Deck 20: Management and Entrepreneurship: Handling Start-Ups and New Ventures

Question 1

The use of corn to make ethanol create a new use for corn. This kind of opportunity comes from which of the following?

A) creation of new products or services
B) new geographical market
C) creation or discovery of new materials
D) discovery of new methods of production
E) new methods of organizing

Answer 1

B

Question 2

George has been researching if he should open a business on his own or with a partner/group. The combination of diverse skills, experiences, and relationship from an entrepreneurial team would offer George a/an ________.

A) team benefit
B) combination plus
C) advantage group
D) team advantage
E) team bonus

Answer 2

D

Question 3

The Internet allowed Netflix to offer customers a new way to rent DVDs and video games. This is an example of ________.

A) new markets
B) new raw materials
C) new methods of production
D) new methods of organizing
E) new products

Answer 3

D

Question 4

Entrepreneurial opportunity is ________.

A) the activities and investments committed to gain returns from the new product or service arising from the opportunity
B) resources (i.e., money, relationships, etc.) the entrepreneur could lose if the opportunity does not succeed
C) an occasion to bring into existence new products and services that allow outputs to be sold at a price greater than their cost of production
D) an individual's ability to notice and be sensitive to new information about objects, incidents, and patterns of behavior in the environment
E) the process in which an individual or group of individuals in an existing corporation create a new organization or instigate renewal or innovation within that corporation

Question 5

Opportunities may sometimes arise from the discovery of new geographical markets in which new customers will value the new product or service.

Question 6

A(n) ________ is an individual who identifies, evaluates, and exploits opportunities.

A) leader
B) entrepreneur
C) supplier
D) distributor
E) opportunist

Question 7

When Nintendo Crescendo, an electronics company, develops and markets the Wii gaming system, it is an opportunity that has arisen from a ________.

A) new product or service
B) new geographical market
C) new method of production
D) new raw material
E) new method of organizing

Question 8

________ allow entrepreneurs to produce goods or services at lower costs, which allows the entrepreneurs to satisfy the needs of customers more effectively.

A) New markets
B) New raw materials
C) New methods of production
D) New methods of organizing
E) New products

Question 9

Who is an entrepreneur?

Question 10

________ refers to the identification, evaluation, and exploitation of opportunities.

A) Entrepreneur
B) Entrepreneurial opportunity
C) Entrepreneurial alertness
D) Entrepreneurship
E) Entrepreneurial risk

Question 11

Which of the following is an example of an opportunity that has arisen from new uses for raw materials?

A) the invention of the heart stent
B) an American bank providing services in Canada
C) raising chickens without using any antibiotics
D) using the Internet to sell a product
E) using corn to produce ethanol

Question 12

If a food manufacturer raises chickens for commercial use, without using antibiotics, which type of opportunity is this?

A) new products or services
B) new geographical markets
C) new raw materials
D) new methods of production
E) new methods of organizing

Question 13

Entrepreneurship refers to the identification, evaluation and exploitation of opportunities.

Question 14

Which type of opportunity is Citibank pursuing if it provides services in China?

A) new products or services
B) new geographical markets
C) new raw materials
D) new methods of production
E) new methods of organizing

Question 15

Research suggests that organizations started by entrepreneurial teams tend to perform better than those started by individual entrepreneurs working by themselves. What is this attributed to?

A) The new, fresh mindset of entrepreneurs.
B) Organizations started by teams have more money.
C) Individual organizations do not have the manpower to help.
D) The combination of diverse skills, experiences, and relationships of the entrepreneurial team members.
E) Entrepreneurial teams use more research for start-up decisions.

Question 16

A company starting to distribute their existing products in a new country is gaining from which type of opportunity?

A) creation of new products or services
B) new geographical market
C) creation or discovery of new raw materials
D) discovery of new methods of production
E) new methods of organizing

Question 17

Which of the following is an example of an opportunity that arose from the use of a new method of organizing?

A) using corn to produce ethanol
B) using the Internet to sell a product
C) raising chickens without antibiotics
D) an American bank providing services in Australia
E) the invention of the heart stent

Question 18

Opportunities may arise from the creation or discovery of ________.

A) new research
B) new raw materials
C) ethics
D) more capital
E) social networks

Question 19

Explain the fundamentals of entrepreneurship.

Question 20

Which of the following demonstrates the correct sequence in the stages of entrepreneurship?

