Deck 4: Integrating Internal and External Resources Open Innovation, Absorptive Capacity and Integration

Question 1

The patents that pharmaceutical firms own are an example of external resources

Answer 1

False

Question 2

Technological developments, most significantly the rapid movements and diffusion of information technology and the Internet, have raised barriers to integrating external resources

Answer 2

False

Question 3

The example of the East-West Seed Company suggests the while analyzing the developments in their current context, managers need to scan the periphery and pay attention to possible alternatives or better resources elsewhere

Answer 3

True

Question 4

Examples such as Toyota's seized leadership in the automobile industry show that openness relates only to technology and R&D

Question 5

Core rigidities indicate that a firm is too reliant on its internal resources

Question 6

Open or inclusive innovation helps us understand how organisations today seek to gain competitive advantage

Question 7

Between 1995 and 2002 Alessi has been able to achieve an average rate of return of 20% and a return on equity of about 40%

Question 8

Coopetition is the value creating constellation in which market players compete in the development of complementary products

Question 9

Maintaining focus and becoming aware of weak signals is easy for managers and the companies they lead

Question 10

The mutually beneficial combination of external and internal resources is referred to as resource integration

Question 11

Internationalisation promises higher returns because it allows firms to broaden the pool of resources that can exploit

Question 12

Intellectual property rights are rarely an issue when a new product launch is discussed in emerging markets

Question 13

One of the oldest and most frequently used tools in strategic management is SWOT analysis

Question 14

Lead users are often intrinsically motivated individuals or communities who experiment, invent, improve and adapt existing products

Question 15

The absorptive capacity of the company to internalize or utilize external resources has a limited effect on the company's performance

Question 16

Open innovation relies primarily on internal resources

Question 17

Uncertainty, complexity and inter-organizational dynamics are three conditions that characterize managerial decisions concerning external resources, capabilities and core competencies

Question 18

Profiting from others' use of an organization's IP, and buying others' IP whenever it advances the organization's own business model, is an example of open innovation principles

Question 19

IDEO's Deep Dive is an example of a best practice for generating novel ideas for new product development

Question 20

Knowledge and capabilities are no longer sources of competitive advantage in the current economic environment

Question 21

After studying the external and internal environment and the need to integrate external resources, the firm has the knowledge required to select corporate level strategies and organizational form to realize its goals

Question 22

The Toyota Production System relies heavily on the creativity and alertness of all employees and the ingenuity of suppliers and sales partners to generate ideas

Question 23

Not invented here refers to the protection of internal ideas from competitors

Question 24

Absorptive capacity, or the ability to learn, underpins the successful implementation of practical alternatives to integrating knowledge such as alliances, M&A, lead users, ventures etc.

Question 25

Recently Proctor & Gamble instituted a policy stating that any idea that originates in its labs must not be offered to outside firms under any circumstances

Question 26

Stable integration is the purposeful selection of resources that are better sourced externally to substitute specific elements of the value chain

Question 27

One difficulty resulting from exploiting external resources is understanding highly complex tasks that require tacit knowledge

Question 28

One of the following countries is often referred to as a BRIC country

A) Brazil
B) Canada
C) Israel
D) Ireland

Question 29

Competences can turn into core rigidities when

A) Companies become too reliant on external resources
B) Companies fully integrate internal and external resources
C) Companies learn from the past
D) Companies lose their ability to learn and end up trapped with what mattered in the past

Question 30

Muji's products bear the message

A) No brand, quality goods
B) Low cost brand names
C) No brand, low cost
D) Low prices, essential

Question 31

One of the following is not used in SWOT analysis

A) Threats
B) Options
C) Weaknesses
D) Strengths

Question 32

Muji's approach to co-designing with customers includes the following

A) Always using ideas that customers have scored highly
B) Removing all of the company's internal design capacity
C) Inviting customers to submit and pre-evaluate new designs
D) Avoiding feasibility checks and moving straight to manufacture and distribution

Question 33

Firms can develop four main approaches to integration including all except one of the following

A) Institutionalize the integration of external and internal resources
B) Internalize external resources and develop synergies with internal resources
C) Increase performance by exploiting distinct and separate external and internal resources
D) Identify critical external resources

Question 34

Strategic competitiveness and above average returns involve

A) Focus on external resources to overcome threats in the external environment and take advantage of opportunities to create value for customers
B) Integrating internal with external resources to overcome threats from the internal environment and take advantage of opportunities to create value for customers
C) Integrating internal with external resources to overcome threats in the external environment and take advantage of opportunities to create value for customers
D) Focus on internal resources to overcome threats in the external environment and take advantage of opportunities to create value for customers

Question 35

Disruptive technologies transform a company's frame of reference and make fundamental organizational change necessary

Question 36

Basic modes of integration describe broad, alternative approaches to integrate internal and external knowledge

Question 37

External resources are lie outside the boundary of the company and may include all expect one of the following

A) Assets
B) Knowledge
C) Employees
D) Skills

Question 38

Berlitz used the following internal resource to develop the Berlitz Method of language learning

A) French language teachers who were not able to communicate well in English
B) French language teachers who were able to communicate in English and French
C) French language teachers who only used English as the language of instruction in class
D) French speakers who could speak no English

