Mind-tap Quizzes 1-8

The entrepreneurial ego can cause the entrepreneur to a. have a sense of pessimism. b. take too few risks. c. take characteristics that usually lead to success to the extreme. d. ignore government regulations.

c. take characteristics that usually lead to success to the extreme.

In restructuring corporate thinking, top management should a. make the entrepreneur follow strict corporate guidelines. b. create diversity and order in strategic activities. c. identify potential entrepreneurs after an innovation program is in operation. d. promote entrepreneurship through experimentation.

d. promote entrepreneurship through experimentation.

One reason that corporate entrepreneurship has become popular is because it allows corporations to tap the innovative talents of the personnel. a. True b. False

a. True

Private placement is a method of raising capital through the private placement of securities. a. True b. False

a. True

Sophisticated investors are wealthy individuals who invest more or less regularly in new and/or early- and late-stage ventures. a. True b. False

a. True

Sources of debt financing include trade credit, accounts receivables, factoring, and finance companies. a. True b. False

a. True

The cognitive ability of entrepreneurs to acquire and transform information has yet to be studied. a. True b. False

a. True

The first step in planning a strategy of corporate entrepreneurship is sharing the vision of innovation that executives wish to achieve. a. True b. False

a. True

The left hemisphere of the brain is responsible for logical and analytical skills. a. True b. False

a. True

Collective entrepreneurship, as a concept, refers to a. the collective spirit of innovation that resides in the firm's founder. b. the joint recognition of the CEO and CFO as champions of innovation. c. entrepreneurial thinking that is diffused throughout the company. d. socialist enterprising

c. entrepreneurial thinking that is diffused throughout the company

Which of the following as a factor contributing to new-venture failure? a. family issues. b. good management/poor product. c. product/market problems. d. personality clashes.

c. product/market problems.

Transformational triggers in a corporate entrepreneurial environment initiates the need for a. achieving higher productivity standards. b. laying off workers. c. strategically adapting to change. d. changing company location.

c. strategically adapting to change.

Entrepreneurial stress can be caused by having a type A personality which can be defined as: a. taking too little responsibility. b. getting away from business. c. taking things personally. d. having a chronic sense of time urgency

d. having a chronic sense of time urgency

Check My Work The phase of the creative process when the idea or solution the individual is seeking is discovered is the a. incubation process. b. background or knowledge accumulation. c. evaluation and implementation. d. idea experience

d. idea experience

The main objective of Regulation D is to a. regulate new small-business investment. b. increase investment in private placement. c. reduce debt financing by small enterprises. d. make it easier and less expensive for small ventures to sell stock.

d. make it easier and less expensive for small ventures to sell stock.

Groups that function outside traditional lines of authority permitting rapid turnaround of new ideas as well as instilling a high level of group loyalty are called: a. multiple approaches. b. strategic innovators. c. champions. d. skunk works

d. skunk works

The statement, "with every new venture launched, new and unintended opportunities often arise," would be associated with: a. the entrepreneurial principle b. the Dilbert principle c. the opportunity principle d. the corridor principle

d. the corridor principle

The Franchise Disclosure Document (FDD) is a legally required disclosure document that must be presented to potential franchisees during presale discussions. a. True

a

characteristics of the "dark side" of entrepreneurship:

a sense of distrust an external optimism a desire for success

common myths about entrepreneurs:

a. Entrepreneurs are academic and social misfits. c. All you need is money to be an entrepreneur. d. Entrepreneurs are doers, not thinkers.

