Week 1
Skunk Works
a highly innovative enterprise that uses groups functioning outside traditional lines of authority
The decision to behave entrepreneurially is the result of the interaction of
the individual's personal entrepreneurial mind-set and an opportunity.
Entrepreneurial cognition includes which of the following attributes?
- The understanding of how to simplifying mental models and piece together previously unconnected information. - The knowledge structures to make assessments, judgments, or decisions involving opportunity evaluation, venture creation, and growth. - The ability to identify and invent new products or services. - ALL OF THE ABOVE
(T or F) Commitment, determination, and perseverance are the only characteristics one needs to become a successful entrepreneur.
FALSE. A review of the literature related to entrepreneurial characteristics reveals the existence of a large number of factors and new characteristics are continually being added to this ever-growing list.
(T or F) A loss orientation toward grief recovery in dealing with failure can sometimes lessen negative emotional reactions.
FALSE. Empirical research has found that loss orientation toward grief recovery can sometimes exacerbate the negative emotional reaction.
(T or F) Ethics represents a set of principles prescribing a behavioral code that does not include moral duty and obligations.
FALSE. In the broadest sense, ethics provides the basic rules or parameters for conducting any activity in an "acceptable" manner but more specifically, ethics represents a set of principles prescribing a behavioral code that explains what is good and right or bad and wrong; ethics may, in addition, outline moral duty and obligations.
(T or F) The resources of the organization are irrelevant to the ability of the corporate entrepreneur to implement an idea.
FALSE. Innovators need discretionary resources to explore and develop new ideas and while some companies give employees the freedom to use a percentage of their time on projects of their own choosing and set aside funds to explore new ideas when they occur, others control resources so tightly that nothing is available for the new and unexpected and the result is nothing new.
(T or F) Firms do not need to alter management techniques to encourage corporate entrepreneurship since it tends to occur naturally.
FALSE. The management structure itself encourages employees to believe that innovation is, in fact, part of the role set for all organization members and some of the specific conditions that reflect management support include quick adoption of employee ideas, recognition of people who bring ideas forward, support for small experimental projects, and seed money to get projects off the ground.
(T or F) Skunk works are project groups that work within the traditional lines of authority.
FALSE. "Skunk Works" is a nickname given to small groups that work on their ideas outside of normal organizational time and structure which eliminates bureaucracy, permits rapid turnaround, and instills a high level of group identity and loyalty.
(T or F) Today's entrepreneurs are faced with few ethical decisions because the legal system imposes greater penalties on wrongdoers.
FALSE. Ethical issues in business are of great importance today and entrepreneurs are faced with many ethical decisions, especially during the early stages of their new ventures.
social cognition theory
Cognition is used to refer to the mental functions, mental processes (thoughts), and mental states of intelligent humans. Social cognition theory introduces the idea of knowledge structures— mental models (cognitions) that are ordered in such a way as to optimize personal effectiveness within given situations—to the study of entrepreneurship.
Characteristics often attributed to the entrepreneur include which of the following?
Commitment, determination, and perseverance
(T or F) The "corridor principle" states that entrepreneurs often get stuck on one idea.
FALSE. According to the corridor principle new pathways or opportunities will arise that lead entrepreneurs in different directions.
(T of F) Entrepreneurs always start their business at a young age.
FALSE. Most successful entrepreneurs work hard—through planning and preparation—to minimize the risk involved and better control the destiny of their vision.
(T or F) Entrepreneurs are high risk takers.
FALSE. Most successful entrepreneurs work hard—through planning and preparation—to minimize the risk involved and better control the destiny of their vision.
(T or F) During the past ten years, new business start-ups in the United States averaged nearly 600,000 per year.
FALSE. The U.S. Small Business Administration reported that, during the past 10 years, new business start-ups numbered over 400,000 per year.
(T or F) The "dark side" of entrepreneurship refers to the stress that entrepreneur's experience.
FALSE. The dark side of entrepreneurship refers to the destructive and negative aspects found within the energetic drive of successful entrepreneurs that may envelop entrepreneurs and dominate their behavior and although each of these factors has a positive aspect, it is important for entrepreneurs to understand their potential destructive side as well.
(T or F) 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 dream of career success of the millennial generation (Generation Y) and post millennial generation (Generation Z) will require them to be more nimble, independent, and entrepreneurial than past generations.
(T or F) Entrepreneurs are born, not made.
FALSE. The recognition of entrepreneurship as a discipline is helping to dispel the myth that entrepreneurs are born not made and like all disciplines, entrepreneurship has models, processes, and case studies that allow the topic to be studied and the knowledge to be acquired.
(T or F) The word entrepreneur is derived from the Spanish word entreprendre, meaning "to undertake."
FALSE. The word entrepreneur is derived from the French entreprendre, meaning "to undertake."
