Deck 6: Managing Start-Ups and New Ventures

Question 1

Globalisation and increased competition give an advantage to large businesses which can offer the flexibility and fast response that small companies can't offer.

Answer 1

False

Question 2

Two principle advantages of forming a corporation are continuity and limits on the owners' liability.

Answer 2

True

Question 3

The small-business owner who has high energy and enjoys handling the everyday tasks of their own business is considered to be in the 'juggler' entrepreneur category.

Answer 3

True

Question 4

The drawbacks of proprietorship include unlimited liability and difficulty in obtaining financing.

Question 5

A legal entity created and registered by the government and existing apart from its owners is known as a company.

Question 6

Lynda believes that the failure of her new invention was due to her inability to spend enough time developing its features and form.We can infer that Linda must have an internal locus of control.

Question 7

The characteristic known as 'tolerance of ambiguity' describes a person to be untroubled by disorder and uncertainty

Question 8

The small-business owner who has high energy and enjoys handling the everyday tasks of their own business is considered to be in the 'hard worker' entrepreneur category.

Question 9

A business plan is a document specifying the business details prepared by an entrepreneur prior to opening a new business.

Question 10

Social entrepreneurship focuses on creating social value by providing solutions to social problems,but with a primary purpose of generating profit and returns.

Question 11

An entrepreneur recognises a viable idea for a business product or service and carries it out.

Question 12

Social entrepreneurs are leaders who are committed to positive social change.

Question 13

A psychological characteristic that enables a person to accept the threat of competition and potential risk is called a tolerance for ambiguity.

Question 14

A partnership is a legal entity created as a legal entity by the state and existing apart from its owners.

Question 15

The human quality in which people are motivated to excel and pick situations in which success is likely is known as 'self-confidence'.

Question 16

When funds are invested in exchange for ownership in the company,it is called equity financing.

Question 17

If an individual has an internal locus of control,they believe that their future is not within their control but rather is influenced by external forces.

Question 18

The process of initiating a business venture,gathering and organising the appropriate resources and assuming the associated risks and rewards is entrepreneurship.

Question 19

A sole proprietorship is an unincorporated business owned by two or more people.

Question 20

The innovation process requires organisations (and entrepreneurs)to avoid risk at all costs.

Question 21

According to the 'five types of small business owners",a(n)__________________ is characterised as someone who thrives on the challenge of building larger,more profitable business.

A) Iidealist
B) optimiser
C) hard worker
D) juggler
E) sustainer

Question 22

A business model that provides a shared office space,management support services and management/legal advice to entrepreneurs is known as a business incubator.

Question 23

Funding that is raised by a large number of investors giving small amounts of money,typically through social media and the Internet,is known as crowdsourcing.

Question 24

To encourage intrapreneurship in an organisation,the management should tolerate failure and use it as a learning experience.

Question 25

In developing a new method of farming abalone,principally for the Asian market,Steve Cooper's innovation depicts him as an ____________.

A) introvert
B) innovator
C) entrepreneur
D) intrapreneur
E) extrapreneur

Question 26

A business model that provides a shared office space,management support services and management/legal advice to entrepreneurs is known as a spin-off company.

Question 27

Financing provided by a wealthy individual who believes in the idea for a start-up and provides personal funds and advice to help the business get started is known as equity financing.

Question 28

An arrangement by which the owner of a product or service allows others to purchase the right to distribute the product or service with help from the owner is known as Angel financing.

Question 29

An independent company producing a product or service similar to that produced by the entrepreneur's former employer is known as a sole proprietor.

Question 30

Someone who recognises a viable idea for a business product or service and carries it out is referred to as a(n):

A) intrapreneur
B) entrepreneur
C) manager
D) leader
E) introvert.

Question 31

If an individual believes that their future is within their control and that external forces will have little influence on the outcomes of their decisions they are said to have an external locus of control.

Question 32

A business incubator is an independent company producing a product or service similar to that produced by the entrepreneur's former employer.

Question 33

An intrepreneur is a person that acts as an entrepreneurial employee of an organisation.

Question 34

According to the 'five types of small business owners',a(n)__________________ is characterised as being rewarded by chance to work on something new and creative.

A) idealist
B) optimiser
C) hard worker
D) juggler
E) sustainer

Question 35

In order,entrepreneurial businesses go through the following distinct stages of growth: start up,success,survival,take off and resource maturity.

Question 36

An entrepreneur:

A) assumes the risks of the business
B) reaps the rewards of the business
C) assumes the financial and legal risks of ownership
D) recognises a viable idea for a business product or service and carries it out
E) All of these choices.

