Deck 7: Entrepreneurship

Question 1

A small business is typically defined as having fewer than 20 employees and characterized by many innovative practices.

Answer 1

False
Explanation: A small business is often defined as having fewer than 100 employees and being independently owned and operated,not dominant in its field,and not characterized by many innovative practices.

Question 2

A great idea is one of the essential ingredients in a successful entrepreneurial venture.

Answer 2

True
Explanation: Many entrepreneurs and observers say that in contemplating a business,one must start with a great idea.A great product,a viable market,and good timing are essential ingredients in any recipe for success.

Question 3

Successful entrepreneurs are innovators and also have good knowledge and skills in management,business,and networking.

Answer 3

True
Explanation: Successful entrepreneurs are innovators and also have good knowledge and skills in management,business,and networking.In contrast,inventors may be highly creative but often lack the skills to turn their ideas into a successful business.

Question 4

New venture creators working inside big companies are called intrapreneurs.

Question 5

An example of the intermediary model of e-commerce is eBay.

Question 6

Many great organizations have been built on the founder's desire to offer a product.

Question 7

Magazines and newspapers that are available online frequently use an affiliate model for e-commerce.

Question 8

Entrepreneurs are best characterized as gamblers in their approach to risk.

Question 9

A franchisor is an innovator who has created at least one successful store and seeks partners to operate the same concept in other local markets.

Question 10

Natural disasters can provide opportunities for entrepreneurs.

Question 11

Allegra independently owns and operates Southwest Style,a small business with about 30 employees.She is happy with the size of her business and the average profits it generates.From this scenario,Allegra's business can be considered an entrepreneurial venture.

Question 12

Franchising is an entrepreneurial alliance between two organizations.

Question 13

An entrepreneurial venture has growth and high profitability as primary objectives.

Question 14

In the subscription model for e-commerce,fees are charged to bring buyers and sellers together.

Question 15

Entrepreneurs spot,create,and exploit opportunities in a variety of ways.

Question 16

Online travel agents typically use the transaction fee model for e-commerce.

Question 17

Entrepreneurs' primary motivation to start their own firms is most often to get rich quickly.

Question 18

There is a difference between a small business and an entrepreneurial venture.

Question 19

Entrepreneurship occurs when an enterprising individual pursues a lucrative opportunity.

Question 20

In e-commerce,the advertising support model involves advertisers paying for access to the demographic group that visits the operator's site.

Question 21

Protected environments for new,small businesses are known as business incubators.

Question 22

An entrepreneurial orientation includes being proactive and competitively aggressive.

Question 23

Successful entrepreneurs often exhibit creativity,self-reliance,and the ability to adapt.

Question 24

Start-ups have at least two major liabilities: completeness and effectiveness.

Question 25

Entrepreneurs with plenty of business experience tend to overlook the risk factor involved in starting a new business.

Question 26

Social capital is a competitive advantage in the form of relationships with other people and the image other people have of you.

Question 27

Entrepreneurs are frequently challenged by an aversion to record keeping.

Question 28

A business is legitimate if its goals and methods are consistent with societal values.

Question 29

The best business plans convey five key factors: the people,the opportunity,the competition,the context,and risk and reward.

Question 30

Bad economic conditions make it especially difficult for an entrepreneurial organization to expand.

Question 31

A business plan would best be described as the initial rough sketch of an idea for starting a new venture.

Question 32

The reason for nearly all financial failures of entrepreneurial ventures is the lack of adequate start-up capital.

Question 33

Bootlegging refers to creating official job assignments for employees to create new products and processes of their own choosing.

Question 34

Organizations that encourage intrapreneurship face the obvious risk that the effort can fail.

Question 35

Large corporations are merely passive bystanders in the entrepreneurial explosion.

Question 36

Jake worked as an engineer for Z-T Solutions.He had many innovative ideas for the company,but most were never explored to his satisfaction.Therefore,he left the corporation to start his own business.He applied his ideas and thoughts to this business and finally succeeded.This is an example of ____.

A) entrepreneurship
B) domain selection
C) corporate espionage
D) vertical integration
E) franchising

Question 37

Initial public stock offerings provide a way to raise capital through federally registered and underwritten sales of shares in the company.

Question 38

The entrepreneurial strategy matrix allows one to conceptualize ventures along two dimensions: investment and risk.

Question 39

Skunkworks are project teams designated to produce new,innovative products.

Question 40

_____ occurs when an enterprising individual pursues a lucrative opportunity.

A) Bootlegging
B) Franchising
C) Intrapreneurship
D) Entrepreneurship
E) Business incubation

Question 41

The transaction fee model involves companies charging fee:

A) to advertise on a site.
B) for goods and services.
C) to direct site viewers to other company's sites.
D) for site visitors.
E) to bring buyers and sellers together.

