Which of the following is a difference between entrepreneurially managed firms and traditionally managed firms?

Corporate EntrepreneurshipCorporate entrepreneurshipis entrepreneurial action within an organisation.Causes for Interest in CorporateEntrepreneurshipDesire for responsibilityStrong need for individual expression and freedomDiscontent within the structured organisationElements of Corporate EntrepreneurshipNew business venturing (sometimes calledcorporate venturing) refers to the creation of anew business within an existing organization. These entrepreneurial activities consist of creatingsomething new of value either by redefining the company’s current products or services, developingnew markets, or forming more formally autonomous or semiautonomous units or firms.Formations of new corporate ventures are the most salient manifestations of corporateentrepreneurship.Organizational innovativenessrefers to product and serviceinnovation, with an emphasis on development and innovation in technology. It includes new productdevelopment, product improvements, and new production methods and procedures.Self-renewalis the transformation of an organization through the renewal of the key ideas onwhich it is built. It has strategic and organizational change connotations and includes a redefinition ofthe business concept, reorganization, and the introduction of system-wide changes to increaseinnovation.Proactivenessincludes initiative and risk taking, as well as competitive aggressiveness andboldness, which are particularly reflected in the orientations and activities of top management. Aproactive organization tends to take risks by conducting experiments; it also takes initiative and isbold and aggressive in pursuing opportunities. Organizations with this proactive spirit attempt to leadrather than follow competitors in such key business areas as the introduction of new products orservices, operating technologies, and administrative techniques.MANAGERIAL VERSUSENTREPRENEURIAL DECISIONMAKINGEntrepreneurial management is distinct from traditional management in terms of eight dimensions:1.strategic orientation2.commitment to opportunity

3.commitment of resources4.control of resources5.management structure6.reward philosophy7.growth orientation8.entrepreneurial culture.The nature of the differences among thesedimensions is represented in Table 2.1 anddescribed in greater detail belowTABLE 2.1DistinguishingEntrepreneurially from Traditionally Managed FirmsStrategic Orientation and Commitment toOpportunitystrategic orientation- A focus on those factors that are inputs into the formulation of thefirm’s strategyStrategic orientation refers to those factors that are inputs into the formulation of the firm’s strategy.We can think of it as the philosophy of the firm that drives its decision about strategy; the way that itlooks at the world and the way it looks at itself and these perceptions are the driving factors behindthe firm’s strategy. The strategy of entrepreneurial management is driven by the presence or

Upload your study docs or become a

Course Hero member to access this document

Upload your study docs or become a

Course Hero member to access this document

End of preview. Want to read all 10 pages?

Upload your study docs or become a

Course Hero member to access this document

Entrepreneurship, Notes, corporate entrepreneurship, obs, 124, traditionally managed firms

89 entre chapter 2.docx - How do suppliers form an important component in an entrepreneur's professional-support network? They ensure the adequate

