Deck 5: Managing Entrepreneurship and Small Business

Question 1

Anita Roddick,founder of The Body Shop PLC,believed in social responsibility and said that: "If you think you're too small to have an impact,try going to bed with a mosquito."

Answer 1

True

Question 2

Richard Branson launched Indigo Books & Music which is now the largest book retailer in Canada

Answer 2

False

Question 3

Entrepreneurs have an external focus of control.

Answer 3

False

Question 4

Creativity and initiative are two traits needed by entrepreneurs.

Question 5

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

Question 6

People with innovative ideas don't always get a chance to turn them into reality.

Question 7

Founders of new business enterprises that achieve large-scale success or people who assume responsibility for introducing a new product or a change in operations in an existing organization are not entrepreneurs.

Question 8

Entrepreneurs start their own businesses,often in order to be their own boss or to make a special contribution to society.

Question 9

Entrepreneurs include people who buy a local franchise outlet,open a small retail shop,or go into a self-employed service business.

Question 10

Entrepreneurs have strong interests in creative production and high interest in enterprise control.

Question 11

People with innovative ideas always get a chance to turn them into reality.

Question 12

Success in highly competitive business environments depends on access to wealthy investors and establishing a corporate form of ownership to minimize risk.

Question 13

Frank Stronach built one of the world's largest automotive parts manufacturing company by holding true to his vision of Fair Enterprise which ensures the rights of employees,management and investors to share in the profits they all help produce.

Question 14

The general profile of an entrepreneur is an individual who is very self-confident,determined,resilient,adaptable,and driven by excellence.

Question 15

Entrepreneurs are self-starters who are willing to stay with a course of action even when their plans are not working.

Question 16

Entrepreneurs typically come from families with strong corporate career backgrounds and seek independence from the corporate bureaucracies that dominated their parents.

Question 17

It has always been easier for women to access capital for small business start-up as expansions.

Question 18

Entrepreneurs typically have an internal locus of control,a high energy level,a high need for achievement,a high tolerance for ambiguity,self-confidence,an action orientation,the desire for independence,and a high degree of flexibility.

Question 19

Most entrepreneurs start their own business before the age of 25.

Question 20

Entrepreneurship describes strategic thinking and risk-taking behaviour that results in the creation of new opportunities for individuals and/or organizations.

Question 21

Richard Branson used his father's New York-based real estate empire to start the Virgin Group.

Question 22

The SBA estimates that about 55% of small firms are conducting business over the internet.

Question 23

Wanting to be their own bosses and controlling their future or seeking to fulfill a dream are important reasons that people pursue entrepreneurship and launch their own businesses.

Question 24

Richard Branson is a bad example of entrepreneurship because his Virgin holdings were all,at one time,other businesses that he bought and merely changed the names.

Question 25

If an entrepreneurs has not made it big in their own business before the age of 30 they are not likely to succeed.

Question 26

A franchise is where a business owner sells to another person the right to operate the same business in another location,under the original owner's business name and guidance.

Question 27

Necessity-based entrepreneurship takes place because other employment options don't exist.

Question 28

Entrepreneurship offers women and members of visible minorities opportunities to strike out on their own and gain economic independence,

Question 29

The following phrases — entrepreneurs are born,not made;entrepreneurs are gamblers;and entrepreneurs are young — capture three fundamental truths about entrepreneurs.

Question 30

The most common ways for an entrepreneur to become involved in a small business include starting one,buying an existing one,or buying and running a franchise.

Question 31

Anita Roddick was committed to human rights,the environment and economic development.

Question 32

A small business has fewer than 100 employees,is independently owned and operated,and does not dominate its industry.

Question 33

Anita Roddick is a good example of successful entrepreneurship born out of necessity.

Question 34

Approximately one-quarter of Canadian businesses are classified as small.

Question 35

Minority-owned businesses are one of the slowest growing sectors of the Canadian economy.

Question 36

Women and minorities are more likely to reach higher levels of success and opportunities by working for a large corporation than by starting their own businesses.

Question 37

Economists differentiate between entrepreneurs who are driven by the quest for new opportunities and those who are driven by absolute need.

Question 38

Heather Reisman used a strong growth and change strategy to establish Indigo as one of the largest book retailer in Canada.

Question 39

Richard Branson came up with the "Roll up the Rim" creative marketing strategy

Question 40

Entrepreneurship does not offer women and members of visible minorities opportunities to strike out on their own and gain economic independence,

Question 41

A succession plan must include legal aspects of any ownership transfer but need not address procedures for choosing or designating the firm's new leadership or any financial and estate plans relating to the transfer.

Question 42

Not having sufficient know-how to run a business in the chosen market or area is a reason for the high failure rate of new businesses.

