Deck 8: Entrepreneurship and Innovation

Question 1

Entrepreneurship can provide

A) an alternative corporate career path.
B) an opportunity to experience the frustration of the glass ceiling.
C) a blocked career path.
D) additional unpleasant organizational politics.

Answer 1

A

Question 2

What is the motive for entrepreneurs to start a new business?

A) They learn from successful family role models.
B) They invent a new product and build a business around it.
C) They become dissatisfied with corporate careers and discover that entrepreneurship provides an attractive set of challenges.
D) all of the above

Answer 2

D

Question 3

Which of the following statements is true about Michael Dell?

A) Dell realized he could build a company on the same business model of other computer firms.
B) Michael Dell became one of the youngest CEOs of a major U.S. corporation.
C) Dell avoided the use of the Internet as a distribution channel.
D) all of the above

Answer 3

B

Question 4

A strong belief in one's own ability to succeed, so that one accepts responsibility for outcomes and tries harder after making mistakes, is

A) a high need for achievement.
B) an internal locus of control.
C) an external locus of control.
D) a high level of self-confidence.

Question 5

A small business is defined by the U.S. Small Business Administration as employing fewer than

A) 25 employees.
B) 100 employees.
C) 250 employees.
D) 500 employees.

Question 6

Jack believes that what happens to him is due to luck and factors beyond his control. Jack has a(n)

A) high need for achievement.
B) internal locus of control.
C) external locus of control.
D) high level of self-confidence.

Question 7

Which of the following is a key characteristic associated with entrepreneurship?

A) Low self-confidence
B) High need for achievement
C) Risk averse
D) External locus of control

Question 8

An advisory board

A) has legally binding duties to the business.
B) provides legally binding advice.
C) is a panel of experts that offers counsel to an entrepreneur.
D) is only used in large corporations.

Question 9

A blueprint that maps out the business strategy for entering markets and explains the business to potential investors is the

A) personal network.
B) business plan.
C) business network.
D) the marketing plan.

Question 10

An entrepreneur's personal network can be formed through

A) participation in professional societies.
B) actively seeking out individuals with similar interests.
C) building trust and good will.
D) all of the above

Question 11

Which of the following is not one of the most common reasons for business failure?

A) Poor knowledge of the market
B) Lack of capital
C) Paralysis of analysis
D) Human resource problems

Question 12

What is the process of creating a business enterprise capable of entering new or established markets by deploying resources and people in a unique way to develop a new organization?

A) Strategic management
B) Entrepreneurship
C) Partnership
D) Innovation

Question 13

Which of the following is not a business skill utilized by entrepreneurs to create and operate an enterprise?

A) High need for achievement
B) Negotiation skills
C) Networking skills
D) Leadership skills

Question 14

An entrepreneurial venture begins with

A) the development of a business plan.
B) obtaining financing.
C) the selection of the most appropriate type of legal structure to operate under.
D) an idea.

Question 15

A firm's alliances formed with other businesses to achieve mutually beneficial goals is a(n)

A) personal network.
B) advisory board.
C) board of directors.
D) business network.

Question 16

Which of the following are key components of the business plan?

A) A description of the product or service
B) Sources of funding
C) An analysis of market trends and potential competitors
D) all of the above

Question 17

Which of the following is a reality of entrepreneurship?

A) Entrepreneurs are born, not made.
B) It is necessary to have access to money to become an entrepreneur.
C) Most entrepreneurs are not young people under 30 years of age.
D) Entrepreneurs become successful on their first venture.

Question 18

As opposed to a small business, one of the important goals of an entrepreneurial venture is

A) social responsibility.
B) profit.
C) growth.
D) innovation.

Question 19

Entrepreneurship

A) creates jobs.
B) stimulates innovation.
C) provides opportunities for diverse people in society.
D) all of the above

Question 20

The business form that is owned by one person is

A) proprietorship.
B) corporation.
C) partnership.
D) an LLC.

Question 21

A partnership

A) is subject to a large number of government regulations.
B) can generally raise more capital than a proprietorship.
C) is provided a charter from the state.
D) is more complex to form than a corporation.

