Deck 6: Entrepreneurship and New Ventures

Question 1

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.

Answer 1

False

Question 2

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

Answer 2

False

Question 3

Entrepreneurs enjoy being assigned tasks with minimal accountability.

Answer 3

False

Question 4

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

Question 5

Internet entrepreneurship is the use of the Internet to pursue an entrepreneurial venture.

Question 6

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

Question 7

Lean startups are permanent,cost-intensive organizations.

Question 8

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

Question 9

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

Question 10

In web-based businesses,freemium models involve selling access to high-value content through a subscription website.

Question 11

Having a succession plan helps avoid a succession problem.

Question 12

In web-based businesses,merchant models involve providing free listings and getting referral fees from online merchants for directing potential customers to them.

Question 13

Entrepreneurs have a tolerance for ambiguity.

Question 14

Small businesses have a high success rate.

Question 15

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

Question 16

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

Question 17

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

Question 18

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

Question 19

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

Question 20

Intrapreneurs are entrepreneurs who make significant contributions within large organizations.

Question 21

Rita works at a large cosmetic company.She made an organic hand-softening cream for her personal use.She realized that there was a large market for such a product,and convinced her manager to make her cream a part of the company's product line.The product soon became a big success,and led to a significant increase in the revenues of her company.Rita is an)________.

A)necessity-based entrepreneur
B)social entrepreneur
C)venture capitalist
D)intrapreneur
E)serial entrepreneur

Question 22

A sole proprietorship is the most common form of small business ownership in the United States.

Question 23

A ________ entrepreneur is a risk-taking individual who takes action to pursue opportunities others fail to recognize,or even view as problems or threats.

A)serial
B)classic
C)follow-through
D)sustainer
E)social

Question 24

A limited liability corporation combines the advantages of sole proprietorship,partnership,and corporation.

Question 25

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

Question 26

The main characteristic of ________ entrepreneurs is that they start and run new ventures over and over again,moving from one interest and opportunity to the next.

A)sustainer
B)classic
C)serial
D)first-mover
E)necessity-based

Question 27

A sole proprietorship is simple to start,run,and terminate.

Question 28

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

Question 29

Which of the following is true about intrapreneurs?

A)Intrapreneurs are born,not made.
B)Intrapreneurs take risks to introduce a new product or process,or pursue innovations that can change the organization in significant ways.
C)Intrapreneurs make large investments in new ventures in return for an equity stake in the business.
D)Intrapreneurs are entrepreneurs found in small organizations.
E)Intrapreneurs are primarily responsible for selling of shares of stock to the public at large.

Question 30

Debt financing requires collateral that pledges business assets or personal assets,such as a home,to secure the loan in case of default.

Question 31

Which of the following scenarios demonstrates an entrepreneur who has a tolerance for ambiguity?

A)Sam's decision to modify a pre-existing problem-tackling strategy in his private firm
B)Rick's decision to hire an experienced manager to head his new branch in another state
C)Andy's decision to expand his private firm overseas despite the risk of facing cultural differences
D)Stella's decision to quit her job to enter into a partnership with a well-recognized firm
E)Edna's decision to join her family's well-established business

Question 32

Entrepreneurs:

A)do not like situations with high degree of uncertainty.
B)thrive on performance feedback.
C)have an external locus of control.
D)are unwilling to admit problems and errors.
E)do not like autonomy.

Question 33

________ takes place because other employment options don't exist.

A)Classic entrepreneurship
B)Serial entrepreneurship
C)Intrapreneurship
D)An initial public offering
E)Necessity-based entrepreneurship

Question 34

Business incubators aid in the development of startups.

Question 35

The term ________ describes strategic thinking and risk-taking behavior that results in the creation of new opportunities.

A)business planning
B)partnership
C)entrepreneurship
D)proxemics
E)franchising

Question 36

In a business plan,the executive summary contains the mission of the company,the details of the owners,and the legal form of the organization.

Question 37

A first-mover advantage comes from:

A)making improvements to existing product lines.
B)being the first to exploit a niche or enter a market.
C)being the first to take a free-ride on the opportunity created by a pioneer.
D)the ability to poach trained personnel from an established business.
E)taking risks while strategizing to improve an existing market.

