Deck 19: Entrepreneurship and New Ventures

Question 1

Which statement correctly describes the educational needs of entrepreneurs?

A) An entrepreneur can benefit from learning about business fundamentals.
B) An entrepreneur may not need a degree at all.
C) An entrepreneur with a degree does not need a business degree in preference to other majors.
D) All of the options listed
E) None of the options listed

Answer 1

D

Question 2

Which of the following quotes succinctly capture Phillip Di Bella's beliefs about entrepreneurial activities?

A) 'Entrepreneurship is all about looking at something and being able to it better.'
B) 'I love to learn things that I know little about.'
C) 'His commitment to ethical business practices and creative product development were guiding philosophies.'
D) 'If you think you're too small to have an impact, try going to bed with a mosquito.'
E) 'Homegrown companies are important because they employ Australians, and so the profits remain in the country to create wealth.'

Answer 2

A

Question 3

Reasons for new business failure include all of the following EXCEPT:

A) lack of marketing control.
B) lack of experience.
C) lack of strategy and strategic leadership.
D) lack of expertise.
E) lack of commitment.

Answer 3

A

Question 4

According to the text, a family business is an ideal situation when everything goes right. Which of the following is NOT one of the aspects of everything 'going right' with a family business?

A) Everyone working together.
B) Everyone knowing that what they do benefits the family.
C) Everyone enjoying equal shares in the financial success of the business.
D) Everyone sharing values.
E) Everyone sharing a common goal.

Question 5

__________ is a risk-taking individual who takes action to pursue opportunities and situations others may fail to recognise as such or may even view as problems or threats.

A) A managerial activist
B) An entrepreneur
C) An opportunist
D) An intrapreneur
E) A daredevil

Question 6

Entrepreneurs include:

A) people who buy a local franchise outlet or go into a self-employed service business.
B) people who assume responsibility for introducing a new product or a change in operations in an existing organisation.
C) founders of new business enterprises that achieve large-scale success.
D) people who open a small retail shop.
E) All of the options listed

Question 7

Which of the following statements about entrepreneurs is a myth?

A) Talent gained and enhanced by experience is a foundation for entrepreneurial success.
B) An entrepreneur may not need a college degree at all.
C) Age alone is not a barrier to entrepreneurship.
D) Entrepreneurs are gamblers.
E) Just having money is no guarantee of success; many entrepreneurs start with very little money.

Question 8

A business that uses the web to help 13- to 18-year-old children open a bank account, learn about investing and donate to charity is an example of a(n):

A) minority-owned business.
B) business that will never succeed.
C) business exploiting children.
D) internet-based entrepreneurial business.
E) family-oriented business.

Question 9

What percentage does small business account for in terms of technology investment in Australia and New Zealand?

A) 25 per cent
B) 30 per cent
C) 10 per cent
D) 50 per cent
E) 40 per cent

Question 10

The entrepreneur Richard Branson founded which business(es)?

A) Property developers SOHO China
B) The Body Shop
C) Dick Smith Electronics, Australian Geographic magazine and Dick Smith Foods
D) Virgin Airlines, Virgin Records and Virgin Cola
E) The Harvey Norman retail chain

Question 11

Success in highly competitive business environments depends on:

A) entrepreneurship.
B) minimising risk.
C) establishing a corporate form of ownership.
D) venture capitalists.
E) access to wealthy investors.

Question 12

In succession planning, family businesses should do all of the following EXCEPT:

A) share the succession plan with all who are affected by it and make sure that they understand it.
B) use entrepreneurial consultants in establishing the succession plan.
C) set up the succession plan well in advance of the need to use it.
D) prepare the leadership successor through training and experience to assume the new role when needed.
E) identify the leadership successor well ahead of time.

Question 13

Entrepreneurs tend to be distinguished by their backgrounds and experiences. Which of the following is NOT typical of entrepreneurs?

A) Entrepreneurs often try more than one business venture.
B) Entrepreneurs have strong interests in creative production and high interest in enterprise control.
C) Entrepreneurs seek independence and the sense of mastery that comes with success.
D) Entrepreneurs tend to have prior career or personal experience in the business area or industry in which they develop an entrepreneurial venture.
E) Entrepreneurs typically come from families with strong corporate career backgrounds and seek independence from the corporate bureaucracies that dominated their parents.

