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2 Written questions
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Test: 2 |Quzlet
FALSE.
INCORRECT: You gave no answer
POSSIBLE ANSWERS: In a market characterized by network externalities, the benefit from using a good
decreases with an increase in the number of other users of the same good,, The qualities that make people
inventive also make them entrepreneurial, According to the concept of innovation funnel, the number of
successful products launched wil be greater than the number of raw ideas generated, Tacit knowledge is
knowledge that can be documented in writen form, in the context of -curves in technological improvement,
‘performance improvement in the early stages of a technology is rapid, Technological innovation decreases the
‘amount of output achievable from a given quantity of labor and capital, The sclence-push approach to research
and development argued that innovation was driven by the perceived demand of potential users., Firms that
charge headlong into new product development usually have short development cycles., GDP does not relate
directly to the amount of goods consumers can purchase., Late entrants typically bear the bulk of research and
development expenses, Firms cannot influence the shape of the s-curve through their development activities,
A legally induced adherence to a dominant design is not possible., The time invested by buyers to become
familiar with a product's operation cannot be considered as a switching cost., The majority of effort and money
invested in technological innovation comes from non-industrial firms., Collaborative research is prohibited in
high-technology sectors., Technology diffusion and information diffusion take the same amount of time.,
According to the Utterback and Abernathy model, firms in the fluid phase avoid experimenting with different
form factors or product features., By choosing not to exercise its monopoly power, a firm can steepen its
‘monopoly costs curve., The "Buyer Utility Map" developed by Kim and Mauborgne cannot be applied to
industrial products., The learning curve indicates that the more units a company produces of an item, the more
each unit will cost,, Knowledge that cannot be readily codified is called explicit knowledge., All pioneers face
‘customer uncertainty, Technological innovation results in complete eradication of negative externaiities., When
3 market is characterized by mature enabling technologies, a firm should enter the market late, Early leaders
are firms that are the first to enter the market, A firm intending to refine an earlier entrant's technology should
avoid fast-cycle development processes, A firm's organizational structure and control systems have no influence
‘on the generation of innovative ideas., Innovation and new technologies have led to longer product life cycles
and lowered product obsolescence., Knowledge that is explicit requires more frequent and close interaction to
be meaningfully exchanged than knowledge that is tacit, Among the various adopter categories, innovators
have the greatest potential for opinion leadership. Globalization of markets has reduced the importance of
Innovation., A firm that supports a technology that is not chosen as the dominant design will have better
potential to earn near-monopoly rents in the short run than a firm that develops a dominant design., As firms
develop complementary technologies to improve the productivity or ease of utilization of the core technology,
the technology becomes less attractive to other firms., The path a technology follows through time is termed its
technology transfer., For a firm to adopt a component innovation, it typically requires that the firm have
architectural knowledge about the way components link and integrate to form a whole system., When an
industry has network externalities, the value of a good to a user is more likely €o go up linearly rather than
Increase in an s-shape., In the context of s-curves in technological improvement, as a technology begins to reach
its inherent limits, the cost of each marginal improvement decreases., IFentry barriers are high, entering a
‘market early becomes necessary., According to Anderson and Tushman, in the era of ferment, firms focus on
efficiency and market penetration., User innovators typically create new product innovations in order to profit
from the sale of the innovation to customers., According to the concept of the innovation funnel, one new idea is
usually responsible for several new products., New product development time increases when using strategic
alliances and cross-functional teams., For a very new product technology, market research will be of great help.
Technologies always get the opportunity to reach their performance limits before being replaced by anew
technology. In industries that have increasing returns to adoption, allowing competitors to get a head start in
building an installed base is a safe strategy., An organization's overall creativity evel isa simple aggregate of the
creativity ofthe individuals it employs., The last 16 percent ofthe individuals in a social system to adopt an
innovation are termed as late majority, Incubators are regional districts, typically set up by government, to
foster R&D collaboration between government, universities, and private firms., Network externalities cannot
arise in markets that do not have physical networks, For a new technology to be successful in a market, its
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‘enough for the new technology's stand-alone tilly (o exceed that of the incumbent standard. The degree (0
which innovative activities are geographically clustered is independent of the national differences in the way
technology development is funded or protected, Technology diffusion curve is s-shaped because adoption is
intially fast when a new technology is introduced to the market, The ability of an organization to recognize,
assimilate, and utilize new knowledge is referred to as learning effect., A modular innovation significantly affects
the overall configuration of a system., Flexible manufacturing technologies have increased the importance of
production economies of scale, The innovation process is often conceived of a a funnel, because most
potential new product ideas make it through the development process., Early followers enter the market only
after a product begins to penetrate the mass market. or In industries characterized by network externalities, the
value of a technological innovation fo users vil be a function only of its stand-alone benefits and cost.