(T or F) A decacorn, such as Facebook or Uber, is a venture with a $1 million market valuation.
FALSE. many start-ups are surpassing the $1 billion level and achieving $10 billion valuations. These firms, such as Facebook, Uber, and Airbnb, are now referred to as decacorns.
Which of the following is true of corporate venturing?
It is the adding of new businesses or portions of new businesses via equity investments to the corporation.
Which of the following would NOT be considered one of the six major future trajectories of the entrepreneurship discipline from researchers Donald F. Kuratko and Michael H. Morris?
Selecting Entrepreneurship Students - The Audience
(T of F) A "gazelle" is a business establishment with at least 20 percent sales growth every year for five years.
TRUE. A gazelle is a business establishment with at least 20 percent sales growth every year (for five years), starting with a base of at least $100,000.
(T or F) In the model of sustained corporate entrepreneurship discussed in the text, a transformational trigger can be internal or external to the company.
TRUE. A transformational trigger is something external or internal to the company that causes a change to take place and initiates the need for strategic adaptation or change.
(T or F) Entrepreneurs are aggressive catalysts for change within the marketplace.
TRUE. Entrepreneurs are individuals who recognize opportunities and are aggressive catalysts for change within the marketplace
(T or F) There is a certain psychic risk involved with entrepreneurship.
TRUE. Entrepreneurs face a number of different types of risk such as financial risk, career risk, family and social risk, and psychic risk with psychic risk being the greatest risk to the well-being of the entrepreneur.
(T or F) The macro view of entrepreneurship includes external processes that are sometimes beyond the control of the entrepreneur.
TRUE. The macro view of entrepreneurship presents a broad array of factors that relate to success or failure in contemporary entrepreneurial ventures that includes external processes that are sometimes beyond the control of the individual entrepreneur, for they exhibit a strong external locus of control point of view.
(T or F) 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. While the research has focused on entrepreneurial cognitions, a new stream of thinking links the foundation of the entrepreneurial mind-set to cognitive adaptability, which can be defined as a person's ability to be dynamic, flexible, and self-regulating in cognitions given dynamic and uncertain task environments.
Which of the following accurately describes an entrepreneur?
Their principal objectives are innovation, profitability, and growth.
role failure
Unethical acts against the firm involving a person failing to perform his or her managerial role, including superficial performance appraisals (not being totally honest) and not confronting someone who is cheating on expense accounts.
macro view of entrepreneurship
a broad array of factors that relate to success or failure in contemporary entrepreneurial ventures
gazelle
a business establishment with at least 20 percent sales growth every year, starting with a base of 100,000 for 5 years
All of the following are reasons for the growth of corporate entrepreneurship except
a desire to dramatically increase profitability.
entrepreneurship
a dynamic process of vision, change, and creation. it requires an application of energy and passion toward the creation and implementation of new ideas and creative solutions. essential ingredients include the willingness to take calculated risks - in terms of time, equity, or career; the ability to formulate an effective venture team; the creative skill to marshal needed resources; the fundamental skill of building a solid business plan; and the vision to recognize opportunity where others see chaos, contradiction, and confusion.
stress
a function of discrepancies between a person's expectations and ability to meet demands, as well as discrepancies between the individual's expectations and personality. If a person is unable to fulfill role demands, then stress occurs
dynamic states model
a network of relationships and systems that convert opportunity tension into value for a venture's customers, generating new resources that maintain the dynamic state
external locus of control
a point of view in which external processes are sometimes beyond the control of the individual entrepreneur
displacement school of thought
a school of entrepreneurial thought that focuses on group phenomena such as the political, cultural, and economic environments
entrepreneurial trait school of thought
a school of entrepreneurial thought that focuses on identifying traits that appear common to successful entrepreneurs
environmental school of thought
a school of entrepreneurial thought that focuses on the external factors and forces - values, mores, and institutions - that surround a potential entrepreneur's lifestyle
strategic formulation school of thought
a school of entrepreneurial thought that focuses on the planning process used in successful venture formulation
venture opportunity school of thought
a school of entrepreneurial thought that focuses on the search for idea sources, on concept development, and on implementation of venture opportunities
financial/capital school of thought
a school of entrepreneurial thought that focuses on the ways entrepreneur's seek seed capital and growth funds
ethics
a set of principles prescribing a behavioral code that explains what is good and right or bad and wrong
code of conduct
a statement of ethical practices or guidelines to which an enterprise adheres
failure
a venture not being able to survive as caused by inexperience or incompetent management
Which of the following best describes a "unicorn" in venture terminology?
a venture with a $1 billion market value
framework of frameworks
allows for the entrepreneurship theory to move forward identifying the static and dynamic elements of new theories, typologies, or frameworks
entrepreneurial leadership
an entrepreneur's ability to anticipate, envision, maintain flexibility, think strategically, and work with others to initiate changes that will create a viable future for the organization
entrepreneurial behavior
an entrepreneur's decision to initiate the new venture formation process
entrepreneur
an innovator or developer who recognizes and seizes opportunities; converts these opportunities into workable/marketable ideas; adds value through time, effort, money, or skills; assumes the risks of the competitive marketplace to implement these ideas; and realizes the rewards from these efforts
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
A __________ is a statement of ethical practices or guidelines to which an enterprise adheres.
code of conduct
The second step in planning a strategy of entrepreneurship for the enterprise is
developing and encouraging innovation.
