Deck 7: Entrepreneurship

Question 1

Entrepreneurship occurs when an enterprising individual pursues a(n) _____.

A)safe career
B)risky business gamble
C)imitative path
D)lucrative opportunity
E)passive position

Answer 1

D
Explanation: Entrepreneurship occurs when an enterprising individual pursues a lucrative opportunity. To be an entrepreneur is to initiate and build an organization rather than being only a passive part of one.

Question 2

Which of the following would be classed as an entrepreneurial venture?

A)Angelo expects growth and high profitability from his new business.
B)Pauline expects growth and moderate profitability from her new business.
C)Jeanne expects stability and minimal profitability from her new business.
D)Selim expects stability and moderate profitability from his new business.
E)Cara expects stability and high profitability from her new business.

Answer 2

A
Explanation: An entrepreneurial venture has growth and high profitability as primary objectives. Entrepreneurs manage aggressively and develop innovative strategies, practices, and products.

Question 3

_____ is an entrepreneurial alliance between two organizations.

A)Bootlegging
B)An affiliate model
C)Skunkworks
D)Franchising
E)A business incubator

Answer 3

D
Explanation: Franchising is an entrepreneurial alliance between two organizations: the franchisor and the franchisee. For the franchisee, the opportunity is wealth creation via a proven (but not failure-proof) business concept, with the added advantage of the franchisor's expertise. For the franchisor, the opportunity is wealth creation through growth.

Question 4

Large corporations are merely passive bystanders in the entrepreneurial explosion.

Question 5

The best business plans convey five key factors: the financing, the opportunity, the competition, the succession plan, and risk and reward.

Question 6

To be successful, entrepreneurs should be innovators and also have good knowledge and skills in management, business, and networking.

Question 7

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

Question 8

Which of the following descriptions of entrepreneurs is true?

A)Entrepreneurs must have an idea for a great product.
B)Entrepreneurs usually have a placid personality.
C)Entrepreneurs have little awareness of the market.
D)Entrepreneurs know how to exploit opportunities.
E)Entrepreneurs prefer to be lone wolves.

Question 9

Julieta decided that a growing Latino population has created an opportunity to market her family's salsa recipes. Which type of opportunity is she focusing on?

A)Technological discoveries
B)Demographic change
C)Economic dislocations
D)Calamities
E)Government initiatives and rule changes

Question 10

The essential ingredients in any recipe for entrepreneurial success are a great product or idea, a viable market, and _____.

A)a rich backer
B)good timing
C)a cautious personality
D)a large income reserve
E)unexpected luck

Question 11

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

Question 12

Donna independently owns and operates Punkin's Pies, 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, Donna's business can be considered an entrepreneurial venture.

Question 13

Entrepreneurs are frequently challenged by an aversion to record keeping.

Question 14

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

Question 15

Which of the following statements about entrepreneurs and risk is the most accurate?

A)Entrepreneurs are best characterized as gamblers in their approach to risk.
B)Entrepreneurs usually avoid taking risks in their ventures.
C)Successful entrepreneurs never even consider whether their ventures are risky.
D)Entrepreneurs alternate between pursuing and retreating from risk.
E)Successful entrepreneurs take very careful, calculated risks.

Question 16

Most entrepreneurs start their own firms because they

A)have failed at everything else they have done.
B)are gamblers at heart and thrive on risk.
C)feel satisfaction in creating something from nothing.
D)want to get rich quickly and then sell the company.
E)have unrealistic expectations about what it will entail.

Question 17

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

Question 18

Entrepreneurial venture is just another name for a small business.

Question 19

Nora works for a corporation and is using the company's resources to build a new line of business for her employers. Nora is a(n) _____.

A)entrepreneur
B)intrapreneur
C)extrapreneur
D)interpreneur
E)pseudopreneur

Question 20

A small business usually has fewer than _____ employees.

A)20
B)50
C)75
D)100
E)150

Question 21

The primary objective of an entrepreneurial venture is to

A)provide non-profit services.
B)create a stable small business.
C)reduce the amount of dividends paid.
D)acquire growth and high profitability.
E)increase the social capital.

Question 22

_____ is a competitive advantage that exists in your relationships with other people and the image other people have of you.

A)Value-added production
B)Business economics
C)Affiliation
D)Entrepreneurial orientation
E)Social capital

Question 23

One of the most common reasons that entrepreneurial ventures fail is

A)a lack of adequate start-up capital.
B)improperly spending start-up capital.
C)not buying the highest-quality equipment.
D)tying spending too closely to revenues.
E)the unpredictability of the stock market.

Question 24

Which of the following e-commerce models has advertisers pay for access to the demographic group that visits the operator's site?

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

Question 25

_____ occurs when an enterprising individual pursues a lucrative opportunity.

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

Question 26

Which of the following e-commerce models are online newspapers most likely to use?

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

Question 27

YouChuse is on online business that allows people to upload their original artwork to be imprinted on cards and calendars, which are then offered for sale. What e-commerce model is YouChuse most likely using?

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

Question 28

Which of the following online businesses is the most likely to use the transaction fee model?