Question 14

The characteristics that are typically associated with entrepreneurs include all of the following EXCEPT:

A) self-confidence.
B) high need for achievement.
C) intolerance for ambiguity.
D) internal locus of control.
E) action orientation.

Question 15

Which one of the following statements does NOT accurately describe entrepreneurs?

A) Entrepreneurs are motivated to act collectively to accomplish challenging goals.
B) Entrepreneurs are persistent, hardworking and willing to exert extraordinary efforts to succeed.
C) Entrepreneurs believe that they control their own destiny; they are self-directing and like autonomy.
D) Entrepreneurs feel competent, believe in themselves and are willing to make decisions.
E) Entrepreneurs are risk takers; they tolerate situations with high degrees of uncertainty.

Question 16

Which of the following best describes Mark Zuckerberg?

A) A social revolutionary
B) A visionary technologist
C) An intrapreneur
D) A social entrepreneur
E) A technopreneur

Question 17

There are certain myths about entrepreneurs. Which of the following is NOT one of these myths?

A) Entrepreneurs are made, not born.
B) Entrepreneurs are gamblers.
C) Money is the key to entrepreneurial success.
D) You must have a degree in business to be an entrepreneur.
E) You have to be young to be an entrepreneur.

Question 18

Which of the following is included among the distinguishing experiences and backgrounds of entrepreneurs?

A) Entrepreneurs tend to have parents who were entrepreneurs or self-employed.
B) Entrepreneurs tend to be raised in families that discourage responsibility, initiative and independence.
C) Most entrepreneurs start their businesses between the ages of 45 and 55.
D) All of the options listed
E) None of the options listed

Question 19

_______________describes strategic thinking and risk-taking behaviour that results in the creation of new opportunities for individuals and/or organisations.

A) Organisational development
B) Management development
C) Angel investing
D) Entrepreneurship
E) Strategic planning

Question 20

Which of the following statements about entrepreneurship and the internet is FALSE?

A) There is as much opportunity for small business to use the internet as a business tool as there is for large organisations.
B) Internet entrepreneurial opportunities are limited only by one's creativity.
C) Australasian entrepreneurs have not embraced the internet.
D) The smaller, more fragmented markets in Australasia may not warrant the costs of establishing a sophisticated e-business for all entrepreneurs.
E) The growth of internet entrepreneurship in Australia and New Zealand has been less rapid than in North America.

Question 21

A succession plan should include:

A) procedures for choosing or designating the business's new leadership.
B) legal aspects of any ownership transfer.
C) any financial and estate plans relating to the transfer.
D) All of the options listed
E) None of the options listed

Question 22

B2B refers to:

A) a specialised business-to-business purchasing cooperative that links suppliers and customers.
B) a specialised business-to-business stock exchange that links entrepreneurs and angel investors.
C) a specialised business-to-business website that links buyers and sellers.
D) a specialised business-to-business trading floor that links buyers and sellers of commodities.
E) a specialised business-to-business website that links entrepreneurs and venture capitalists.

Question 23

Which of the following descriptions of the succession problem in family businesses is INCORRECT?

A) The vast majority of family businesses with succession plans will survive well beyond the second generation.
B) The key management issue in the succession problem concerns how the assets will be distributed and who will run the business when the current head leaves.
C) The succession problem should be handled ahead of time with a succession plan.
D) The succession problem involves transferring leadership from one generation to the next.
E) Since not all family businesses have succession plans, many will not survive beyond the first generation.

Question 24

__________ is generated by exploiting a niche or entering a market before competitors.

A) Niche manipulation
B) Niche competency
C) Anticipatory market leadership
D) Anticipatory niche advantage
E) First-mover advantage

Question 25

__________ involve(s) exchanging ownership shares in the business in return for outside investment monies.

A) Debt financing
B) Money market instruments
C) Futures trading
D) Equity financing
E) Commodities marketing

Question 26

The __________ occurs when members of the controlling family of a business get into disagreements about work responsibilities, business strategy, operating approaches, finances or other matters.