Incongruities are gaps or differences between expectations and reality. a. True b. False

a. True

Individuals may avoid corporate entrepreneurial behavior due to the impact of traditional management techniques. a. True b. False

a. True

Informal risk capitalists are often referred to as "business angels." a. True b. False

a. True

Innovation is the process by which entrepreneurs convert opportunities into marketable ideas. a. True b. False

a. True

Many ways of developing corporate entrepreneurship exist. Decide if the following action would help develop corporate entrepreneurship (True) or not (False). Encourage a bias for action. a. True b. False

a. True

Many ways of developing corporate entrepreneurship exist. Decide if the following action would help develop corporate entrepreneurship (True) or not (False). Encourage brainstorming. a. True b. False

a. True

The four phases in the creative process in order are a. background or knowledge accumulation, incubation, idea experience, and evaluation and implementation. b. incubation, background or knowledge accumulation, idea experience, and evaluation and implementation. c. evaluation and implementation, idea experience, incubation, and background or knowledge accumulation. d. idea experience, background or knowledge accumulation, incubation, and evaluation and implementation.

a. background or knowledge accumulation, incubation, idea experience, and evaluation and implementation

The most common source of debt financing is a. commercial banks. b. factoring. c. trade credit. d. finance companies.

a. commercial banks.

The macro view of entrepreneurship presents factors exhibiting a strong a. external locus of control. b. environmental locus of control. c. internal locus of control. d. contemporary locus of control.

a. external locus of control

Which of the following terms refers to the systematic evolution of a product or service into newer or larger markets? a. incremental innovation b. radical innovation c. collective entrepreneurship d. strategic management

a. incremental innovation

One of the advantages of public offerings is a. liquidity. b. disclosure. c. requirements. d. cost.

a. liquidity

Which of the following is not one of the phases in the creative process? a. preliminary investigation b. background or knowledge accumulation c. evaluation and implementation d. the incubation process

a. preliminary investigation

Which of the following may be the greatest risk to the well-being of the entrepreneur? a. psychic risk b. financial risk c. social risk d. family risk

a. psychic risk

Which of the following terms refers the inaugural breakthroughs launched from experimentation and determined vision? a. radical innovation b. incremental innovation c. strategic management d. collective entrepreneurship

a. radical innovation

The terms upside gain and downside loss refer to the profits the business can make and the losses it can suffer. a. True b. False

a. true

A loss orientation toward grief recovery in dealing with failure can sometimes lessen negative emotional reactions. a. True b. False

b. False

According to the Model of Entrepreneurship Motivation, the entrepreneur's expectations are not compared with the actual or perceived outcomes of the firm. a. True b. False

b. False

Equity financing is money invested in the venture with legal obligations to repay the principal amount of interest or interest rate on it. a. True b. False

b. False

The "dark side" of entrepreneurship refers to the stress that entrepreneur's experience. a. True b. False

b. False

Which of the following statements is not true of venture capitalists? a. They take a long time to raise venture capital. b. They are interested in trying to manage firms themselves. c. They want the entrepreneur and the management to run the company. d. They expect high return on investments

b. They are interested in trying to manage firms themselves.

All of the following are reasons for the growth of corporate entrepreneurship except a. a sense of distrust in the traditional methods of corporate management. b. a desire to dramatically increase profitability. c. an exodus of some of the best people out of corporations. d. a rapidly growing number of new and sophisticated competitors.

b. a desire to dramatically increase profitability

The macro view can be broken down into which three areas? a. displacement, trait, and financial b. environmental, financial, and displacement c. entrepreneurial trait, opportunity, and strategic d. financial/capital, strategic, and opportunity

b. environmental, financial, and displacement

The individual who buys the franchise is the a. franchisette. b. franchisee. c. franchatter. d. franchisor.

b. franchisee.

The person who sells the franchise is usually required to do all of the following except: a. provide professional management training to the unit's staff. b. pay a fee. c. help out with financial assistance. d. provide continuing aid and a guidance to the person buying the franchise.

b. pay a fee.

Three specific phases that a new venture goes through are a. beginning start-up, start-up, ending start-up. b. prestart-up, start-up, poststart-up. c. prestart-up, start-up, evaluation. d. start-up, poststart-up, evaluation.

b. prestart-up, start-up, poststart-up.

Mountain gap strategies refer to: a. unique products b. unique markets c. unique locations d. unique resources

b. unique markets

A "gazelle" is a

business establishment with at least 20 percent sales growth every year for five years

Which of the following helps account for the rise of interest in corporate entrepreneurship? a. A general increase in the number of competitors. b. A decrease in the number of sophisticated competitors. c. An increase in corporations losing some of their best people. d. An increase government regulation of small entrepreneurs.

c. An increase in corporations losing some of their best people.

