Deck 9: Growing and Internationalizing the Entrepreneurial Firm

Question 1

Governments in developed countries impose fewer procedures and offer lower total costs for start-up firms.

Answer 1

True

Question 2

The level of complexity and required resources increases from direct export, to licensing/ franchising, and finally to foreign direct investment.

Answer 2

True

Question 3

While venture capital is a popular method of financing in the West, China leads the world with the highest level of informal investing.

Answer 3

True

Question 4

An institution-based view suggests that firm-specific resources and capabilities largely determine entrepreneurial success and failure.

Question 5

Owners, managers, and employees at entrepreneurial firms tend to be more innovative and take more risks than those at large firms.

Question 6

Whether entrepreneurship is encouraged or discouraged depends on formal institutions affecting entrepreneurs and start-up enterprises.

Question 7

A letter of credit is used when the exporter needs greater assurance that the importer is going to pay for the goods or services received.

Question 8

A potential start-up primarily has entrepreneurial vision, drive, and leadership, which compensate for its shortage of tangible resources.

Question 9

International transaction costs are qualitatively higher than domestic transaction costs.

Question 10

If an Azerbaijani importer does not pay an American exporter on time, it is safe to assume it is being opportunistic because all international transactions must follow the same guidelines.

Question 11

Most SMEs are still slow at internationalizing.

Question 12

There is a positive relationship between a high degree of innovation and superior profitability.

Question 13

Cultural values and norms are examples of informal institutions.

Question 14

The best-performing entrepreneurs tend to have the most general knowledge about a host of business opportunities.

Question 15

Entrepreneurship flourishes more in environments with more formal institutional procedures.

Question 16

In the globalized world, entrepreneurship is growing equally in most economies.

Question 17

It is best for entrepreneurs to not pass on their entrepreneurial ideology to others in order to reduce competition.

Question 18

Licensing is mostly used in the service industries.

Question 19

Because of globalization, it is always better for a firm to quickly internationalize and take advantage of foreign opportunities than to focus on domestic issues first and ease into foreign markets.

Question 20

Only smaller, younger firms are considered entrepreneurial.

Question 21

____ perform an important middleman function by linking sellers and buyers overseas.

A) Export intermediaries
B) Indirect exporters
C) Sporadic exporters
D) Alliance partners

Question 22

Small- and medium-sized enterprises (SMEs) are defined as:

A) Firms with fewer than 50 departments in the European Union and fewer than 25 departments in the United States
B) Firms with fewer than 50 departments in the United States and fewer than 25 departments in the European Union
C) Firms with fewer than 500 employees in the European Union and fewer than 250 employees in the United States
D) Firms with fewer than 500 employees in the United States and fewer than 250 employees in the European Union

Question 23

When internationalizing, entrepreneurs are advised to be:

A) Timid
B) Bold
C) Compulsive
D) Inflexible

Question 24

Which is NOT one of the three broad modes for entering foreign markets?

A) Licensing/franchising
B) Direct exports
C) Microfinancing
D) Foreign direct investment

Question 25

Which of the following is NOT a defining characteristic of entrepreneurship?

A) Opportunity
B) Discovery
C) Exploration
D) Age

Question 26

The key differentiator between rapidly and slowly internationalizing SMEs is:

A) The amount and speed of foreign direct investment.
B) The international experience of entrepreneurs.
C) The ability to apply new technology.
D) Formal institutions and government regulation.

Question 27

Small- and medium-sized enterprises (SMEs) account for ____ percent of the number of firms worldwide.

A) 50
B) 95
C) 12
D) 80

Question 28

____ is the method of sending out exports based on unsolicited inquiries.

A) Direct exporting
B) A letter of credit
C) SME exporting
D) Sporadic exporting

Question 29

The term for a global movement to help eradicate poverty by providing financing is:

A) Foreign direct investments
B) Microfinancing
C) Venture capital investment
D) Entrepreneurship

Question 30

Which is a major reason for China looking more towards informal financing?

A) Microfinancing is a widespread effort.
B) There is a lack of formal institutions such as venture capitalists.
C) The Chinese government outlaws formal financing.
D) Family relationships are valued highly, so investors turn towards them first.

Question 31

____ is defined as a combination of innovative, proactive, and risk-seeking behavior that crosses national borders and is intended to create wealth in organizations.

A) Foreign direct investment
B) International entrepreneurship
C) International alliance partnering
D) Microfinancing

Question 32

Which of the following is NOT one of the 5 strategies for entrepreneurial SMEs to internationalize without leaving their home country?

A) Become suppliers for foreign firms
B) Export indirectly
C) Outsource administrative work
D) Harvest and exit through sell-offs

Question 33

Which of the following would most likely foster more entrepreneurship?

A) Individualistic and high uncertainty-avoidance
B) Collectivistic and high uncertainty-avoidance
C) Collectivistic and low uncertainty-avoidance
D) Individualistic and low uncertainty-avoidance

Question 34

Which of the following is a popular way to enter into international service markets?

A) Direct exports
B) Foreign direct investments
C) Franchising
D) Indirect exports

Question 35

Which of the following is NOT a part of VRIO?

A) Value
B) Resources
C) Limitability
D) Organization

Question 36

Born global is a term referring to:

A) Establishing large firms with major international networks
B) Entrepreneurial firms that attempt to internationalize from inception
C) The newest generation of entrepreneurs
D) Firms that focus on domestic issues first, then cautiously approach international opportunities.

Question 37

All of the following are resources and capabilities of start-up ventures EXCEPT:

A) Strong vision
B) Entrepreneurial drive
C) Leadership
D) Longstanding presence

Question 38

Which is not one of the four major characteristics associated with a growing entrepreneurial firm?

A) Growth
B) Financing
C) Inimitable
D) Internationalization

Question 39

____ is at the heart of entrepreneurship.

A) Vision
B) Leadership
C) Innovation
D) Financing

Question 40

A major drawback for foreign direct investment (FDI) is:

A) Cost
B) Control
C) Physical closeness
D) Commitment

Question 41

Identify the three characteristics of a growing entrepreneurial firm. Explain how each is encouraged more in an environment friendly to entrepreneurs than in an environment opposing entrepreneurship.

Question 42

Identify and explain the dilemma behind transaction costs and international entrepreneurial opportunities.

Question 43

Explain the institution-based views and resource-based views in light of their effect on entrepreneurial success.

Question 44

Discuss direct exporting, licensing, and franchising as strategies for entering a foreign market. Explain each, and detail strengths and weaknesses.

Question 45

Define microfinance, then explain how it works towards alleviating poverty.