W212 Exam 1 Possible Questions

Which of the following statements best describes a "gazelle?"

A business with at least 20 percent growth every year.

Which of the following helps account for the rise of interest in corporate entrepreneurship?

An increase in corporations losing some of their best people.

Which of the following statements is true?

Entrepreneurship is the ability to create and build a vision from practically nothing.

Offer two in-depth examples of the dilemmas entrepreneurs face with ethics and laws

One of the dilemmas that I think about every time I shop online is reviews. How do you know that the reviews you are looking at are from actual customers or the business trying to make themselves look better? It is completely legal for a company to post fake reviews but is it ethical? I view it as unethical. The business may view it as being worth doing because it may bring in enough customers to produce a cozy profit. If the review is written by the company but happens to be true, is it okay? At what point will it damage the reputation of the business? Dilemma they may face with law is perhaps in advertising. They may use a picture that they are unaware is copyrighted. If they use that image for their business it can cause some serious legal issues. When I first found out about copyright, I was worried that the logo my father decided to use for his business was copyrighted so I researched it to make sure. Turns out it was a completely custom logo for his business that he had someone create for him.

Discuss the specific areas of entrepreneurial risk.

Risks that apply are financial, career, family and social, and psychic. The financial risk is you dumping your life saving into a business that ends up failing so you end up with nothing and lost your life savings. Career risk is if you quit your job so that you can start a business but the business fails after time, will you be able to get your old job back? Family and social risk is the risk that I fear and why I won't start my own business for quite some time. When you start your own business you will be taking time away from family and friends. You may lose friends and create gaps in the family where you are no longer as close as you used to be. Psychic risk is the psychological effects that you may suffer from if the business suffers

Why has sustainable development, perhaps, become the most prominent topic of our time?

Sustainable development, perhaps, becomes the most prominent topic of our time because of the population increase and the rapid growth in industrialization. It is defined as the development that focuses on meeting the needs of today's generation without compromising the needs of the next generation. The current population is ever-increasing at a very alarming rate, and the existing resources are being used to establish these needs. If the population continues to exploit the resources, then there is a high likelihood that the next generation will have limited or no resources at all. The rapid growth in industrialization has led to the reckless exploitation of resources, which has created fear for the depletion of natural resources. All these factors have put into question the survival of the next generation, which has made sustainable development a prominent topic in this generation. It has also led to the depletion of the ozone layer or climate change, or the destruction of the biosphere.

Which of the following best describes a "unicorn" in venture terminology?

a venture with a $1 billion market value

Characteristics often attributed to the entrepreneur include which of the following?

a. Commitment, determination, and perseverance b. Preference to be a loner c. Power hungry d. Ability to be indecisive

Which of the following process approach to entrepreneurship incorporates an array of individual, organizational, and environmental elements in determining a venture's ability to survive?

dynamic states model

Key elements in plans to create a sustainable future are likely to include which of the following?

eliminating the concept of waste

The major thrust of corporate entrepreneurship is to __________.

encourage innovation

The major thrust of corporate entrepreneurship is to

encourage innovation.

A decacorn, such as Facebook or Uber, is a venture with a $1 million market valuation.

false

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

false

Commitment, determination, and perseverance are the only characteristics one needs to become a successful entrepreneur

false

Corporate entrepreneurship activity occurs outside the firm.

false

Employees shouldn't expect feedback on their entrepreneurial ideas.

false

Entrepreneurs always start their business at a young age.

false

Entrepreneurs are born not made.

false

Entrepreneurs are high risk takers.

false

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

false

International alliances rarely require the exchange of proprietary knowledge.

false

Successful global start-ups, or entrepreneurial businesses that are "born global," surprisingly often lack internationally experienced management.

false

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

false

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

false

The generation of the twenty-first century believe that career success will require them to be less nimble, independent, and entrepreneurial than past generations and focus on tried and true educational disciplines for long-term career stability

false

The triple bottom line is an accounting framework that focuses on optimizing short-term financial performance.

false

The word entrepreneur is derived from the Spanish word entreprendre, meaning "to undertake."

false

Today's entrepreneurs are faced with few ethical decisions because the legal system imposes greater penalties on wrongdoers.

false

Traditional management practices are not obstacles to corporate entrepreneurship

false

During the past ten years, new business start-ups in the United States averaged nearly 600,000 per year

false?