Chapter 02 - Entrepreneurial Intentions and Corporate Entrepreneurship Chapter 02 Entrepreneurial Intentions and Corporate Entrepreneurship Answer Key True / False Questions 1. Robert Mondavi Winery was the first Californian to produce and market premium wines that were expected to compete with European wines. TRUE Difficulty: Medium p.33 2. Corporate entrepreneurship is most strongly reflected in entrepreneurial activities as well as in top management orientations in organizations. TRUE Difficulty: Easy p.37 3. Corporate venturing consists of creating something new of value either by redefining the company's current products or services, developing new markets, or forming more formally autonomous or semiautonomous units or firms. TRUE Difficulty: Hard p.37 4. Traditionally managed firms commitment to opportunity is revolutionary with long duration. FALSE Difficulty: Medium p. 38 5. Entrepreneurially managed firm structure is usually flat with multiple informal networks. TRUE Difficulty: Medium p. 38 2-1 © 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. Chapter 02 - Entrepreneurial Intentions and Corporate Entrepreneurship 6. Entrepreneurially run firms are driven by controlled resources whereas traditionally managed firms are driven by perception of opportunity. FALSE Difficulty: Medium p.38 7. Entrepreneurs focus on how to minimize resources needed whereas traditional firms focus on accumulating resources. TRUE Difficulty: Medium p.39 8. The typical corporate culture has a climate and a reward system that favor activist decision making. FALSE Difficulty: Medium p.40-41 9. In encouraging a culture for corporate entrepreneurship, using older, proven, technology is recommended in order to increase stability in the organization. FALSE Difficulty: Easy p.41 10. Most managers in a corporation are capable of being successful corporate entrepreneurs with the correct training. FALSE Difficulty: Easy p.44 11. In an encouraging climate for corporate entrepreneurship, rewards should be based on the attainment of established performance goals. TRUE Difficulty: Easy p.44 2-2 © 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. Chapter 02 - Entrepreneurial Intentions and Corporate Entrepreneurship 12. It is important for an entrepreneur to understand all aspects of the environment. Part of this ability is reflected in the individual's level of creativity, which generally increases with age and education in most individuals. FALSE Difficulty: Hard p.45 13. The corporate entrepreneur to have the ability to encourage teamwork and use a multidisciplined approach, which violates organizational practices and structures taught in most business schools. TRUE Difficulty: Medium p.46 14. For an organization with a traditional environment, it is best to facilitate an external process to establish an entrepreneurial environment. TRUE Difficulty: Medium p.46 15. An organization that wants to become more entrepreneurial must learn to be more productive with fewer resources. TRUE Difficulty: Easy p.47 16. Entrepreneurial activities tend to immediately affect the bottom line, and hence are seldom overlooked and receive extensive funding and support. FALSE Difficulty: Medium p.47 2-3 © 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. Chapter 02 - Entrepreneurial Intentions and Corporate Entrepreneurship 17. Corporate ventures are totally independent units, hence the equity portion of the compensation is particularly difficult to handle. FALSE Difficulty: Medium p.47 18. One study found that new ventures started within a corporation performed better than those started independently by entrepreneurs. FALSE Difficulty: Easy p.47-48 19. Generally, independent, venture-capital-based start-ups by entrepreneurs tend to outperform corporate start-ups significantly. TRUE Difficulty: Medium p.48 20. An entrepreneur with loss-orientation would talk about the business-failure with a close friend or relative. TRUE Difficulty: Easy p.50 21. An entrepreneur's recovery from grief is detrimental to society. FALSE Difficulty: Med p.50 Multiple Choice Questions 2-4 © 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. Chapter 02 - Entrepreneurial Intentions and Corporate Entrepreneurship 22. Robert Mondavi came up with all of the following process innovations except: A. steel fermentation tanks B. vacuum corking of bottles C. labels that indicated when the wine was cold D. aging wines in new French oak barrels Difficulty: Hard p.33 23. In 1994 Robert Mondavi came up with: A. a capsule-free, flange-top bottle design. B. a new flavor of wine cooler that revolutionized the industry. C. a new brand of liquor with a unique marketing campaign. D. a way to vacuum cork bottles. Difficulty: Hard p. 35 24. Corporate entrepreneurship is best described as: A. the hiring of former Entrepreneurs. B. entrepreneurial action within an organization. C. the process of buying acquiring entrepreneurial firms. D. the process of hiring consultants to teach a firm how to be more creative. Difficulty: Medium p.36 25. _____ includes initiative and risk taking, as well as competitive aggressiveness and boldness. A. New business venturing B. Self-renewal C. Innovativeness D. Proactiveness Difficulty: Easy p.37 2-5 © 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. Chapter 02 - Entrepreneurial Intentions and Corporate Entrepreneurship 26. New product development falls under which of the four major components of corporate entrepreneurship? A. New business venturing B. Self-renewal C. Innovativeness D. Proactiveness Difficulty: Medium p.37 27. In regards to the differences between the entrepreneurial and administrative focuses which of the following is correct? A. Entrepreneurs focus on slow steady growth and managers focus on rapid growth