Lesson 15

What are some of the characteristics of people who become successful entrepreneurs?

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

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

Institutional corruption

Which of the following statements about successful entrepreneurs and innovators are true?

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 are the tendencies that determine entrepreneurial orientation?

Taking risks Being competitively aggressive Allowing independent action Being proactive

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

Opportunity obsession

Which of the following best captures Larry's view of entrepreneurs?

They are their own bosses and are completely independent.

Which of the following are purposes for creating a business plan?

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

To meet the medical needs of a growing population of aged people, there has been an increase in entrepreneurial ventures specific for different medical problems of the aged. These ventures exemplify entrepreneurial opportunities due to

demographic changes.

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

When contemplating a business, an entrepreneur must start with a good ______.

idea

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 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

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.

Another reason Larry is confident about being an entrepreneur is because he sees his high SATs as which of the following?

an indicator of successful entrepreneurship

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

In the context of entrepreneurship, a(n) _____ focuses on an entire venture and describes all the elements involved in starting it.

business plan

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

cheaper

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 according to their relative levels of innovation and risk, 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

In order for Larry to be a successful entrepreneur, he needs to be knowledgeable and have

networking skills.

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

Nonfinancial resources that are important to the success of a new business are business legitimacy, networks, advisory boards, and the management team.

top

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

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

Larry is sure that entrepreneurs do which of the following?

work harder than managers in big companies

Lifestyle and taste changes

An increasing desire by consumers to protect the environment

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

small business

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

social

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

Larry's thoughts about starting a business and the length of time it takes to reach profitability are based on the assumption that

talented entrepreneurs are able to make a business profitable within one year.

Which of the following are specific key planning factors, in addition to financial elements, that entrepreneurs must think through carefully?

Competition People Context

What are high-potential future opportunities for entrepreneurship?

Cryptocurrency Nanotechnology Green energy

Which of the following are myths about entrepreneurship?

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

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

the outer space market

Which of the following are elements of social capital?

Being part of a network of people Having a good reputation

Which of the following are typical ways entrepreneurs can exploit opportunities?

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

Joel and Nigel are both creative people who started their own businesses. Joel's business failed, and Nigel's business flourished. In analyzing these outcomes, Stan, a business executive and mutual friend of Joel and Nigel, noted, "Joel is an inventor, and Nigel is an entrepreneur." What is the difference between inventors and entrepreneurs?

Entrepreneurs have good knowledge and skills in management, business, and networking, whereas, inventors lack such skills.

In what ways does entrepreneurship differ from management?

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.

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.

Which of the following best captures Larry's feelings about the relationship between his start-up capital and the success of his venture?

He's got plenty of start-up capital, so he'll be sure to be successful.

Which of the following are favorable factors in increasing entrepreneurial activity?

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

Which of the following are factors that influence the success or failure of business start-ups?

Management-related challenges Economic environment

Which of the following present possible opportunities for new business ideas?

Natural disasters Lifestyle and taste changes Technological discoveries

In general, successful entrepreneurs have good knowledge and skills in which of the following?

Networking Management Business

Demographic changes

Smartphones that are easier for older people to use

Which of the following are benefits that business partners can serve?

Spreading the workload Sharing expertise Accessing capital

Technological discoveries

Start-ups in microcomputers and nanotechnology

Government initiatives and rule changes

Stricter energy efficiency requirements

What is the role of the economic environment on 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 is a crucial nonfinancial resource?

The top management team

Which of the following are factors that typically motivate entrepreneurs as they start a business?

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

Which of the following do start-ups contribute to the economy?

Wage growth Increased productivity

Larry is thinking he will be a great entrepreneur because he sees himself as which of the following?

a lone wolf who doesn't like working with others

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

Terrence realizes that the availability of appliances with embedded computer chips is low in the market. Hence, he uses this lucrative opportunity and sets up a store that sells exclusively appliances with embedded computer chips. Which of the following is Terrence engaging in?

entrepreneurship

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

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

opportunity analysis

The first formal step in creating a business plan that includes a description of a good or a service and other assessments is a(n) ______.

opportunity analysis

"Jerry is likely to succeed as an entrepreneur," said Randolph, Jerry's long-time business mentor. "Jerry has many desirable personality characteristics, including

opportunity obsession and tolerance of risk."

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

A difference between entrepreneurs and intrapreneurs is the

presence or absence of corporate support.

"When we launch our new, small business, we must keep costs—for rents and administrative services—very low," said Robbie. His partner, Kyoshi, responded, "Perhaps we should launch our venture in a business incubator, which is a(n)

protected environment for new, small businesses."

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

radical innovation

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

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

side street effect

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

skunkwork

Which of the following describe typical features of a business incubator?

Offers shared costs Located in an industrial park Associated with universities

An entrepreneurial alliance between an innovator who created 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

In the creation of a new business, people's judgment of which of the following characteristics of the company make up its legitimacy?

Appropriateness Desirability Acceptance

Which of the following are characteristics of an entrepreneurial personality?

Commitment and determination Motivation to excel Leadership

A business plan is an opportunity for entrepreneurs to do which of the following?

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

_________ is 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.

Entrepreneurial orientation

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

Entrepreneurs

True or false: The only essential step for building support for a project idea within a company is to get the support of higher level officials.

False

What does the entrepreneurial strategy matrix do?

Helps identify effective and ineffective strategies Helps entrepreneurs decide on a preferred level of risk and innovation Helps entrepreneurs decide if their ventures suit their objectives

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

innovation and risk

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

innovativeness and business management skills

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 e-commerce business model based on charging a commission for bringing buyers and sellers together is the ______ model.

intermediary

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

intrapreneurs