Chapter 1 Quiz

A benefit corporation (or B-Corp) is an organization certified by the nonprofit B Lab to ensure strict standards of social and environmental performance, accountability, and transparency are met. According to the book, which of the following statements is true?

"Buy one, give one" promotions can generate sales while also raising awareness of social issues.

What percentage of U.S. businesses are family-owned or controlled by a family?

80% to 90%

Discuss "social entrepreneurship" and describe the differences between entrepreneurial ventures and nonprofit organizations.

There has been some debate as to how to define social entrepreneurship. Some argue that all types of entrepreneurship are social, while others define it as purely an activity of the nonprofit sector. These blurred lines imply that entrepreneurs are forced to choose between making a social or an economic impact. We contend that social entrepreneurs can do both. It is possible to address a social issue and make a profit—keeping a company economically stable ensures its capability consistently meets the needs of its customers without relying on fundraising or other methods to keep it afloat. We therefore define social entrepreneurship as the process of sourcing innovative solutions for particular problems.

Successful entrepreneurs tend to follow this approach to collaboration.

They collaborate with both potential customers and competitors.

Social entrepreneurship encompasses only not-for-profit ventures.

True

Tony is a manager for a company that builds solar panels. In his position as a manager, Tony used the feedback from his team members as the basis of a plan for the company to start installing the solar panels, as well, in order to enhance the company's competitive position and profitability. Tony is an example of a(n)

corporate entrepreneur

Richard Branson's expansion of Virgin to include railway, music, media, and banking industries is an example of

serial entrepreneurship

Richard Branson's expansion of Virgin to include railway, music, media, and banking industries is an example of ______.

serial entrepreneurship

Sam is tired of seeing injustice and mistreatment of children in inner cities and has an innovative idea to help them develop self-esteem. Sam is an example of a

social entrepreneur

Entrepreneurs are traditionally extreme risk-takers.

False

Joan has pursued seven money-making ventures over the past ten years ranging from retail storefronts to mobile app development. Joan is a "serial entrepreneur."

True

Unlike necessity-based entrepreneurs, opportunity-based entrepreneurs freely make their own choice to get involved in a business.

True

Which of the following led to entrepreneurship regaining its popularity over the last decades of the 20th century?

all of these

Buying an existing small business is not considered entrepreneurship.

false

Social entrepreneurs

seek innovative solutions to social and environmental problems

According to the 2015/16 GEM report, the percentage of entrepreneurs in the United States has declined to 3%—the lowest on record.

False

Risk cannot be averted by an entrepreneur's activity or attitude.

False

Robert has a business that he wants to pass down to others in his family to run. Robert has ______.

a family enterprise

Scientific evidence has proven that a specific set of traits distinguishes entrepreneurs from non-entrepreneurs.

False

The authors define entrepreneurship as ______.

a discipline that seeks to understand how opportunities are discovered, created, and exploited, by whom, and with what consequences

Michael is a franchise restaurant owner. Which of the following best describes his franchising costs?

a franchise fee to start, a monthly royalty as a percentage of sales, and other operational costs

Total entrepreneurial activity (TEA) is the percentage of the population of each country between he ages of 18 and 64, who are either

a nascent entrepreneur or owner-manager of a new business

During the period between 1920 and 1975, which of the following did NOT contribute to the decline of the traditional entrepreneur?

an increase in production due to the expansion of the middle class

Rahul wants to start a spice business but wants a secure framework with experts in property rights, accounting, law, investment banking, and technology. Of the conditions that need to be put in place for the Entrepreneurial Ecosystem, he needs

commercial and legal infrastructure

This is the discipline that seeks to understand how opportunities are discovered, created, and exploited, by whom, and with what consequences.

entrepreneurship

Individuals who are still active in business for over three and a half years are known as

established business owners

According to the authors, entrepreneurship is best taught as a linear process that will lead to a specific destination.

false

B-Corp certification recognizes organizations that achieve five or more years of consistent profitable growth.

false

Bill Gates was an overnight success because it took only three months to become a success.

false

Entrepreneurship is reserved for startups

false

According to the text, why would some organizations not be enthusiastic about employees acting entrepreneurially inside a company?

fear that they will leave the company and start their own business

What is the process of creating new products, ventures, processes, or renewal within large organizations?

intrapreneurship

To be certified as a benefit corporation (or B-Corp), an organization is rated on all the following except

it global mission

The entrepreneurial method requires consistent practice so that ______ can be continuously developed and applied to future endeavors.

knowledge and expertise

Which of the following is NOT a condition for small and medium businesses to flourish in a country?

large population size

What is the survival rate of family businesses transitioning from the first to the second generation?

less than 30%

Research revealed what percentage of Inc. 500 wrote formal business plans prior to launching their companies?

less than 50%

______ are small, short-term loans often associated with entrepreneurs in developing countries.

microloans

Individuals who have set up a business they will own or co-own, which is less than three months old and has not yet generated wages or salaries for the owners, are known as ______.

nascent entrepreneurs

Which of the following is NOT an aspect of the Entrepreneurship Ecosystem described in the chapter?

open-access patent databases

Sally decided to look into buying a franchise as her entrance into entrepreneurship. Which of the following is NOT a benefit of franchising?

potential competition from other franchise owners

The nonprofit 1001 Fountains for Tomorrow, whose goal is to provide safe drinking water for small rural villages in Cambodia, is an example of

social entrepreneurship

A temporary organization in search of a scalable business model is known as a(n) ______.

startup

Effectuation is the theory that

the future is unpredictable yet controllable

During the period between 1920 and 1975, which of the following did NOT contribute to the decline of the traditional entrepreneur?

the transition toward a knowledge-based economy

Contemporary researchers focus on how entrepreneurs

think and act

An entrepreneur can own his or her own business or work in a corporation with an entrepreneurial spirit.

true

Corporate entrepreneurs work within only large organizations whereas entrepreneurs inside can exist in any type of organization, big or small.

true