Deck 6: Entrepreneurship

Question 1

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

Answer 1

False

Question 2

Managers are quicker to act and actively manage risk, while entrepreneurs often are slower to act and tend to avoid risk.

Answer 2

False

Question 3

Observers say that in contemplating one's business, one must start with a great idea.

Answer 3

True

Question 4

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

Question 5

Corporate managers who create new independent businesses with the benefit of corporate support are known as intrapreneurs.

Question 6

A small business differs from an entrepreneurial venture.

Question 7

Entrepreneurs operate in a formal management hierarchy with well-defined authority and responsibility.

Question 8

Entrepreneurs spot, create, and exploit opportunities.

Question 9

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 10

A small business is often defined as having fewer than 100 employees, as well as being independently owned and operated.

Question 11

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

Question 12

Entrepreneurs experience stress, but they also have high job satisfaction.

Question 13

Entrepreneurs are not tolerant of stress and find it difficult to resolve problems.

Question 14

Start-ups have at least two major liabilities: newness and fast growth.

Question 15

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

Question 16

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 17

Entrepreneurs start their own firms because of the challenge, profit potential, and enormous satisfaction they hope lies ahead.

Question 18

Entrepreneurs are essentially gamblers.

Question 19

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

Question 20

Business incubators, often located in industrial parks or abandoned factories, are protected environments for new, small businesses.

Question 21

_____ 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

Question 22

A common entrepreneurial malady is an aversion to record keeping.

Question 23

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

Question 24

The successful intrapreneurial organization avoids relying on its entrepreneurial spirit to produce at least one winner from among several projects.

Question 25

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

Question 26

The pursuit of lucrative opportunities by enterprising individuals under conditions of uncertainty is known as:

A) entrepreneurship.
B) sugging.
C) bootlegging.
D) skunkworks.
E) incubation.

Question 27

Today's large corporations are passive bystanders in the entrepreneurial explosion.

Question 28

A business plan describes only the basic idea involved in starting a new venture.

Question 29

Organizations that encourage intrapreneurship face the obvious risk of failure.

Question 30

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

Question 31

While working at a software company, Ronald has created a new venture based solely on his idea while using his company's proprietary technology. Ronald can be described as a(n):

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

Question 32

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

Question 33

The process by which enterprising individuals initiate, manage, and assume the risks and rewards associated with a business is known as a(n):

A) start-up.
B) corporation.
C) governmental agency.
D) entrepreneurial venture.
E) joint venture.

Question 34

Eddie was a manager at a company that produced household appliances. He had many innovative ideas to increase profit. 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 a(n):

A) entrepreneurial venture.
B) spin-off.
C) corporate espionage.
D) skunkwork.
E) angel investment.

Question 35

In the context of building intrapreneurship, skunkworks are project teams designated to produce a new, innovative product.

Question 36

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

A) angel investment
B) junior enterprise
C) small enterprise
D) entrepreneurial venture
E) greenfield venture

Question 37

As the business grows, entrepreneurs often hesitate to delegate work they are used to doing.

Question 38

Your roommate wants to start a business and everybody has been giving her various kinds of advice about being an entrepreneur. 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 39

When creating a new business one should start with:

A) a viable market.
B) a product.
C) a great idea.
D) good timing.
E) meeting social responsibilities.

Question 40

Laura recently started her own business. She has nearly recreated a company she worked for previously. But, she has great business acumen and has been able to run her business much more efficiently and profitably. Laura is a(n):

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

Question 41

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 most start-up businesses.
E) The odds of survival of an entrepreneurial venture worsen if it grows to at least 10 or 20 people.

Question 42

According to Peter Drucker, which of the following is true with respect to 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 family members, despite good qualifications.
D) Someone outside the family and the business should help plan succession.
E) The business should "go public" as soon as possible.

Question 43

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

A) grow as aggressively as possible.
B) discontinue hiring family members.
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 44

Which of the following is a benefit of business incubators?

A) Free rent
B) High security
C) Provision of venture capital
D) Access to shared services
E) Guaranteed profitability

Question 45

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) entrepreneurial ventures that are marginally successful but never experience significant growth.
E) the lack of focus seen in many entrepreneurs.

Question 46

Which of the following improves the odds of survival of a venture?

A) Economic downturn
B) Newness
C) Smallness
D) Risky market
E) Revenues of $2-3 million

Question 47

Laura, an enterprising individual, wants to open a store in her town. She wants her store to be of the same type as a popular coffee chain that is successfully operating in a city nearby. Laura wants to become a(n):

A) business incubator.
B) innovator.
C) angel investor.
D) franchisee.
E) intrapreneur.