A)A newspaper
B)A specialized encyclopedia
C)A do-it-yourself auction site
D)A clothing retailer
E)A search engine

Question 29

Entrepreneurs manage _____ and develop _____ strategies, practices, and products.

A)conservatively; innovative
B)conservatively; imitative
C)conservatively; traditional
D)aggressively; innovative
E)aggressively; imitative

Question 30

Protected environments for new, small business are known as _____.

A)business incubators
B)business accelerators
C)business shelters
D)skunkworks
E)bootleggers

Question 31

People who have an entrepreneurial orientation tend to

A)be cautious.
B)innovate.
C)be reactive.
D)avoid aggression.
E)be dependent.

Question 32

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

A)franchisor
B)franchisee
C)bootlegger
D)intrapreneur
E)ally

Question 33

If a business's goals and methods are consistent with societal values, it is considered _____.

A)legitimate
B)competitive
C)conventional
D)reactionary
E)cooperative

Question 34

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

A)Bootleggers
B)Skunkworks
C)Intrapreneurs
D)Affiliates
E)Incubators

Question 35

Initial public stock offerings provide a way to raise capital through

A)offering a partnership to someone with a lot of money to invest.
B)the unadvertised sale of stock to acquaintances and friends of the owner.
C)the merger of two different companies that agree to share ownership.
D)federally registered and underwritten sales of shares in the company.
E)the purchase of one company by another that is usually larger and better funded.

Question 36

Which of the following online businesses uses the intermediary model of e-commerce?

A)eBay
B)iTunes
C)Google
D)Travelocity
E)Amazon

Question 37

Anshul worked as an engineer for FuturTech. 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 38

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 39

Serena prepares a document that outlines her plan to open a new candy company, including descriptions of the product, the market, her strategies, and the future direction she envisions for the company. This document is a(n) _____.

A)entrepreneurial orientation
B)opportunity analysis
C)business incubator
D)initial public offering
E)business plan

Question 40

Two major liabilities of start-ups are

A)newness and complexity.
B)newness and smallness.
C)oversaturation and smallness.
D)oversaturation and inexperience.
E)inexperience and complexity.

Question 41

Karen is evaluating whether she has the right personality to be an entrepreneur. Which of the following characteristics should she have if she wants to succeed?

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 42

Using his own money and resources, Leo-who had recently been laid off 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 43

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 44

_____ are also referred to as corporate entrepreneurs.

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

Question 45

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

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

Question 46

One primary reason that entrepreneurs start their own firms is that they

A)won'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 47

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 48

Dr. Elbridge began helping women in Bajukistan obtain microloans for small business start-ups. This act is a typical example of

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

Question 49

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

Question 50

Annika believes there is an opportunity to start up a business that produces sports equipment using greener technologies, thereby keying into two consumer trends. Into which category does opportunity fit?

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

Question 51

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

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

Question 52

The transaction fee model involves companies charging fees

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 53

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 54

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

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

Question 55

An entrepreneur who is decisive, tenacious, disciplined, and willing to make sacrifices demonstrates which of the following characteristics?

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

Question 56

Elliot interviews several entrepreneurs to learn what characteristics contributed to their success. Which of the following characteristics is most likely to be mentioned in the interviews?

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

Question 57

FactzDump.com pays commissions to other sites to drive business to its own sites. This is an example of which model?

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

Question 58

EliteTimes 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 59

Richard worked as a teacher for several years before starting an educational games 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 Richard possess?

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

Question 60

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 61

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

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

Question 62

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 63

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 64

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

A)Initial public stock offerings
B)Venture capital funds
C)Microloans from social entrepreneurs
D)Dividends
E)Social capitals

Question 65

A(n) _____ is a formal planning step that focuses on an entire venture and describes all the elements involved in starting it.

A)business plan
B)operational plan
C)opportunity analysis
D)trend analysis
E)strategic plan

Question 66

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 67

Benefits of business incubators typically include ____.

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

Question 68

A disadvantage of going public is the

A)declining 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 of otherwise unaffordable opportunities.
E)increase in the amount of company debt.

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

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 71

A(n) _____ includes a description of the good or service, an assessment of the opportunity, an assessment of the entrepreneur, a specification of activities and resources needed to translate the idea into a viable business, and the individual's source of capital.

A)SWOT analysis
B)situational assessment
C)opportunity analysis
D)PERT chart
E)organization chart

Question 72

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 73

Aleta is developing a new software company. She locates her business in an industrial park that offers low rent and shared support staff to start-up companies. This is an example of a _____.

A)skunkworks
B)spin-off
C)franchise
D)bootlegging operation
E)business incubator

Question 74

Joakim wishes to open a new landscaping company that will have no services that are particularly distinctive compared to competitors in this well-established field; because of the need for trucks and equipment, 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 75

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 76

Hector comes up with a highly unusual but appealing idea for a new phone application. He would require a substantial amount of money to pay for developing the required graphics and technology. His idea can 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

Renaldo is creating a business plan. His first formal step should be 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 78

Which of the following is the fundamental reason for creating an opportunity analysis?

A)To obtain financing
B)To negotiate agreements with suppliers
C)To excite potential customers
D)To analyze whether or not to proceed
E)To work out the details of marketing, finance, and manufacturing

Question 79

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 80

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