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
The displacement school of thought can be divided into which three groups?
economic, cultural, and political
The major thrust of corporate entrepreneurship is to
encourage innovation.
intrapreneurship
entrepreneurial activities that receive organizational sanction and resource commitments for the purpose of innovative results within an established corporation.
Collective entrepreneurship, as a concept, refers to
entrepreneurial thinking that is diffused throughout the company.
entrepreneurial experience
entrepreneurs emerge as a function of the novel, idiosyncratic, and experiential nature of the venture creation process involving three parallel, interactive phenomena: emergence of the opportunity, emergence of the venture, and emergence of the entrepreneur
entrepreneurial discipline
entrepreneurship is based on the same principles, whether the entrepreneur is an existing large institution or an individual starting his or her new venture single handed
The macro view of entrepreneurship can be broken down into which three areas?
environmental, financial, and displacement
micro view of entrepreneurship
examines the factors specific to entrepreneurship and part of the internal locus of control
Entrepreneurial stress can be caused by having a type A personality which can be defined as:
having a chronic sense of time urgency.
mountain gap strategies
identifying major market segments as well as interstice (in-between) markets that arise from larger markets
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.
Which of the following terms refers to the systematic evolution of a product or service into newer or larger markets?
incremental innovation
collective entrepreneurship
individual skills integrated into a group wherein the collective capacity to innovate becomes something greater than the sum of its parts
better widget strategies
innovation that encompasses new or existing markets
metacognitive model
integrates the combined effects of entrepreneurial motivation and context, toward the development of metacognitive strategies applied to information processing within an entrepreneurial environment
When entrepreneurs believe that their accomplishments and setbacks are within their own control and influence, they are exhibiting
internal locus of control.
cognition
it refers to mental processes. these processes include attention, remembering, producing and understanding language, solving problems, and making decisions
interactive learning
learning ideas within an innovative environment that cut across traditional, functional lines in the organization
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.
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.
Which of the following may be the greatest risk to the well-being of the entrepreneur?
psychic risk
Which of the following terms refers the inaugural breakthroughs launched from experimentation and determined vision?
radical innovation
Not confronting someone who is cheating on expense accounts is an example of which of the following?
role failure act
bootlegging
secretly working on new ideas on company time as well as on personal time
The first step in planning a strategy of entrepreneurship for enterprise
sharing the vision of innovation.
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 works.
corridor principle
states that with every venture launched, new and unintended opportunities arise
Which of the following schools of thought in the micro view of entrepreneurship includes such terms as mountain gap, great chef, better widget and water well?
strategic formulation school of thought
water well strategies
the ability to gather or harness special resources (land, labor, capital, raw materials) over the long term.
corporate venturing
the adding of new businesses to the corporation. this can be accomplished through three implementation modes: internal corporate venturing, cooperative corporate venturing, and external corporate venturing
financial risk
the money or resources at stake for a new venture
great chef strategies
the skills or special talents of one or more individuals around whom a venture is built
entrepreneurial revolution
the tremendous increase in entrepreneurial business and entrepreneurial thinking that has developed during the last 20 years. this revolution will be as powerful to the twenty-first century as the Industrial Revolution was to the twentieth century (if not more!)
internal locus of control
the viewpoint in which the potential entrepreneur has the ability or control to direct or adjust the outcome of each major influence
entrepreneurial motivation
the willingness of an entrepreneur to sustain his or her entrepreneurial behavior
The word entrepreneur is derived from the French entreprendre, which is translated as
to compete.
Identified by researchers, which of the following are specific factors identified by the Corporate Entrepreneurship Assessment Instrument (CEAI) that managers in organizations can concentrate on in structuring an entrepreneurial climate?
top management support, time, autonomy, rewards, and organizational boundaries
Which of the following is an obstacle to corporate entrepreneurship?
traditional management techniques
Entrepreneurs and gazelles have been credited with making disproportionate contributions to all but which of the following?
unemployment
role distortion
unethical acts committed on the basis that they are "for the firm" even though they are not, and involving managers/entrepreneurs who commit individual acts and rationalize that they are in the firm's long-run interests
role assertion
unethical acts involving managers/entrepreneurs who represent the firm and who rationalize that they are in a position to help the firm's long run interests
Which of the following negative effects of an entrepreneur's inflated ego can result in a fantasy approach to business?
unrealistic optimism
(T or F) Entrepreneurial cognition is, in part, about understanding how entrepreneurs use simplifying mental models to make assessments, judgments, and decisions about opportunities.