Who must negotiate a final deal to purchase a business? a. A lawyer b. A CPA c. The potential buyer

c. The potential buyer

Which of the following statements best describes a "gazelle?" a. a business with no sales growth b. an inventor who turned business person c. a business with at least 20 percent growth every year d. a business that has acquired numerous firms

c. a business with at least 20 percent growth every year

Areas of risk to the entrepreneur include a. financial, product, market b. psychic, social, physical. c. career, family, psychic. d. family, business, social

c. career, family, psychic

A __________ is a statement of ethical practices or guidelines to which an enterprise adheres. a. code of honor b. code of silence c. code of conduct d. code of ethics

c. code of conduct

An approach developed as a criteria selection list from which entrepreneurs can gain insights into the viability of their venture is the a. time-essence of a venture approach. b. marketability feasibility approach. c. feasibility criteria approach

c. feasibility criteria approach

What are the four types of innovation? a. synthesis, extension, retention, analysis b. analysis, synthesis, duplication, retention c. invention, extension, synthesis, duplication d. extension, retention, analysis, duplication

c. invention, extension, synthesis, duplication

The incubation process involves which of the following? a. changing jobs b. talking with friends c. letting the subconscious work d. working harder

c. letting the subconscious work

When one designs a unique good or service, the individual is said to have used a(n) ____approach to starting the business. a. old-old b. old-new c. new-new

c. new-new

Michael Gerber, the author of The E-Myth, explains that the failure of most small businesses is due to a. owners being more managerial rather than technical b. owners being more entrepreneurial rather than managerial c. owners being more technical rather than entrepreneurial d. owners being more entrepreneurial rather than technical

c. owners being more technical rather than entrepreneurial

Which of the following is not a type of debt financing? a. finance companies b. trade credits c. private placement d. accounts receivables

c. private placement

Which of the following is a type of equity financing? a. loan without warrants b. loan with warrants c. convertible debentures d. common stock

d. common stock

The displacement school of thought can be divided into which three groups? a. environmental, financial, and economic b. political, cultural, environmental c. cultural, environmental, and financial d. economic, cultural, and political

d. economic, cultural, and political

Market feasibility analysis relies on a. the entrepreneur's vision. b. organizational competence. c. venture capital. d. general economic trends and competitor data.

d. general economic trends and competitor data.

Many entrepreneurs lack _____ for their new venture. a. intelligence b. innovation c. commitment d. objectivity

d. objectivity

Advantages of debt financing include all of the following except: a. no relinquishment of ownership. b. potential greater return on equity. c. low interest rates that justify the opportunity cost. d. regular interest payments.

d. regular interest payments.

Producing and selling a drug that will reduce heart attacks but failing to complete all of the paperwork that must be filed with the government prior to selling the product

ethical but illegal

A ____ is a system of distribution that enables a supplier to arrange for a dealer to handle a specific product or service under certain mutually agreed upon conditions.

franchise

A decision to sell toys that pass minimum safety standards but can often result in minor accidents to children is an example of a(n)

legal and unethical decision

Generally, entrepreneurial stress is due to

the discrepancy between the entrepreneur's expectations and the ability to meet demands

The decision to behave entrepreneurially is the result of the interaction of:

the individual's personal entrepreneurial mind-set and an opportunity.

A code of conduct is a statement of ethical practices or guidelines to which an enterprise adheres. a. True b. False

true

Many ways of developing corporate entrepreneurship exist. Decide if the following action would help develop corporate entrepreneurship (True) or not (False). Allow bootlegging of ideas. a. True b. False

true

Obtaining inside information from another brokerage that results in the entrepreneur netting more than $2 million is...

unethical and illegal

Offering a member of the city council $100,000 to vote to give the entrepreneur the local cable television franchise

unethical and illegal

The micro view is divided into which three theories?

venture opportunity theory, entrepreneurial, strategic

During the past ten years, new business incorporations averaged nearly _______________ per year.

