Deck 9: Growing and Internationalizing the Entrepreneurial Firm

Question 1

One hallmark of entrepreneurial growth is a dynamic,flexible,guerrilla strategy.

Answer 1

True

Question 2

The word "entrepreneurs" mostly refers to founders and owners of new businesses or managers of existing firms.

Answer 2

True

Question 3

Compared to large firms,innovators at SMEs have limited ability to personally profit from their innovations because property rights usually belong to the corporation.

Answer 3

False

Question 4

Whether entrepreneurship is facilitated or retarded significantly depends on formal institutions governing how entrepreneurs start up new firms.

Question 5

Sweden has the lowest venture capitalist investment in the world.

Question 6

Brazil has the lowest level of informal investment in the world.

Question 7

SMEs are the exclusive domain of entrepreneurship.

Question 8

In entrepreneurial firms,an innovation strategy allows a potentially more sustainable basis for competitive advantage.

Question 9

Both formal and informal institutional constraints,as rules of the game,affect entrepreneurship.

Question 10

According to the resource-based view,the entrepreneurial resources must have inimitable resources to be successful.

Question 11

Firms with fewer than 500 employees in the United States are considered small- and medium-sized enterprises.

Question 12

In general,governments in developed economies impose more procedures to start a company than those in poorer countries.

Question 13

An institution-based view suggests that firm-specific resources and capabilities largely determine entrepreneurial success and failure.

Question 14

Individuals who discover,evaluate,and exploit previously unexplored opportunities are referred to as entrepreneurs.

Question 15

Owners,managers,and employees at large firms tend to be more innovative and take more risks than those at entrepreneurial firms.

Question 16

Firms that are first to introduce new goods or services are likely to earn "monopoly profits" until competitors emerge.

Question 17

The growth of an entrepreneurial firm can be viewed as an attempt to more fully use currently underutilized resources and capabilities.

Question 18

Cultural values and norms are examples of informal institutions.

Question 19

SMEs tend to be less entrepreneurial than large firms.

Question 20

International entrepreneurship is defined as "a combination of innovative,proactive,and risk-seeking behavior that crosses national borders and is intended to create wealth in organizations." 

Question 21

A letter of credit increases transaction costs by increasing transaction risks.

Question 22

Entrepreneurial opportunities exist to lower transaction costs and bring distant groups of people,firms,and countries together.

Question 23

Foreign direct investment is the only way in which SMEs can enter foreign markets.

Question 24

In the United States,small- and medium-sized enterprises (SMEs) are defined as firms with less than _____.

A) 20 employees 
B) 250 employees 
C) 1000 employees 
D) 500 employees

Question 25

Franchising enables SMEs to enter foreign markets.

Question 26

Family background and educational attainment correlate with entrepreneurship.

Question 27

Becoming a licensee or franchisee of a foreign brand does not internationalize the licensee or franchisee firm.

Question 28

Microfinance emerged in response to the lack of financing for entrepreneurial opportunities in many developing countries.

Question 29

Foreign acquisitions are an example of an FDI entry into foreign markets.

Question 30

A firm can internationalize by becoming a supplier for a foreign firm that is doing business in the domestic market.

Question 31

Foreign firms interested in becoming licensees or franchisees have to put their own capital up front.

Question 32

Which of the following is a defining characteristic of entrepreneurship? 

A) Size of the firm 
B) Market share of the firm 
C) Ability to exploit opportunity 
D) Nationality of the individual or firm

Question 33

Entrepreneurs need to cultivate strong informal norms granting legitimacy to entrepreneurs.

Question 34

Direct exports are the sale of products made through export intermediaries.

Question 35

Franchising is typically used in manufacturing industries.

Question 36

Entrepreneurial firms can internationalize while staying in domestic markets through indirect exports.

Question 37

Licensing is mostly used in the service industries.

Question 38

It is impossible to internationalize without venturing abroad.

Question 39

Indirect export is one of the strategies used by entrepreneurial SMEs to internationalize without leaving their home country.

Question 40

Domestic transaction costs are qualitatively higher than international transaction costs.

Question 41

With regard to investment in start-ups,investment by _____ is considered as informal investment.

A) foreign entrants 
B) friends 
C) venture capitalists 
D) banks

Question 42

Which of the following is a part of the VRIO framework? 

A) Value 
B) Reliability 
C) Impulse 
D) Orientation

Question 43

International new ventures are also referred to as _____.

A) born global firms 
B) microfinance firms 
C) greenfield subsidiaries 
D) conglomerates

Question 44

The term for a global movement to help eradicate poverty by lending small sums used to start small businesses is referred to as _____.

A) foreign direct investments 
B) microfinance 
C) venture capital investment 
D) preferred financing

Question 45

Which of the following is one of the methods by which entrepreneurial firms internationalize by entering foreign markets? 

A) Harvest and exit 
B) Indirect exports 
C) Microfinancing 
D) Franchising

Question 46

Microfinance provides micro loans used to: 

A) pay mortgages. 
B) pay car loans. 
C) start small businesses. 
D) start subsidiaries.

Question 47

Which of the following is true of SMEs? 

A) They are less entrepreneurial than large firms, on average. 
B) They account for over 95 per cent of total firms around the world. 
C) They generate less employment than larger firms around the world. 
D) They generally have more than a thousand employees per firm.

Question 48

Which of the following types of societies would most likely foster more entrepreneurship? 

