CHAPTER 03 THE ENTREPRENEURIAL MIND SET IN

ORGANIZATIONS CORPORATE ENTREPRENEURSHIP

TRUEFALSE

1. One reason that corporate entrepreneurship has become popular is because it allows corporations
to tap the innovative talents of the personnel.

(A) True

(B) False

Answer : (A)

2. As part of creating an innovative climate, a firm should base rewards given upon results achieved.

(A) True

(B) False

Answer : (A)

3. A corporation can encourage entrepreneurship activities if top management sponsors

entrepreneurial projects.

(A) True

(B) False

Answer : (A)

4. Few firms today realize the need for corporate entrepreneurship.

(A) True

(B) False

Answer : (B)

5. ​The need for corporate entrepreneurship has risen in response to one problem: rapid growth.

(A) True

(B) False

Answer : (B)

6. Clever bootlegging of ideas refers to secretly working on new ideas on company time as well as on
personal time.

(A) True

(B) False

Answer : (A)

7. The contemporary thrust of entrepreneurship as the major force in global business has led to a
desire for entrepreneurial activity inside enterprises.

(A) True

(B) False

Answer : (A)

8. Skunk works are project groups that work within the traditional lines of authority.

(A) True

(B) False

Answer : (B)

9. ​3M's philosophy is based on the theory that the more ideas, the better the chances for a
successful innovation.

(A) True

(B) False

Answer : (A)

10. Today's managers must foster excitement for innovation and remove obstacles for employees to
engage in corporate entrepreneurship.

(A) True

(B) False

Answer : (A)

11. Firms do not need to alter management techniques to encourage corporate entrepreneurship
since it tends to occur naturally.

(A) True

(B) False
Answer : (B)

12. Trust from the company is one key element to successful corporate entrepreneurship.

(A) True

(B) False

Answer : (A)

13. Employees shouldn't expect feedback on their entrepreneurial ideas.

(A) True

(B) False

Answer : (B)

14. Corporations that promote personal growth will attract the best people.

(A) True

(B) False

Answer : (A)

15. When an entrepreneurial environment is created, a company does not usually set aside the
traditions of the company.

(A) True

(B) False

Answer : (B)

16. ​Some people, unaccustomed to operating in a CE style will leave.

(A) True

(B) False

Answer : (A)

17. The first step in planning a strategy of corporate entrepreneurship is sharing the vision of
innovation that executives wish to achieve.

(A) True
(B) False

Answer : (A)

18. Systematic evolution of a product or service into newer or larger markets is referred to as
radical innovation.

(A) True

(B) False

Answer : (B)

19. Corporate entrepreneurs should be restricted to the resources of their own divisions of the
corporation.

(A) True

(B) False

Answer : (B)

20. Researchers have identified specific factors that organizations can concentrate on in helping
individuals develop more entrepreneurial behavior.

(A) True

(B) False

Answer : (A)

21. Corporate venturing flourishes when a vertical management system is in place.

(A) True

(B) False

Answer : (B)

22. An innovative team or I-Team, is composed of two or more people who formally create and share
ownership of a new organization.

(A) True

(B) False

Answer : (A)
23. Radical innovations must be nurtured.

(A) True

(B) False

Answer : (A)

24. A "champion" is a person with a big ego and just gets in the way of corporate entrepreneurship.

(A) True

(B) False

Answer : (B)

25. ​In many ways, an I-Team is a smaller business that operates outside of the business.

(A) True

(B) False

Answer : (B)

26. Corporate entrepreneurship is contingent upon individual members continuing to undertake

innovative activities.

(A) True

(B) False

Answer : (A)

27. The resources of the organization are irrelevant to the ability of the corporate entrepreneur to
implement an idea.

(A) True

(B) False

Answer : (B)

28. Understanding the entrepreneur is only part of understanding the entrepreneurial process.

(A) True

(B) False

Answer : (A)
29. Expecting clever bootlegging of ideas should come as a surprise.