Question 37

The success stage occurs after takeoff stage in the five stages of growth for an entrepreneurial company.

Question 38

The resource maturity stage is the last of the five stages of growth for an entrepreneurial company.

Question 39

The management should insist on formal,structured meetings in order to encourage intrapreneurship in an organisation.

Question 40

The process of starting a business venture,organising the resources and taking the risks is known as:

A) intrapreneurship
B) entrepreneurship
C) small business administration
D) venture capital
E) equity financing.

Question 41

The drawback(s)of proprietorship include:

A) the unlimited liability of the partners
B) conflicts with partners
C) tax responsibilities
D) difficulty in obtaining financing
E) complexity and cost.

Question 42

Which of these refers to the belief by individuals that their future is within their control and that external forces will have little influence?

A) Awareness of passing time
B) Tolerance for ambiguity
C) Internal locus of control
D) External locus of control
E) Deferred locus of control

Question 43

________________ means that people are motivated to excel and pick situations in which success is likely.

A) External locus of control
B) Tolerance for ambiguity
C) Awareness of passing time
D) Internal locus of control
E) Need to achieve

Question 44

___________________ innovation is a keen to continuous improvement.

A) Moderate
B) Incremental
C) Radical
D) Internet-based
E) All of these choices.

Question 45

Before opening his own photographic retail outlet,Steve was writing a report that details the specifics of his ideas and future business operations.This document is known as a:

A) cost-benefit analysis
B) business portfolio
C) business plan
D) competitive analysis
E) mission statement.

Question 46

An effective business plan will include all of the following,except:

A) clear and realistic financial projections
B) evidence of an effective entrepreneurial management team
C) a clear and compelling vision for the business
D) in-depth details, typically greater than 50 pages in length
E) All of these choices.

Question 47

In order for an innovation to succeed in the marketplace in must pass all of the following 'tests',except:

A) The innovation must be fit for purpose.
B) The innovation must have sound marketing strategy and a strong selling proposition.
C) The total market and value proposition should be based on a strong gut feel by the entrepreneur.
D) The capabilities to 'scale up' production must be established.
E) All of these choices.

Question 48

Jeff likes to set his own goals,which have an intermediate level of difficulty.Which of the entrepreneurial characteristics does he probably possess?

A) A high need for achievement
B) A high need for power
C) An external locus of control
D) An inability to deal with uncertainty
E) Intolerance of ambiguity

Question 49

______________________ are leaders who are committed to both good business and positive social change.

A) Social entrepreneurs
B) Business leaders
C) Social entrepreneurs
D) Politicians
E) None of these choices.

Question 50

All of these are entrepreneurial characteristics,except:

A) self-confidence
B) tolerance for ambiguity
C) external locus of control
D) high energy level
E) awareness of passing time.

Question 51

____________________ is the most important reason for starting a business.

A) To create something new
B) To control my life
C) To make a huge profit
D) To be my own boss
E) Frustration at phone answering services

Question 52

______________________ (two words)combines creativity,business acumen,passion and hard work of the traditional entrepreneur with a mission to change the world for the better.

A) Social entrepreneurship
B) Green business
C) Intrapreneurship skill
D) Societal pressure
E) None of these choices.

Question 53

Adam believes that things such as luck or chance will determine his future success.Adam has:

A) an internal locus of control
B) a high need for achievement
C) a tolerance for ambiguity
D) an external locus of control
E) high level of self-confidence.

Question 54

Entrepreneurs are able to:

A)deal easily with delays
B)exhibit high levels of patience
C)procrastinate well
D)All of these choices.
E)A and B.

Question 55

The belief by individuals that their future is not within their control but rather is influenced by external forces is referred to as a(n):

A) awareness of passing time
B) tolerance for ambiguity
C) internal locus of control
D) external locus of control
E) deferred locus of control.

Question 56

Bruce owns his own unincorporated consulting business,from which he derives a modest profit.This business is best described as a(n):

A) partnership
B) sole proprietorship
C) corporation
D) association
E) company.

Question 57

A(n)____________ is an unincorporated business owned by two or more people.

A) partnership
B) proprietorship
C) corporation
D) association
E) co-existence

Question 58

Business plan documents may differ in their specifics,but all effective ones share the following characteristics,except:

A) They demonstrate a clear, compelling vision.
B) Provide detailed information about potential customers and target market characteristics.
C) Pay attention to formatting and clear writing.
D) Are detailed, complex and are typically greater than 50 pages in length.
E) All of these are characteristics of effective business plans.

