For technologies in which standardization and compatibility are important, maintaining
the integrity of the core product is absolutely essential.
Product life cycles shorten with high-speed technological changes.
Cross-functional communication can lead to longer cycle times.
When multiple firms can produce a technology, losing money on the technology in the
short term to promote it as a standard is highly risky.
Technological innovation results in complete eradication of negative externalities.
A strategic stakeholder analysis emphasizes the stakeholder management issues the firm
ought to attend to due to their ethical or moral implications.
Licensing a technology from another firm is typically more expensive for a licensee
than developing a new technology in-house.
The combination and harmonization of multiple abilities make core competencies
difficult to imitate.
As a firm grows it becomes more difficult to exercise direct managerial oversight.
The last 16 percent of the individuals in a social system to adopt an innovation are
termed as late majority.
Collective research organizations can take the form of trade associations.
Ferguson TechnoWorks made the strategic decision to invest heavily in the
development of derivative projects. This is likely to make the returns on its R&D look
good only in the short run.
The customization of products and processes to a local market makes them particularly
difficult to transfer to divisions serving different markets.
According to the concept of the innovation funnel, one new idea is usually responsible
for several new products.
Path dependency refers to those abilities that make a firm more agile and responsive to
change.
According to the Utterback and Abernathy model, firms in the fluid phase avoid
experimenting with different form factors or product features.
Which of the following is an example of a socially complex resource?
a. A team of graphic designers who combine their skills to create products
b. A food preservation technology that is available to most firms in the industry
c. A pharmaceutical firm which acquires land at a subsidized price from the government
d. A restaurant that procures its raw materials from a local market
Virtual Inc., a manufacturing company, has recently entered into the cell phone industry.
This industry is characterized by rapid technological innovations. Which of the
following is an implication for Virtual Inc.?
a. The life cycle of its cell phones will be very long.
b. It will face rapid product obsolescence.
c. It will face low market segmentation in the cell phone industry.
d. It will face lower need for product differentiation.
True Tarmac Co. entered into an alliance with several trucking companies to use high
tech communications to manage its trucks across the nation. In this arrangement, firms
will help each other keep a track on trucks of the entire alliance, but will not share other
information. This alliance falls in:
a. quadrant A-individual alliance with capability complementation.
b. quadrant B-network of alliances with capability complementation.
c. quadrant C-individual alliance with capability transfer.
d. quadrant D-network of alliances with capability transfer.
The CEO of an automobile manufacturing firm directed the R&D department to come
up with a radical innovation. Which of the following best fits the bill?
a. A door that unlocks by recognizing the owner’s fingerprints
b. Seats that vibrate to massage the backs of passengers
c. A gear system that automatically shifts based on the driver’s speed
d. A car that runs on water and solar power
Which of the following is true of conjoint analysis?
a. It is simple method for ranking objects or ideas on a number of different dimensions.
b. It is used by managers to compare their desired balance of projects with their actual
balance of projects.
c. It involves the creation of a hypothetical efficiency frontier.
d. It is most commonly used to assess the relative importance to customers of different
product attributes.
When technology is progressing rapidly, firms are more likely to:
a. commit themselves to fixed assets.
b. focus on developing the necessary skills in-house.
c. use linkages with other specialized firms to access resources they do not possess.
d. avoid becoming more narrowly specialized.
When gutter shields were developed, they replaced gutter cleaning services hired by
homeowners wishing to keep leaves and debris out of their gutters. In other words, the
same need was met by an entirely new technology. This is an example of a(n) _____
technology.
a. complementary
b. component
c. discontinuous
d. incremental
Which of the following is true of technological innovations?
a. Technological innovations help increase a country’s gross domestic product.
b. Technological innovations decrease the amount of output achievable from a given
quantity of labor and capital.
c. Technological innovations slow down the product development cycles and product
obsolescence.
d. Technological innovations increase production costs and reduce product
differentiation.
If Pinter receives a utility patent for an invention in the United States in August 2004,
by when must he apply for protection in other countries who have signed the Paris
Convention to have his patent recognized there as of the same date?
a. 3 days
b. 3 months
c. 6 months
d. 12 months
Customers who face the same general needs of the marketplace but are likely to
experience them months or years earlier than the rest of the market and stand to benefit
disproportionately from solutions to those needs are referred to as _____.
a. laggards
b. intrapreneurs
c. early followers
d. lead users
When are winner-take-all markets good for consumers?
a. When monopoly costs exceed the value of network externality returns.
b. When monopoly costs exceed the value of technological utility.
c. When the monopoly cost curve is extremely steep.
d. When the value of technology utility and network externality returns exceeds
monopoly costs.
