Deck 6: Entrepreneurship

Question 1

Social capital refers to being part of a social network and having a good reputation.

Answer 1

True

Question 2

_____ are new venture creators working inside big companies; they are corporate entrepreneurs, using their company's resources to build a profitable line of business based on a fresh new idea.

A) Intrapreneurs
B) Entrepreneurs
C) Sole proprietors
D) Management novices
E) Licensees

Answer 2

A

Question 3

Harriet recently started her own business. She has nearly recreated a company she worked for previously. She has great business acumen and has been able to run her business much more efficiently and profitably. Harriet is an)

A) promoter.
B) entrepreneur.
C) manager.
D) intrapreneur.
E) inventor.

Answer 3

B

Question 4

An entrepreneur is not a manager but engages in additional activities that all managers do.

Question 5

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

Question 6

In the transaction fee model, a website brings buyers and sellers together and charges a commission for each sale.

Question 7

In the context of the entrepreneurial strategy matrix, most small business ventures are in the lower right quadrant where innovation is low and risk is high.

Question 8

CEOs play a crucial role in promoting entrepreneurship within large corporations.

Question 9

Which of the following statements is true of entrepreneurship?

A) Any entrepreneur with a good idea can raise venture capital.
B) Entrepreneurs are their own bosses and independent.
C) Entrepreneurs "get rich quick" and enjoy a lot of leisure time.
D) Entrepreneurs take careful, calculated risks and are not afraid to act on those decisions.
E) If an entrepreneur is talented, he or she will quickly succeed.

Question 10

_______ is the pursuit of lucrative opportunities by enterprising individuals under conditions of uncertainty.

A) Entrepreneurship
B) Sugging
C) bootlegging
D) Skunkworks
E) Incubation

Question 11

Edgar was a manager at a company that produced household appliances. He had many innovative ideas to increase profits. However, his ideas were not received well by the company. So, he left the company to pursue his own business. His new business is known as an)

A) entrepreneurial venture.
B) spin-off.
C) franchise
D) merger
E) angel investment.

Question 12

_____ is an enterprise having fewer than 100 employees, independently owned and operated, not dominant in its field, and not characterized by many innovative practices.

A) A nonprofit organization
B) A small business
C) A greenfield venture
D) An entrepreneurial venture
E) An incubator

Question 13

Start-ups have a major liability of fast growth.

Question 14

When working for a software company, David created a new venture based solely on his idea while using his company's proprietary technology. David can be described as an)

A) intrapreneur.
B) angel investor.
C) quasi partner.
D) venture capitalist.
E) franchisee

Question 15

A common entrepreneurial malady is an aversion to record keeping.

Question 16

An) _____ is a new business having growth and high profitability as primary objectives.

A) angel-funded-start-up
B) junior enterprise
C) merger
D) entrepreneurial venture
E) greenfield venture

Question 17

Identify the correct statement regarding entrepreneurship.

A) Entrepreneurs are gamblers.
B) Entrepreneurs are their own bosses and independent.
C) Entrepreneurs experience stress, but they also have high job satisfaction.
D) Entrepreneurs seek power and control over others.
E) If an entrepreneur is talented, he or she will quickly succeed.

Question 18

_____ is the process by which enterprising individuals initiate, manage, and assume the risks and rewards associated with a business.

A) A start-up
B) A partnership
C) An incubator
D) Entrepreneurship
E) Joint venture

Question 19

Calamities such as wars and natural disasters can provide opportunities for entrepreneurs.

Question 20

A small business differs from an entrepreneurial venture.

Question 21

The side street effect refers to

A) the appearance of unexpected opportunities as one follows a plan.
B) a corporate spin-off not sanctioned by the corporation.
C) using corporate resources to pursue entrepreneurial activities.
D) the entrepreneurial ventures that are marginally successful but never experience significant growth.
E) the lack of focus seen in many entrepreneurs.

Question 22

_____ involves creating new systems, resources, or processes to produce new goods or services and/or serve new markets.

A) Advertising
B) Micropayment
C) Entrepreneurship
D) Profiteering
E) Transporting

Question 23

______ is an entrepreneurial alliance between an innovator who has created at least one successful store and wants to grow and a partner who manages a new store of the same type in a new location.

