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A number of models of the creative process can be helpful to those who need to engage in innovation and entrepreneurship. One proven and practical process for challenging the way we perceive things includes three main stages. Which of these is not a stage in the process?


A) Raising the resources.
B) Understanding the opportunity.
C) Generating ideas.
D) Planning for action.

E) B) and C)
F) A) and B)

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Which of the following is the least common method used by firms to learn about competitors' innovations?


A) Licensing.
B) Reverse engineering.
C) Patent analysis.
D) Publications.

E) B) and C)
F) All of the above

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The national system of innovation in which a firm is embedded matters greatly, since it strongly influences both the direction and the vigour of its own innovative activities. This includes national market incentives and pressures to which firms have to respond. Which of the following is not a significant incentive?


A) Local production input prices, where international differences can help generate very different pressures for innovation.
B) Local (private and public) investment activities, which create innovative opportunities for local suppliers.
C) Local skills and knowledge.
D) Local natural resources, which create opportunities for innovation in both upstream extraction and downstream processing.

E) All of the above
F) None of the above

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Cognitive maps are a useful methods to encourage creativity and promote innovation. Which of the following is not a benefit of using cognitive maps?


A) Help to build consensus.
B) Make assumptions explicit.
C) Involve different stakeholders.
D) Can be used individually, or in groups.

E) All of the above
F) B) and C)

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At each of the different stages of developing a new venture there are different significant challenges to overcome in order to make a successful transition to the next stage, what the researchers call "critical junctures". Which of the following is not normally such a critical transition?


A) Entrepreneurial commitment - persistence that bind the venture champion to the emerging business venture.
B) Venture credibility - of the venture team, key customers and other social capital and relationships.
C) Resource availability - access to the necessary financial resources.
D) Opportunity recognition - the ability to connect know-how to a commercial application.

E) B) and C)
F) C) and D)

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Firms in emerging economies may pursue different routes to upgrading through innovation. Which of the following is not a common pathway?


A) Capability upgrading - improving the range of functions undertaken, or changing the mix of functions, for example, production versus development or marketing.
B) Process upgrading - incremental process improvements to adapt to local inputs, reduce costs or to improve quality.
C) Competitiveness upgrading - adopting best-practice methods from developed economies.
D) Inter-sectoral upgrading - moving to different sectors, for example, to those with higher value-added.

E) All of the above
F) C) and D)

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Firms' innovative behaviours are strongly influenced by the competencies of their managers and the ways in which their performance is judged and rewarded (and punished) . Methods of judgement and reward vary considerably amongst countries, according to their national systems of corporate governance: in other words, the systems for exercising and changing corporate ownership and control. Which of the following is not generally true?


A) In the Anglo-Saxon system corporate ownership (shareholders) is separated from corporate control (managers) .
B) In the Anglo-Saxon system investors are slow to deal with poor investment choices.
C) In the Nippon-Rhineland system a higher priority is given to investment than to returns to shareholders.
D) In the Nippon-Rhineland system banks, suppliers and customers are more heavily locked into the firms in which they invest.

E) B) and C)
F) None of the above

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Technological leadership in firms does not necessarily translate itself into economic benefits. The capacity of the firm to appropriate the benefits of its investment in technology depends on its position. Which of the following is not relevant?


A) Innovation 'leadership'-where firms aim at being first to market, based on technological leadership.
B) Complementary assets or capabilities in marketing and distribution.
C) Capacity to defend its advantage against imitators, for example, through standards or intellectual property.
D) The learning curve in production generates both lower costs, and a particular and powerful form of accumulated and largely tacit knowledge.

E) All of the above
F) A) and B)

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A

In his popular book, The World is Flat: The globalized world in the 21st century (Penguin, 2006) , Thomas Friedman argues that developments in technology and trade, in particular information and communications technologies (ICTs) , are spreading the benefits of globalization to the merging economies, promoting their development and growth. Which of the following is not true?


A) Technology and innovation are evenly distributed globally.
B) Technology and innovation are not easily transferred across regions or firms.
C) Different national contexts influence the ability of firms to absorb such technology and innovation.
D) The position of firms in international value chains can constrain their ability to exploit innovation.

E) C) and D)
F) A) and B)

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Prahalad and Hamel argue that the capacity to open up new product markets requires distinctive core competencies, coupled with methods of corporate organization and evaluation that explicitly recognize the importance of these competencies. Which of the following is not true of core competencies?


A) Contribute to more than one core product, and to more than one business unit.
B) Suggests that large and multidivisional firms should be viewed as a collection of strategic business units.
C) Require focus: companies are likely to lead in more than five or six core competencies.
D) Are supported by organizational competencies such communication, involvement, and a commitment to working across organisational boundaries.

E) A) and C)
F) B) and C)

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B

Which of the following is not one of the main factors influencing the decision where to locate R&D globally?


A) The importance of external sources of technical and market knowledge, e.g. sources of technology, suppliers, and customers.
B) The quality of the science and technology base.
C) The importance and costs of internal transactions, e.g. between engineering and production.
D) The cost and disruption of relocating key personnel to the chosen site.

E) A) and D)
F) None of the above

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Firms have many reasons for monitoring and learning from the development of technological, production and organizational competencies of systems of innovation in other countries, and especially from those that are growing and strong. Which of the following is not a significant reason?


A) Understanding and imitating foreign systems of innovation.
B) Firms can benefit more specifically from the technology generated in foreign systems of innovation.
C) Potential sources of improvement in the corporate management of innovation.
D) Identify and plan for firms with a potential capacity to compete through innovation.

E) A) and C)
F) All of the above

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Four factors have a major influence on the ability of a firm to develop and create value through innovation. Which of the following is not one of these factors?


A) Its ability to identify and exploit external sources of innovation, especially international networks.
B) Its ability to invest in basic science and technology.
C) Its power and market position within the international value chain, which in part defines the innovation-based opportunities and threats that it faces.
D) The national system of innovation in which the firm is embedded, and which in part defines its range of choices in dealing with opportunities and threats.

E) A) and B)
F) A) and C)

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Deciding where to locate and perform R&D depends on a number of factors. Which of the following is not a significant influence?


A) R&D supporting overseas production should be located close to that of overseas production.
B) R&D supporting existing businesses (i.e. products, processes, divisions) should be located in established divisions.
C) R&D supporting global products and services should be located overseas.
D) R&D supporting new businesses should initially be located in central laboratories, then transferred to divisions for exploitation.

E) A) and B)
F) A) and C)

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C

The notions of core competence and dynamic capabilities are useful as they emphasize the importance of developing firm-level resources. However, there are a number of limitations to these approaches. Which of the following is not a significant limitation of the concepts?


A) Industries face differing potentials for technology-based diversification.
B) Recommendations that firms should concentrate resources on a few distinctive world-beating technological competencies are misleading.
C) Emphasizes the difficulty of capturing and transferring knowledge due to its tacit nature and context-specificity.
D) More general enabling competencies for the co-ordination of changes in supply, production and distribution systems are necessary.

E) All of the above
F) None of the above

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