Week 7

Question 1

Why diversify?

Answer 1

Spread the risk

Question 2

Why can acquisitions be successful?

Answer 2

Because firms gain access to knowledge that has the potential to meaningfully contribute to enhanced innovative outputs in other operations held by the firm

Question 3

Define Strategic entrepreneurship

Answer 3

Strategic entrepreneurship involves taking entrepreneurial actions using a strategic perspective

Question 4

What’s the main responsibility of top level managers focusing on emerging brands or innovation?

Answer 4

Verify that their firms is consistently finding entrepreneurial opportunities.

Question 5

Define corporate entrepreneurship

Answer 5

Corporate entrepreneurship is the use or application of entrepreneurship within an established firm

Question 6

Define entrepreneurial opportunities

Answer 6

Conditions in which new goods or services can satisfy a need in the market

Question 7

Name the three types of innovative activities according to joseph schumpeter

Answer 7

1. Invention is the act of creating or developing a new produt or process.
2. Innovation is a process used to create a commercial product from an invention;
3. Imitation is the adoption of a similar innovation by different firms.

Question 8

Firms invest in Research and development to produce two types of innovations:

Answer 8

Incremental and novel

Question 9

What are incremental innovations?

Answer 9

Incremental innovations build on existing knowledge bases and provide small improvements in current products

Question 10

What are novel/ breakthrough innovations

Answer 10

Novel or breakthrough innovations usually provide significant technological changes and create new knowledge

Question 11

Define internal corporate venturing

Answer 11

Internal corporate venturing is the set of activities firms use to develop internal inventions and especially innovations

Question 12

Define Autonomous strategic behaviour

Answer 12

Autonomous strategic behaviour is a bottom-up process in which product champions pursue new ideas, often through a political process, by means of which they develop and coordinate the actions required to innovate and to bring the innovation to the market.

Question 13

Define a product champion

Answer 13

An individual with an entrepreneurial mindset who seeks to create support for developing an innovation.

Question 14

What’s induced strategic behaviour?

Answer 14

A top-down process whereby the firm’s current strategy and structure foster innovations that are closely associated with that strategy and structure.

Question 15

What do cross-functional product development teams facilitate?

Answer 15

Efforts to integrate activities associated with different organisational functions, such as design, manufacturing, and marketing

Question 16

How can innovation be achieved through cooperative strategies?

Answer 16

Alliances with other firms can contribute to innovations:
- They provide info on new business opportunities and the innovations that might be developed to exploit them
- Firms use cooperative strategies to align what they believe are complementary assets with the potential to lead to future innovations
- Combining complementary assets through alliances has the potential to result in breakthrough innovations.

Question 17

What are the risks of innovation through cooperative strategies;

Answer 17

The conflict is natural when firms try to work together to reach a mutual goal
Members of an alliance also take a risk that a partner will appropriate their technology or knowledge and use it for its own benefit.

Question 18

What does the ideal partnership look like in innovation through strategic cooperation?

Answer 18

The ideal partnership is one in which the firms have complementary skills as well as compatible strategic goals.

Question 19

How does innovation through acquisition work?

Answer 19

Firms sometimes acquire companies to gain access to their innovations and to their innovative capabilities

Question 20

What are the risks of innovation through Acquisition?

Answer 20

A firm may substitute an ability to buy innovations for an ability to develop them internally.

This may result when a firm concentrates on financial controls to identify, evaluate, and then manage acquisitions.

Question 21

Define path dependance (strategic renewal)

Answer 21

Path dependance is the influence of past stages in organizational development on future decisions and actions.

Question 22

Define strategic renewal

Answer 22

Strategic renewal can be understood as the adaptive choices and actions a firm undertakes to alter its path dependance and maintain a dynamic strategic fit with changing environments over time

Question 23

Name the two theories that explain organizational renewal:

Answer 23

Selection

Adaptation

Question 24

Explain the selection theory that explains organizational renewal:

Answer 24

The selection perspective has a deterministic approach to viewing the interaction between firms and their environment. From a selection perspective, firms are assumed to be limited in their ability and agility for adaptation.

Question 25

Explain the population ecology theory

Answer 25

Views renewal at the level of populations of firms.

Question 26

Define Relative intertia

Answer 26

Relative intertia is the notion that organizations internal rate of change is too slow to respond to the rate of change in the external environment.

Question 27

Define Hyper competition

Answer 27

Hyper competition is an environmental condition characterized by rapidly escalating competition, highly uncertainty, heterogeneity of players and constant disequilibrium and change.

Question 28

Explain the resource-based theory

Answer 28

Views the firm as a bundle of tangible and intangible resources and tacit know-how that must be identified, selected, developed and deployed to generate superior performance