Complete Test Bank Chapter 12 International production and

Chapter 13

Test Bank

Type: true-false

Title: Chapter 13 Question 01

1) Innovation is the process of developing and often commercialising new products, services, and processes.

a. True

Feedback: This is the definition of innovation.

A-head reference: 13.2 Understanding the nature, types, and process of global innovation

b. False

Type: true-false

Title: Chapter 13 Question 02

2) R&D enables firms to improve their ability to assimilate knowledge from outside.

a. True

Feedback: Firms develop the ability to internalize knowledge created by other firms and organisations.

A-head reference: 13.2 Understanding the nature, types, and process of global innovation

b. False

Type: true-false

Title: Chapter 13 Question 03

3) During the concetualization phase of innovation the emphasis is on the design of possible versions of the product.

a. True

b. False

Feedback: The statement is false because in the conceptualization phase the emphasis is on the development of initial concept of project.

A-head reference: 13.2 Understanding the nature, types, and process of global innovation

Type: true-false

Title: Chapter 13 Question 04

4) One of the most common misconceptions of innovation is that it does not go hand in hand with conformity and existing organisational rules.

a. True

Feedback: Conformity is required to overcome various constraints within the organisation and to bring ideas to fruitful conclusion.

A-head reference: 13.3 From creativity to innovation

b. False

Type: true-false

Title: Chapter 13 Question 05

5) Innovation in an organisation is nurtured by establishing reliable and systematic processes and practices to nurture an innovative culturewithin the entire organisation.

a. True

Feedback: Nurturing innovation in an organisation requires different but complementary approaches

A-head reference: 13.3 From creativity to innovation

b. False

Type: true-false

Title: Chapter 13 Question 06

6) The purpose of process innovation is to lower costs, increase sales and profits.

a. True

Feedback: True, see Figure 13.2.

A-head reference: 13.4 Innovation in the global economy: a competitive weapon or a defence mechanism?

b. False

Type: true-false

Title: Chapter 13 Question 07

7) Foreign market operating strategies entail decisions on market selection, entry mode and timing

a. True

Feedback: True because such decisions involve the where (market selection), how (entry mode) and when (timing) elements in a foreign market operating strategy

A-head reference: 13.6 Creating and transferring knowledge across national borders

b. False

Type: true-false

Title: Chapter 13 Question 08

8) Firms need to locate R&D functions in their home countries to increase the economic benefits to the frim

a. True

b. False

Feedback: That is conventional wisdom, but strategy in the global factory system increasingly focuses on R&D globalisation.

A-head reference: 13.5 Building innovation capabilities abroad

Type: true-false

Title: Chapter 13 Question 09

9) Globalised R&D units function best when established as separate from the focal firm.

a. True

b. False

Feedback: It is false because geographically disbursed R&D units need to be integrated in the international operations of the global factory to create a cohesive research community.

A-head reference: 13.5 Building innovation capabilities abroad

Type: true-false

Title: Chapter 13 Question 10

10) Tacit knowledge can be expressed, codified, and articulated.

a. True

b. False

Feedback: Tacit knowledge is embedded in the minds of individuals and cannot be easily transferred from one individual to another.

A-head reference: 13.6 Creating and transferring knowledge across national borders

Type: multiple response question

Title: Chapter 13 Question 11

11) Factors that infleunce the economic benefits of R&D are _______ Please select all that apply.

Feedback: All answers are correct. See figure 13.3 on p.461.

A-head reference: 13.4 Innovation in the global economy: a competitive weapon or a defence mechanism?

a. Technological and commercial succes of the project

b. IPR and appropriability regimes

c. Innovations of rivals

d. Knowledge leakage and diffusion

Type: multiple response question

Title: Chapter 13 Question 12

12) Knowledge transfer and the global factory framework may promote _______ Please select all that apply.

Feedback: All options are correct.