Once a new product design becomes a dominant design:
a. the product is no longer profitable.
b. it becomes difficult for competitors to imitate.
c. the architecture on which the industry can focus its efforts is destabilized.
d. the product design is adopted by the majority of producers.
Trekker Inc. has developed a product with a very short product development cycle.
Which of the following results can it typically expect?
a. Its sales will be slow as consumers will already be committed to other products.
b. It will be able to provide complementary goods to enhance the attractiveness of its
product.
c. It will beunable to fully amortize the fixed costs of development before the product
becomes obsolete.
d. It will not be able to upgrade its product.
Which of the following is true of externalities?
a. All externalities are negative in nature.
b. They are only borne by individuals responsible for creating them.
c. Technological innovation results in complete eradication of negative externalities.
d. Externalities can be in the form of benefits reaped by individuals.
Pipeline Designs Inc. is a firm that outsources designs for apparels and accessories to
reputed fashion houses across Europe. Of late, it has been losing out on orders from
important clients. A study conducted on the firm reflected that though the designers
were highly capable, low levels of employee empowerment, motivation, and
experimentation stifled their creativity. To tackle this problem the firm should:
a. adopt a mechanistic structure.
b. adopt high degrees of formalization and standardization.
c. adopt an organic structure.
d. avoid keeping its R&D activities decentralized.
Which of the following is considered to be a novel idea?
a. A detergent that is advertised as a very effective stain-remover
b. A company announces that it has produced a recreational hovercraft for kids
c. An announcement by a cell phone company that it now offers free text messaging
d. An announcement by a college that it will install artificial turf on its football field
According to Anderson and Tushman, the era of incremental change:
a. is a period of turbulence and uncertainty.
b. is characterized by most firms investing in learning about alternative design
architectures.
c. focuses on efficiency and market penetration.
d. focuses on altering the architecture rather than improving components.
_____ refers to the allocation of a finite quantity of resources over different possible
uses.
a. Systematic allotment
b. Corporate funding
c. Organizational appropriation
d. Capital rationing
Which of the following is true about the Bayh-Dole Act of 1980?
a. It made university technology transfer activities illegal and unethical.
b. It allowed universities to collect royalties on inventions funded with taxpayer dollars.
c. It restricted provision of patents for inventions developed at universities.
d. It made investment in research and technology mandatory for public companies.
M&P Inc., a consumer goods manufacturing firm, has subsidiaries throughout the globe
that have to respond to varying local market requirements. Therefore, the firm has
planned to adopt a local-for-local approach to innovation. Which of the following is
true in this context?
a. The subsidiaries of M&P Inc. and their R&D divisions will be highly autonomous.
b. The subsidiaries will achieve economies of scale in R&D activities.
c. This approach will make diffusion of valuable innovations across the company
simple.
d. This approach will reduce redundancy in activities.
The U.S. Postal Service now offers a “Click-N-Ship” online service, where users can
buy and print postage and labels online. According to the “Buyer Utility Map,” the U.S.
Postal Service is offering the _____ utility lever, during the _____ stage of buyer
experience cycle.
a. risk, use
b. fun and image, maintenance
c. convenience, purchase
d. environmental friendliness, disposal
Which of the following is true of component and architectural innovation?
a. Component innovation does not significantly affect the overall configuration of a
system.
b. Architectural innovation is also called as modular innovation.
c. For a firm to initiate component innovation, knowledge about the whole system is
necessary.
d. Component innovations have more far-reaching and complex influences on industry
competitors and technology users than architectural innovations.
Explain why a mechanistic organizational structure stifles creativity.
Loren has invented a new product that detects water leakages due to broken pipes and
sends out an alarm similar to a smoke alarm. However, Loren has very little personal
money to invest in this new product. He finally raised enough money to enter the
market and began to experience some success. The product was not patentable because
it was too similar to other existing technologies. Major corporations saw his success
and have now entered the market with competing products. What will be the probable
destiny of Loren’s company?
What is a trademark? How can the rights to a trademark or service mark be established?
Explain what Schumpeter meant by the term creative destruction.
How can the s-curves be used as a prescriptive tool? What would be the limitations of
this approach?