Question 59

According to the 'five types of small business owners',a(n)__________________ is characterised enjoying the chance to balance work and personal life.

A) idealist
B) optimiser
C) hard worker
D) juggler
E) sustainer

Question 60

The psychological characteristic that allows a person to be untroubled by disorder and uncertainty is called:

A) tolerance of ambiguity
B) external locus of control
C) need to achieve
D) awareness of passing time
E) internal locus of control.

Question 61

Colin is an entrepreneur.At this stage of his company's growth,his main concerns are whether he has enough customers and money.What stage of growth is Colin's company in?

A) Start-up and existence
B) Survival
C) Take-off
D) Success
E) Hardship

Question 62

During the __________ stage,the company will need to make greater use of budgets,standard cost systems and statistical reports.

A) existence
B) survival
C) take-off
D) success
E) maturity

Question 63

Managers must tailor their planning,organising,leading and controlling to fit:

A) the current stage of growth
B) financial needs
C) inventory levels
D) the number of orders to be filled
E) their comfort level.

Question 64

Funding from a large number of investors giving small amounts of money,typically through social media and Internet is known as a(n):

A) debt financing
B) angel funding
C) crowdsourcing
D) crowdfunding
E) None of these choices.

Question 65

All the following are typical reasons that small business ventures fail,except:

A) overexpansion
B) inaccurate accounting
C) no online presence
D) operational mediocrity
E) All of these are typical reasons that small business ventures fail.

Question 66

Which of these offers the advantage that the entrepreneur has the ability to develop and design the business in the entrepreneur's own way?

A) Participate in a business incubator
B) Start a new business
C) Buy a franchise
D) Buy an existing business
E) All of these choices.

Question 67

At which stage of growth is the company if it is solidly based and profitable?

A) Resource maturity
B) Take-off
C) Survival
D) Success
E) Existence

Question 68

A __________ is an independent company producing a product or service similar to that produced by the entrepreneur's former employer.

A) franchise
B) business incubator
C) spin-off
D) new business
E) None of these choices.

Question 69

An artificial entity created by the state and existing apart from its owners is known as a(n):

A) partnership
B) proprietorship
C) company
D) association
E) dealership.

Question 70

An arrangement by which the owner of a product or service allows others to purchase the right to distribute the product or service with help from the owner is known as:

A) franchising
B) business incubation
C) spinning-off
D) globalisation
E) right offerings.

Question 71

The business incubator:

A) gives up control since every business is run the same way
B) provides shared office space, management support services and management advice
C) develops an international business
D) provides an established name and advertising
E) Two of these choices.

Question 72

A company has made substantial financial gains,but may start to lose the advantages of small size through diseconomy of scale.Which stage of growth is this company experiencing?

A) Resource maturity
B) Take-off
C) Success
D) Survival
E) Existence

Question 73

A functional organisation structure starting to evolve with managers in charge of finance,manufacturing and marketing,describes which stage of growth?

A) Existence
B) Survival
C) Take-off
D) Success
E) Resource maturity

Question 74

During the latter stages of entrepreneurial growth,the manager:

A) must learn to delegate and decentralise authority
B) must institute greater use of rules and procedures
C) must hire sufficient management to handle the growth
D) All of these choices.
E) None of these choices.

Question 75

Assistance provided by angel financing involves:

A)investing large amounts of money
B)providing necessary assistance and advice
C)providing information to help the entrepreneur prosper
D)baring a lower amount of associated investment risk
E)A,B and C.

Question 76

Financing consists of funds are invested in exchange for ownership in the company is known as:

A) venture capital
B) debt financing
C) equity financing
D) franchising
E) licensing.

Question 77

Two principal advantages of forming a corporation are:

A) unlimited liability and potential conflicts with partners
B) freedom from debt and relatively simple structure
C) continuity and limits on owner's liability
D) unlimited liability and continuity
E) continuity and non-tax structure.

Question 78

Borrowing money that has to be repaid in order to start a business is known as:

A) venture capital
B) debt financing
C) equity financing
D) franchising
E) licensing.

Question 79

Since 1998,a major investment in computer systems was made to provide CEO Peter Dryen at Dryen Australia with the type of information he could no longer keep up with himself.This would suggest that Dryen Australia is in the ________ stage.

A) existence
B) growth
C) take-off
D) success
E) maturity

Question 80

A group of organisations or individuals that invest money in new or expanding businesses for ownership and profit potential is known as a(n):

A) organisational entrepreneurs
B) investment group
C) venture capital organisation
D) angel financiers
E) None of these choices.