Which of the following may be the greatest risk to the well-being of the entrepreneur?

financial risk

Bottom-line measures of economic performance include all of the following except:

global competition.

A decision to sell pharmaceuticals that have not been cleared with the Federal Drug Administration is an example of a(n):

illegal and unethical decision

When entrepreneurs believe that their accomplishments and setbacks are within their own control and influence, they are exhibiting

internal locus of control

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

An L3C is a new legal form for social enterprises known as

low-profit, limited liability companies.

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:

skunk work

The social entrepreneur aims to increase which of the following?

social value

The entrepreneurial ego can cause the entrepreneur to

take characteristics that usually lead to success to the extreme

One reason why corporate entrepreneurship has done so well is that it allows organizations to

tap the innovative talents of their people

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.

Among the advantages for global entrepreneurs of diaspora networks are

the speed with which information flows across borders.

An account framework that goes beyond the traditional measures of profit, return on investment, and shareholder value to include environmental and social dimensions is called

the triple bottom line

The word entrepreneur is derived from the French entreprendre, which is translated as

to compete.

Which of the following is an obstacle to corporate entrepreneurship?

traditional management techniques

A "gazelle" is a business establishment with at least 20 percent sales growth every year for five years.

true

Codes of conduct are becoming more prevalent in industry are proving to be more meaningful, more comprehensive and easier to implement in terms of the administrative procedures used to enforce them.

true

Ecopreneurship is a combination of ecologically and economically sustainable development.

true

Entrepreneurial cognition is, in part, about understanding how entrepreneurs use simplifying mental models to make assessments, judgments, and decisions about opportunities.

true

Entrepreneurs are aggressive catalysts for change within the marketplace.

true

Licensing agreements can involve patents, trademarks, and technical know-how.

true

New research into the foundation of the entrepreneurial mind-set identifies cognitive adaptability as a person's ability to be dynamic, flexible, and self-regulating in cognitions given dynamic and uncertain task environments.

true

One of the adverse effects of uniform compensation is low motivation

true

Purpose, accountability, and transparency are characteristics associated with socially sustainable enterprises.

true

Social entrepreneurs and their ventures are driven by social goals and aim to increase social value in order to contribute to the welfare or well-being in a given community.

true

Social entrepreneurs are known to combine resources to exploit opportunities to create social value.

true

The social entrepreneurship process begins with a perceived social opportunity translated into an enterprise concept.

true

The three Ps of the triple bottom line are people, planet, and profits.

true

There is a certain psychic risk involved with entrepreneurship.

true

Green entrepreneurship is concerned

turning ecologically sustainable development into economically sustainable development.

Entrepreneurs and gazelles have been credited with making disproportionate contributions to all but which of the following?

unemployment

Entrepreneurial cognition includes which of the following attributes?

a. The understanding of how to simplifying mental models and piece together previously unconnected information. b. The knowledge structures to make assessments, judgments, or decisions involving opportunity evaluation, venture creation, and growth. c. The ability to identify and invent new products or services. d. all of the above

All of the following are reasons for the growth of corporate entrepreneurship except:

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

Which of the following four factors is not included in the Social Corporate Entrepreneurship Scale (SCES) developed by researchers?

a. firm transparency b. social proactiveness c. rewards d. social intention

Which of the following negative effects of an entrepreneur's inflated ego can result in a fantasy approach to business?

a. overbearing need for control and power b. overriding desire for success c. sense of distrust d. unrealistic optimism

Examples of social enterprise obligations to the environment include all of the following except

a. pollution control. b. restoration of the environment. c. recycling efforts. d. support for minority-own businesses

Social entrepreneurs can also be referred to as all of the following except

a. social obligators. b. public entrepreneurs. c. civic entrepreneurs. d. social innovators.

Methods for going international include all of the following except

a.importing. b. exporting. c. licensing. d. foreign reclamation

Corporate social responsibility refers to

actions that further some social good beyond the interests of the firm.

