Chapter 6 - SB

The situation in which an individual initiates and builds an organization pursuing a lucrative opportunity is called ______.

entrepreneurship

When an enterprising individual pursues a lucrative opportunity, initiating and building an organization rather than being only a passive part of one, it is called ______.

entrepreneurship

When entrepreneurs start their enterprises and then capitalize on an unexpected opportunity, it is called the ______ effect.

side street

A lasting source of competitive advantage for an entrepreneur that involves building relationships and networking with people is ______ capital.

social

In what ways does entrepreneurship differ from management? (Choose every correct answer.) Multiple select question. Entrepreneurs often rent or use assets on a temporary basis while managers usually prefer to own assets. Entrepreneurs use networks of contacts while managers have more clearly defined authority and responsibility. Managers operate with less formal hierarchy, and engage in activities that not all entrepreneurs do. Managers are often slower to act and tend to avoid risk while entrepreneurs are quicker to act and actively manage risk.

Entrepreneurs often rent or use assets on a temporary basis while managers usually prefer to own assets. Entrepreneurs use networks of contacts while managers have more clearly defined authority and responsibility. Managers are often slower to act and tend to avoid risk while entrepreneurs are quicker to act and actively manage risk.

In general, successful entrepreneurs have good knowledge and skills in which of the following? (Choose every correct answer.) Multiple select question. Business Networking Management Psychology

Business Networking Management

The e-commerce business model in which a website is paid by companies that promote their goods or services on the website is the ______ model.

advertising support

A group of people with business experience who can help guide an entrepreneur is called a(n) ______.

advisory board

Sites such as Zazzle.com, which pay commissions to other sites to bring business to them, are using the ______ model for e-commerce.

affiliate

A great product, a viable market, and ______ are essential ingredients to entrepreneurial success.

good timing

An entrepreneurial venture seeks to have ______.

growth and high profitability

In a franchise agreement, the franchisor is the ______ and the franchisee is the ______.

innovator; operator

A website, such as eBay, that brings buyers and sellers together and charges a commission is an example of the ______ model of e-commerce.

intermediary

The first-time sale of federally registered and underwritten shares of company stock to the public is called a(n) ______.

initial public offering

An important model for characterizing new ventures categorizes them by their levels of ______.

innovation and risk

When Amazon.com and online travel agents charge a fee for goods or services, they are using the ______ fee model of e-commerce.

transaction

The e-commerce business model in which a company charges for goods or services is the ______ model.

transaction fee

Companies without much of a track record tend to have

trouble lining up lenders, investors, and even customers

Business incubators are often associated with a(n) ______.

university

Intrapreneurs are individuals who create new ventures ______.

within an existing organization using their company's resources

The tendency of an organization to identify and capitalize successfully on opportunities to launch new ventures by entering new or established markets with new or existing goods or services is called ______.

entrepreneurial orientation

A new business that has growth and high profitability as primary objectives is called a(n) ______.

entrepreneurial venture

Independence, profit potential, and a better quality of life are reasons individuals become ______.

entrepreneurs

Using market-based methods to leverage resources in order to stimulate social change is a form of social ______.

entrepreneurship

One of the key planning factors that entrepreneurs must think through carefully in creating a business plan is risk and ______.

reward

Among its various benefits, the value of a plan is that it helps the entrepreneur reduce ______ and maximize ______.

risk; reward

An important factor affecting the success of intrapreneurship is ______.

scale

The _______ street effect occurs when an entrepreneurial opportunity is discovered unexpectedly while pursuing another opportunity.

side

Project teams that produce a new product within a predetermined time frame and without fear of team members losing their jobs if the new product fails are called ______.

skunkworks

A(n) ______ generally has fewer than 500 employees and expects moderate sales and profits.

small business

Traditionally driven by the government and big defense contractors, the ______ market represents a potential future opportunity for entrepreneurs.

space transport

The e-commerce business model based on charging a monthly or annual fee for access to a website is the ______ model.

subscription

When a newspaper company charges a monthly or annual fee to access its website content, the company is using the ______ model for e-commerce.

subscription

Rapid growth leads to increased hiring which then requires entrepreneurs to do what?