A) opportunity identification, opportunity evaluation, opportunity exploitation
B) opportunity identification, opportunity exploitation, opportunity evaluation
C) opportunity evaluation, opportunity identification, opportunity exploitation
D) opportunity evaluation, opportunity exploitation, opportunity identification
E) opportunity exploitation, opportunity evaluation, opportunity identification

Question 21

________ is a type of evaluation that helps entrepreneurs understand whether an idea is practical.

A) Illusion of control
B) Entrepreneurial risk management
C) Strategic planning
D) Feasibility analysis
E) Entrepreneurial alertness

Question 22

________ refers to the resources that the entrepreneur could lose if the opportunity does not succeed.

A) Downside loss
B) Entrepreneurial risk
C) Feasibility analysis
D) Information asymmetry
E) Illusion of control

Question 23

Information asymmetry refers to an individual's ability to notice and be sensitive to new information about objects, incidents, and patterns of behavior.

Question 24

________ is the second step of the entrepreneurial process.

A) Opportunity identification
B) Opportunity selection
C) Opportunity evaluation
D) Opportunity feedback
E) Opportunity success

Question 25

What will entrepreneurs study in a feasibility analysis?

A) customer demands, structure of the industry, ability to provide the new product or service
B) ways to increase production and cut corners on costs
C) strategic planning
D) the likelihood of a product or service affecting the generation gap
E) entrepreneurial alertness

Question 26

________ is the first step of the entrepreneurial process.

A) Opportunity identification
B) Opportunity evaluation
C) Risk identification
D) Opportunity feedback
E) Risk evaluation

Question 27

Entrepreneurial alertness refers to an individual's ability to notice and be sensitive to new information about objects, incidents, and patterns of behavior in the environment.

Question 28

Rick and Jose gain new market information regarding a potential entrepreneurial opportunity. Despite the fact that both of them have gained access to this new information, only one of these individuals has access to additional information suggesting that other competitors are already moving to exploit this opportunity. What is this an example of?

A) information asset
B) information assurance
C) social networking
D) information asymmetry
E) information reliability

Question 29

Although an opportunity may exist, it needs to be recognized first. This is ________.

A) opportunity feedback
B) opportunity evaluation
C) opportunity exploitation
D) opportunity identification
E) opportunity cost

Question 30

Martha has recently created a Facebook account. She also understands that she can utilize this to advertise her growing recycling business. This is an example of ________.

A) information symmetry
B) market research
C) information asset
D) social networks
E) entrepreneurial risk

Question 31

Which of the following is true of an individual who has a low level of entrepreneurial alertness?

A) They are more likely to identify potential entrepreneurial opportunities.
B) They spend most of their time giving feedback to employers.
C) They are more likely to dismiss or ignore new information and overlook potential opportunities.
D) They are more likely to follow the new market opportunities.
E) They have low entrepreneurial risk.

Question 32

________ is the likelihood and magnitude of the opportunity's downside loss.

A) Illusion of control
B) Entrepreneurial risk
C) Entrepreneurial alertness
D) Exploitation
E) Entrepreneurial opportunity

Question 33

________ refers to an individual's ability to notice and be sensitive to new information about objects, incidents, and patterns of behavior in the environment.

A) Social networking
B) Entrepreneurial opportunity
C) Entrepreneurial alertness
D) Feasibility analysis
E) Entrepreneurial risk

Question 34

What occurs when an entrepreneur decides whether he or she has just a good idea or a viable opportunity that will provide the desired outcomes?

A) opportunity identification
B) opportunity selection
C) opportunity evaluation
D) opportunity feedback
E) opportunity success

Question 35

Betty and David decide to conduct a survey to observe people's reaction to their innovative idea for a new product. With the help of an organization that conducts primary research, the couple are able to get the responses of people from their town. The results are very encouraging and they decide to start their company. What error have they committed?

A) hypercorrection
B) cognitive distortion
C) law of small numbers
D) defense mechanism
E) overregularization

Question 36

What is entrepreneurial opportunity? Which are the types of opportunities as described by Schumpeter?

Question 37

Mike wants to start his own laundry service. However, he intends to first study the market and consider factors like who his competitors are, how they function, their market shares, how he can attract prospective customers, etc., before he decides whether his plan is viable. Mike is engaging in ________.

A) benchmarking
B) entrepreneurial risk management
C) feasibility analysis
D) exploitation
E) angel investing

Question 38

The ability of entrepreneurs to understand how to turn a new technology into a product or service that will be valued by consumers refers to the ability to assess ________.

A) information symmetry
B) market research
C) means-end relationships
D) social networks
E) entrepreneurial risk

Question 39

Describe the four factors that influence the ability of individuals to identify opportunities.

Question 40

An entrepreneurial team advantage can be equated to ________ as those on the team share their experiences and knowledge.

A) entrepreneurial alertness
B) information asymmetry
C) social networks
D) feasibility analysis
E) illusion of control

Question 41

Which of the following is true about factors that adversely influence the accuracy of an entrepreneur's risk perceptions?