600,000

The "corridor principle" states that entrepreneurs often get stuck on one idea.

FALSE

Franchisees have the option of using the logo and symbols of the franchisor. a. True b. False

FALSE!!

Entrepreneurs are high risk takers

FALSE!!!

The generation of the twenty-first century may become known as generation E because it is becoming the most entrepreneurial generation since the Industrial Revolution

TRUE

The four phases of the creative process are knowledge accumulation, incubation, idea experience, and evaluation. a. True b. False

a. True

Many ways of developing corporate entrepreneurship exist. Decide if the following action would help develop corporate entrepreneurship (True) or not (False). Provide feedback on performance. a. True b. False

a. True

Obtaining external financing is considered one of the major types of problems for a new venture during its first year. a. True b. False

a. True

Using the failure prediction model discussed in the chapter, the risk of failure can be reduced by: a. using less debt as initial financing and generating revenue in the initial stages. b. using more debt as initial financing and generating less revenue in the initial stages. c. using more revenue to enhance more debt in the initial stage.

a. using less debt as initial financing and generating revenue in the initial stages.

Ethics represents a set of principles prescribing a behavioral code that does not include moral duty and obligations. a. True b. False

b. False

Many ways of developing corporate entrepreneurship exist. Decide if the following action would help develop corporate entrepreneurship (True) or not (False). Encourage structured activity. a. True b. False

b. False

Many ways of developing corporate entrepreneurship exist. Decide if the following action would help develop corporate entrepreneurship (True) or not (False). Set implicit goals. a. True b. False

b. False

Most entrepreneurs are well schooled in the technology associated with their ventures. a. True b. False

b. False

Skunk works are project groups that work within the traditional lines of authority. a. True b. False

b. False

When should a potential franchisee receive the FDD (Franchise Disclosure Document)? a. two days before signing a contract or paying any money b. at least ten days before signing a contract or paying any money

b. at least ten days before signing a contract or paying any money

Secretly working on new ideas on company time as well as on personal time is referred to as a. interactive learning. b. bootlegging. c. skunk works.

b. bootlegging

Which of the following terms is not synonymous with social lending? a. crowdfunding b. commercially viable lending c. banking 2.0 d. peer-to-peer (P2P) lending

b. commercially viable lending

The second step in planning a strategy of entrepreneurship for the enterprise is a. applying the exact tools of the entrepreneur. b. developing and encouraging innovation. c. identifying specific objectives. d. sharing the vision of innovation

b. developing and encouraging innovation.

Which of the following are sources of innovation? a. industry changes and extension b. unexpected occurrences and incongruities c. synthesis and technology d. duplication and processes

b. unexpected occurrences and incongruities

An agreement not to compete is also known as a. a deferential sale of business clause. b. a waiver of competition clause. c. a legal restraint of trade.

c. a legal restraint of trade.

Looking for different or unorthodox relationships among elements and people is one way to develop creativity. How might a person develop this capacity? a. by perceiving in a restraining mode b. by perceiving in a retinal mode c. by perceiving in a relational mode d. by perceiving in a restructured mode

c. by perceiving in a relational mode

Which of the following are specific factors identified by researchers, that organizations can concentrate on in structuring an entrepreneurial climate. a. rewards, resources, innovation, and vision b. skunk works, multiple approaches, and vision c. radical innovation, incremental innovation, and vision d. top management support, time, resources, rewards, and organizational boundaries

d. top management support, time, resources, rewards, and organizational boundaries

Which of the following is an obstacle to corporate entrepreneurship? a. rewards based upon results b. a system of feedback and positive reinforcement c. orientation to the market d. traditional management techniques

d. traditional management techniques

Which of the following would not be considered as encouraging to an entrepreneurial environment? a. top management sponsorship of entrepreneurship b. identifying potential entrepreneurs c. promotion of entrepreneurship through experimentation d. uniform compensation

d. uniform compensation