Question 38

When establishing a corporation,a partnership agreement must be made.

Question 39

Which of the following is true of entrepreneurs?

A)They believe that their destiny is beyond their control.
B)They like to avoid risk.
C)They have a high need for achievement.
D)They are averse to autonomy.
E)They have a low tolerance for ambiguity.

Question 40

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

Question 41

The ________ model is a web-based business model that involves providing free service in exchange for collecting information on users and selling it to other businesses.

A)advertising
B)brokerage
C)infomediary
D)freemium
E)referral

Question 42

An)________ refers to the issue of who will run the business when the current head leaves.

A)family business integration
B)family business feud
C)family disagreement
D)succession problem
E)role confusion

Question 43

Todd and Smith are both general managers at Kennith & Sons,their father's business.After a heart attack,their father decides to retire.He is faced with the challenge of choosing between one of his two equally capable sons to replace him in the business.Which type of problem related to family businesses,is the father facing?

A)Family business integration
B)Succession problem
C)Family disagreement
D)Role confusion
E)Family business feud

Question 44

With respect to web-based business models,advertising models involve:

A)bringing buyers and sellers together for online business transactions and taking a percentage from the sales.
B)providing a meeting point sold by subscription or supported by advertising.
C)offering a free service and encouraging users to buy extras.
D)providing free information or services and then generating revenues from paid commercials made available to viewers.
E)providing free service in exchange for collecting information on users and selling it to other businesses.

Question 45

In the context of web-based business models,a merchant model involves:

A)bringing buyers and sellers together for online business transactions and taking a percentage from the sales.
B)providing a meeting point sold by subscription or supported by advertising.
C)offering a free service and encouraging users to buy extras.
D)providing free service in exchange for collecting information on users and selling it to other businesses.
E)e-tailing or selling products direct to customers through the Web.

Question 46

Which of the following is true about a franchise?

A)It is one of the least common ways to get involved in a business.
B)It runs under the franchisee's name and guidance.
C)The franchise parent receives a flat fee from the franchisee.
D)It makes use of things like opensource software,while containing costs,staying small,and keeping operations as simple as possible.
E)It refers to a business in which material or goods are given to another person,but ownership is retained until the goods are sold.

Question 47

Lean startups:

A)aim to create a sophisticated product with a big budget.
B)focus on increasing their acquisitions.
C)establish a complex and detailed work structure.
D)aim to keep operations as simple as possible.
E)focus on making lives better for underserved populations.

Question 48

An)________ necessarily has 500 or fewer employees,is independently owned and operated,and does not dominate its industry.

A)small business
B)social organization
C)non-profit organization
D)classic entrepreneurship
E)Internet entrepreneurship

Question 49

In family businesses,________ refers to the problem that arises when members of the family have major disagreements over how the business should be run.

A)budget deficit
B)debt financing
C)an ethical dilemma
D)a reverse culture shock
E)a family business feud

Question 50

A ________ is a business in which the owner of a business sells to another the right to operate the same business in another location.

A)non-profit organization
B)franchise
C)joint venture
D)family business
E)wholly-owned subsidiary

Question 51

An)________ is a new and temporary venture that is trying to discover a profitable business model for future success.

A)family business
B)intrapreneurship
C)startup
D)business incubator
E)acquisition

Question 52

Sue had to quit her job to run her mother's bookstore when her mother passed away.The store was earning good profits and so she decided to open a new branch in another state.What kind of a business does Sue own?

A)Limited liability corporation
B)Social enterprise
C)Family business
D)Corporation
E)Necessity-based enterprise

Question 53

The freemium model,a web-based business model,involves:

A)providing free information or services and then generating revenues from paid advertising made available to viewers.
B)offering a free service and encouraging users to buy extras.
C)providing free listings and getting referral fees from online merchants for directing potential customers to them.
D)providing free service in exchange for collecting information on users and selling it to other businesses.
E)selling access to high-value content through a subscription website.

Question 54

Drea,a florist,realized the need for easily accessible organic compost in her neighborhood.Her neighborhood consists mainly of senior citizens who are unable to procure their own gardening supplies.She quickly established "We Compost," a non-profit organization that delivers compost to each household in her neighborhood.This is an example of ________.

