Deck 6: Entrepreneurship and New Ventures

Question 1

Entrepreneurship describes strategic thinking and risk-taking behaviour that results in the creation of new opportunities for individuals and/or organizations.

Answer 1

True

Question 2

Entrepreneurs' belief that they are in control of their own destiny shows that they have an internal locus of control.

Answer 2

True

Question 3

Entrepreneurs include people who buy a local franchise outlet, open a small retail shop, or go into a self-employed service business.

Answer 3

True

Question 4

Money is the key to entrepreneurial success.

Question 5

Classic entrepreneurs are risk-taking individuals who take action to pursue opportunities others fail to recognize, or even view as problems or threats.

Question 6

Entrepreneurs are born, not made.

Question 7

Classic entrepreneurship is a form of ethical entrepreneurship that seeks novel ways to solve pressing social problems.

Question 8

Entrepreneurs typically have an internal locus of control, a high energy level, a high need for achievement, a high tolerance for ambiguity, self-confidence, an action orientation, the desire for independence, and a high degree of flexibility.

Question 9

Founders of new business enterprises that achieve large-scale success or people who assume responsibility for introducing a new product or a change in operations in an existing organization are not entrepreneurs.

Question 10

Success in highly competitive business environments depends on access to wealthy investors and establishing a corporate form of ownership to minimize risk.

Question 11

Anita Roddick, founder of The Body Shop PLC, believed in social responsibility and said that: "If you think you're too small to have an impact, try going to bed with a mosquito."

Question 12

Serial entrepreneurship is one way for people, including women and minorities who have hit the "glass ceiling" in their careers or are otherwise cut off from other employment choices, to strike out on their own and gain economic independence.

Question 13

It has always been easier for women to access capital for small business start-up as expansions.

Question 14

People with innovative ideas don't always get a chance to turn them into reality.

Question 15

A first-mover advantage comes from being first to exploit a niche or enter a market.

Question 16

Social enterprises have a social mission to help make lives better for underserved populations.

Question 17

The general profile of an entrepreneur is an individual who is very self-confident, determined, resilient, adaptable, and driven by excellence.

Question 18

An entrepreneur is a risk-taking individual who acts to pursue opportunities and situations others fail to recognize, or even view as problems or threats.

Question 19

Entrepreneurs have a tolerance for ambiguity.

Question 20

Entrepreneurs typically come from families with strong corporate career backgrounds and seek independence from the corporate bureaucracies that dominated their parents.

Question 21

Minority-owned businesses are one of the slowest growing sectors of the Canadian economy.

Question 22

Entrepreneurs have strong interests in creative production and high interest in enterprise control.

Question 23

Women and minorities are more likely to reach higher levels of success and opportunities by working for a large corporation than by starting their own businesses.

Question 24

One of the most common ways to get involved in a small business is to buy and run a franchise.

Question 25

Necessity-based entrepreneurship takes place because other employment options don't exist.

Question 26

Economists differentiate between entrepreneurs who are driven by the quest for new opportunities and those who are driven by absolute need.

Question 27

Growing too fast is one of the reasons small businesses fail.

Question 28

Most entrepreneurs start their own business before the age of 25.

Question 29

Lean start-ups are permanent, cost-intensive organizations.

Question 30

In a franchise, the franchise parent receives a share of income or a flat fee from the franchisee.

Question 31

The following phrases-entrepreneurs are born, not made; entrepreneurs are gamblers; and entrepreneurs are young-capture three fundamental truths about entrepreneurs.

Question 32

If an entrepreneur has not made it big in their own business before the age of 30, they are not likely to succeed.

Question 33

A franchise is where a business owner sells to another person the right to operate the same business in another location, under the original owner's business name and guidance.

Question 34

Entrepreneurship does not offer women and members of visible minorities opportunities to strike out on their own and gain economic independence.

Question 35

Statistics on small business failure rates indicate that 60 to 80 percent of new businesses fail in their first five years of operation.

Question 36

The vast majority of small businesses employ between 100 and 150 persons.

Question 37

A start-up is a new venture that the entrepreneur is hoping will take shape and prove successful as things move forward.

Question 38

Wanting to be their own bosses and controlling their future or seeking to fulfill a dream are important reasons that people pursue entrepreneurship and launch their own businesses.

Question 39

Entrepreneurship offers women and members of visible minorities opportunities to strike out on their own and gain economic independence.

Question 40

Entrepreneurs are self-starters who are willing to stay with a course of action even when their plans are not working.

Question 41

Taking the time to craft a vision and mission, and to formulate, revise, and properly implement strategy are reasons for the high failure rate of new businesses.