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TRUE
INCORRECT: You gave no answer
POSSIBLE ANSWERS: According to Anderson and Tushman, in the era of incremental change, most competition
revolves around improving components rather than altering the architecture,, Many startup firms demise
because new innovations tend to be adopted very slowly at first, S-curves of technology diffusion are in part
function of the s-curves in technology improvement., Most innovative ideas do not become successful nev
products, Innovation often originates with those who create solutions for their own needs, Ifyou are a first
‘mover in the market of a new technology, you may find that your product offerings will have (0 be revised as
consumers reveal their preferences, Network externality returns refers fo the value customers reap as a larger
portion of the market adopts the same good, S-curves in technology performance and s-curves in technology
diffusion are fundamentally different processes., Technologically superior products do not always win in the
‘market, Firms form alliances with competitors to jointly work on an innovation project or to exchange
information, The decline in the government share of spending on R&D is largely due to the rapid increase in
industry R&D funding rather than a real decline n the absolute amount spent, A technology may be
underdeveloped and its fit with customer needs unknown in the early market stages., The terms research and
development represent different kinds of investment in innovation-related activities, Inventors tendency toward
introversion cause them to be good at manipulating concepts, Products that have a large installed base are
likely to attract more developers of complementary goods. A large perceived installed base can lead to a large
‘actual installed base., Monetary rewards undermine creativity by encouraging employees to focus on extrinsic
rather than intrinsic motivation, The intellectual property policies of a university embrace both patentable and
unpatentable innovations., As firms’ routines and capabilities become more and more oriented around the
dominant architecture, the firms become less able to identity and respond to a major architectural innovation,
The influence of a dominant design can extend beyond its ovmn technology cycle., Other things being equal, less
customer uncertainty favors earlier timing of entry., Though learning curves are found in a wide range of
organizational processes, there are substantial differences in the rates at which organizations learn.,
Externalities are costs that are borne by individuals other than those responsible for creating them. In an
industry characterized by increasing returns to adoption, there can be powerful advantages to being an early
pprovider., It's possible for a firm that follows an s-curve mode! too clasely to end up switching technologies later
than it should, The intial cost of a good itself can be a switching cost, Product innovations are more visible
than process innovations., Proximity and interaction can directly influence firms' ability and willingness to
exchange knowledge., The credibility of a firm can influence the rate of adoption of its technology, First movers
‘ypically invest more in exploratory research than late entrants., Investing in process innovation helps firms
lower their costs., Not ail innovations require complementary goods., Ifa business discharges untreated
chemical waste into local water bodies, it imposes a negative externality on the community members., An
individual with only 2 moderate degree of knowledge of afield will be able to produce more creative solutions
than an individual with extensive knowledge ofthe field, Increasing returns to adoption means that, the more a
technology is adopted, the more valuable it becomes,, if an individual knows a field too well, it can stifle
creativity, Then a technology's performance is plotted against the amount of effort and money invested in the
technology, it typically shows slow intial improvement, then accelerated improvement, then diminishing
improvement. in industries characterized by increasing returns, the rate of return from a product or process
increases with the size ofits installed base. or An innovation can be competence enhancing to one firm, while
competence destroying for another.
2 Matching questions
Most innovative ideas do not become a TRUE
successful new products.
FALSE
CORRECT: TRUE b
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2, Technological innovation decreases the
‘amount of output achievable from a given
‘quantity of labor and capital.
CORRECT: FALSE
5 Multiple choice questions
1. FALSE
(No Answer)
a. Product innovations are more visible than process innovations.
b. CORRECT: GDP does not relate directly to the amour
9 goods consumers can purchase.
Not all innovations require complementary goods.
. Most innovative ideas do not become successful new products.
2 TRUE
(No Answer)
a. CORRECT: Ifyou are a first mover in the market of a new technology, you may find that your product
offerings will have to be revised as consumers reveal their preferences.
». Innovation and new technologies have led to longer product lfe cycles and lowered product obsolescence.
If entry barriers are high, entering 2 market early becomes necessary.
. When a market is characterized by mature enabling technologies, a firm should enter the market late
3. FALSE
(No Answer)
a. The initial cast of a good itself can be a switching cost.
». First movers typically invest more in exploratary research than late entrants,
Not all innovations require complementary goods.
d. CORRECT: Late entrants typically bear the bulk of research and development expenses,
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4, TRUE
(No Answer)
a. GDP does not relate directly to the amount of goods consumers can purchase.
bb, Network externalities cannot arise in markets that do not have physical networks.
«. Early leaders are firms that are the first to enter the market.
dd, CORRECT: Network externality returns refers to the value customers reap as a larger portion of the market
adopts the same good,
FALSE
(No Answer)
a. If an individual knows a field too well, it can stifle creativity.
». Investing in process innovation helps firms lower their costs.
& CORRECT: Firms cannot influence the shape of the s-curve through their development activities.
d, Product innovations are more visible than process innovations.
5 True/False questions
1. Alegally induced adherence to a dominant design is not possible. ~ FALSE
This is true. You gave no answer.
2. Thetime invested by buyers to become familiar with a product's operation cannot be considered as a switching
cost, TRUE
This is false. You gave no answer.
It should be The time invested by buyers to become familiar with a product's operation cannot be considered as
a switching cost. - FALSE
3. The majority of effort and money invested in technological innovation comes from non-industrial firms. -- TRUE
This is false. You gave no answer.
It should be The majority of effort and money invested in technological innovation comes from non-industrial
firms, -- FALSE.
4 Collaborative research is prohibited in high-technology sectors. ~ TRUE
This is false. You gave no answer.
It should be Collaborative research is prohibited in high-technology sectors. -- FALSE.
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5. S-cunes in technology performance and s-curves in technology diffusion are fundamentally different processes.
= FALSE
This is false, You gave no answer.
It should be S-curves in technology performance and s-curves in technology diffusion are fundamentally
different processes. ~ TRUE
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