A)serial entrepreneurship
B)classic entrepreneurship
C)intrapreneurship
D)necessity-based entrepreneurship
E)social entrepreneurship

Question 55

Which of the following web-based business models involves bringing buyers and sellers together for online business transactions and taking a percentage from the sales?

A)Advertising model
B)Brokerage model
C)Community model
D)Freemium model
E)Infomediary model

Question 56

A business model is a:

A)plan that describes the organizational structure of the company.
B)plan for making a profit by generating revenues that are greater than costs.
C)plan to determine the strengths and viability of a company's organizational structure.
D)model that depicts the detail of an organization's workflow.
E)model that lists the details of all the employees of an organization.

Question 57

Social entrepreneurs:

A)take risks and create enterprises whose missions are to help make lives better for underserved populations.
B)bring buyers and sellers together for online business transactions and take a percentage from the sales.
C)are wealthy individuals willing to invest in a new venture in return for an equity stake.
D)pursue innovations that can change the organization in significant ways.
E)start new ventures because they have few or no other employment and career options.

Question 58

Maggie has recently lost her job and has not been able to find employment elsewhere.She has to support her children,and take care of her mortgage.She realizes a niche for chemical-free house cleaning services.Eventually she opens her own house cleaning service.This is an example of ________.

A)classic entrepreneurship
B)serial entrepreneurship
C)intrapreneurship
D)necessity-based entrepreneurship
E)social entrepreneurship

Question 59

An)________ model is a web-based business model that involves providing a meeting point sold by subscription or supported by advertising.

A)advertising
B)community
C)brokerage
D)infomediary
E)freemium

Question 60

________ 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.

A)Classic
B)Necessity-based
C)Follow-through
D)Serial
E)Sustainable

Question 61

Stating that the failure of a small business was due to "lack of experience" implies:

A)not having expertise in the essentials of business operations,including finance,purchasing,selling,and production.
B)not taking the time to craft a vision and mission,nor to formulate and properly implement a strategy.
C)not keeping track of the numbers,and failure to control business finances and use existing monies to best advantage.
D)not taking the time to consolidate a position,fine-tune the organization,and systematically meet the challenges of growth.
E)not having sufficient know-how to run a business in the chosen market or geographical area.

Question 62

An)________ plan describes how the leadership transition and related financial matters will be handled when the time for changeover arrives.

A)partnership
B)startup
C)succession
D)liability
E)equity

Question 63

An)________ plan describes the direction for a new business and the financing needed to operate it.

A)succession
B)business
C)structural
D)operational
E)feasibility

Question 64

Which of the following is true of small business development centers?

A)They concentrate on establishing social enterprises.
B)They exclusively support all non-profit organizations in the U.S.
C)They are supported by the U.S.Small Business Administration.
D)They offer guidance to entrepreneurs trying to invest in acquisitions.
E)They aid in the development of public sectors.

Question 65

Insufficient financing implies:

A)not taking the time to consolidate a position,fine-tune the organization,and systematically meet the challenges of growth.
B)not having enough money available to maintain operations while still building the business and gaining access to customers and markets.
C)not having expertise in the essentials of business operations,including finance.
D)not keeping track of the numbers,and failure to keep business finances to best advantage.
E)not making the best use of existing monies.

Question 66

In a business plan,the overview of the business purpose and the business model for making money is contained in the ________.

A)market strategy
B)market description
C)company description
D)industry analysis
E)executive summary

Question 67

Delilah decided to open her first store in Dallas.Being new to the business,she was unable to cope with the demands of running her store,and after several bad decisions,she finally had to shut it down.What was most likely the main reason for the failure of Delilah's business?

A)Lack of experience
B)Insufficient financing
C)Lack of commitment
D)Ethical failure
E)Growing too fast

Question 68

Which of the following best describes lack of commitment?