Question 42

Sean worked in a hospital for several years before starting a medical equipment company.He has a clear vision of the result he is working to get.Moreover,he is aware of his strengths and weaknesses,and always sets realistic goals.In this case,which of the following characteristics of successful entrepreneurs does Sean possess?

A) Leadership
B) Risk tolerance
C) Opportunity obsession
D) Self-reliance and ability to adapt
E) Motivation to excel

Question 43

An individual who establishes a new organization without the benefit of corporate sponsorship is called a(n):

A) intrapreneur.
B) entrepreneur.
C) sole proprietor.
D) franchisee.
E) licenseE.

Question 44

Bringing buyers and sellers together and charging a commission for each sale is known as the _____ model.

A) transaction fee
B) advertising support
C) intermediary
D) affiliate
E) subscription

Question 45

_____ are best described as new venture creators working inside big companies.

A) Entrepreneurs
B) Intrapreneurs
C) Knowledge workers
D) Sole proprietors
E) Franchisees

Question 46

Generally,which of the following characteristics contributes to entrepreneurs' success?

A) Commitment to work-life balance
B) Tolerance of risk and uncertainty
C) Discounting of own weaknesses
D) Comfort with the status quo
E) Obsession with earning money

Question 47

Dr.Gerry began helping women in South Rhodia obtain microloans.This act is a typical example of:

A) social entrepreneurship.
B) skunkworks.
C) the subscription model.
D) bootlegging.
E) business incubation.

Question 48

Leah is interested in running a business and decides to open a branch of a successful fashion store that her sister owns in another town.In this case,Leah could be best described as a(n)____.

A) business incubator
B) innovator
C) franchisor
D) franchisee
E) intrapreneur

Question 49

Quad Inc. ,a car manufacturer,has started to sell electric cars in response to the rising fuel prices.In which of the following categories has Quad Inc.spotted opportunities?

A) Economic dislocations
B) Demographic changes
C) Lifestyle and taste changes
D) Calamities
E) Government initiatives and rule changes

Question 50

Entrepreneurs start their own firms because they:

A) don't have to work as hard.
B) can do as they please.
C) dislike the bureaucracy in corporate life.
D) are on a quest for power.
E) like to manipulate and control peoplE.

Question 51

A new business having growth and high profitability as primary objectives is a(n):

A) business incubator.
B) consortium.
C) pop-up store.
D) entrepreneurial venture.
E) small business.

Question 52

What characteristics do successful entrepreneurs who are decisive,tenacious,disciplined,and willing to sacrifice possess?

A) Leadership
B) Commitment and determination
C) Opportunity obsession
D) Creativity,self-reliance,and ability to adapt
E) Motivation to excel

Question 53

A business having fewer than 100 employees,independently owned and operated,not dominant in its field,and not characterized by many innovative practices is a(n):

A) matrix venture.
B) small business.
C) franchise.
D) entrepreneurial venture.
E) consortium.

Question 54

According to many entrepreneurs and observers,when creating a new business,one should start with:

A) strategic positioning.
B) social capital.
C) great ideas.
D) domain selection.
E) social responsibility.

Question 55

The primary objective of an entrepreneurial venture is to:

A) provide non-profit services.
B) create a long term relationship with an investment banking firm.
C) reduce the amount of dividends paid.
D) acquire growth and high profitability.
E) increase the social capital.

Question 56

Using his own money and resources,Justin-who recently resigned from his job-started a new business based on the innovative ideas that he himself had generated.This is an example of a(n):

A) entrepreneurship.
B) joint venture.
C) business incubation.
D) diversification strategy.
E) bootlegging venturE.

Question 57

The Draconian Times requires regular viewers of its online articles to pay a monthly fee to maintain uninterrupted access to its content.This is an example of the _____ model.

A) bootlegging fee
B) advertising support
C) intermediary
D) affiliate
E) subscription

Question 58

With which of the following models does a site pay commissions to other sites to drive business to its own sites?

A) Transaction fee model
B) Advertising support model
C) Intermediary model
D) Affiliate model
E) Subscription model

Question 59

When spotting an opportunity,which of the following possibilities involves capitalizing on new clothing and music trends,the desire for fast food,and growing interest in sports?