A) An entrepreneur's belief in the law of small numbers increases the risk he or she perceives with an opportunity.
B) Because individuals are more likely to obtain good information and less likely to obtain bad information, small samples of information are likely biased negatively.
C) Most entrepreneurs have access to large databases.
D) The control that an entrepreneur feels with respect to the opportunity's outcome may influence perceptions of the idea's risk.
E) Law of small numbers and the illusion of control positively influence the accuracy of risk perceptions when evaluating opportunities.

Question 42

Jerry starts his own business even when he is advised by family and friends that it is not a suitable opportunity. His friends feel that the market is uncertain and a new entry at this juncture is inadvisable. Jerry soon realizes that his friends were right and he should have taken their advise. In spite of himself, he is forced to admit that the market situation is such that it would take more than being a good entrepreneur to survive. Which of the following is Jerry experiencing?

A) exploitation
B) anchoring
C) information bias
D) illusion of control
E) reactance

Question 43

Which of the following is true about bank financing?

A) Like angel investors and venture capitalists, banks invest in a business.
B) Banks are more interested in ensuring that the entrepreneur's opportunity will survive long enough to ensure repayment.
C) Banks typically focus on investing in a small number of industries.
D) Banks are concerned with the long-term potential for returns.
E) Banks typically provide more capital as the new venture becomes more established.

Question 44

Which of the following best describes an angel investor?

A) Families and friends of an entrepreneur are not angel investors.
B) Angel investors raise money and then use this money to make investments in new firms.
C) Angel investors make fewer investments than venture capitalists.
D) Angel investors focus on a small number of industries.
E) Angel investors provide the initial financing to start-up ventures.

Question 45

When analyzing entrepreneurial opportunities, the opportunity identification step is, "Where the rubber meets the road" and often presents a difficult challenge.

Question 46

________ is the third step of the entrepreneurial process.

A) Opportunity identification
B) Opportunity evaluation
C) Opportunity exploitation
D) Opportunity selection
E) Opportunity improvement

Question 47

Which of the following is true about the differences between angel investors and venture capitalists?

A) Venture capitalists are wealthy individuals who provide capital to new companies.
B) Angel investors raise money and then use this money to make investments in new firms.
C) Venture capitalists make more investments than angel investors.
D) Angel investors tend not to focus on particular industries.
E) Venture capitalists typically provide the initial financing to start-up ventures.

Question 48

When entrepreneurs identify how they will market, produce, and position their new products, they are involved in which of the following entrepreneurial processes?

A) opportunity placement
B) opportunity planning
C) opportunity management
D) opportunity exploitation
E) opportunity analysis

Question 49

Describe opportunity exploitation.

Question 50

Even if an entrepreneur's idea is feasible, opportunities are associated with risk. In this context, ________ refers to the resources reduced if an opportunity does not succeed.

A) illusion of control
B) law of small numbers
C) downside loss
D) exploitation
E) feasibility analysis

Question 51

________ are firms that raise money from investors and then use this money to make investments in new firms.

A) Angel investors
B) Venture capitalists
C) Banking institutions
D) Entrepreneurs
E) Insurance companies

Question 52

When an entrepreneur obtains financing from a financial institution in the form of a loan, it is termed as ________.

A) angel investing
B) capital investments
C) bank financing
D) loan sharking
E) corporate funding

Question 53

Exploitation exists when entrepreneurs overestimate the extent to which they can control the outcome of an opportunity.

Question 54

What is entrepreneurial risk? In this context, explain downside loss.

Question 55

________ refers to the activities and investments committed to gain returns from the new product or service arising from the opportunity.

A) Exploitation
B) Information asymmetry
C) Entrepreneurial risk
D) Illusion of control
E) Social value

Question 56

Entrepreneurs are most likely to exploit an opportunity when ________.

A) customers are likely to continue using the same product
B) there is no market demand, but an opportunity to create market demand
C) they perceive that they have the support of important stakeholders
D) they want to enhance the prospects of the opportunity by training an incapable management team
E) they feel they do not have access to the resources needed to ensure high levels of organizational performance

Question 57

Bob's perception he has been successful with his past entrepreneurial opportunities and therefore his luck will continue with his latest venture is known as ________.

A) upside gain
B) feasibility gain
C) illusion of control
D) feasibility control
E) gain control

Question 58

________ are wealthy individuals who provide capital to new companies.

A) Angel investors
B) Venture capitalists
C) Bank financiers
D) Crowd funders
E) Private equity investors

Question 59

Jose has successfully initiated a business of repairing cars. However, without immediate income to sustain the business, he may have to shut his shop. His friend, Adam, invests in the company and gives the company a much-required boost. In this situation, Adam is a(n) ________.