Question 39

Acquisitions are instances of corporate development where one corporate entity internalizes another entity, which subsequently ceases to exist independently

Question 40

Consumer ethnography is an approach that seeks to understand consumers and their behavior by employing

A) Information from within the company
B) Secondary research
C) Fieldwork to generate data
D) Statistical information only

Question 41

By 2000 for Proctor & Gamble to rely on organic growth would have been approximately equivalent to

A) Building a multi-billion Euro business each year
B) Building a multi-million Euro business each year
C) Building a multi-billion Euro business each decade
D) Building a multi-billion Euro business each quarter

Question 42

Resource integration is the

A) Separate and distinct identification and response to external and internal resources
B) Predominance of external resources over internal resources
C) Mutually beneficial combination of external and internal resources
D) Predominance of internal resources over external resources

Question 43

The East-West Seed Company may currently be described in all except one of the following ways

A) Occupying and exploiting a highly profitable market
B) Seeking new opportunities for growth
C) Involving a low technology content in its products
D) A leader in its market space

Question 44

An alliance between companies involves all except one of the following

A) One entity internalizes another entity which subsequently ceases to exist
B) Agreements between two or more parties to undertake activities to pursue shared goals or protect common interests
C) Agreement between parties that stipulate sharing of risks and opportunities
D) Sharing of superior technology, skills and knowledge

Question 45

Open innovation builds on seminal work and seeks to integrate all except one of the following concepts

A) Lead users
B) Linear model of innovation
C) The importance of information
D) Knowledge processes

Question 46

Markets can be described as highly efficient coordinating mechanisms that

A) Remove the need for organisations
B) Require no further regulation
C) Are based on unenforceable contracts
D) Bring supply and demand together

Question 47

A closed innovation system includes all except one of the following

A) A science and technology base
B) The market
C) Technology spin offs
D) Research investigations Rese

Question 48

Alessi's current approach to developing products can be described in the following way

A) The same approach now as compared to when the company began
B) A shift away from in-house design and more openness to co-development with external partners
C) A primary focus on new product development
D) A competitive relationship with external designers

Question 49

Dynamic integration can be described in the following way

A) Resembles a process compared to stable and modular integration
B) Results in more structural solutions compared to stable and modular integration
C) Is the only model of integration open to companies
D) Is the purposeful selection of resources that are better sourced externally

Question 50

Proctor and Gamble's 'Connect & Develop' approach to innovation includes all except one of the following

A) Access to more internal technologies than any other consumer products company
B) Primarily connecting ideas across internal businesses
C) Reaching outside of Proctor & Gamble to a global network of nearly two million researchers
D) A bigger and stronger innovation pipeline

Question 51

Clusters of firms are usually defined as

A) Groups of firms within the same jurisdiction
B) Regional agglomerations of firms that form part of a single company
C) Global groups of firms with complementary products in the same or related industries
D) Regional agglomerations of competing firms and those with complementary products in the same or related industries

Question 52

The four principles of Alessi's 'formula for success' include all except one of the following

A) Function
B) Sales
C) Aesthetics
D) Price

Question 53

Modes of integration include all except one of the following

A) Stable integration
B) Dynamic integration
C) Reverse integration
D) Modular integration

Question 54

The transaction cost theory developed by Coarse and Williams could suggest the following

A) A call for smaller organisations and a larger role for markets
B) Efficient organisations and efficient markets are essentially in the same position
C) Internalizing resources for integration incurs lower transaction costs than contracting externally
D) Organisations exist because transaction costs within firms are always higher than in external markets

Question 55

One example of an open innovation principle is

A) The smart people in our field work for us
B) If we create the most and best in the industry, we will win
C) If we discover it ourselves, we will get it to market first
D) If we make the best use of internal and external ideas, we will win

Question 56

Muji is an example of integrating external resources through the way in which the company

A) Uses alliances and acquisitions to expand the organization's resource pool
B) Absorbs customer knowledge whenever possible through summer camps and online submissions
C) Uses only explicit knowledge and revealed needs of its customers
D) Demonstrates not invented here syndrome

Question 57

Manga has emerged as a main source of profits in the Japanese publishing industry since the 1970s because of

A) The dynamic integration of external resources (judgement, creativity and skill)
B) The use of exclusively internal resources (judgement, creativity and skill)
C) The ability to engage the best known artists from the established magazines from the start
D) Retaining a small market share

Question 58

Coopetition can be described as a situation in which

A) Companies cooperate to develop complementary products and simultaneously compete
B) Companies cooperate to develop complementary products and do not compete with each other
C) One company acquires another company with which it was in competition
D) Companies with non-complementary products agree to cooperate

Question 59

Fitting new knowledge within the existing frame of reference can be referred to as

A) Assimilation
B) Transforming
C) Organizational change
D) Positioning

Question 60

Not invented here syndrome refers to

A) The patents held by external organisations
B) The closedness of organisations to internal ideas
C) The closedness of organisations to external ideas
D) Ideas generated by employees outside of an organization

Question 61

Describe the differences between open innovation and closed innovation

Question 62

Discuss the need for organisations need to remain both open and closed, and to select and absorb new knowledge.

Question 63

What are the basic models for integrating internal and external resources?

Question 64

What is the context for firms to integrate internal and external resources?

Question 65

Why and how do firms use external resources to support their strategy?