A) Technological discoveries
B) Demographic changes
C) Lifestyle and taste changes
D) Economic dislocations
E) Government initiatives

Question 60

While working at Giggles Corp. ,Kelly has created a new venture based solely on her idea and Giggles' proprietary technology.Kelly can be described as a(n):

A) intrapreneur.
B) independent entrepreneur.
C) sole proprietor.
D) venture capitalist.
E) franchiseE.

Question 61

According to Peter Drucker,who should help plan succession for a family-managed business?

A) Family members only
B) Family members and the board of directors only
C) Nonfamily business managers only
D) Someone outside the family and the business
E) Government succession agencies

Question 62

Which of the following is a reason why companies go public?

A) To become a franchisee
B) To gain more control
C) To evade taxation imposed by the government
D) To raise more capital
E) To reduce the amount of dividends paid

Question 63

In order for family-managed businesses to survive and prosper,management guru Peter Drucker advises them to:

A) hire family members alone.
B) discontinue hiring family members.
C) fill at least one key position with a nonfamily member.
D) exclude outsiders while planning succession.
E) allow for minimal performance by family members.

Question 64

Which of the following characteristics increases the likelihood of an entrepreneur's success?

A) Unwillingness to sacrifice
B) Intolerance of ambiguity
C) Avoiding risky situations
D) Avoiding uncertainty
E) Opportunity obsession

Question 65

IPO is an acronym that stands for:

A) instant public obligation.
B) initial public obligation.
C) initial public stock offering.
D) immediate principal obligation.
E) innovative process for organizing.

Question 66

Success of entrepreneurial ventures is often jeopardized by the death of the founder.Which of the following is an important measure to minimize this problem?

A) Conservative use of funds
B) Adequate succession planning
C) Systematic recordkeeping
D) Decreased delegation
E) Going public

Question 67

Benefits of business incubators include ____.

A) free rent
B) high security
C) venture capital
D) access to shared services
E) guaranteed profitability

Question 68

Generally,the first formal planning step is to:

A) secure financing.
B) write a business plan.
C) conduct an opportunity analysis.
D) get others to support one's ideas.
E) hire the right peoplE.

Question 69

Which of the following is one of the major liabilities of start-ups?

A) Acuteness
B) Completeness
C) Validness
D) Complexness
E) Smallness

Question 70

Benjamin wishes to open a new home furnishing company that will have no services that are particularly distinctive compared to competitors in this well-established field;the business will require a sizable investment.In which part of the entrepreneurial strategy matrix is new company likely to be located?

A) Upper-left quadrant
B) Lower-left quadrant
C) Upper-right quadrant
D) Lower-right quadrant
E) Center

Question 71

_____ are a way for a business to raise capital through federally registered and underwritten sales of shares in the company.

A) IPOs
B) Venture capital funds
C) Debentures
D) Dividends
E) Social capitals

Question 72

A product that represents a novel idea requiring little financial investment would be displayed in the _____ of the entrepreneurial strategy matrix.

A) upper-left quadrant
B) lower-left quadrant
C) upper-right quadrant
D) lower-right quadrant
E) center

Question 73

The _____ quadrant in the entrepreneurial strategy matrix depicts ventures of truly novel ideas with little risk.

A) upper-left
B) lower-left
C) upper-right
D) lower-right
E) central

Question 74

_____ are protected environments for new,small companies.

A) Skunkworks
B) Spin-offs
C) Regulators
D) Global start-ups
E) Business incubators

Question 75

Bad economic times can:

A) offer more opportunities to expand.
B) make it easier to start a company.
C) make it easier for survival.
D) make it difficult to recruit talent.
E) often provide early success to entrepreneurs.

Question 76

A novel product idea that involves a large financial investment would be categorized as involving:

A) high innovation / low risk.
B) high innovation / high risk.
C) low innovation / low risk.
D) low innovation / high risk.
E) low innovation / uncertain risk.

Question 77

A reason why many entrepreneurs prefer to avoid going public is that they:

A) lack the needed skill.
B) don't have sufficient information.
C) feel they would lose control.
D) wish to raise more capital.
E) are restricted by the government.

Question 78

Entrepreneurs,in part because they are very busy,often fail to use ____.

A) formal control systems
B) benchmarking
C) emotional intelligence
D) cost competencies
E) social capital

Question 79

A disadvantage of going public is the:

A) loss of interest in the stock price necessary to run the business.
B) absence of interest in capital gains.
C) creation of a long-term relationship with non-beneficial banking institutions.
D) pursuit otherwise unaffordable opportunities.
E) rising debt.

Question 80

Most small business ventures are in the _____ category of the entrepreneurial strategy matrix.

A) high innovation / high risk
B) low innovation / low risk
C) high innovation / low risk
D) low innovation / high risk
E) high investment / low risk