(A) True

(B) False

Answer : (B)

30. The success of corporate entrepreneurship depends on the entrepreneurs within the firm.

(A) True

(B) False

Answer : (A)

31. Organizational boundaries allow people to focus on new ideas.

(A) True

(B) False

Answer : (B)

32. I-Teams are rarely seen in corporate entrepreneurial environments.

(A) True

(B) False

Answer : (B)

33. Another common name for an I-Team is an intrapreneurial team.

(A) True

(B) False

Answer : (B)

34. In the model of sustained corporate entrepreneurship discussed in the text, a transformational
trigger can be internal or external to the company.

(A) True

(B) False

Answer : (A)
MULTICHOICE

35. Corporate entrepreneurial activity takes place the firm.

(A) only with outside suppliers to

(B) with anyone outside

(C) both inside and outside

(D) inside

Answer : (D)

36. Which of the following is not a characteristic of firms that exhibit corporate entrepreneurships?

(A) ​being dynamic

(B) being flexible

(C) being prepared to take on new business opportunities

(D) being stagnant

Answer : (D)

37. One reason why corporate entrepreneurship has done so well is that it allows organizations to

(A) increase salaries.

(B) fire the dead wood.

(C) encourage high risk taking.

(D) tap the innovative talents of their people.

Answer : (D)

38. Intrapreneurship is also referred to as:

(A) inside entrepreneurship

(B) internal entrepreneurship

(C) corporate entrepreneurship

(D) outside entrepreneurship

Answer : (C)
39. ____ people thoroughly understand the concept of corporate entrepreneurship.

(A) Just about all

(B) Most

(C) Many

(D) Few

Answer : (D)

40. The major thrust of corporate entrepreneurship is to

(A) encourage greater risk taking.

(B) raise profitability.

(C) encourage innovation.

(D) increase morale.

Answer : (C)

41. All of the following are reasons for the growth of corporate entrepreneurship except

(A) a desire to dramatically increase profitability.

(B) a rapidly growing number of new and sophisticated competitors.

(C) a sense of distrust in the traditional methods of corporate management.

(D) an exodus of some of the best people out of corporations.

Answer : (A)

42. Which of the following helps account for the rise of interest in corporate entrepreneurship?

(A) A decrease in the number of sophisticated competitors.

(B) An increase government regulation of small entrepreneurs.

(C) An increase in corporations losing some of their best people.

(D) A general increase in the number of competitors.

Answer : (C)

43. Which of the following is an obstacle to corporate entrepreneurship?

(A) orientation to the market

(B) a system of feedback and positive reinforcement

(C) traditional management techniques

(D) rewards based upon results

Answer : (C)

44. In following the rules for innovation, a manager should do all of the following except

(A) encourage action.

(B) use formal meetings whenever possible.

(C) punish failure.

(D) reward performance.

Answer : (C)

45. In restructuring corporate thinking, top management should

(A) identify potential entrepreneurs after an innovation program is in operation.

(B) make the entrepreneur follow strict corporate guidelines.

(C) promote entrepreneurship through experimentation.

(D) create diversity and order in strategic activities.

Answer : (C)

46. Which of the following is not a question in the corporate entrepreneurial planning process?

(A) Does the firm encourage and reward entrepreneurs?

(B) Do employees frequently require permission?

(C) Does the firm direct resources toward entrepreneurship?

(D) Has the firm met government regulations for innovation?

Answer : (D)

47. Secretly working on new ideas on company time as well as on personal time is referred to as

(A) skunk works.

(B) champion.

(C) bootlegging.
(D) interactive learning.

Answer : (C)

48. The adverse impact of can be so destructive that individuals within the enterprise will tend to
avoid entrepreneurial behavior.

(A) traditional management techniques

(B) innovative climate rules

(C) specific entrepreneurial strategies

(D) informal meetings

Answer : (A)

49. Innovative factors identified by James Brian Quinn that exist in large organizations experienced
in successful innovation include all of the following except

(A) interactive learning.

(B) uniform compensation.

(C) multiple approaches.

(D) skunk works.

Answer : (B)

50. How many factors are critical to the internal environment of an organization seeking to have its
managers pursue innovative activity?

(A) six

(B) seven

(C) five

(D) three

Answer : (C)

51. Which of the following would not be considered as encouraging to an entrepreneurial

environment?