A) Individualistic and high uncertainty-avoidance 
B) Collectivistic and high uncertainty-avoidance 
C) Collectivistic and low uncertainty-avoidance 
D) Individualistic and low uncertainty-avoidance

Question 49

____ is at the fundamental component required for an entrepreneurial mindset.

A) Firm size 
B) Leadership 
C) Innovation 
D) Financing

Question 50

Among developed countries,_____ has the lowest rate of start-ups.

A) United Kingdom 
B) United States 
C) Russia 
D) Japan

Question 51

In the European Union,small and medium-sized enterprises (SMEs) are defined as firms with less than _____.

A) 500 employees 
B) 250 employees 
C) 1000 employees 
D) 750 employees

Question 52

____ is a way to reach overseas customers by exporting through domestic-based export intermediaries.

A) Direct exports 
B) Licensing 
C) Indirect exports 
D) Letters of credit

Question 53

In a manufacturing industry,_____ refers to firm A's agreement to give firm B the rights to use A's proprietary technology (such as a patent) or trademark (such as a corporate logo) for a royalty fee paid to A by B.

A) franchising 
B) bailment 
C) adverse possession 
D) licensing

Question 54

Which of the following nations has the highest level of informal investment,as a percentage of GDP,in the world? 

A) Sweden 
B) China 
C) Greece 
D) Japan

Question 55

Which of the following supports the notion that most new ventures in China are financed by friends and family? 

A) Informal investments are outlawed in China. 
B) China lacks formal market-supporting institutions. 
C) Credit reporting agencies are abundant in China. 
D) Venture capitalists are the biggest investors for entrepreneurship in China.

Question 56

_____ is defined as the identification and exploitation of previously unexplored opportunities.

A) Distributorship 
B) Dealership 
C) Vendorship 
D) Entrepreneurship

Question 57

Founders and/or owners of new businesses or managers of existing firms who identify and exploit new opportunities are called _____.

A) bloggers 
B) entrepreneurs 
C) adjudicators 
D) arbitrators

Question 58

Which of the following is one of the four major characteristics associated with a growing entrepreneurial firm? 

A) Monotonousness 
B) Internationalization 
C) Inimitability 
D) Informality

Question 59

____ is the sale of products made by entrepreneurial firms in their home country to customers in other countries.

A) Direct exports 
B) Letters of credit 
C) Licensing 
D) Indirect exports

Question 60

Which of the following nations has the lowest level of VC investment,as a percentage of GDP,in the world? 

A) Sweden 
B) The United States 
C) Greece 
D) South Africa

Question 61

____ perform an important "middleman" function by linking sellers and buyers overseas.

A) Export intermediaries 
B) Indirect exporters 
C) Sporadic exporters 
D) Alliance partners

Question 62

Entrepreneurs selling an equity stake or the entire firm to foreign entrants are using a(n) ____ strategy to internationalize.

A) export 
B) franchising 
C) licensing 
D) harvest and exit

Question 63

Is successful entrepreneurship based more on the "traits" of the entrepreneur or on the "institutions" at work in his or her environment?

Question 64

Which of the following is a popular way to enter into international service markets? 

A) Licensing 
B) Harvest and exit 
C) Franchising 
D) Indirect exporting

Question 65

In a service industry,_____ refers to firm A's agreement to give Firm B the rights to use A's proprietary assets for a royalty fee paid to A by B.

A) adverse possession 
B) franchising 
C) bailment 
D) licensing

Question 66

Which of the following types of entrepreneurs are best described as people who start,grow,and sell several businesses throughout their career? 

A) Social entrepreneurs 
B) Lifestyle entrepreneurs 
C) Serial entrepreneurs 
D) Cooperative entrepreneurs

Question 67

A ____ is a financial contract that states that the importer's bank will pay a specific sum of money to the exporter upon delivery of the merchandise.

A) bill of lading 
B) deed 
C) letter of credit 
D) bill of exchange

Question 68

Relative to licensing and franchising,_____ allow a firm to have better control of how its proprietary technology is used while entering foreign markets.

A) harvest and exit methods 
B) foreign direct investments 
C) indirect exports 
D) direct exports

Question 69

What is the stage model? How does the stage model apply to internationalization?

Question 70

Identify and explain the dilemma behind transaction costs and international entrepreneurial opportunities.

Question 71

Explain the resource-based views in light of their effect on entrepreneurial success.

Question 72

Explain the concept of microfinance.

Question 73

Which of the following types of contracts are used between exporters and importers to reduce transaction risks? 

A) Letter of credit 
B) Articles of incorporation 
C) License 
D) Bill of lading

Question 74

Which of the following is one of the methods by which entrepreneurial firms internationalize by staying in domestic markets? 

A) Through harvest and exit sell-offs to foreign entrants 
B) Through direct exports 
C) Through strategic alliances by FDI 
D) Through greenfield wholly owned subsidiaries abroad

Question 75

Model of internationalization that portrays the slow step-by step process an SME must go through to internationalize its business is referred to as the_____.

A) indirect model 
B) stage model 
C) franchising model 
D) direct export model

Question 76

Identify the three advantages offered by the innovation strategy used in a growing entrepreneurial firm.

Question 77

Explain the institution-based views in light of their effect on entrepreneurial success.

Question 78

Discuss direct exporting,licensing/franchising,and FDI as strategies for entering a foreign market.Explain each,and detail strengths and weaknesses.