Question 22

Entrepreneurs may obtain debt financing for specific purchases through

A) equipment manufacturing.
B) suppliers.
C) credit cards.
D) all of the above

Question 23

Growing too quickly may result in which of the following?

A) A cash flow crisis
B) Employees that are likely to experience stress
C) Management that is no longer competent
D) all of the above

Question 24

After a public offering

A) there is a higher tolerance for management mistakes.
B) management decisions are under a higher level of public scrutiny.
C) there is less shareholder pressure for dividends.
D) less information is made public for competitors.

Question 25

Pat and Jim are founding an entrepreneurial venture. They want to leverage their complementary skills and raise as much capital as possible. Which business form would you recommend for their venture?

A) Proprietorship
B) Corporation
C) Partnership
D) Advisory board

Question 26

A disadvantage of a corporation is

A) activities are limited to those stated in the charter.
B) unlimited liability for the firm's debts.
C) difficulty in obtaining capital.
D) limited continuity of the life of the enterprise.

Question 27

Venture capitalists

A) manage pools of money.
B) provide management knowledge.
C) provide financial advice.
D) all of the above

Question 28

A corporation

A) is a legal entity separate from the individuals who own it.
B) receives limited rights to operate from the government that provides its charter.
C) is more costly to form than a partnership.
D) all of the above

Question 29

Which of the following is not an alternative to entrepreneurship?

A) Intrapreneurship
B) Partnership
C) Spin-offs
D) Franchising

Question 30

Raising capital by selling securities on the New York Stock Exchange or NASDAQ is a

A) public offering.
B) debt financing offer.
C) commercial loan.
D) venture capitalist.

Question 31

An early entrepreneurial venture that has the potential for rapid growth but is in a high risk situation with few assets may seek financing from

A) venture capitalists.
B) public offerings.
C) commercial loans.
D) all of the above

Question 32

When advising John of what to include in the production plan of his business plan for his entrepreneurial venture, which would you not include in your recommendation?

A) Manufacturing process
B) Names of suppliers of raw materials
C) Physical plant
D) Product forecasts

Question 33

The benefit of forming a corporation is

A) lower taxes.
B) ease of formation.
C) limited liability.
D) less governmental regulation.

Question 34

An advantage of a proprietorship is

A) it requires a minimum of paperwork.
B) it can provide complementary skills that can create more opportunities for the enterprise.
C) it has limited liability.
D) the personal assets of the owner are separate from the business.

Question 35

What percent of all U.S. businesses are proprietorships?

A) 24
B) 44
C) 74
D) 94

Question 36

A form of business organization in which new business units are developed within a larger corporation structure in order to deploy the firm's resources to market a new product or service is referred to as

A) a spin-off.
B) intrapreneurship.
C) franchising.
D) a corporation.

Question 37

A means of obtaining financial resources that involves the sale of part of the ownership of the business is

A) debt financing.
B) equity financing.
C) commercial loans.
D) bankruptcy.

Question 38

The two principle means of obtaining the resources to fund a new business are

A) loans and debt financing.
B) equity financing and debt financing.
C) equity financing and venture capitalists.
D) public offerings and venture capitalists.

Question 39

More than half of all entrepreneurships are started by

A) a single individual.
B) an individual from a family of entrepreneurs.
C) individuals under 30 years old.
D) a team of founders.

Question 40

A common form of debt financing is

A) venture capitalists.
B) commercial loans.
C) equity financing.
D) bankruptcy.

Question 41

3M's description of innovation is "a new idea together with action or implementation that has a bottom-line impact." This reflects which key component of innovation?

A) The invention by itself does not make for innovation.
B) It is not just the change that is important or that defines innovation.
C) An innovation is more than just a novel idea or product.
D) all of the above

Question 42

Entrepreneurship has provided an alternative career path for many minorities in the United States.

Question 43

An entrepreneur assumes fewer risks with franchising because the franchise can provide

A) a product or service with an established market and favorable image.
B) management training and assistance in operating the business.
C) economies of scale for advertising and purchasing.
D) all of the above

Question 44

Franchising is particularly prevalent in which sector of the economy?