(A) uniform compensation

(B) identifying potential entrepreneurs

(C) top management sponsorship of entrepreneurship

(D) promotion of entrepreneurship through experimentation

Answer : (A)

52. In an innovative climate, failure is viewed as

(A) the end of the world.

(B) a learning experience.

(C) O.K., inevitable, since the employee is probably not capable of further innovative thought.

(D) a basis for firing.

Answer : (B)

53. ​____________ observed that "corporate entrepreneurship may be formal or informal activities
aimed at creating new businesses in established companies through product and process innovations
and market developments."

(A) Shaker A. Zahra

(B) ​William D. Guth

(C) Ari Ginsberg

(D) James Brian Quinn

Answer : (A)

54. Which of the following will help to foster an innovative climate?

(A) encourage action from employees

(B) punish mistakes

(C) eliminate coffee breaks to encourage employees to work harder

(D) do away with dress codes

Answer : (A)

55. Bureaucrats in an organization must

(A) standardize procedures.

(B) engage in horizontal management.

(C) learn to give way to intrapreneurs.

(D) avoid risky moves.

Answer : (C)

56. Who identified six factors found in large corporations that have exhibited successful
innovations?

(A) James Brian Quinn

(B) Henk Volberda

(C) Charles Baden-Fuller

(D) ​ Shona Brown

Answer : (A)

57. Corporate entrepreneurial strategy should be thought of as

(A) vision directed.

(B) dichotomous.

(C) restricted to one group in the firm.

(D) management directed.

Answer : (A)

58. In attempting to create an entrepreneurial climate, the organization should consider that

(A) the corporations that promote personal growth will attract the best people.

(B) strict management rules work best.

(C) third-party contractors of labor will not be used.

(D) workers like independence.

Answer : (A)

59. All of the following are important characteristics for establishing an intrapreneurial climate
except

(A) the presence of explicit goals.

(B) feedback.

(C) positive reinforcement.

(D) punishment of mistakes.

Answer : (D)

60. Rewards should be based upon _____ to encourage the desired behavior.

(A) seniority

(B) results

(C) attitude

(D) morale

Answer : (B)

61. Key features in the success of any innovative program include all of the following except

(A) confidence.

(B) trust.

(C) accountability.

(D) high profitability.

Answer : (D)

62. Which of the following is not one of the Corporate Innovative Training Program modules?

(A) the entrepreneurial experience

(B) innovative thinking

(C) sustaining innovation teams

(D) social media training and awareness

Answer : (B)

63. The first step in planning a strategy of entrepreneurship for enterprise is

(A) identifying specific objectives.

(B) sharing the vision of innovation.

(C) applying the exact tools of the entrepreneur.

(D) developing radical innovation.

Answer : (B)
64. The second step in planning a strategy of entrepreneurship for the enterprise is

(A) identifying specific objectives.

(B) sharing the vision of innovation.

(C) applying the exact tools of the entrepreneur.

(D) developing and encouraging innovation.

Answer : (D)

65. Which of the following terms refers to the systematic evolution of a product or service into
newer or larger markets?

(A) radical innovation

(B) incremental innovation

(C) collective entrepreneurship

(D) strategic management

Answer : (B)

66. Which of the following terms refers the inaugural breakthroughs launched from experimentation
and determined vision?

(A) radical innovation

(B) incremental innovation

(C) collective entrepreneurship

(D) strategic management

Answer : (A)

67. Which of the following are specific factors identified by researchers, that organizations can
concentrate on in structuring an entrepreneurial climate.

(A) radical innovation, incremental innovation, and vision

(B) skunk works, multiple approaches, and vision

(C) top management support, time, resources, rewards, and organizational boundaries

(D) rewards, resources, innovation, and vision

Answer : (C)
68. Internal venture capital that is set aside for special entrepreneurial projects is termed:

(A) intracapital.

(B) project capital.

(C) intrapreneurial seed money.

(D) collective capital.

Answer : (A)

69. Employee perception of is critical for the success of corporate entrepreneurship.

(A) equality

(B) a good benefits program

(C) interactive learning

(D) an innovative environment

Answer : (D)

70. Which of the following is an advantage to developing an entrepreneurial environment?

(A) a good benefits program

(B) retention and motivation of the best employees

(C) creation of a workforce that adheres to strict rules

(D) a flexible work environment regarding time off work

Answer : (B)

71. Which of the following is not included in the set of innovative rules that 3M follows, which
encourages employees to foster ideas?

