Deck 6: Entrepreneurship

Question 1

A(n) ________ is an enterprise having fewer than 500 employees, independently owned and operated, not dominant in its field, and not characterized by many innovative practices.

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

Answer 1

B

Question 2

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.

Answer 2

True

Question 3

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.

Answer 3

C

Question 4

Tomas 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, thus creating a(n)

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

Question 5

A small business differs from an entrepreneurial venture.

Question 6

________ 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 7

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

Question 8

Frances recently started her own business. She has nearly recreated a company she worked for previously. She is innovative and has great management skills and has been able to run her business efficiently and profitably. Frances is a(n)

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

Question 9

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

Question 10

A(n) ________ 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 11

________ 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 12

From the profiles below, identify the person who is most likely to become a successful entrepreneur .

A) Percy enjoys challenges, has a strong social network, has good knowledge of management techniques, and possesses excellent business skills.
B) Dot 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) Kaitlin likes to invent new products, enjoys working in the laboratory, and avoids conflict whenever possible. She has little knowledge of business.
D) Sarah has strong marketing and selling skills, and loves challenges in these areas.
E) Liam is creative, embraces new ideas and products, and likes to motivate others but prefers working by himself.

Question 13

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

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

Question 14

________ 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 15

Choose the statement that 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 16

A common entrepreneurial malady is an aversion to record keeping.

Question 17

When working for a software company, and because Tomas is a(n) ________, he created a new venture based solely on his idea while using his company's proprietary technology.

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

Question 18

________ use networks of contacts more than formal authority.

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

Question 19

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

Question 20

A common myth about entrepreneurship is that "Any entrepreneur with a good idea can ________ to fund his/her business."

A) go public
B) use a skunkworks
C) use formal control systems
D) raise venture capital
E) start a franchise

Question 21

Paul is more deliberate and slower to act, and he tends to avoid risk. Paul is better suited to be a(n) ________ than a(n) ________.

A) franchisee; franchisor
B) manager; entrepreneur
C) franchisor; franchisee
D) entrepreneur; manager
E) entrepreneur; small business owner

Question 22

________ helps an entrepreneur succeed.

A) Encouragement of centralization
B) Tolerance of ambiguity and uncertainty
C) Risk aversion
D) Maintenance of the status quo
E) Fending off constructive criticism

Question 23

Suzette's husband told her, "I admire your boldness, but I'm not sure that you should open that business. I've heard that entrepreneurs are ________." Suzette replied, "That's a common myth. In fact, entrepreneurs take very careful, calculated risks and are not afraid to act on those decisions."

A) inventors
B) gamblers
C) promoters
D) planners
E) investors

Question 24

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 25

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 26

________ 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 27

Paige independently owns and operates HiZ Inc., a company with 22 employees. She manages aggressively and expects rapid sales and profit growth. Paige's company is considered a(n) ________ venture.

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

Question 28

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

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

Question 29

In the context of the entrepreneurial strategy matrix, a ________ is most likely to have the highest risks and returns.

A) clothing outfit
B) tax preparation service
C) new passenger vehicle
D) new restaurant
E) lawn mowing service

Question 30

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 31

Ramon, I believe that you will succeed," said Juan, his mentor. "When an entrepreneur is contemplating a new business, the very first step is to have ________. You are on the right track."

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

Question 32

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 33

RanMark Corp. brings buyers and sellers together and charges a commission for each sale. RanMark Corp. is a(n) ________ business model.

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

Question 34

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 35

Entrepreneurs experience stress, but they also have high job satisfaction. They tend to be ________ healthy and ________ likely to retire than those who work for others.

A) less; more
B) more; more
C) more; less
D) less; less
E) equally; equally

Question 36

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 37

Beane 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 38

A new technique for extracting oil and gas-called "fracking"-spurred an economic boom in the formerly sleepy town of Oilville, located in what had been thought to be a depleted oil field. Workers swarmed into the town, and Karen started a laundry service to meet their needs. In this case, Karen had spotted an entrepreneurial opportunity created by the new extraction technique, or a ________, which in turn created an oil boom, or a(n) ________.

A) technological discovery; economic dislocation
B) technological discovery; government initiative
C) government initiative; lifestyle change
D) technological discovery; lifestyle change
E) calamity; economic dislocation

Question 39

Tonda spotted, created, and exploited a(n) ________ for ride-sharing services for elderly customers that big companies had ________ and, in so doing, she captured the market with her simpler, cheaper, more accessible, and more convenient services.

A) business incubator; monopolized
B) opportunity; avoided
C) intrapreneurship; avoided
D) opportunity; rejected
E) intrapreneurship; failed at

Question 40

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

A) challenge.
B) profit potential.
C) enormous satisfaction.
D) opportunity to manage other people.
E) hope that lies ahead.