If we accept the argument that social entrepreneurship is a continuum, at one extreme would be social entrepreneurs driven exclusively by producing social benefits; at the other, would be

b. social entrepreneurs motivated by profitability with social benefits being the means.

Secretly working on new ideas on company time as well as on personal time is referred to as

bootlegging

Areas of risk to the entrepreneur include

career, family, psychic

Entrepreneurial stress can be caused by having a type A personality which can be defined as:

chronic sense of time urgency

A __________ is a statement of ethical practices or guidelines to which an enterprise adheres.

code of condct

The first of five steps for entering the international marketplace

conducting research.

What are the five specific feasibility phases that a new venture will go through?

1. Technical- feasibility analysis of product or service. 2. Market- determination of market opportunities and risks. 3. Financial- analysis of financial feasibility and resources. 4. Organizational- analysis of organizational capabilities and personnel requirements. 5. Competitive- analysis of the competition.

Which of the following statements about social entrepreneurship is not true?

. Social entrepreneurship is limited to the world of not-for-profit corporations.

List and describe three pitfalls in selecting a new venture.

1. Lack of Objective Evaluation: Many entrepreneurs lack objectivity. Engineers and technically trained people are particularly prone to falling in love with an idea for a product or service. They seem unaware of the need for the scrutiny they would give to a design or project in the ordinary course of their professional work. The way to avoid this pitfall is to subject all ideas to rigorous study and investigation. 2. Inadequate Understanding of Technical Requirements: The development of a new product often involves new techniques. Failure to anticipate the technical difficulties related to developing or producing a product can sink a new venture. Entrepreneurs cannot be too thorough when studying the project before initiating it. Encountering unexpected technical difficulties frequently poses time-consuming and costly problems. 3. Ignorance of Legal Issues: Business is subject to many legal requirements. One is the need to make the workplace safe for employees. A second is to provide reliable and safe products and services. A third is the necessity for patents, trademarks, and copyrights to protect one's inventions and products. When these legal issues are overlooked, major problems can result.

Explain three major reasons why new ventures fail.

1. Product/market problems: • Poor timing- a premature entry into the marketplace contributed to failure in 40 percent of the cases studied. • Product design problems- although these may be related to timing, product design and development became key factors at earlier stages of the venture; when the essential makeup of the product or service changed, failure resulted. • Inappropriate distribution strategy- Whether it was based on commissioned sales, representatives, or direct sales at trade shows, the distribution strategy had to be geared toward the product and customer. • Unclear business definition- Uncertainty about the "exact" business they were in caused firms to undergo constant change and to lack stabilization. • Overreliance on one customer- this resulted in a failure to diversify and brought about the eventual demise of some of the firms. 2. Financial problems: • Initial undercapitalization- Undercapitalization contributed to failure in 30 percent of the case studies. • Assuming debt too early- Some of the firms attempted to obtain debt financing too soon and in too large an amount. This led to debt service problems. • Venture capital relationship problems- Differing goals, visions, and motivations of the entrepreneur and the venture capitalist resulted in problems for the enterprise. 3. Managerial problems: • Concept of a team approach- The following problems associated with the managerial team were found: (1) hirings and promotions on the basis of nepotism rather than qualifications, (2) poor relationships with parent companies and venture capitalists, (3) founders who focused on their weaknesses rather than on their strengths (though weakening the company, they supposedly were building their skills), and (4) incompetent support professionals (e.g., attorneys who were unable to read contracts or collect on court judgments that already had been made). • Human resource problems- inflated owner ego, employee related concerns, and control factors were all problems that led to business failure. The study also revealed such inter- personal problems as (1) kickbacks and subsequent firings that resulted in an almost total loss of customers, (2) deceit on the part of a venture capitalist in one case and on the part of a company president in another, (3) verbal agreements between the entrepreneur and the venture capitalists that were not honored, and (4) protracted lawsuits around the time of discontinuance

