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PoM - 18
| entrepreneurial activities | The implementation of new ventures and idea generation in organizations. |
| explicit knowledge | Information codified or written down as rules or guidelines. |
| followship | The process of seeking or accepting influence. |
| formal and informal contracts | Used to allow firms to share technology between each other. |
| franchise agreements | Long-term agreements that involve long payoffs for the sharing of known technology. |
| innovation | Invention, new product development, and process-improvement methods are all examples of innovation. |
| joint ventures | Long-term alliances that involve the creation of a new entity to specifically carry out a product/process innovation. |
| leadership | The action of leading a group of people or an organization. |
| licensing agreements | Involve technology acquisition without R&D. |
| management of innovation | Includes both change management and managing organizational processes that encourage innovation. |
| management of technology | The planning, implementation, evaluation, and control of the organization’s resources and capabilities in order to create value and competitive advantage. |
| mergers/acquisitions (M&A) | For an acquisition, one firm buys another; for a merger, the two firms come together and form a new firm. |
| organizational learning | The acquisition of knowledge through the collection of data that is analyzed to gather information, which is then transferred and shared through communication among members of the organization. |
| research and development (R&D) | Involves the seeking and developing of new technologies, products, and/or processes through creative efforts within the firm. |
| strategic drift | Occurs when a joint venture loses strategic focus on the reasons for the joint venture. |
| strategic inertia | The tendency of organizations to continue on their current trajectory. |
| tacit knowledge | Emerges from experience of an individual. |
| technology | The branch of knowledge that deals with the creation and use of technical means and the application of this knowledge for practical ends. |
| value proposition | A promise by a company to a customer or market segment. |
3.A firm believes that its product mix or way of doing things is not going to be successful in the long run.
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The most common types of external processes used to enhance technology and innovation in a firm include:1.Mergers/acquisitions (M&A), which involve ownership changes within the firms. For an acquisition, onefirm buys another; for a merger, the two firms come together and form a new firm. The essence of bothof these approaches is that a new, larger organizational entity is formed. The new firm should have moremarket power (be larger) and should gain knowledge about a technology or domain of activity. Theblending of two cultures, two sets of processes, and two structures are all potential disadvantages of M&Aactivity.2.Joint venturesare long-term alliances that involve the creation of a new entity to specifically carry out aproduct/process innovation. The entity is usually governed by a contractual relationship that specifies thecontributions and obligations of the partners in the joint venture. There are potential culture clashes aswell as the potential forstrategic drift—losing strategic focus on the reasons for the joint venture.3.Franchise agreementsare usually long-term agreements that involve long payoffs for the sharing ofknown technology. Fast food restaurants, such as McDonald’s, use franchise agreements with storeowners. McDonald’s provides R&D for new processes and new products. The store owners (franchisees)pay a fee for the use of the name and the marketing of the product. The contract and monitoring costsassociated with franchise agreements are the big disadvantage of this type of alliance.