A) family feud
B) corporate conflict
C) family business disaster
D) partnership disagreement
E) family business feud

Question 27

As many as _____ per cent of new businesses fail in their first three years of operation?

A) 50
B) 30
C) 40
D) 20
E) 60

Question 28

A(n) __________ describes all the details necessary to set the direction for a new business and to obtain the necessary financing to operate it.

A) operating budget
B) SWOT analysis
C) business plan
D) operating plan
E) strategic contingencies analysis

Question 29

A(n) __________ is a formal statement that describes how the leadership transition and related financial matters will be handled when the time for changeover arrives.

A) organisation change map
B) transition map
C) leadership transformation plan
D) succession plan
E) continuing operations plan

Question 30

The high failure rate of new businesses is due to:

A) not taking the time to consolidate a position, fine-tune the organisation and systematically meet the challenges of growth.
B) not devoting enough time to the requirements of running a competitive business.
C) falling prey to the temptations of fraud, deception and embezzlement.
D) All of the options listed
E) None of the options listed

Question 31

Which of the following is NOT one of the defining characteristics of small businesses?

A) A business with 100 or fewer employees
B) A business that makes an annual profit of less than $1
C) A business that does not dominate its industry
D) A business that is independently owned
E) A business that is independently operated

Question 32

Statistics on small business failure rates indicate that __________ of new businesses fail in their first five years of operation.

A) less than 20 per cent
B) more than 80 per cent
C) 60 to 80 per cent
D) 20 to 40 per cent
E) about half

Question 33

Which of the following is NOT an accurate statement about the nature of family businesses?

A) Family businesses must deal with a set of unique problems.
B) In Australia around 75 per cent of businesses are family owned and controlled.
C) When everything works properly, the family business is almost an ideal situation.
D) Family businesses represent the largest percentage of businesses operating worldwide.
E) Family businesses must solve the same problems of other small or large businesses.

Question 34

Small business failures are largely due to:

A) regulatory change.
B) poor management.
C) reduction in product sales.
D) inexperience.
E) lack of financial capital.

Question 35

A type of business that is owned and financially controlled by family members is known as a(n):

A) entrepreneurial hobby.
B) limited partnership.
C) franchise.
D) family business.
E) general partnership.

Question 36

B2B in the small business sector is considered risky because of which of the following concerns?

A) Whether smaller businesses are willing to give up their traditional distributor relationships for the online exchange
B) Whether the small business can generate enough users to cover early start-up costs
C) Whether enough small businesses are sufficiently automated to take advantage of the services
D) All of the options listed
E) None of the options listed

Question 37

Over __________ of all businesses in Australia and New Zealand are classified as small.

A) 90 per cent
B) 75 per cent
C) 45 per cent
D) 60 per cent
E) 30 per cent

Question 38

Which of the following statements about the survival rates of family businesses is TRUE?

A) About 40 per cent of family businesses survive to the second generation.
B) About 22 per cent of family businesses survive the third generation.
C) About 18 per cent of family businesses are expected to survive beyond the third generation.
D) All of these statements are true
E) None of these statements is true

Question 39

Which of the following is NOT a reason for the high failure rate of new businesses?

A) Poor financial control
B) Ethical failure
C) Poor advertising
D) Growing too fast
E) Lack of experience

Question 40

A(n) __________ is where a business owner sells to another person the right to operate the same business in another location, under the original owner's business name and guidance.

A) outsourcing alliance
B) franchise
C) professional partnership
D) distribution alliance
E) supplier alliance

Question 41

Which of the following issues is not necessary for a new venture to stay customer-focused?

A) How much does it cost to support and retain a customer?
B) Why is your business strategy compelling in the marketplace?
C) How will you price your product or service for the customer?
D) Who is your customer?
E) How much does it cost to attract a customer?

Question 42

In the __________ stage of the life cycle of entrepreneurial organisations, the business model works, growth is experienced, and the complexity of managing the business operation expands significantly.

