The house of quality uses a scale of one to ten to evaluate competing products.
The intellectual property policies of a university embrace both patentable and
unpatentable innovations.
Innovation and new technologies have led to longer product life cycles and lowered
product obsolescence.
Some firms avoid collaboration for fear of giving up their proprietary technologies.
Firms cannot influence the shape of the s-curve through their development activities.
Firms that charge headlong into new product development usually have short
development cycles.
Not all innovations require complementary goods.
A company with a short development cycle can quickly revise or upgrade its offering.
By choosing not to exercise its monopoly power, a firm can steepen its monopoly costs
curve.
A firm can benefit from developing “antichampions”.
A firm’s organizational structure and control systems have no influence on the
generation of innovative ideas.
Standard discounted cash flow analysis has the potential to severely undervalue a
development project’s contribution to the firm.
The contract book is an important mechanism for establishing team commitment to the
project and a sense of ownership over the project.
Suppliers can contribute ideas for product improvement or increased development
efficiency.
The qualities that make people inventive also make them entrepreneurial.
When a market is characterized by mature enabling technologies, a firm should enter
the market late.
Monetary rewards undermine creativity by encouraging employees to focus on extrinsic
rather than intrinsic motivation.
Which of the following is true of a project which has a present value of cash inflow of
$20,000 and the present value of the cash outflows of $15,000 (given the assumptions
made in calculating the costs and cash inflows)?
a. The project cannot be carried out as the outflow is high.
b. The net present value of the project is $35,000.
c. The project will require 5 years to break even.
d. The project generates wealth.
Software whose code is made freely available to others for use, augmentation, and
resale is referred to as:
a. wholly proprietary systems.
b. patented software.
c. open source software.
d. copyright protected systems.
Regional districts that are set up by the government to foster R&D collaboration
between government, universities, and private firms are typically called _____.
a. technological trajectories
b. free trade areas
c. complementors
d. science parks
In the United States patent owners are granted a term of _____ years of protection.
a. 17
b. 20
c. 15
d. 30
Silk Work Inc., a manufacturer of silk garments, is planning to replace hand weaving
with some modern machines that run on fuel. Which of the following consequences of
this measure can be categorized as a negative externality?
a. Increased amount of output achievable from the given quantity of labor
b. Increase in the quality of the silk garments
c. Increased pollution as a result of the new technology
d. Increased need for investment to finance the modernization
Socially complex resources refer to:
a. resources or activities that emerge through the interaction of multiple individuals.
b. resources that cannot be defined in terms of a numerical value.
c. resources that require public sanction in order to be utilized for profit-making
purposes.
d. resources that are shared by different parties thereby necessitating the need for legal
intervention.
S-curves in technology diffusion are obtained by plotting the:
a. capacity of a technology against time.
b. cumulative number of adopters of a technology against time.
c. performance speed of a technology against effort.
d. performance power of a technology against effort.
The innovation process is often conceived of as a funnel because:
a. most innovative ideas become successful new products.
b. it decreases the amount of output achievable from a given quantity of labor and
capital.
c. it increases the importance of production economies of scale.
d. there are many potential new product ideas and only a few make it through the
development process.
Astech Inc. has been developing a new graphic design software. The firm releases a
functional version of the software, and sends it to several lead users for testing. Based
on the feedback from the lead users, the firm will improve the design of the product,
and begin commercial production. This initial version of the product is referred to as the
_____.
a. spiral model
b. substitute product
c. beta version
d. alpha model
Institutions designed to nurture the development of new businesses that might otherwise
lack access to adequate funding or advices are called _____.
a. complementors
b. research collaboration offices
c. incubators
d. technology clusters
Additive manufacturing refers to:
a. printing a design by laying down thin horizontal cross sections of material.
b. printing a new design that converges with an old design by adding details.
c. constructing a model by injection molding.
d. constructing a model by machining a mold.
Sandy lives in a country that is a member of the Madrid Union and has registered her
trademark within her country. That trademark is now protected:
a. throughout the world.
b. only in countries which Sandy chooses among the members of the Madrid Union.
c. only in her own country.
d. only in the countries where the product related to the trademark is manufactured.
Which of the following differentiates a joint venture from other forms of alliances?
a. It usually does not result in the creation of a new business entity.
b. It increases asset commitment.
c. It increases cycle time of a technology.
d. It involves a significant equity stake.
A CEO of a certain pharmaceutical company asked his consultant if it was a good idea
to implement the s-curve model to predict when a technology would reach its limits.
