Strategic Decision-making in Innovative Contexts
1. Once established, competitive advantage is:
a. subject to erosion by competitors or entrants.
b. a firm’s reward for leading the industry.
c. easily maintained unless entry barriers are high.
d. relatively stable over time.
2. Strategic management of innovation and technological change:
a. exists only in technology-intensive industries.
b. tries to influence or direct technological change before it occurs.
c. cannot be managed.
d. can contribute to a firm’s competitive advantage.
3. The difference between invention and innovation is:
a. an inventor is guaranteed a payment, an innovator is not.
b. invention requires an inventor, innovation requires no individual person.
c. you must innovate before you invent.
d. invention is the development of newknowledge, innovation is the commercialisation
of it.
4. As the industry life cycle progresses:
a. product innovation gives way to process innovation.
b. foreign competition is more likely.
c. strategic innovation becomes more important.
d. technological innovation declines.
5. Why is innovation no guarantee of success and fortune?
a. Implementation of innovation may be a failure due to internal organisational factors.
b. Success depends on the value created and the portion of that value that the
innovator is able to appropriate.
c. Nothing is guaranteed in the corporate world and in life in general.
d. Success depends on the value created.
6. To determine the strength of an innovator’s appropriation, four elements should be
considered. Which ones?
a. Property rights, lead-time, complementary resources, and relative bargaining power
b. Property rights, lead-time, complementary resources, and tacitness and complexity
of technology
c. Property rights, tacitness and complexity of technology, corporate culture, and HR
management
d. Property rights, tacitness and complexity of technology, lead-time, and luck
7. Licensing, joint ventures, and alliances, are examples of:
a. strategies involving third parties.
b. alternative strategies to exploit innovation.
c. alternative strategies to create inventions.
d. alternative strategies to sell inventions to another firm in the industry
8. The choice of a strategy to exploit innovation depends on two factors:
a. luck and past experience in the industry.
b. characteristics of the innovation and a firm’s financial resources.
c. characteristics of the innovation and a firm’s resources and capabilities.
d. all of the above.
9. Lead-time refers to:
a. the period of time during which a firm is the leader of an industry.
b. the period of time during which a firm has discovered the largest number of
innovations.
c. the time it takes followers to catch up.
d. none of the above.
10. Innovation is an act of:
a. luck
b. creativity
c. selfishness
d. none of the above