A)Not having enough funding to maintain operations while still building the business and gaining access to customers and markets
B)Not having sufficient know-how to run a business in the chosen market or geographical area
C)Not having expertise in the essentials of business operations,including finance,purchasing,selling,and production
D)Falling prey to the temptations of fraud,deception,and embezzlement
E)Not devoting enough time to the requirements of running a competitive business

Question 69

________ offer space,shared services,and advice to help get small businesses started.

A)Business councilors
B)Business incubators
C)Succession plans
D)Social advisors
E)Internet entrepreneurships

Question 70

According to the life cycle of entrepreneurial firms,the maturity stage signifies the stage in which the:

A)entrepreneur struggles to get the new venture established and survive long enough to test the viability of the underlying business model in the marketplace.
B)business model begins to work well,growth is experienced,and the complexity of managing the business operation expands significantly.
C)entrepreneur recognizes a niche in the market and formulates an idea to take advantage of it.
D)entrepreneur experiences the advantages of market success and financial stability while facing the continuing management challenge of remaining competitive in a changing environment.
E)entrepreneur formulates a plan for making a profit by generating revenues that are greater than the costs of doing business.

Question 71

Which of the following best describes lack of strategy and strategic leadership?

A)Not taking the time to craft a vision and mission,nor to formulate and properly implement a plan
B)Not having enough funding to maintain operations while still building the business and gaining access to customers and markets
C)Not having sufficient know-how to run a business in the chosen market or geographical area
D)Falling prey to the temptations of fraud,deception,and embezzlement
E)Not having expertise in the essentials of business operations,including finance,purchasing,selling,and production

Question 72

According to the life cycle of entrepreneurial firms,the breakthrough stage signifies the stage in which the:

A)entrepreneur recognizes a niche in the market and formulates an idea to take advantage of it.
B)entrepreneur experiences the advantages of market success and financial stability.
C)entrepreneur faces the continuing management challenge of remaining competitive in a changing environment.
D)business model begins to work well,growth is experienced,and the complexity of managing the business operation expands significantly.
E)entrepreneur struggles to get the new venture established and survive long enough to test the viability of the underlying business model in the marketplace.

Question 73

In a standard business plan,an organization's mission,ownership details and legal forms are listed under ________.

A)market strategy
B)executive summary
C)company description
D)industry analysis
E)staffing description

Question 74

The goal of business incubators is to:

A)ensure that established businesses retain their competitive advantage.
B)aid third generation family businesses resolve family business feuds.
C)formulate a succession plan for established family businesses.
D)increase the survival rates for new startups.
E)establish social enterprises.

Question 75

________ implies that a business owner does not have the skill-sets required in the essentials of business operations,including finance,purchasing,selling,or production.

A)Lack of experience.
B)Insufficient financing
C)Lack of expertise
D)Ethical failure
E)Growing too fast

Question 76

Sheila has been successfully running a salon for over a year.She decided to use her profits and expand her business by selling her homemade organic hair care products.This involved miscellaneous costs that exhausted her funds,and she had to file for bankruptcy.Which of the following is most likely the main reason for Sheila's failure?

A)Lack of commitment
B)Poor financial control
C)Ethical failure
D)Late entry into the business
E)Lack of motivation

Question 77

________ leadership manages and leads the venture into maturity as an ever-evolving and still-growing enterprise.

A)Strategic
B)Entrepreneurial
C)Bureaucratic
D)Transformational
E)Democratic

Question 78

________ leadership brings the venture into being and sees it through the early stages of an enterprise.

A)Transactional
B)Entrepreneurial
C)Bureaucratic
D)Transformational
E)Democratic

Question 79

According to the life cycle of entrepreneurial firms,the birth stage signifies the stage in which the:

A)entrepreneur recognizes a niche in the market and formulates an idea to take advantage of it.
B)entrepreneur experiences the advantages of market success and financial stability.
C)entrepreneur faces the continuing management challenge of remaining competitive in a changing environment.
D)business model begins to work well,growth is experienced,and the complexity of managing the business operation expands significantly.
E)entrepreneur struggles to get the new venture established and survive long enough to test the viability of the underlying business model in the marketplace.

Question 80

Mel,who owns a popular restaurant,plans to expand his business.After reading favorable reviews,he decides to invest in an acquisition unaware that it is a dummy corporation.This fraud leads to significant financial losses for him,and he is forced to shut down his business.Which of the following is most likely to be the main reason for the failure of Mel's business?

A)Lack of motivation
B)Lack of strategy
C)Lack of commitment
D)Ethical failure
E)Late entry into the business