The consultant identified a limitation with the use of the model. Which of the following
is the limitation identified by the consultant?
a. Using the s-curve would be too expensive.
b. Unexpected changes alter the shape of a technology’s s-curve.
c. S-curve model cannot be applied in the pharmaceutical industry.
d. The s-curve model is outdated and unrealistic.
Which of the following is true of ambidextrous organizations?
a. They have uniform incentive plans for all employees within the organization.
b. They help achieve long-term innovation, but not short-term efficiency.
c. They fail to tolerate varying cultures and different sets of behavior from employees.
d. They have a complex organizational form that is composed of multiple internally
inconsistent architectures.
Which of the following is true of a patent?
a. The laws governing patent protection are universal and do not differ from country to
country.
b. A patent granted in one country provides protection in all other countries as well.
c. In the U.S., an inventor can publish an invention up to a year before applying for the
patent.
d. Discovery of scientific principles that pertain to natural laws can be patented.
Which of the following calls for an early entry into a market?
a. Immature enabling technologies
b. Unavailability of complementary goods
c. High customer uncertainty
d. Low entry barriers
Josh is the executive vice president of a bank. Recently the president of the bank asked
Josh to use his influence to ensure that the online banking project was developed and
implemented. Paul is being asked to be a:
a. devil’s advocate.
b. project champion.
c. entrepreneur.
d. mentor.
Divine Laboratories, a 70 year old large pharmaceutical firm, has consistently invested
heavily in R&D. Divine Laboratories would typically have:
a. better capabilities to take on larger innovation projects than smaller firms.
b. fewer rules and regulations than smaller firms.
c. a more effective governance system than smaller firms.
d. lesser bureaucratic inertia than smaller firms.
In the context of product development teams, which of the following is true?
a. The larger the team, the easier it is to foster a shared sense of identity among team
members.
b. As the size of the team increases, the potential for social loafing increases.
c. Forming cross-functional teams hinders cross-fertilization of ideas.
d. Increasing the diversity of team members eliminates the possibility of homophily.
In the 1980s and 1990s, Neon Co. was the most successful firm in the television
market. The firm believed that competitors would never be able to produce televisions
comparable to its quality and cost. As a result, it was unable to respond to the new
generations of television that Japanese competitors had begun to infiltrate the market
with. Eventually, Neon lost its market leadership to its competitors. This is a typical
example for the _____.
a. Giffen effect
b. Hawthorne effect
c. Idiosyncrasy credit
d. Icarus Paradox
eZone, an online retailer, uses an online ordering and payment system called PayPlus
which accepts credit cards and electronic funds transfers. Its payment Web site has a
user-friendly interface. The payment system is heavily secured using encryption
technology. According to the “Buyer Utility Map,” PayPlus is offering _____ utility
lever in the purchase stage.
a. cost
b. fun and image
c. environmental friendliness
d. simplicity
Which of the following is true of a firm entering a market too early?
a. The distribution channel will be well established prior to its entry.
b. The technology and complements will be underdeveloped.
c. Competitors would have already captured controlling shares of the market.
d. The firm will not be able to reap the advantages of monopoly rent.
Companies that buy manufacturer’s products in bulk, and then resell them (often in
smaller or more diverse bundles) to other supply channel members are referred to as
_____.
a. wholesalers
b. manufacturers’ representatives
c. retailers
d. value-added resellers
Speeding Horse Inc., the leader in the video game console market, is making its new
generation consoles backward compatible with its previous games. This means that:
a. it is giving away its own installed base or complementary goods advantages to
competitors.
b. it is providing a significant incentive to the owners of its previously developed
consoles and games.
c. the transition of customers through product generations will become difficult.
d. a large range of complementary goods of the previous generations, mainly the games,
will lose its existing value and utility.
Explain why it is considered advantageous if a company’s technology is adopted by
users ahead of other technologies.
Explain how an understanding of the innovation funnel might influence a company’s
view of research and development?
What is the internal rate of return of a project? How is it calculated? What are the
drawbacks of using this method?
What are the advantages and disadvantages of collaborating for research and product
development?
Explain how the globalization of markets affects the importance of innovation.
What are the disadvantages of licensing?
What is Quality Function Deployment (QFD)? What are its advantages?
What is a copyright? Discuss the provisions of the section 106 of the 1976 Copyright
Act.
How can firms evaluate potential partners?
Dr. Abby was the chairman of the Freshman Program Committee at Blue Mountain
University. This committee was designing a new curriculum for freshmen. Explain how
Dr. Abby might perform all three boundary-spanning activities.