A) growth
B) birth
C) decline
D) maturity
E) breakthrough

Question 43

A first-mover advantage comes from:

A) being first to relocate key business operations.
B) being first to produce a product or provide a service.
C) being first within the industry to embrace social responsibility.
D) being first to outsource non-core business activities.
E) being first to exploit a niche or enter a market.

Question 44

Which of the following items should NOT be included in a business plan?

A) Market description
B) Products and services description
C) Staffing description
D) Operations description
E) Change management strategy

Question 45

Activities that focus on refining the strategy, continuing growth and managing for success occur in the __________ stage of the life cycle of entrepreneurial organisations.

A) growth
B) birth
C) decline
D) maturity
E) breakthrough

Question 46

The life cycle of entrepreneurial organisations:

A) poses different management challenges at each stage.
B) requires different management competencies at each stage.
C) requires entrepreneurs to deal with the issue of managerial succession at each stage by changing and/or refining his/her skills, passing management control on to professionals, or selling the business.
D) All of the options listed
E) None of the options listed

Question 47

Which of the following questions provide appropriate guidelines for ensuring that new ventures stay customer-focused?

A) How will you reach key customer market segments?
B) What determines customer choices to buy or not buy this product or service?
C) How much does it cost to make and deliver your product or service?
D) All of the options listed
E) None of the options listed

Question 48

A(n) __________ consists of a general partner and one or more 'limited' partners who do not participate in day-to-day business management.

A) unlimited partnership
B) general partnership
C) limited partnership
D) professional partnership
E) committed partnership

Question 49

__________ refers to the borrowing of money to buy specific business equipment or machinery.

A) Production loan
B) Fixed-cost loan
C) Leasing
D) Lending
E) Financing

Question 50

Which of the following items should be included in a business plan?

A) Company description
B) Marketing strategy
C) Executive summary
D) All of the options listed
E) None of the options listed

Question 51

A(n) __________ is a legal entity that exists separate from its owners, protects the owners from personal liability and gives the business a life of its own beyond that of its owners.

A) angel investor
B) limited partnership
C) partnership
D) company
E) sole proprietorship

Question 52

At the __________ stage of the life cycle of entrepreneurial organisations, the management challenge is one of fighting for existence and survival.

A) birth
B) decline
C) breakthrough
D) growth
E) maturity

Question 53

Activities that focus on establishing the business, getting customers and finding financing occur in the __________ stage of the life cycle of entrepreneurial organisations.

A) birth
B) decline
C) maturity
D) breakthrough
E) growth

Question 54

When people start new businesses, they can greatly benefit from having a good:

A) business plan.
B) product demand forecast.
C) profit forecast.
D) employee manual.
E) operating budget.

Question 55

A(n) __________ is an individual or a married couple pursuing business for a profit.

A) sole proprietorship
B) angel investor
C) limited partnership
D) partnership
E) company

Question 56

At the __________ stage of the life cycle of entrepreneurial organisations, the management challenge is one of coping with growth and takeoff.

A) decline
B) maturity
C) breakthrough
D) growth
E) birth

Question 57

Activities that focus on working on finances, becoming profitable and growing occur in the __________ stage of the life cycle of entrepreneurial organisations.

A) growth
B) breakthrough
C) birth
D) decline
E) maturity

Question 58

A(n) __________ is formed when two or more people agree to contribute resources to start and operate a business together.

A) angel investor
B) partnership
C) company
D) sole proprietorship
E) limited partnership

Question 59

At the __________ stage of the life cycle of entrepreneurial organisations, the management challenge is one of investing wisely and staying flexible.

A) birth
B) decline
C) maturity
D) breakthrough
E) growth

Question 60

According to the text, there is general agreement that __________ should have an executive summary, cover certain business fundamentals, be well organised with headings, be easy to read, and be no more than about 20 pages in length.

A) a marketing plan
B) a corporate mission statement
C) an operating budget
D) a SWOT analysis
E) a successful business plan

Question 61

Describe the life cycle of entrepreneurial organisations and the management challenges that occur at each stage.

Question 62

Which of the following start-up costs may investors cover to get an entrepreneurs business off the ground?