(A) don't kill a project

(B) keep divisions small

(C) try to eliminate failure

(D) share the wealth

Answer : (C)

72. In order to develop an entrepreneurial environment, factors that organizations need to be aware
of include all of the following except
(A) management support.

(B) autonomy.

(C) rewards.

(D) imposed time constraints.

Answer : (D)

73. Developing corporate entrepreneurial managers involves teaching them to

(A) Conduct business as usual

(B) Break out of the box.

(C) Give across-the-board raises.

(D) Think of new ad campaigns.

Answer : (B)

74. The person who has the opportunity to lead and "run" with an idea would be coined which of the
following?

(A) Department Manager

(B) Manager

(C) Champion

(D) Visionary

Answer : (C)

75. Which is not a precipitating event that Zahra identifies as motivating the decision to act
entrepreneurially?

(A) market instability

(B) competitive threat from rivals

(C) new demand for a firm's products

(D) a big increase in earnings

Answer : (D)

76. Entrepreneurial characteristics include

(A) a strong drive to succeed.

(B) superior intelligence.

(C) high risk taking.

(D) low morals.

Answer : (A)

77. Typically, when faced with setbacks or failure, entrepreneurs

(A) remain optimistic and view it as a learning experience.

(B) become outraged and take a short vacation.

(C) blame top management.

(D) resign.

Answer : (A)

78. Success of the corporate entrepreneurship plan depends on

(A) resources provided by the firm.

(B) shirking ethics to ensure entrepreneurial wins.

(C) a few individuals.

(D) the reaction of rivals.

Answer : (A)

79. Sustaining corporate entrepreneurship requires

(A) keeping up with market trends.

(B) maximizing profits.

(C) keeping the corporate vision strong.

(D) equal pay raises.

Answer : (C)

80. Transformational triggers in a corporate entrepreneurial environment initiate the need for

(A) laying off workers.

(B) strategically adapting to change.

(C) changing company location.

(D) achieving higher productivity standards.

Answer : (B)

81. In many ways, an I-Team is

(A) a small business operating within a large business

(B) a small business integrated within other parts of the firm

(C) a large business operating within a large business

(D) a partnership operating within a small business

Answer : (A)

82. Collective entrepreneurship, as a concept, refers to

(A) the collective spirit of innovation that resides in the firm's founder

(B) the joint recognition of the CEO and CFO as champions of innovation

(C) entrepreneurial thinking that is diffused throughout the company

(D) socialist enterprising

Answer : (C)

ESSAY

83. ​Select one of the young managers discussed in the text, and with an emphasis on how their out
of the box idea benefited their employer, describe how that person's entrepreneurial attitude and
creative problem-solving enabled them to rise through their organization's hierarchy.

Graders Info :

Matthew Zubiller: Pharmaceutical company who started a high-tech healthcare business. He

developed Advanced Diagnostic Management which is a unit centered on a high-tech tool for
physicians related to generic testing.

Kori Reed: Public relations manager at ConAgra who is an expert in child hunger. She used her
existing knowledge of antihunger campaigns and interest in combating childhood hunger to identify
an opportunity.

Pam Rogers Klyn: A product development manager at Whirlpool who focused on cost control
efforts. She advocated for a company-wide emphasis on cost savings, stressing small efforts like
turning off lights and tying annual bonuses to cost goals.
84. Explain some of the disadvantages that may occur in firms that are trying to incorporate
entrepreneurship into their organizations.

Graders Info :

One disadvantage may be that there is resistance to change by some managers. Also, if a company
jumps into intrapreneuring too quickly without proper training, there may be some managers left not
knowing what to do. If the corporate climate is not right for intrapreneuring, there is almost no
chance for success.

85. Not all corporate entrepreneurial behavior is good for the organization. Why?

Graders Info :

The encouragement of corporate entrepreneurship can and often does result in counterproductive
rogue behavior. The senior manager's task is not simply to build an organization whose core
qualities are conducive to innovation but to design and develop innovation-facilitating and control-
facilitating mechanisms that complement one another.