Raise prices

Demographic changes

Smartphones that are easier for older people to use

Which of the following could explain why entrepreneurs fail to use their resources wisely? (Choose every correct answer.) Multiple select question. Entrepreneurs fail to spend funds on advertising. Start-up capital is used on expensive locations. They are too willing to delegate less important tasks. Entrepreneurs fail to maintain control over their resources.

Start-up capital is used on expensive locations. Entrepreneurs fail to maintain control over their resources.

Technological discoveries

Start-ups in microcomputers and nanotechnology

Government initiative and rule changes

Stricter energy efficiency requirements

Innovativeness

Supports new ideas and experimentation and shows a willingness to depart from existing practices

Which of the following is a crucial nonfinancial resource?

A top management team

When it comes to how a new business is viewed, people's judgment of which of the following characteristics of the company make up its legitimacy? (Choose every correct answer.) Multiple select question. Acceptance Financial projections Appropriateness Desirability

Acceptance Appropriateness Desirability

Proactiveness

Acts in anticipation of future problems and opportunities

Lifestyle and taste changes

An increasing desire by consumers to protect the environment

Which of the following are typical ways entrepreneurs can exploit opportunities? (Choose every correct answer.) Multiple select question. By exploring domains that are avoided by large companies By introducing goods or services that capture the market because they are simpler or more convenient By using the same approach that large companies use to market goods or services By operating as a franchisee of an established business

By exploring domains that are avoided by large companies By introducing goods or services that capture the market because they are simpler or more convenient

What are high-potential future opportunities for entrepreneurship? (Choose every correct answer.) Multiple select question. Green energy Cryptocurrency Artificial intelligence Analog photography

Green energy Cryptocurrency Artificial intelligence

Which of the following are elements of social capital? (Choose every correct answer.) Multiple select question. Having a good reputation Being part of a network of people Protecting useful information Providing venture financing

Having a good reputation Being part of a network of people

What does the entrepreneurial strategy matrix do? (Choose every correct answer.) Multiple select question. Helps determine the initial number of employees required Specifies which products and services will be successful Helps entrepreneurs decide if their ventures suit their objectives Helps identify effective and ineffective strategies

Helps entrepreneurs decide if their ventures suit their objectives Helps identify effective and ineffective strategies

Which of the following statements about IPOs is true?

IPOs are federally registered.

Entrepreneurs often hesitate to ______ work to others as their business grows.

delegate

Business partners help each other in which ways? (Choose every correct answer.) Multiple select question. By multiplying risk By accessing capital By sharing expertise By spreading the workload

By accessing capital By sharing expertise By spreading the workload

Competitive aggressiveness

Challenges competitors directly and intensely

Which of the following are specific key planning factors, in addition to financial elements, that entrepreneurs must think through carefully? (Choose every correct answer.) Multiple select question. Context Competition Legacy People

Context Competition People

Which of the following are specific key planning factors, in addition to financial elements, that entrepreneurs must think through carefully? (Choose every correct answer.) Multiple select question. Context Legacy People Competition

Context People Competition

A business plan is an opportunity for entrepreneurs to do which of the following? (Choose every correct answer.) Multiple select question. Guarantee that the new business will be successful. Convince others that the entrepreneur understands the process of starting a business. Determine ways to reduce risk and maximize rewards. Persuade customers to pay for the business's goods or services.

Convince others that the entrepreneur understands the process of starting a business. Determine ways to reduce risk and maximize rewards.

Which of the following are factors that influence the success or failure of business start-ups? (Choose every correct answer.) Multiple select question. Public relations Economic environment Hierarchy Management-related challenges

Economic environment Management-related challenges

Which group is more likely to rent assets on a temporary basis than own them?

Entrepreneurs

Which of the following are myths about entrepreneurship? (Choose every correct answer.) Multiple select question. Entrepreneurs are gamblers. Entrepreneurs tend to be healthier than those who work for others. The hard part of starting a business is building the business. Entrepreneurs are their own bosses who don't need to answer to anyone.

Entrepreneurs are gamblers. Entrepreneurs are their own bosses who don't need to answer to anyone.

Which of the following are myths about entrepreneurship? (Choose every correct answer.) Multiple select question. Entrepreneurs tend to be healthier than those who work for others. The hard part of starting a business is building the business. Entrepreneurs are their own bosses who don't need to answer to anyone. Entrepreneurs are gamblers.

Entrepreneurs are their own bosses who don't need to answer to anyone. Entrepreneurs are gamblers.