A) Franchising
B) An initial public offering
C) Bootlegging
D) The subscription model
E) The affiliate model

Question 24

_____ use networks of contacts more than formal authority.

A) Managers
B) Entrepreneurs
C) Small businesses
D) Franchisees
E) Franchisors

Question 25

Penelope independently owns and operates Olive Inc., a company with 45 employees. She tends not to manage particularly aggressively and expects moderate sales, profits, and growth. Penelope's company is not considered an) _____ venture.

A) entrepreneurial
B) intrapreneurial
C) franchise
D) small business
E) independent

Question 26

Entrepreneurs start their own firms for all of the following reasons except

A) the challenge
B) the profit potential
C) the enormous satisfaction
D) the great idea
E) the hope that lies ahead.

Question 27

_____ create new independent businesses with the benefit of corporate support.

A) Corporate managers
B) Intrapreneurs
C) Observers
D) Franchisors
E) Franchisees

Question 28

An) _____ 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) manager
C) intrapreneur
D) entrepreneur
E) employee

Question 29

Some say that _____ are slower to act and tend to avoid risk.

A) entrepreneurs
B) managers
C) franchisors
D) small businesses
E) consumers

Question 30

Entrepreneurs experience stress, but they also have high job satisfaction. They tend to be

A) less healthy and more likely to retire than those who work for others.
B) more healthy and more likely to retire than those who work for others.
C) more healthy and less likely to retire than those who work for others.
D) less healthy and less likely to retire than those who work for others.

Question 31

Which of the following individuals is most likely to become a successful entrepreneur?

A) Nigel enjoys challenges, has a strong social network, has good knowledge of management techniques, and possesses excellent business skills.
B) Hilary has an MBA and has been a manager in a corporate office for ten years. She likes a job to be well done and works best when she plans ahead.
C) Phoebe likes to invent new products, enjoys working in the laboratory, and avoids conflict whenever possible. She has little knowledge of business.
D) Kylie has strong marketing and selling skills, and loves challenges in these areas.
E) Edward is creative, embraces new ideas and products, and likes to motivate others but prefers working by himself.

Question 32

_____ spot, create, and exploit opportunities.

A) Managers
B) Entrepreneurs
C) Intrapreneurs
D) Franchisors
E) Consumers

Question 33

There is a myth that entrepreneurs are essentially

A) savers.
B) gamblers.
C) observers.
D) planners.
E) investors.

Question 34

A small business is often defined as having fewer than _____ employees, as well as being independently owned and operated.

A) 500
B) 400
C) 300
D) 200
E) 100

Question 35

Which of the following characteristics helps an entrepreneur succeed?

A) encouragement of centralization
B) tolerance of ambiguity and uncertainty
C) risk aversion
D) maintenance of the status quo
E) prevention of constructive criticism

Question 36

Observers say that in contemplating one's business, one must start with

A) a great idea.
B) financial capital.
C) a good location.
D) family support.
E) investors.

Question 37

In the context of successful business models for e-commerce, the _____ model involves charging monthly or annual fees for website visits or access to website content.

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

Question 38

In the context of successful business models for e-commerce, sites that pay commissions to other sites to drive business to their own sites involve the _____ model.

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

Question 39

Polo Corp. brings buyers and sellers together and charges a commission for each sale. This type of business model is known as the

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

Question 40

______ usually prefer to own assets, whereas _____ often rent or use assets on a temporary basis.

A) Entrepreneurs; franchisee
B) Franchisees; managers
C) Entrepreneurs; managers
D) Managers; entrepreneurs
E) Franchisors; franchisees

Question 41

Montgomery Donuts has made the decision to sell shares of stock publicly. This is called

A) futures exchange.
B) add-on sale.
C) initial public offering.
D) trade sale.
E) profit sharing.

Question 42

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

A) upper left
B) low risk
C) upper right
D) lower right
E) high innovation

Question 43

As a business grows, _____ often hesitate to delegate work they are used to doing.

A) entrepreneurs
B) managers
C) franchisors
D) intrapreneurs
E) stock holders

Question 44

What is the role of business incubators?

A) They provide new and small businesses with information silos.
B) They protect consumers from fraud.
C) They provide enhanced wellness benefits to employees of large businesses.
D) They provide a protected environment for new and small businesses.
E) They provide opportunities for exponential growth without competition.

Question 45

Which of the following is true of entrepreneurial ventures?

A) Companies offering mundane products cannot hope to gain competitive advantage.
B) For start-ups, failure is an exception rather than the rule.
C) Successful companies do not always require a cutting-edge technology or an exciting new product.
D) Acquiring venture capital is essential to the success of all start-up businesses.
E) The odds of survival of an entrepreneurial venture worsen if it grows to at least 10 or 20 people.

