Question

Large firms may be more likely to innovate because ______.

a. the risks of failure are less to them than to small firms.
b. they can attract the capital needed more easily.
c. they can more easily attract the scientists and engineering staff they need.
d. a, b and c

Answer 1

Large firms are more likely to innovate because they can better absorb risks, easily attract capital and top talent, including scientists and engineers required for innovation, making answer d. a, b, and c correct.

Step-by-step explanation:

Large firms may be more likely to innovate for several reasons. First, large firms often have greater resources at their disposal which can attract financial capital more easily than startup firms or smaller entities. This financial capacity enables them to invest in research and development without the immediate pressures that smaller companies might face. Secondly, because they are somewhat larger in size, they may enjoy economies of scale that reduce the per-unit cost of their products or services, providing them with a competitive edge in the marketplace. Finally, larger companies tend to have a stronger brand reputation and stability, making it easier to attract top talent to their organization, including skilled scientists and engineers who are critical to the innovation process.

In summary, the correct answer to the student's question is d. a, b, and c, as large firms generally have an advantage in terms of absorbing the risks of failure, accessing capital, and hiring the necessary staff for innovation activities.

Answer 2

The correct option is D

Step-by-step explanation:

Large firms such as AstraZeneca and GlaxoSmithkline are more likely to innovate because the risk of failure is minimal such that no matter the amount invested in a failed research project ,it is not material enough to send them out of business.

Also the reason is that they can easily raise the necessary funding unlike a small firm whose liquidity might low and credit rating very poor.

Lastly, they can easily attract the needed brains as they have the ability to pay handsome wages and salaries