Question 41

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 42

Pierce's new business rocketed upwards in its first year, but its progress stagnated thereafter. His mentor noted that Pierce was having a hard time "letting go"-giving his two best employees responsibility to take on assignments that they were obviously ready to handle. In fact, Pierce was needlessly and constantly "looking over their shoulder" to check their work. As evidenced by these reasons, Pierce's entrepreneurial venture was being threatened by his failure to

A) delegate.
B) plan.
C) go public.
D) use formal control systems.
E) properly use funds.

Question 43

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 44

A(n) ________ 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 45

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 46

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 47

Identify which 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 48

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 your idea into a viable business, and your source(s) of capital together make up a(n)

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

Question 49

Robinson Linens has made the decision to "go public" through an initial public stock offering (IPO). Robinson Linens undertook this process to

A) reduce capital, reduce debt, improve the balance sheet, and enhance net worth.
B) raise capital, reduce debt, improve the balance sheet, and dissolve net worth.
C) raise capital, reduce debt, improve the balance sheet, and enhance net worth.
D) raise debt, raise capital, improve the balance sheet, and enhance net worth.
E) raise debt, reduce capital, improve the balance sheet, and enhance net worth.

Question 50

________ is a benefit of business incubators.

A) An information silo
B) High security
C) Provision of venture capital
D) A shared cost
E) Guaranteed profitability

Question 51

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 52

Entrepreneurs are NOT

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

Question 53

The purpose of an opportunity analysis is to

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

Question 54

The success of an entrepreneurial venture is often jeopardized by the death of its founder. ________ 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 55

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 56

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 57

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 58

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 59

Ernesto decides to open a Mexican restaurant serving street tacos and fajitas. This will be one of several such restaurants in his small town. This entrepreneurial venture, like most small businesses, is characterized by ________ risk and ________ innovation.

A) moderate; moderate
B) moderate; high
C) low; high
D) high; low
E) high; high

Question 60

________ 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 61

In the context of entrepreneurial orientation, ________ occurs when an organization is willing to commit significant resources and perhaps borrow heavily to venture into the unknown.

A) independent action
B) innovativeness
C) risk taking
D) competitive aggressiveness
E) proactiveness

Question 62

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.

Question 63

The stage for building support for an idea, or ________, means guaranteeing a project's technical and political feasibility, often with a formal presentation to higher management.

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

Question 64

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 65

Blanche works as a respected senior engineer for a large manufacturer of pharmaceutical process equipment. Several researchers within the company have discovered an innovative way to repackage pharmaceutical drugs. The company has given Blanche the opportunity and responsibility to lead a fully funded project team for 12 months to develop this idea. She is excited to lead this ________ team.

A) spin-off
B) skunkworks
C) bootlegging
D) social capital
E) venture capital

Question 66

Elena, a manager, has a new project idea. Before she begins building support for her idea, she begins by ________, which is explaining the idea to her boss to get his approval to seek wider support.

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

Question 67

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 68

An organization that resists entrepreneurial initiative

A) faces the risk of overrelying on a single project.
B) may lose its ability to adapt when conditions require change.
C) spreads intrapreneurial efforts over many small-scale projects.
D) represents the process of changing the status quo.
E) may fail while awaiting the completion of one large, innovative project.

Question 69

A(n) ________ often 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) value chain
E) business incubator

Question 70

Bill, let me give you some advice," said his mentor, Ted. "Before seeking formal approval for your project from higher levels of management, spend some time getting support from your peers, or as it is often called

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

Question 71

Susan 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 a(n)

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

Question 72

Syd 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. Syd's company supports

A) bootlegging.
B) skunkworks.
C) spin-offs.
D) delegation.
E) corporate espionage.

Question 73

The most dangerous risk in intrapreneurship is that of

A) spreading intrapreneurial efforts over too many projects.
B) overrelying on a single large project.
C) working on too many underfunded projects.
D) maintaining the status quo.
E) engaging in prospects that are too risky.

Question 74

A function of a business plan is to

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

Question 75

________ is/are a key factor that an entrepreneur should have clearly thought out. It will include a competitive advantage that can be defended, with a focus on the customer.

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

Question 76

Jake has asked Len to be a primary investor in his entrepreneurial start-up. Len first wants to carefully study Jake's business plan, in particular these key factors:

A) the clients, the opportunity, the competition, the context, and the risk/reward.
B) the people, the opportunity, the competition, the context, and the risk/reward.
C) the clients, the other investors, the suppliers, the context, and the opportunities/threats.
D) the people, the other investors, the suppliers, the context, and the opportunities/threats.
E) the people, the threats, the partners, the context, and the risk/reward.

Question 77

________ 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 78

Chris's new business is failing. In desperation, he asks his most experienced investor, Gerardo, for advice. Gerardo says, "Chris, I'm glad you asked. As a(n) ________ investor, I've seen other businesses struggle, and I believe that I can help your business recover. In fact, I'll probably be willing to make further investments if I can have some say-so in what steps you take to recover."

A) sophisticated
B) nonprofessional
C) affiliate model
D) intermediary model
E) junior

Question 79

________ 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 80

________ 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