MIB Master of International Business: Global Management of Innovation & Knowledge 5 — Questions and Answers
Question 1: Which theory argues that firms internationalize to exploit their firm-specific advantages, including proprietary technology and knowledge?
- Heckscher-Ohlin trade theory
- OLI (Eclectic) Paradigm (Correct answer)
- Purchasing power parity theory
- Gravity model of trade
Correct answer: OLI (Eclectic) Paradigm
Dunning's OLI Paradigm explains FDI through Ownership (firm-specific advantages including knowledge), Location, and Internalization advantages.
Question 2: A global firm implements a 'hack-a-thon' across its subsidiaries in 12 countries simultaneously. The primary innovation management goal is:
- Reducing operational costs through crowdsourcing
- Generating diverse ideas by leveraging geographically distributed talent (Correct answer)
- Complying with local labor regulations requiring skills assessment
- Replacing formal R&D with informal employee activities
Correct answer: Generating diverse ideas by leveraging geographically distributed talent
Global hack-a-thons tap into diverse cultural and professional perspectives across subsidiaries, producing a broader and more varied innovation pipeline than centralized R&D alone.
Question 3: What is the 'not-invented-here' (NIH) syndrome in corporate innovation?
- Resistance to adopting external ideas due to internal bias favoring in-house developments (Correct answer)
- A patent law principle preventing use of ideas developed abroad
- A tax incentive for domestically developed innovations
- A strategy of only hiring researchers from local universities
Correct answer: Resistance to adopting external ideas due to internal bias favoring in-house developments
NIH syndrome causes teams to reject or undervalue external knowledge, even when superior to internal solutions, because of cultural preference for self-generated ideas.
Question 4: In an international joint venture focused on technology development, which factor most critically determines how knowledge is shared between partners?
- The size of the joint venture's marketing budget
- The trust level and relational capital built between partner firms (Correct answer)
- The number of patents each partner contributes
- The geographic distance between partner headquarters
Correct answer: The trust level and relational capital built between partner firms
Trust and relational capital reduce opportunistic behavior, enabling genuine knowledge sharing rather than strategic withholding between alliance partners.
Question 5: Which approach to global R&D organization assigns each subsidiary a specific technology domain for which it serves as the worldwide center of excellence?
- Polycentric R&D model
- Distributed mandate model (Correct answer)
- Centralized hub model
- Home-base exploiting model
Correct answer: Distributed mandate model
In a distributed mandate model, subsidiaries are granted global responsibility for specific technologies or product lines, becoming the network's recognized expert for those domains.
Question 6: A firm tracks the ratio of revenue from new products to total revenue over time. This KPI is designed to measure:
- Cost efficiency in manufacturing
- Innovation metabolism — how quickly the firm renews its product portfolio (Correct answer)
- Market share relative to competitors
- Employee productivity in R&D departments
Correct answer: Innovation metabolism — how quickly the firm renews its product portfolio
New product revenue ratio (innovation metabolism) measures the pace at which a firm generates commercial value from innovation, indicating portfolio renewal speed.
Question 7: Which of the following describes 'combinatorial innovation' in a global context?
- Merging two companies to eliminate R&D redundancy
- Recombining existing technologies or knowledge from different domains or geographies to create novel solutions (Correct answer)
- Combining marketing and R&D budgets into a single allocation
- Using AI to combine customer feedback into a product specification
Correct answer: Recombining existing technologies or knowledge from different domains or geographies to create novel solutions
Combinatorial innovation generates novelty by mixing existing ideas, technologies, or practices from different industries or regions, requiring no fundamental scientific breakthroughs.
MIB Master of International Business: Global Management of Innovation & Knowledge 5
Which theory argues that firms internationalize to exploit their firm-specific advantages, including proprietary technology and knowledge?