Question 46

What is the role of the economic environment in the success of entrepreneurial ventures?

A) Increases in the money supply and the supply of bank loans lead to improved prospects and increased sources of capital.
B) Entrepreneurial success is not affected by the economic environment; a good idea will prevail in all external conditions.
C) Entrepreneurial success is affected only by the talent and behavior of individuals, not by the economic environment.
D) Downturns in the economic environment offer no opportunity for entrepreneurial success.
E) A robust economy and the resulting increase in credit and demand boost the rate of new business formation, but a troubled economy has little effect on new ventures.

Question 47

Enrique decides to embark on an entrepreneurial venture. He is cautious because the risk is high and his idea is fairly common. Which of the following might he choose?

A) the first old age home in a region with a predominantly aging population
B) a business selling a vaccine to combat zika
C) the only gas station in town
D) a Mexican restaurant serving street tacos and fajitas
E) a business selling high-speed Internet

Question 48

In the context of the entrepreneurial strategy matrix, a novel product idea that involves a large financial investment would be described as

A) high innovation/low risk.
B) high innovation/high risk.
C) low innovation/low risk.
D) low innovation/high risk.
E) low innovation/no risk.

Question 49

Orson Inc., an entrepreneurial venture, does not have any distinctive services when compared with the well-established competitors in the same field, and the business will require a sizable investment. In which quadrant of the entrepreneurial strategy matrix will the venture be placed?

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

Question 50

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

A) Initial public stock offerings
B) Venture capital funds
C) Skunkworks
D) Bootleggings
E) Franchises

Question 51

In the context of common management challenges, leadership deteriorates into micromanagement when entrepreneurs fail to

A) train a successor.
B) monitor financial performance.
C) delegate work.
D) enjoy work.
E) adapt to an information silo.

Question 52

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

A) refrain from having someone outside the family help plan succession.
B) discontinue hiring outsiders as they are more objective.
C) fill at least one key position with a nonfamily member.
D) offer initial public stock offerings as soon as possible.
E) tolerate mediocre performance by family members.

Question 53

Which of the following is a benefit of business incubators?

A) information silo
B) high security
C) provision of venture capital
D) access to shared services
E) guaranteed profitability

Question 54

In the context of the entrepreneurial strategy matrix, which of the following products is most likely to have the highest risks and returns?

A) A commercial outfit
B) A tax preparation service
C) A new retail shop
D) A new restaurant
E) A lawn mowing service

Question 55

Entrepreneurs are not

A) tolerant of stress.
B) risk takers.
C) able to resolve problems.
D) making only safe decisions.
E) risk managers.

Question 56

Entrepreneurs, in part because they are very busy, often fail to use _____, resulting in inadequate margins to support growth.

A) formal control systems
B) a forward-thinking orientation
C) an opportunity analysis
D) venture capital
E) total quality management systems

Question 57

The success of an entrepreneurial venture is often jeopardized by the death of its founder. Which of the following is an important measure to minimize this problem?

A) conservative use of funds
B) succession planning
C) record keeping
D) decreased delegation
E) going public

Question 58

Business incubators, often located in industrial parks or abandoned factories, are

A) protected environments for new, small businesses.
B) protected environments for established, large businesses.
C) unprotected environments for established, small businesses.
D) unprotected environments for new, large businesses.
E) unprotected environments for commercial businesses.

Question 59

According to Peter Drucker, which of the following statements is true of managing a family business?

A) Mediocre performance by family members employed in the company may be tolerated.
B) The business should be aggressively managed.
C) The business should not hire outsiders as they contribute expertise the family might not have.
D) Someone outside the family and the business should help plan succession.
E) The business should "go public" as soon as possible.

Question 60

The odds of survival for a new venture improve if

A) there is an economic downturn.
B) there is novelty.
C) it is small.
D) it grows to at least 10 or 20 people.
E) it has revenues of $1 million.

Question 61

An) _____ describes all the elements involved in starting a new venture.

A) business plan
B) control system
C) value chain
D) initial public stock offering
E) organization chart

Question 62

Which of the following is the purpose of an opportunity analysis?

A) to obtain financing
B) to negotiate agreements with suppliers
C) to excite potential customers
D) to specify resources needed to translate an idea into a viable business
E) to work out the details of marketing, finance, and manufacturing

Question 63

_________ is the first step toward building organizational support for an idea that involves explaining the idea and seeking approval to look for wider support.