A) bank financier
B) venture capitalist
C) angel investor
D) crowd funder
E) private equity investor

Question 60

Explain feasibility analysis.

Question 61

________ involves improving the firm's ability to execute strategies and focuses on new processes instead of new products.

A) Sustained regeneration
B) Project hosting
C) Organizational rejuvenation
D) Strategic renewal
E) Domain definition

Question 62

Which of the following is an example of corporate entrepreneurship?

A) creating new products, services, or technologies
B) editing papers and reports
C) reinvesting funds in other companies
D) contracting work to consultants
E) reducing corporate organization

Question 63

Beth heads the team of designers at La Belle, Inc., a well-known brand of designer bags. She is an extraordinary designer and manages her team excellently. In the past, La Belle has successfully implemented many of Beth's innovative ideas to their benefit. The company has now decided that Beth should be given the responsibility of managing their new business unit that specializes in clothes, shoes, and other accessories. What type of entrepreneurship is displayed in this scenario?

A) intrapreneurship
B) creative destruction
C) corporate social entrepreneurship
D) social entrepreneurship
E) corporate entrepreneurship

Question 64

Which of the following is true about corporate entrepreneurship?

A) Corporate entrepreneurs focus on less quantitative performance measures that are not related to money.
B) The purpose of corporate entrepreneurship is to create value for the public.
C) Corporate entrepreneurs face more difficulties attracting capital from angel investors, venture capitalists, or banks.
D) Corporate entrepreneurship results in new companies that often continue to work closely with the parent company.
E) Corporate entrepreneurs often face difficulties in the form of hiring and compensating employees.

Question 65

________ occurs when firms develop new culture, processes, or structures to support new product innovations in current markets as well as with existing products in new markets.

A) Domain definition
B) Organized rejuvenation
C) Strategic renewal
D) Sustained regeneration
E) Project hosting

Question 66

Which of the following is the most frequently used type of corporate entrepreneurship?

A) sustained regeneration
B) organized rejuvenation
C) domain definition
D) strategic renewal
E) project hosting

Question 67

Strategic renewal occurs when a firm proactively seeks to create a new product market position that competitors have not recognized.

Question 68

The success of corporate entrepreneurship efforts will depend on many factors. Which of the following are examples of dependent factors?

A) organization's culture, practices, tolerance level for uncertainty
B) stakeholders and investors
C) Dow and NASDAQ
D) individual profits
E) competition

Question 69

________ occurs when a firm proactively seeks to create a new product market position that competitors have not recognized.

A) Sustained regeneration
B) Organized rejuvenation
C) Public hosting
D) Strategic renewal
E) Domain definition

Question 70

What is corporate entrepreneurship?

Question 71

________ occurs when a firm attempts to alter its own competitive strategy.

A) Public hosting
B) Sustained regeneration
C) Organized rejuvenation
D) Strategic renewal
E) Domain definition

Question 72

Angel investors and venture capitalists provide ________ for entrepreneurial opportunities.

A) consulting
B) management
C) research analysis
D) financing
E) feasibility analysis

Question 73

When do entrepreneurs require external capital? Describe the three primary sources of external capital.

Question 74

________ is the process in which an individual or group of individuals in an existing corporation create a new organization or instigate renewal or innovation within that corporation.

A) Corporate social entrepreneurship
B) Intrapreneurship
C) Entrepreneurship
D) Corporate entrepreneurship
E) Social entrepreneurship

Question 75

With respect to corporate entrepreneurship, sustained regeneration occurs when firms develop new culture, processes, or structures to support new product innovations.

Question 76

________ occurs when a firm tries to offer a new strategy altogether, unlike introducing a new product or service.

A) Public hosting
B) Sustained regeneration
C) Organized rejuvenation
D) Strategic renewal
E) Domain definition

Question 77

When pursuing domain definition, what should firms hope for?

A) to be moderately competitive in the market segment
B) organized rejuvenation
C) to become the first competitor in a market segment
D) strategic renewal
E) to be one of many competitors in the market segment

Question 78

An example of organizational rejuvenation is when Meryl Computers Inc., a computer hardware company, changes policies and procedures within the company to support innovation.

Question 79

When an individual or group of individuals in an existing corporation create a new organization or create a new group within an existing organization, they are involved in ________ entrepreneurship.

A) corporate
B) social
C) commercial
D) innovative
E) strategic

Question 80

The pursuit of entrepreneurial opportunities for the purpose of generating sales and profits is called ________.

A) commercial entrepreneurship
B) intrapreneurship
C) intrepreneurship
D) corporate entrepreneurship
E) social entrepreneurship