A) Staff wages
B) Rent
C) The purchasing of equipment
D) All of the options listed
E) None of the options listed

Question 63

A(n) __________ is a special facility that offers space and a variety of shared administrative services and management advice to help small businesses get started.

A) business incubator
B) family business
C) partnership
D) innovation group
E) small business mentoring office

Question 64

__________ is entrepreneurial behaviour displayed by people or subunits operating within large organisations.

A) Angel investing
B) Intrapreneurship
C) Creativity
D) New venture leadership
E) Innovation

Question 65

Describe the potential opportunities that the internet and international business provide for entrepreneurs.

Question 66

To realise the benefits of intrapreneurship, managers of large organisations often find that success depends on the ability of large organisations to:

A) raise significant amounts of money.
B) act like their competitors.
C) vertically integrate their operations.
D) develop slick advertising campaigns.
E) act like small organisations.

Question 67

Suppose that you work for a large corporation and have been recently assigned to the innovation group. This job assignment means that you have been assigned to:

A) a small organisational subunit where the people can be highly creative and are free of many of the restrictions of the larger organisation.
B) an organisational subunit that produces foul-smelling chemicals.
C) a disciplinary and training program for poor performing employees.
D) engage in corporate espionage.
E) work on less desirable tasks.

Question 68

The major source(s) of outside financing for an entrepreneurial start up are:

A) governmental grants.
B) foundation grants.
C) debt financing and equity financing.
D) All of the options listed
E) None of the options listed

Question 69

Which of the following statements is NOT accurate?

A) Capitalising on entrepreneurial behaviours is no more challenging in large organisations than it is in small organisations.
B) High performance is increasingly based on employees' entrepreneurial behaviour.
C) Creativity and innovation are important to continued success in dynamic and competitive environments.
D) Just like smaller organisations, large organisations depend on the entrepreneurial spirit.
E) High performance relies on the contributions of workers who are willing to assume risks.

Question 70

__________ involves borrowing money that must be repaid over time with interest.

A) Capital loans
B) Venture capital
C) Equity finance
D) Debt finance
E) Pension funds

Question 71

One of the advantages of __________ is that it takes place in a larger organisation that is able to turn new ideas into profitable new products, services and business ventures.

A) first-mover advantage
B) venture capitalism
C) intrapreneurship
D) angel investing
E) partnerships

Question 72

Entrepreneurship is rich in diversity, with __________ and minority owned business start-ups increasing in numbers.

A) graduates
B) volunteers
C) executives
D) women
E) pensioners

Question 73

Explain the connection between entrepreneurship and intrapreneurship. How can the characteristics of the typical entrepreneur be beneficial for the intrapreneur?

Question 74

Explain why small businesses often fail and what can be done to help avert failure.

Question 75

Regardless of the focus and location, incubators share the common goal of helping to build successful new businesses that create:

A) innovative technologies.
B) small business hubs.
C) jobs and improve economic development.
D) new markets.
E) social networks.

Question 76

Describe the characteristics of entrepreneurs. Which of these characteristics do you think are most important for entrepreneurial success? Why?

Question 77

Business incubators share the common goal of:

A) helping to build new businesses that improve economic development.
B) helping to build successful new businesses.
C) helping to build new businesses that create jobs.
D) All of the options listed
E) None of the options listed

Question 78

Small organisational subunits where teams are allowed to work together in a unique setting that is highly creative and free of the operating restrictions of the larger parent organisation are known as:

A) creative cliques.
B) product innovation circles.
C) innovation groups.
D) venture teams.
E) quality innovation circles.

Question 79

Through the efforts of __________, large organisations are able to turn new ideas into profitable new products, services and business ventures.

A) angel investors
B) entrepreneurs
C) venture capitalists
D) intrapreneurs
E) family businesses

Question 80

Which of the following are important issues in new venture creation?

A) Can the entrepreneur identify a market niche that is being missed by other established businesses?
B) Can the entrepreneur identify a new market that has not yet been discovered by existing businesses?
C) Can the entrepreneur generate first-mover advantage by exploiting a niche or entering a market before competitors?
D) All of the options listed
E) None of the options listed