A) Making cheerleaders
B) Bootlegging
C) Horse trading
D) Clearing the investment
E) Getting the blessing

Question 64

____ comes from people's judgment of a company's acceptance, appropriateness, and desirability, generally stemming from company goals and methods that are consistent with societal values.

A) Social capital
B) Bootlegging
C) Legitimacy
D) The strategic window
E) The side street effect

Question 65

When a business goes wrong, ______ are less helpful and less likely to advance more money.

A) nonprofessional investors
B) professional investors
C) sophisticated investors
D) money managers
E) stock traders

Question 66

"Loading the gun," or lining up ammunition in support of one's idea, is a phrase used by managers at General Electric that parallels which stage of building support for an idea?

A) making cheerleaders
B) bootlegging
C) horse trading
D) clearing the investment
E) getting the blessing

Question 67

In the context of key planning elements, which of the following is true of what venture capital firms consider important for an entrepreneurial venture?

A) They believe that a strong marketing campaign is the best for an entrepreneurial venture.
B) They believe that a good quality product is the best bet for an entrepreneurial venture.
C) They believe that the venture with the highest projected profit is the best.
D) They believe that the greater the strength of a venture, the better it is.
E) They believe that what counts is a person's ability to execute an idea.

Question 68

Igor works as a technician for a large manufacturer of biomedical equipment. He has discovered a way to produce disposable products in large quantities that will be useful in research facilities. His employer has given Igor and a selected team of researchers the resources to develop this idea. This project is referred to as

A) a spin-off.
B) a skunkwork.
C) bootlegging.
D) horse trading.
E) sponsorship.

Question 69

Which of the following devotes too much attention to financial projections while neglecting other important information that is important to investors?

A) a business audit
B) an accounting analysis
C) a business plan
D) a value chain
E) a business incubator

Question 70

How can an entrepreneur generate legitimacy?

A) by avoiding constructive criticism
B) by being risk-averse
C) by removing standards established by credentialing associations
D) by visibly conforming to expectations created by governments
E) by maintaining the status quo

Question 71

Guaranteeing a project's technical and political feasibility, often with a formal presentation to higher management, refers to which of the following stages for building support for an idea?

A) making cheerleaders
B) bootlegging
C) horse trading
D) clearing the investment
E) getting the blessing

Question 72

In the context of starting an entrepreneurial venture, the first formal step is to

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

Question 73

A description of the good or service, an assessment of the opportunity, an assessment of the entrepreneur, and specification of activities and resources needed to translate one's idea into a viable business, and one's sources) of capital together make up an)

A) value chain.
B) control system.
C) opportunity analysis.
D) business audit.
E) organization chart.

Question 74

Valeria has been planning to open a child care center and has been asked by the small business center to create a document that includes the market, strategies, and future directions. This document is called an)

A) initial public offering.
B) income statement.
C) balance sheet.
D) business plan.
E) opportunity analysis.

Question 75

_____ is a competitive advantage in the form of relationships with other people and the image other people have of an entrepreneur.

A) Social capital
B) Community standing
C) Legitimacy
D) Quality of life
E) Opportunity analysis

Question 76

An) _____ describes all the elements involved in starting a new venture.

A) tax statement
B) business plan
C) financial planner
D) contract
E) accounting ledger

Question 77

Which of the following key planning elements involves a competitive advantage that can be defended and says that the focus should be on customers?

A) opportunity
B) risk and reward
C) people
D) competition
E) context

Question 78

Which of the following is a function of a business plan?

A) to improve the balance sheet and enhance net worth
B) to raise capital through federally registered shares of the company
C) to improve credibility with customers and other stakeholders
D) to determine the viability of one's enterprise
E) to create a long-term relationship with an investment banking firm

Question 79

Yvette, a manager, decides to offer her support to Jonny, one of her subordinates, on a new project in exchange for a share of the payoffs. In the context of entrepreneurship, this practice is known as

A) making cheerleaders.
B) bootlegging.
C) horse trading.
D) clearing the investment.
E) getting the blessing.

Question 80

Informal efforts, as opposed to official job assignments, in which employees work to create new products and processes of their own choosing and initiative refer to

A) spin-offs.
B) skunkworks.
C) bootlegging.
D) horse trading.
E) sponsorship.