U.S. firms?
111. What is the importance of international entrepreneurship?
112. Describe the three strategic approaches used to produce and manage innovation: internal corporate venturing,
cooperative strategies, and acquisitions.
113. Discuss the differences between autonomous strategic behavior and induced strategic behavior.
114. Discuss the methods an organization can use to facilitate cross-functional integration.
115. Discuss the potential benefits and disadvantages of innovation through cooperative strategies.
116. Discuss the benefits and risks of acquiring another firm to gain access to innovations.
Subjective Short Answer
Case Scenario 1: Fear Not.
Wim Vijkland was trained as an engineer in the Netherlands and, after college, worked several years in the Chinese
operations of Philips Electronics and then Unilever. Between employers he returned home for several years to
complete an MBA from Tiburg University in the southern Netherlands. His work gave him hands-on experience
with overseas production, and rich sets of contacts in Mainland China and distribution channels in Europe and the
United States. Wim has noted that many small and mid-sized European and U.S. manufacturers are interested in
and would benefit from the low-cost Chinese production environment. Contrary to external stereotypes, he also
believes that a Chinese factory can produce products that meet the most demanding technical and quality
specifications met by manufacturers in more developed economies. At the same time, Vijkland understands that
“foreigners” are generally reluctant to manufacture precision products in China for fear that the underlying
proprietary technologies will be bootlegged and sold to competitors or outright copied. In an attempt to capitalize on
this opportunity, Wim quit his job with Unilever and entered into a partnership with Sulin “Cathy” Liu, a local Beijing
entrepreneur with whom Wim has worked extensively in the past. Cathy has a Ph.D. in physics from CalTech in
California and an MBA from Hong Kong University of Science and Technology. They have dubbed their
partnership FearNot, and organized it as a limited liability corporation (LLC). Their plan is to set up duty-free
manufacturing zones in which they develop mini-factories that operate under their ownership and production
guidance, while at the same time creating a firewall between the clients’ proprietary production processes and the
open Chinese market. It is the partners‘ hope that this combination of intellectual property protection and low-cost
overseas production will provide U.S. and European firms an incentive to enlist FearNot’s services.
117. (Refer to Case Scenario 1). What resources do Wim and Cathy bring to their venture?
118. (Refer to Case Scenario 1). What resources appear to be missing?
119. (Refer to Case Scenario 1). What should FearNot focus on in its first months of operation?
120. (Refer to Case Scenario 1). The likelihood of success of FearNot is increased because both Wim Vijkland and
Cathy Liu to have international backgrounds.
Case Scenario 2: Compliance, Inc.
Compliance, Inc. (CI) conducts clinical human and animal trials for the pharmaceutical and biotechnology industries.
Revenues are split evenly between early and late drug development services and the firm is a leader in the
laboratory technologies needed for such testing. One of CI‘s internal quality managers, Sharon Kline, has approached
the CEO with a new business proposal. She would like to see the firm take one of its in–house software programs
and develop it as a leading-edge commercial product for three specific target markets—medical care providers,
payers of medical care, like insurance companies, and suppliers to medical care providers, like pharmaceutical
companies. The features of the software are easy to use and include electronic distribution, data harvesting, and
robust reporting capabilities. With this software Sharon believes that medical care providers will be able to collect
data to market to and negotiate contracts with payers or employers, profile performance of individual physicians or
practice sites, identify best clinical practices, generate reports that satisfy regulatory or accreditation requirements
for provider sites, and supply professional societies with data for influencing payer and government policies. Another
target market, insurance companies and other medical services payers, will be able to use the software to profile
performance of individual physicians or practice sites, identify best clinical practices, generate reports that satisfy
regulatory or accreditation requirements, and collect data to market to and negotiate contracts with employers.
Finally, the software will allow suppliers to medical care providers to assess how products perform compared to
competitor products, assess outcomes in real-world compared to clinical trial settings, obtain information on
provider-specific practice patterns, determine whether products are being used correctly, get “face- time” with
physicians and HMOs, obtain information on product switching behavior, offer providers a value-added service, and
meet FDA post-marketing surveillance requirements. CI has never launched such a product before
and, even if successful, software is a very different product than the clinical trials services it provides now. The
CEO must determine how to build and manage this new business for CI.
121. (Refer to Case Scenario 2). Does CI’s launch of the software product better fit the notion of autonomous or
induced strategic behavior?
122. (Refer to Case Scenario 2). Where does it appear that autonomous strategic behavior ends and induced strategic
behavior begins in the software situation at CI?
123. (Refer to Case Scenario 2). What actions would you recommend that the CEO undertake to ensure the success of
the software venture?
124. (Refer to Case Scenario 2). The idea for the software product came about via induced strategic behavior.
125. (Refer to Case Scenario 2). Sharon Kline approached the CEO of CI with a business proposal to take an in-house
software program and develop it as a leading-edge commercial product. There is some risk in the idea because CI
has never launched a product before and software is a very different product than the clinical trials services the
company currently offers. This new product, if successful, would be considered a radical innovation.
Case Scenario 3: Bunnywac.
Bunnywac is a global producer and seller of batteries for consumer electronics, and competes primarily by
providing battery products equal in performance at a lower price. The worldwide battery industry suffers from
issues of overcapacity and commoditization, brand segmentation and proliferation, the growing strength of global
retailers, and the low-cost threat of new entrants from Asia. Bunnywac has grown quickly into one of the leading
players in the battery industry primary through horizontal acquisitions, and is now counted among the top four
companies in North and Latin America. Its presence in Europe and Latin America is negligible. A key factor in
Bunnywac’s rapid growth is its technology outsourcing arrangement with Mats. Mats is one of Japan‘s largest
technology holding companies and Bunnywac’s core battery technology is licensed from Mats. Bunnywac’s license
with Mats expires soon and it is concerned that Mats will not renew it, or will renew it only for a substantial price
premium. Consequently, Bunnywac‘s CEO is exploring the possibility of developing its core technology in-house.
126. (Refer to Case Scenario 3). Does Bunnywac’s development of its core battery technology better fit the notion of
autonomous or induced strategic behavior?
127. (Refer to Case Scenario 3). What aspects of Bunnywac’s development of its core battery technology do not fit the
notion of strategic behavior that you identified above?
128. (Refer to Case Scenario 3). How will Bunnywac’s structure likely need to change if it does begin developing its
core battery technologies in-house?
129. (Refer to Case Scenario 3). Facing the risk that its technology supplier, Mats, will not renew its licensing
arrangement, Bunnywac’s CEO is exploring the possibility of developing its core battery technology in-house. If the
license is not renewed, it is likely that the technology will be developed at Bunnywac via the autonomous strategic
behavior approach.