Provide a comprehensive Definition of Entrepreneurship

Entrepreneurship is the creation or simply the extricate of merit. Entrepreneurship is viewed as change and does include some values rather than economic ones. Pursuing of opportunity beyond resources being controlled is called entrepreneurship but most are mistakenly defining entrepreneurs from entrepreneurship. But to give a crisp definition, entrepreneurs are the business persona who conducts the activity through innovating. Therefore, entrepreneurship is the business itself that entrepreneurs are doing. Entrepreneurship is the activity, business, and organization

Define ethics and discuss some conflicts over the ethical nature of decisions

Ethics is your mode of conduct. It is what you view as right or wrong. It starts from the way you treat customers, entering the gray area of legal to illegal and then into illegal. Even then you can still have ethical but illegal, unethical and illegal, ethical and legal, and lastly unethical but legal. Ethics is something that needs to be established early on. Make sure that any employee you hire and all partners have a clear understanding of your code of ethics for your business. If the customer is always right it's probably best to create ethical boundaries on how to handle certain situations, especially if a customer is trying to lie to get their way. Ethics is the moral duty and obligation of a business. The hardest part of this is finding that nice even ground to where everything is legal and ethical. Not every decision a business makes is going to be ethical but hopefully all will be legal.

Why is global thinking important to today's entrepreneurs?

Global thinking is very important for entrepreneurs as the current era has made the world like a village market. Globalization has done any business to become easier, and it is one of the current trends that exist in the market today. The consumers can now select and even buy the products that they need and services or ideas from any parts of the world. Such thinking is very important as it allows the entrepreneurs the ability to access new markets, products, trends, and ideas from other countries. The entrepreneurs are able to expand their businesses to die to new promising avenues by taking part in the global marketplace.

Explain the concept of informal international alliances. What path do entrepreneurs usually follow with respect to informal international alliances?

Informal international alliances refer to the agreement between companies from two or more countries that have no legally binding agreement. This type of agreement lacks any legal protection, and the entrepreneurs in this setting limit their involvement with the informal alliance or even avoid them altogether

Explain some of the disadvantages that may occur in firms that are trying to incorporate entrepreneurship into their organizations.

Many obstacles exist for the corporate entrepreneurship process. The obstacles to corporate entrepreneurship usually reflect the ineffectiveness of traditional management techniques as applied to innovation development. Although it is unintentional, the adverse impact of a particular traditional management technique can be so destructive that the individuals within an enterprise will tend to avoid corporate entrepreneurial behavior. Some of the disadvantages may occur because of traditional management practices are; misspent funds, missed opportunities, low motivation and inefficient operations.

Describe the innovation process.

Most innovations result from a conscious, purposeful search for new opportunities. This process begins with the analysis of the sources of new opportunities. Successful innovators use both the right and left sides of their brains. They look at figures. They look at people. They analytically work out what the innovation has to be to satisfy the opportunity. Then they go out and look at potential product users to study their expectations, values, and needs. Most successful innovations are simple and focused. They are directed toward a specific, clear, and carefully designed application. In the process, they create new customers and market

List some activities that have come to be associated with social entrepreneurship.

The concept of social entrepreneurship has various activities that are associated with it. One of the activities is that social entrepreneurs work for the betterment of the nation, the community, and society. All the efforts are directed towards the benefit of these elements. Some of these activities that have come to be associated with social entrepreneurship include introducing educational programs for poor children. To achieve some of the goals, a social entrepreneur should be able to adopt a mission that accomplishes the mentioned sustainable values. Sustainability refers to the fact that there should be respect for all the natural resources that society depends on at all times. The entrepreneurs should provide banking services in areas that are underprivileged and also helping the children who are orphaned by natural disasters or even epidemic diseases. All the engagement should be on continuous learning and innovation. They should be able to take action, which is beyond the capabilities of the limited resources which the entrepreneurs have at their disposal includes accountability of all their activities.

List and briefly explain each of the phases in the creative process.