Which of the following statements about the early stages of an entrepreneurial venture is true?

Entrepreneurs are unable to specialize.

Which of the following statements about the failure of new start-ups is true?

Estimates of failure rates indicate that more start-ups fail than succeed.

True or False As a business grows, entrepreneurs often quickly delegate work they had been doing previously.

False

Independent action

Grants people the freedom to exercise their creativity and champions promising ideas that they develop.

Which are ways a social enterprise might advance social well-being? (Choose every correct answer.) Multiple select question. Improving health-care access Encouraging responsible consumption Revitalizing local neighborhoods Creating shareholder value

Improving health-care access Encouraging responsible consumption Revitalizing local neighborhoods

Which of the following are favorable factors in increasing entrepreneurial activity? (Choose every correct answer.) Multiple select question. Improving performance of the stock market Increases in the money supply Reductions in the supply of bank loans Real economic growth

Improving performance of the stock market Increases in the money supply Real economic growth

Which of the following is NOT a factor that influences the success or failure of a new venture/business start-up?

Institutional corruption

Risk taking

Is willing to commit significant resources to ventures into the unknown

Which of the following are characteristics of an entrepreneurial personality? (Choose every correct answer.) Multiple select question. Status quo and interdependence Motivation to excel Leadership Commitment and determination

Motivation to excel Leadership Commitment and determination

Which of the following present opportunities for new business ideas? (Choose every correct answer.) Multiple select question. Steady sales of an existing product Natural disasters Lifestyle and taste changes Technological discoveries

Natural disasters Lifestyle and taste changes Technological discoveries

What role does the economic environment play in the success of entrepreneurial ventures?

The economic environment affects the success of entrepreneurial ventures by affecting the supply of capital and prospective opportunities.

Which of the following are factors that typically motivate entrepreneurs as they start a business? Multiple select question. The potential for profit The challenges of the business The sense of satisfaction the business generates The job security the business provides

The potential for profit The challenges of the business The sense of satisfaction the business generates

Which of the following are reasons entrepreneurs fail to use formal controls? (Choose every correct answer.) Multiple select question. They have an aversion to record keeping. Their time is consumed with running the business. They are hyper-vigilant about all aspects of the business. They base pricing decisions on analysis of costs rather than intuition.

They have an aversion to record keeping. Their time is consumed with running the business.

When advertisers pay a website operator to access the demographic group that visits the site, they are using the ______ support e-commerce model.

advertising

The e-commerce business model in which an organization drives business to its own site by paying commission to other sites is known as the ______ model.

affiliate

A group of people who are willing to provide business insights and professional connections are known as ______.

an advisory board

Informal work on a project that is of an employee's own choosing and not officially assigned is called ______.

bootlegging

A formal planning step that focuses on the entire venture and describes all the elements involved in starting it is called a(n) ______.

business plan

Entrepreneurs can find opportunities by entering domains big companies avoid and introducing products that are ______.

cheaper

The difference between the transaction fee model and the intermediary model of e-commerce is that the transaction fee model charges a fee ______, whereas the intermediary model charges a fee ______.

for goods and services; to bring buyers and sellers together

An entrepreneurial alliance between an innovator who creates at least one successful store and wants to grow the business and a partner who manages a new store of the same type in a new location is called a(n) ______.

franchise

Offering payoffs from a project in return for support, time, money, and other resources is called ______.

horse trading

A(n) ______ is when a company wants to raise capital through federally registered and underwritten sales of shares in the company.

initial public offering

One of the essential characteristics that sets entrepreneurs apart from inventors, managers, and promoters is an effective combination of ______.

innovativeness and business management skills

New venture creators who work inside an existing company are called ______.

intrapreneurs

People's judgment of a company's desirability stemming from company goals and methods that are consistent with societal values is called ______.

legitimacy

In the model that conceptualizes entrepreneurial ventures, most small business ventures are categorized as ______.

low in innovation and high in risk

Getting support for a project from peers before seeking formal approval from higher levels in a company is known as ______.

making cheerleaders

Nonfinancial resources that are important to the success of a new business are business legitimacy, networks, advisory boards, and the top ______ teams.

management

The two major liabilities of start-up companies are ______.

newness and smallness

The entrepreneurial strategy matrix helps entrepreneurs think about their venture and whether it suits their ______.