Question 48

Entrepreneurs may be able to capitalize on _____ that refers to finding unexpected opportunities after heading down a road, even if their original idea does not work.

A) the demographic changes
B) the side street effect
C) bootlegging
D) skunkworks
E) advertising support

Question 49

_____ are protected environments for new, small businesses offering low rents and shared costs.

A) Skunkworks
B) Business incubators
C) Spinoffs
D) Bootleggings
E) Global start-ups

Question 50

The success of entrepreneurial venture 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) Succession planning
C) Record keeping
D) Decreased delegation
E) Going public

Question 51

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 52

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

A) upper left
B) lower left
C) upper right
D) lower right
E) upper left and upper right

Question 53

_____ offer 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) Skunkworks
D) Bootleggings
E) Franchises

Question 54

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

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

Question 55

In the context of successful business models for e-commerce, the _____ model involves charging fees to direct Internet website visitors to other companies' websites.

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

Question 56

Which of the following characteristics helps an entrepreneur succeed?

A) Commitment to family welfare
B) Tolerance of risk, ambiguity, and uncertainty
C) Refusal to take risks
D) Maintaining status quo
E) Inability to resolve problems

Question 57

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

A) Velcro fasteners
B) Tax preparation service
C) New pharmaceutical drug
D) New restaurant
E) Lawn mowing service

Question 58

eBay brings buyers and sellers together and charges a commission for each sale. This type of business model is known as a(n):

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

Question 59

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) plan for contingencies.

Question 60

Cambridge Counseling, an entrepreneurial venture, does not have any distinctive services when compared with the well-established competitors in the field, and the business will require a sizable investment. 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 61

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) opportunity analysis
D) venture capital
E) total quality management systems

Question 62

"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 63

A competitive advantage from relationships with other people and the image other people have of the entrepreneur is known as:

A) social capital.
B) bootlegging.
C) legitimacy.
D) skunkworks.
E) side street effect.

Question 64

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

A) Business audit
B) Accounting analysis
C) Business plan
D) Opportunity analysis
E) Business incubator

Question 65

As an organization grows, the successful entrepreneur will:

A) retain control over all research operations.
B) run the company single-handedly.
C) make all major decisions.
D) develop an effective top management team.
E) apply only his personal theories to business.

Question 66

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

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

Question 67

Guaranteeing the 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 68

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

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

Question 69

Amanda, a manager, decides to offer her support to Jason, 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 70

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

A) secure the finances.
B) writing a business plan.
C) conducting an opportunity analysis.
D) getting others to support your ideas.
E) hiring the right people.

Question 71

Successfully fostering and managing intrapreneurship involves:

A) discouraging bootlegging activities.
B) focusing on one very large, innovative project.
C) rewarding risk taking.
D) spreading intrapreneurial efforts over many small scale projects.
E) minimizing aggressiveness with competitors.

Question 72

The most dangerous risk in intrapreneurship is that of:

A) spreading intrapreneurial efforts over too many projects.
B) over relying on a single large project.
C) working on too many underfunded projects.
D) limiting one's personal energy to certain tasks.
E) engaging in prospects that are too risky.

Question 73

Miguel works as a technician for a large manufacturer of biomedical equipment. He has discovered a technique to produce composite materials more efficiently. The company encourages its employees to pursue new ideas on company premises. Which of the following does Miguel's company support?

A) Bootlegging
B) Skunkworks
C) Spin-offs
D) Delegation
E) Corporate espionage

Question 74

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 the idea into a viable business
E) To work out the details of marketing, finance, and manufacturing

Question 75

Which of the following is a function of business plan?

A) To serve as filters to separate unimportant matters from important ones
B) To raise capital through federally registered shares of the company
C) To contribute to the upliftment of company standards
D) To ensure the success of the business
E) To create a long-term relationship with an investment banking firm

Question 76

Which of the following key planning elements involves a competitive advantage that can be defended and should be focused on customer?

A) Opportunity
B) Risk and reward
C) People
D) Competition
E) Context

Question 77

A(n) _____ describes all the elements involved in starting a new venture.

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

Question 78

The first step toward building organizational support for an idea that involves explaining the idea and seeking approval to look for wider support is known as:

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

Question 79

Orlando works as a technician for a large manufacturer of biomedical equipment. Orlando has discovered a way to produce disposable products in large quantities that will be useful in research facilities. His employer has given Orlando 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 80

People's judgment of a company's acceptance, appropriateness, and desirability, generally stemming from company goals and methods that are consistent with societal values is known as:

A) social capital.
B) bootlegging.
C) legitimacy.
D) skunkworks.
E) side street effect.