A) Government
B) Nonprofit
C) Manufacturing
D) Retail service

Question 45

Which of the following inventions would qualify as an innovation that added value?

A) The Segway
B) Pepsi Max
C) Disposable diapers
D) all of the above

Question 46

The launch of CNBC by the National Broadcasting Company (NBC)is an example of

A) franchising.
B) spin-offs.
C) corporate entrepreneurship.
D) all of the above

Question 47

Which of the following is an example of a radical innovation?

A) Caffeine-Free Coke
B) Smaller cell phones
C) Digital compact discs
D) Pepsi Max

Question 48

Which of the following is not one of the steps in Gary Hamel's wheel of innovation?

A) Imagining
B) Scaling
C) Inventing
D) Experimenting

Question 49

Innovation is

A) doing something different.
B) always about radical change.
C) always about incremental change.
D) always embraced by large organizations.

Question 50

An advantage of intrapreneurship is

A) a successful intrapreneur within a corporation receives financial rewards equal to those generated by an independent entrepreneurship.
B) franchising fees are generated.
C) the company provides funding and corporate resources that an independent entrepreneur cannot gather.
D) rights may be sold overseas to grow geographically.

Question 51

If a new product that is developed by a corporation does not fit with the company's established products, what is the recommended form of entrepreneurship?

A) Intrapreneurship
B) Spin-offs
C) Franchises
D) Partnerships

Question 52

When an inventor falls in love with an invention, the expectation that consumers will do so as well may lead to failure of the venture.

Question 53

Today's business success has seen a shift from ________ to ________.

A) quality and price; creativity
B) quality; price
C) price; size
D) creativity; innovation

Question 54

When a business with an established name and product is sold to additional owners along with the rights to distribute the product, which type of operation is created?

A) Intrapreneurship
B) Spin-off
C) Franchise
D) Partnership

Question 55

The small business owner is often focused on stability and profitability while the entrepreneur is focused on growth and greater presence in the market.

Question 56

Data indicates that 90 percent of new ventures are successful after four years.

Question 57

Among the skills required for success by entrepreneurs are negotiation skills, networking skills, and leadership skills.

Question 58

According to Michael Tushman, innovation can involve

A) radical change, but not incremental change.
B) incremental change, but not radical change.
C) neither radical change nor incremental change.
D) radical change or incremental change.

Question 59

When Xerox created Semaphore Communications to manufacture and market a security product that encrypts messages for cellular phones, which form of entrepreneurship were they using?

A) Intrapreneurship
B) Spin-off
C) Franchise
D) Partnership

Question 60

Intrapreneurship is also referred to as

A) franchising.
B) spin-offs.
C) corporate entrepreneurship.
D) all of the above

Question 61

Equity financing requires collateral.

Question 62

Discuss the three different forms entrepreneurs can select from when launching a new venture.

Question 63

What are the key components of a business plan?

Question 64

What are the most common reasons for entrepreneurial business failure?

Question 65

Describe Gary Hamel's five steps in the wheel of innovation.

Question 66

What are some of the key characteristics of entrepreneurs?

Question 67

What are the myths of entrepreneurship?

Question 68

An association of two or more persons acting as co-owners of a business creates a proprietorship.

Question 69

What is entrepreneurship?

Question 70

The benefit of forming a corporation is limited liability.

Question 71

Explain equity financing for entrepreneurs.

Question 72

What is the difference between a small business and an entrepreneurial venture?

Question 73

What are the alternatives to independent entrepreneurship that involve smaller risks?

Question 74

The economic paradigm shift today is from quality and price as key drives to creativity.

Question 75

What is a personal network as it pertains to an entrepreneur? How is it different from a business network?

Question 76

Franchises are typical in technology companies where the new technology does not fit with the company's core competencies.

Question 77

List some entrepreneurial skills related to success.

Question 78

Discuss the importance of entrepreneurship.

Question 79

What are the advantages and disadvantages of forming a partnership?

Question 80

What types of problems may a business face if it grows too quickly?