B. Entrepreneurs rent or sporadically use resources; managers like to own resources C. Entrepreneurs are driven by controlled resources; managers by opportunity D. Entrepreneurs tend to use a hierarchical management structure; managers use a more fluid, flat approach Difficulty: Medium p.38 28. Having an entrepreneurial orientation towards the control of resources means: A. that one focuses on accessing others' resources. B. that one focuses on purchasing resources. C. that one has a belief that resources are unlimited and therefore easy to obtain. D. that one focuses on using a hierarchy management structure in allocating resources Difficulty: Medium p.39 29. Entrepreneurial culture and growth orientation consists of all of the following except: A. encouraging employees to generate ideas. B. focusing on opportunities. C. the desire to grow at a slow and controlled pace. D. being creative. Difficulty: Easy p.41 2-6 © 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. Chapter 02 - Entrepreneurial Intentions and Corporate Entrepreneurship 30. All these are characteristics of an entrepreneurial environment except: A. there are short term horizons. B. new ideas are encouraged. C. the organization operates on frontiers of technology. D. it uses a multidiscipline teamwork approach. Difficulty: Medium p.43 31. Which of the following is true about corporate entrepreneurship? A. Equity in a new venture should not be used as a reward due to its uncertain value B. A company must be willing to invest money without a guarantee of a return in the short term C. Teams should be segmented by department D. Top management should not be involved in the process Difficulty: Medium p.43-44 32. Which is NOT a leadership characteristic of a corporate entrepreneur according to the text? A. Flexibility and vision B. Persistence C. Encourages teamwork D. Encourages colleagues to follow hierarchy Difficulty: Medium p.45 33. The first step in establishing corporate entrepreneurship in an organization is: A. finding mid level managers to champion ideas B. developing ways to get closer to customers C. learn to be more productive with fewer resources D. securing commitment from top management Difficulty: Medium p.46 34. A sufficient time for top management to be committed to corporate entrepreneurship is: A. at least one year. B. at least two years. C. at least three years. 2-7 © 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. Chapter 02 - Entrepreneurial Intentions and Corporate Entrepreneurship D. at least ten years. Difficulty: Hard p.46 35. Which of the following would NOT occur in the second stage of establishing corporate entrepreneurship in an organization? A. Ideas that top management is interested in supporting are identified. B. Identify an evaluation system for involved employees. C. The amount of risk money available is specified. D. Overall program expectations and target results of each corporate venture are established. Difficulty: Medium p.46 36. When establishing corporate entrepreneurship in an organization rewards should: A. be tied to the department in which the idea originated B. be tied to the parent company's stock performance C. be tied to the performance of the entrepreneurial unit created from the idea D. not be changed from whatever current system is being used so that risk is encouraged Difficulty: Medium p.47 37. Which of the following is true? A. Independent, venture-capital-based start-ups by entrepreneurs tend to outperform corporate start-ups significantly. B. New ventures started within a corporation performed better than those started independently by entrepreneurs. C. Independent entrepreneurs find difficulty in maintaining a long-term commitment. D. Corporate ventures become profitable twice as fast as independent ventures. Difficulty: Medium p.47-48 38. Which company, discussed in our text as an example of corporate entrepreneurship, created a high quality monitor that was used by NASA? A. HP B. IBM C. APPLE D. TOSHIBA Difficulty: Medium p.49 2-8 © 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. Chapter 02 - Entrepreneurial Intentions and Corporate Entrepreneurship 39. Which company, discussed in our text as an example of corporate entrepreneurship, created the independent business unit concept? A. HP B. IBM C. APPLE D. TOSHIBA Difficulty: Medium p.49 40. When would an entrepreneur be pronounced to have recovered from the grief of a lost business? A. On the availability of equally challenging entrepreneurial opportunities. B. Upon a simultaneous engagement in an analysis of the failed business. C. On having evaluated and absorbed the lessons learnt from the failed business. D. Thoughts about the events surrounding, and leading up to the loss of the business, no longer generate a negative emotional response. Difficulty: Med p.50 41. In the loss-orientation process of grief recovery, when are painful memories likely to dominate most? A. In the early phase of grief. B. In the medial stage of grief. C. In the later stage of grief. D. Each time a related negative thought comes to mind. Difficulty: Easy p.50 42. Why is loss-orientation physically and mentally exhausting? A. Since it involves psychological counseling. B. Since it involves confrontation. C. Since it advocates change of lifestyle. D. Since it takes a long time to recover from grief. Difficulty: Med 2-9 © 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. Chapter 02 - Entrepreneurial Intentions and Corporate Entrepreneurship p.50 43. Why does restoration-orientation have adverse effects on an individual's health? A. Since it involves suppression by mental effort. B. Since it prescribes physical diversions like a hobby. C. Since it involves regular physical exertion via exercise. D. Since it involves mental catharsis to bring out the grief. Difficulty: Med p.50 44. Which of the following is most effective in grief-recovery? A. Restoration-orientation B. Loss-orientation C. Dual process D. Grief recovery process Difficulty: Easy p.50 2-10 © 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. Chapter 02 - Entrepreneurial Intentions and Corporate Entrepreneurship Essay Questions 45. Identify and briefly describe the 4 major parts of corporate entrepreneurship. 