The creative process has four phases; Phase 1: Background or knowledge accumulation: Successful creations are generally preceded by investigation and information gathering. This usually involves extensive reading, conversations with others, and a general absorption of information relative to the problem or issue under study. This exploration provides the individual with a variety of perspectives on the problem, and it is particularly important to the entrepreneur, who needs a basic understanding of all aspects of the development of a new product, service, or business venture. Phase 2: The Incubation Process: Creative individuals allow their subconscious to mull over tremendous amounts of information gathered during the first phase. This incubation process often occurs while they are engaged in activities totally unrelated to the subject or problem. Getting away from a problem and letting the subconscious mind work on it allows creativity to spring forth. Phase 3: The idea experience: It is when the idea or solution the individual is seeking is discovered. Sometimes referred to as the "eureka factor," this phase is also the average person incorrectly perceives as the only component of creativity. Phase 4: Evaluation and Implementation: This is the most difficult step of the creative process. It requires a great deal of courage, selfdiscipline, and perseverance. Successful entrepreneurs can identify ideas that are workable and that they have the skills to implement. More important, they do not give up when they run into temporary obstacles. Often they will fail several times before they successfully develop their best ideas. In some cases, entrepreneurs will take the idea in an entirely different direction or will discover a new and more workable idea. Another important part of this phase is the reworking of ideas to put them into final form. Frequently an idea emerges from Phase 3 in rough form, so it needs to be modified or tested to achieve its final shape.

Explain and discuss the "dark side" of entrepreneurship

The dark side of entrepreneurship has to do with the negative things you may face as an entrepreneur. The first negative thing you may face has to do with risk. The general rule is high risk, high reward. This does not mean that if you take a large risk, you will get a large reward. You are taking that risk to get nothing. Other elements of the dark side would be high stress which can cause great health issues and even what is known as the Entrepreneurial Ego which is an inflated ego from being an entrepreneur.

Name the sources of entrepreneurial stress and discuss the ways of dealing with stress.

The stress of an entrepreneur stems from loneliness, immersion in business, people problems, and the need to achieve. Loneliness is because the people that they can usually confide in are not around because the entrepreneur is spending long hours away from them trying to get the business going. Immersion in the business is because they cannot get away from it. If they were to leave for vacation, the business would suffer. People problems is because nobody will ever see 100% eye to eye when it comes to how the business should be run. This could mean that they have a fallout with partners or even employees leaving because of the environment. It is rough because all of that will fall back on the owner's shoulders. The need to achieve can be found in everything. It is not only with entrepreneurship. With the need to achieve, the owners will continue to work themselves to death even if the business is successful because it may not be to the standards they want. Ways to deal with loneliness is networking. Make yourself familiar with other business owners who may understand what you're going through. You will relieve that stress from each other and perhaps have ideas to help each other's business grow. Solve immersion in business by taking that vacation. You may not be able to go on the weeklong vacation you want but you can take a weekend camping trip with the family. Solve the problems with partners and employees by communicating with them. Make sure that you understand their concerns and they understand yours. If it is a payment issue try and take out a small loan to tide them over. The need to achieve is more difficult but can be done by trying to gain new perspectives. Try and pull yourself away by getting some people to delegate some tasks to. That can help you achieve a new outlook and give you some time away from the business. Lastly is to exercise. Exercising is a great way to relieve any kind of stress cause by anything. Exercise is a great way to clear your mind from the stresses of day to day frustrations.

Which of the following accurately describes an entrepreneur?

They manage their businesses by expecting stable sales, profits, and growth.

In the context of benefit corporations, what does transparency refer to?

Transparency refers to the requirements that the firm has to adhere to in making their annual reports. The definition only relates to the context of Benefit Corporation and when the company has to create these reports using a third party. The report focuses on the progress that the firm makes towards achieving the desired social and environmental impacts to the public and the company shareholders. Transparency does refer to their obligation in reporting to the public on a firm's social and environmental performance using highly credible third party standards.

The "corridor principle" is best described by which of the following statements?

With every new venture launched, new and unintended opportunities arise.

Throughout the years, many myths have arisen about entrepreneurship as a result of

a lack of research about entrepreneurship.

Michael Gerber, the author of The E-Myth, explains that the failure of most small businesses is due to

owners being more technical rather than entrepreneurial.

Every person has the _____ and _____ to pursue a career as an entrepreneur.

potential; free choice

In restructuring corporate thinking, top management should

promote entrepreneurship through experimentation

Not confronting someone who is cheating on expense accounts is an example of which of the following?

role failure act