Question 43

Only a small percent of businesses operating worldwide are family owned;most are public corporations.

Question 44

Family businesses represent only a small percentage of the businesses operating worldwide.

Question 45

Statistics on small business failure rates indicate that 60 to 80 percent of new businesses fail in their first five years of operation.

Question 46

In the retail sector,brick and mortar start-ups are growing at a much higher rate than on line businesses.

Question 47

In succession planning,family businesses should set up the succession plan well in advance of the need to use it;and then share it with all affected persons,making sure they understand it.

Question 48

By reducing the cost of renting retail space and hiring employees,the Internet has created numerous small business opportunities within the new economy.

Question 49

Not keeping track of the numbers and failure to control business finances has little to do with business success or failure.

Question 50

Everyone working together,sharing values and a common goal,and knowing that what they do benefits the family define the ideal situation in a family business.

Question 51

A succession plan is a formal statement that describes how leadership transition and related matters will be handled when the time for changeover arrives.

Question 52

About 70 percent of family firms survive to the second generation,about 45 percent of them survive to the third generation,and about 25 percent of them are expected to survive beyond the third generation.

Question 53

In succession planning,family businesses should identify the leadership successor well ahead of time and prepare the leadership successor through training and experience to assume the new role when needed.

Question 54

Taking the time to craft a vision and mission,and to formulate,revise,and properly implement strategy are reasons for the high failure rate of new businesses.

Question 55

While family businesses must solve the same problems of other small or large businesses,they also must address a set of unique problems.

Question 56

The vast majority of family business with succession plans will survive well beyond the second generation.

Question 57

Lack of experience,lack of expertise,lack of strategy and strategic leadership,poor financial control,growing too fast,lack of commitment,and ethical failure are important reasons for new business failures.

Question 58

A significant problem that faces family business is the succession problem,which is the transfer of leadership from one generation to the next.

Question 59

Family businesses must solve the same problems of other small or large businesses.

Question 60

The family business feud occurs when members of the controlling family get into disagreements about work responsibilities or finances but not business strategy or operating approaches.

Question 61

Activities that focus on establishing the business,getting customers,and finding financing occur in the breakthrough stage of the life cycle of entrepreneurial firms.

Question 62

To stay customer focused,a new venture should effectively address questions such as: Who is your customer? How will you price your product or service for the customer? How much does it cost to attract a customer? How much does it cost to support and retain a customer?

Question 63

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

Question 64

Activities that focus on working on finances,becoming profitable and growing occur in the birth stage of the life cycle of entrepreneurial firms.

Question 65

Not devoting enough time to the requirements of running a competitive business is a reason for the high failure rate of new businesses.

Question 66

Activities that focus on refining the strategy,continuing growth,and managing for success occur in the growth stage of the life cycle of entrepreneurial firms.

Question 67

At the breakthrough stage of the life cycle of entrepreneurial firms,the business model begins to work well,growth is experienced,and the complexity of managing the business operation expands significantly.

Question 68

A first-mover advantage comes from being first within the industry to outsource non-core business activities or to embrace social responsibility.

Question 69

The entrepreneur's ability to identify a market niche that is being missed by other established firms or to identify a new market that has not yet been discovered by existing firms are important avenues of new venture creation.

Question 70

In creating a new venture,the entrepreneur should have good ideas and the courage to give them a chance.

Question 71

The life cycle of entrepreneurial firms poses different management challenges at each stage and requires different management competencies at each stage.

Question 72

A first-mover advantage occurs by exploiting a niche or entering a market before competitors.

Question 73

Falling prey to the temptations of fraud,deception,and embezzlement is a reason for the success of new businesses.

Question 74

At the maturity stage of the life cycle of entrepreneurial firms,the management challenge is one of coping with growth and takeoff.

Question 75

At the birth stage of the life cycle of entrepreneurial firms,the management challenge is one of fighting for existence and survival.

Question 76

Not taking the time to consolidate a position,fine-tune the organization,or systematically meet the challenges of growth is a reason for the high failure rate of new businesses.

Question 77

In the birth stage of the life cycle of entrepreneurial firms,the entrepreneur struggles to get the new venture established and to survive long enough to test the viability of the underlying business model in the marketplace.

Question 78

A business plan should include an executive summary,industry analysis,company description,products and services description,market description,marketing strategy,operations description,staffing description,financial projection,capital needs,and milestones.

Question 79

At the breakthrough stage of the life cycle of entrepreneurial firms,the management challenge is one of investing wisely and staying flexible.

Question 80

In the maturity stage of the life cycle of entrepreneurial firms,the entrepreneur experiences the advantages of market success and financial stability,while also facing continuing challenges of meeting the needs for professional management skills.