Question 42

Only a small percent of businesses operating worldwide are family owned; most are public corporations.

Question 43

About 70 percent of family firms survive to the second generation, about 45 percent of them survive to the third generation, and about 25 percent of them are expected to survive beyond the third generation.

Question 44

Not keeping track of the numbers and failure to control business finances has little to do with business success or failure.

Question 45

The family business feud occurs when members of the controlling family get into disagreements about work responsibilities or finances but not business strategy or operating approaches.

Question 46

A significant problem that faces family business is the succession problem, which is the transfer of leadership from one generation to the next.

Question 47

A succession plan must include legal aspects of any ownership transfer but need not address procedures for choosing or designating the firm's new leadership or any financial and estate plans relating to the transfer.

Question 48

While family businesses must solve the same problems of other small or large businesses, they also must address a set of unique problems.

Question 49

A family business feud is the issue of who will run the business when the current head leaves.

Question 50

Lack of experience, lack of expertise, lack of strategy and strategic leadership, poor financial control, growing too fast, lack of commitment, and ethical failure are important reasons for new business failures.

Question 51

Business incubators are also called business accelerators.

Question 52

Everyone working together, sharing values and a common goal, and knowing that what they do benefits the family define the ideal situation in a family business.

Question 53

Not taking the time to consolidate a position, fine-tune the organization, or systematically meet the challenges of growth is a reason for the high failure rate of new businesses.

Question 54

In succession planning, family businesses should identify the leadership successor well ahead of time and prepare the leadership successor through training and experience to assume the new role when needed.

Question 55

In succession planning, family businesses should set up the succession plan well in advance of the need to use it; and then share it with all affected persons, making sure they understand it.

Question 56

Not having sufficient know-how to run a business in the chosen market or area is a reason for the high failure rate of new businesses.

Question 57

Not devoting enough time to the requirements of running a competitive business is a reason for the high failure rate of new businesses.

Question 58

Falling prey to the temptations of fraud, deception, and embezzlement is a reason for the success of new businesses.

Question 59

Having a succession plan helps avoid a succession problem.

Question 60

The clear majority of family business with succession plans will survive well beyond the second generation.

Question 61

Business incubators aid in the development of start-ups.

Question 62

Small businesses have a high success rate.

Question 63

In the birth stage of the life cycle of entrepreneurial firms, the entrepreneur struggles to get the new venture established and to survive long enough to test the viability of the underlying business model in the marketplace.

Question 64

Activities that focus on refining the strategy, continuing growth, and managing for success occur in the growth stage of the life cycle of entrepreneurial firms.

Question 65

Activities that focus on working on finances, becoming profitable and growing occur in the birth stage of the life cycle of entrepreneurial firms.

Question 66

At the breakthrough stage of the life cycle of entrepreneurial firms, the management challenge is one of investing wisely and staying flexible.

Question 67

A succession plan describes the direction for a new business and the financing needed to operate it.

Question 68

In the maturity stage of the life cycle of entrepreneurial firms, the entrepreneur experiences the advantages of market success and financial stability, while also facing continuing challenges of meeting the needs for professional management skills.

Question 69

At the breakthrough stage of the life cycle of entrepreneurial firms, the business model begins to work well, growth is experienced, and the complexity of managing the business operation expands significantly.

Question 70

The life cycle of entrepreneurial firms poses different management challenges at each stage and requires different management competencies at each stage.

Question 71

The life cycle of an entrepreneurial firm begins with the breakthrough stage.

Question 72

A first-mover advantage comes from being first within the industry to outsource non-core business activities or to embrace social responsibility.

Question 73

Activities that focus on establishing the business, getting customers, and finding financing occur in the breakthrough stage of the life cycle of entrepreneurial firms.

Question 74

The breakthrough stage involves establishing the firm and fighting for its existence.

Question 75

At the maturity stage of the life cycle of entrepreneurial firms, the management challenge is one of coping with growth and takeoff.

Question 76

At the birth stage of the life cycle of entrepreneurial firms, the management challenge is one of fighting for existence and survival.

Question 77

A first-mover advantage occurs by exploiting a niche or entering a market before competitors.

Question 78

Self-management is an ability to use objective understanding of personal strengths and weaknesses to keep growing-individually and career-wise.

Question 79

The entrepreneur's ability to identify a market niche that is being missed by other established firms or to identify a new market that has not yet been discovered by existing firms are important avenues of new venture creation.

Question 80

To stay customer focused, a new venture should effectively address questions such as: Who is your customer? How will you price your product or service for the customer? How much does it cost to attract a customer? How much does it cost to support and retain a customer?