A-head reference: 13.6 Creating and transferring knowledge across national borders

a. Organisational learning

b. Increase absorptive capacity of foreign based subsidiaries

c. Help units compete with local firms

d. Strengthen capabilities of foreign based subsidiaries

Type: multiple choice question

Title: Chapter 13 Question 13

13) One of the benefits of open innovation is _______ Please select all that apply.

Feedback: The correct response is d) experimenting with new ideas can result in new and unexpected technological combinations.

A-head reference: 13.7 Open innovation in the global economy: acquiring new capabilities from the market

a. Limits knowledge spill-over to other firms

b. Reduces cost of innovation

c. Using broader range of expertise

d. Can lead to the development of new technological opportunities

Type: multiple choice question

Title: Chapter 13 Question 14

14) _______ is one of the main processes of knowledge accumulation. Please select all that apply.

Feedback: The correct response is b), retention is high when subsidiaries minimize knowledge leakage.

A-head reference: 13.6 Creating and transferring knowledge across national borders

a. Identifying opportunities for knowledge sharing

b. Knowledge retention

c. Willingness to share knowledge

d. Efficiency in knowledge transmission

Type: multiple choice question

Title: Chapter 13 Question 15

15) Process innovation refers to _______ Please select all that apply.

Feedback: The correct answer is b) because improved production method is a process improvement while the other options refer to new products or services.

A-head reference: 13.4 Innovation in the global economy: a competitive weapon or a defence mechanism

a. The development of a new service

b. The implementation of a new or improved production method

c. The development of a new product

d. The development of new products or services

Type: multiple choice question

Title: Chapter

13 Question 16

16) A key characteristic of open innovation is _______

Feedback: The correct answer is c) as important resources often extend beyond the boundaries of the MNE and accessing resources outside the firm for example through licensing.

A-head reference: 13.7 Open innovation in the global economy: acquiring new capabilities from the market

a. Increased cooperation by geographically spread R&D subsidiaries of the lead firm

b. Globalising R&D centres

c. Acquiring knowledge and expertise from the market

d. Improved exploiting of firm resources and capabilities

Type: multiple choice question

Title: Chapter 13 Question 17

17) In very competitive and dynamic markets R&D may be a _______

Feedback: Not all firms benefit from innovation and innovation does not always create a competitive advantage.

A-head reference: 13.4 Innovation in the global economy: a competitive weapon or a defence mechanism?

a. Defence mechanism

b. Way to improve processes

c. Way to develop new products

d. Way to disrupt the competition

Type: multiple choice question

Title: Chapter 13 Question 18

18) The fundamental challenge of knowledge transfer in the global factory is _______

Feedback: Tacit knowledge is embedded in the mind of individuals and cannot easily be codified and transferred across borders.

A-head reference: 13.6 Creating and transferring knowledge across national borders

a. Transferring tacit knowledge across borders

b. Transferring explicit knowledge across borders

c. Transferring tacit knowledge in foreign subsidiaries

d. Transferring explicit and tacit knowledge across borders

Type: multiple choice question

Title: Chapter 13 Question 19

19) What potential advantages can be gained from globalising R&D activities

Feedback: Subsidiaries can be located in locations where land, capital, and scientific talent are available at a lower cost than the home country.

A-head reference: 13.5 Building innovation capabilities abroad

a. Subsidiaries offer financial advantage and access to technical knowledge and skills

b. Subsidiaries offer financial advantages such as lower land and labour cost

c. Subsidiaries offer access to local firms

d. Subsidiaries offer access to technical knowledge and skills

Type: multiple choice question

Title: Chapter 13 Question 20

20) How should management respond to innovation failure to foster an innovation culture?

Feedback: Innovation takes place in an environment where innovation is encouraged given acceptable levels of risk.

A-head reference: 13.3 From creativity to innovation

a. Be supportive and do not focus on the failure

b. Express anger and frustration

c. Dismiss the employee(s)

d. Outsource the R&D function