1. New business venturing: These entrepreneurial activities consist of creating something new of value either by redefining the company's current products or services, developing new markets, or forming more formally autonomous or semiautonomous units or firms. 2. Organizational innovativeness refers to product and service innovation. It includes new product development, product improvements, and new production methods and procedures. 3. Self-renewal is the transformation of an organization through the renewal of the key ideas on which it is built. Includes a redefinition of the business concept, reorganization, and the introduction of system wide changes to increase innovation. 4. Proactiveness includes initiative and risk taking, as well as competitive aggressiveness and boldness, which are particularly reflected in the orientations and activities of top management. A proactive organization tends to take risks by conducting experiments; it also takes initiative and is bold and aggressive in pursuing opportunities. Organizations with this proactive spirit attempt to lead rather than follow competitors in such key business areas as the introduction of new products or services, operating technologies, and administrative techniques. Answer will vary. Difficulty: Medium p.36-37 2-11 © 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. Chapter 02 - Entrepreneurial Intentions and Corporate Entrepreneurship 46. Discuss three major ways in which managerial and entrepreneurial decision making differs. Eight areas of difference students can choose from: 1. strategic orientation 2. commitment to opportunity 3. commitment of resources 4. control of resources 5. management structure 6. reward philosophy 7. growth orientation 8. entrepreneurial culture Basic differences in each dimension: 2-12 © 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. Chapter 02 - Entrepreneurial Intentions and Corporate Entrepreneurship Source: This table is taken from T. Brown, P. Davidsson, and J. Wiklund, "An Operationalization of Stevenson's Conceptualization of Entrepreneurship as OpportunityBased Firm Behavior," Strategic Management Journal 22 (2001), p. 955. Answer will vary. Difficulty: Medium p.37-41 47. Identify 5 of the 12 characteristics of an entrepreneurial environment. TABLE 2.3 Characteristics of an Entrepreneurial Environment • Organization operates on frontiers of technology • New ideas encouraged • Trial and error encouraged • Failures allowed • No opportunity parameters • Resources available and accessible • Multidiscipline teamwork approach • Long time horizon • Volunteer program • Appropriate reward system • Sponsors and champions available • Support of top management Students can choose 5 of the 12 from table 2.3 above. Difficulty: Medium p. 43 48. Identify the seven leadership characteristics of a corporate entrepreneur. TABLE 2.4 Leadership Characteristics of a Corporate Entrepreneur • Understands the environment • Is visionary and flexible • Creates management options • Encourages teamwork • Encourages open discussion • Builds a coalition of supporters • Persists Students should summarize table 2.4 above. Instructor could ask less characteristics for a less difficult question. Difficulty: Hard p.45 2-13 © 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. Chapter 02 - Entrepreneurial Intentions and Corporate Entrepreneurship 49. Explain the dual process model of coping with negative emotions. Student should define process as shifting between a loss orientation and a restoration orientation. The student should also explain the two types of loss: loss orientation An approach to negative emotions that involves working through, and processing, some aspect of the loss experience and, as a result of this process, breaking emotional bonds to the object lost. restoration orientation An approach to negative emotions based on both avoidance and a proactiveness toward secondary sources of stress arising from a major loss. The entrepreneur can benefit from both orientations while minimizing the costs of maintaining either for too long. Difficulty: Medium p.50 50. Explain the benefits, or practical implications, of using the dual process model of coping with negative emotions. 1. Helps to reduce feelings of shame and embarrassment. 2. Realizing that psychological and physiological outcomes caused by the feelings of loss are “symptoms” can reduce secondary sources of stress and may also assist with the choice of treatment. 3. Understanding that there is a process can provide entreprenuers some comfort that their current feelings of loss, sadness, and helplessness will eventually diminish. 4. The recovery and learning process can be enhanced by some degree of oscillation between a loss orientation and a restoration orientation 5. Recovery from loss offers an opportunity to increase one’s knowledge of entrepreneurship. This provides benefits to the individual and society. Difficulty: Medium p.50

2-14 © 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

What are the major differences between traditionally managed firms and entrepreneurially managed firms?

What is the first step in the process of corporate entrepreneurship?

Which of the following is true of corporate venturing?

Which of the following is true defining characteristic of venture capital start ups?