objectives

An analysis that includes a description of the good or service, an assessment of the entrepreneur, a specification of activities and resources needed to translate the idea into a viable business, and the sources of capital is called a(n) ______ analysis.

opportunity

The first formal step in creating a business plan that helps determine whether or not to act is a(n) ______.

opportunity analysis

The most dangerous risk in intrapreneurship is the risk of ______.

overreliance on a single project

Two people who go into business together are called ______.

partners

Entrepreneurs often have to ______.

perform more than one business function

In order for an entrepreneurial enterprise to survive the death of its founder, the company needs to have a(n) ______ in place early on.

plan for succession

Since World War II, small entrepreneurial businesses have created 95% of all ______ in the United States.

radical innovation

Which formal control system do entrepreneurs commonly fail to utilize?

record keeping

Which of the following do start-ups contribute to the economy? (Choose every correct answer.) Multiple select question. Increased productivity Wage growth Moderate profits Stock market value

Increased productivity Wage growth

Which of the following do start-ups contribute to the economy? (Choose every correct answer.) Multiple select question. Increased productivity Wage growth Stock market value Moderate profits

Increased productivity Wage growth

What are challenges associated with rapid entrepreneurial growth? (Choose every correct answer.) Multiple select question. Competing with smaller firms Increase in revenue Increasing expenses Competing with bigger firms Limits to founders' capacities

Increasing expenses Competing with bigger firms Limits to founders' capacities

Which of the following statements about successful entrepreneurs and innovators are true? (Choose every correct answer.) Multiple select question. Inventors may be highly creative. Entrepreneurs need to have good business management skills. Entrepreneurs do not need innovativeness. Inventors often lack good business management skills.

Inventors may be highly creative. Entrepreneurs need to have good business management skills. Inventors often lack good business management skills.

Which of the following characterizes a small business?

It does not have many innovative practices.

Which of the following describe typical features of a business incubator? (Choose every correct answer.) Multiple select question. It offers shared costs. It provides an unprotected, competitive environment. It is located in an industrial park. It is associated with a university. It offers high rents.

It offers shared costs. It is located in an industrial park. It is associated with a university.

Which of the following are recommended practices for helping ensure the survival of a family-managed business? (Choose every correct answer.) Multiple select question. Make sure that family members in the business work as hard as other employees. Someone outside the family and the business should help plan succession. Limit the number of family members in the business to two persons. Have at least one key position be filled by a nonfamily member.

Make sure that family members in the business work as hard as other employees. Someone outside the family and the business should help plan succession. Have at least one key position be filled by a nonfamily member.

Which of the following present opportunities for new business ideas? (Choose every correct answer.) Multiple select question. Natural disasters Technological discoveries Lifestyle and taste changes Steady sales of an existing product

Natural disasters Technological discoveries Lifestyle and taste changes

Which of the following are reasons that survival may be difficult for a small start-up company? (Choose every correct answer.) Multiple select question. Serving too large a market No track record Difficulty finding lenders Lack of competition Lack of customers

No track record Difficulty finding lenders Lack of customers

Which entrepreneurial trait involves an intimate knowledge of customers' needs and the desire to create value?

Opportunity obsession

People who become successful entrepreneurs usually have which characteristics?

They understand and have skills in management, business, and networking.

Which of the following are purposes for creating a business plan? (Choose every correct answer.) Multiple select question. To assist in obtaining financing To determine the success of the product or service To guide planning and organizing To determine the viability of an enterprise

To assist in obtaining financing To guide planning and organizing To determine the viability of an enterprise

Which of the following are reasons that entrepreneurial businesses go public by using IPOs? Multiple select question. To develop financial expertise To raise more capital To improve credibility with customers To pursue otherwise unaffordable opportunities To reduce debt

To raise more capital To improve credibility with customers To pursue otherwise unaffordable opportunities To reduce debt

True or False The idea that an entrepreneur gets rich quickly and enjoys a lot of leisure time while someone else does the work is a myth about entrepreneurship.

True

Which of the following exacerbates the problem of entrepreneurs failing to use their resources wisely?

Venture capital funding

Which of the following do start-ups contribute to the economy? (Choose every correct answer.) Multiple select question. Stock market value Wage growth Moderate profits Increased productivity

Wage growth Increased productivity