TRUE. Entrepreneurial cognition is about understanding how entrepreneurs use simplifying mental models to piece together previously unconnected information that helps them to identify and invent new products or services, and to assemble the necessary resources to start and grow businesses.
(T or F) 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. In the broadest sense, ethics provides the basic rules or parameters for conducting any activity in an "acceptable" manner but more specifically, ethics represents a set of principles prescribing a behavioral code that explains what is good and right or bad and wrong; ethics may, in addition, outline moral duty and obligations.
(T or F) One reason that corporate entrepreneurship has become popular is because it allows corporations to tap the innovative talents of the personnel.
TRUE. One reason corporate entrepreneurship has become so popular is that it allows corporations to tap the innovative talents of their own workers and managers.
(T or F) Clever bootlegging of ideas refers to secretly working on new ideas on company time as well as on personal time.
TRUE. The clever bootlegging of ideas is secretly working on new ideas on company time as well as on personal time.
(T or F) The first step in planning a strategy of corporate entrepreneurship is sharing the vision of innovation that executives wish to achieve.
TRUE. The first step in planning a corporate entrepreneurship strategy for the enterprise is to share the vision of innovation that the corporate leaders wish to achieve.
(T or F) Researchers have identified specific factors that organizations can concentrate on in helping individuals develop more entrepreneurial behavior.
TRUE. Using the Corporate Entrepreneurship Assessment Instrument (CEAI), researchers have identified five factors critical to the internal environment of an organization that want to have managers pursue innovative activity including top management support, time availability, autonomy/work discretion, rewards/reinforcement, and organizational boundaries.
Throughout the years, many myths have arisen about entrepreneurship as a result of
a lack of research about entrepreneurship.
corporate entrepreneurship
a new "corporate revolution" taking place due to the infusion of entrepreneurial thinking into bureaucratic structures
Corporate Entrepreneurship Assessment Instrument (CEAI)
a questionnaire designed to measure the key entrepreneurial climate factors
entrepreneurial mind-set
all the characteristics and elements that compose the entrepreneurial potential in every individual
entrepreneurial persistence
an entrepreneur's choice to continue with an entrepreneurial opportunity regardless of counter influences or other enticing alternatives
innovation team (I-Team)
an internal corporate team formulated for the purpose of creating new innovations for the organization
risk
involves uncertain outcomes or events. the higher the rewards, the greater the risk entrepreneurs usually face
family and social risk
starting a new venture uses much of the entrepreneur's energy and time. entrepreneurs who are married, and especially those with children, expose their families to the risks of an incomplete family experience and the possibility of permanent emotional scars. In addition, old friends may vanish slowly because of missed get togethers.
Transformational triggers in a corporate entrepreneurial environment initiates the need for
strategically adapting to change.
The entrepreneurial ego can cause the entrepreneur to
take characteristics that usually lead to success to the extreme.
cognitive adaptability
the ability to be dynamic, flexible, and self-regulating in one's cognitions given dynamic and uncertain task environments
strategic entrepreneurship
the exhibition of large-scale or otherwise highly consequential innovations that are adopted in the firm's pursuit of competitive advantage. using strategic entrepreneurship approaches, innovation can be in any of five areas: the firm's strategy, product offerings, served markets, internal organization, or business model.
psychic risk
the great psychological impact on and the well-being of the entrepreneur who creates a new venture
radical innovation
the inaugural breakthroughs launched form experimentation and determined vision that are not necessarily managed but must be recognized and nurtured
entrepreneurial cognition
the knowledge structures that people use to make assessments, judgments, or decisions involving opportunity evaluation, venture creation, and growth
(T or F) Systematic evolution of a product or service into newer or larger markets is referred to as radical innovation.
FALSE. Incremental innovation refers to the systematic evolution of a product or service into newer or larger markets.
(T or F) Individuals may avoid corporate entrepreneurial behavior due to the impact of traditional management techniques.
TRUE. 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.
Generally, entrepreneurial stress is due to
the discrepancy between the entrepreneur's expectations and the ability to meet demands.
rationalizations
what managers use to justify questionable conduct
top management support
when upper level managers in a corporation can concentrate on helping individuals within the system develop more entrepreneurial behavior
career risk
whether an entrepreneur will be able to find a job or go back to an old job if the venture fails
champion
within the context of corporate entrepreneurship, this is a person with an innovative vision and the ability to share it
Which of the following statements best describes a "gazelle?"
A business with at least 20 percent growth every year.
Which of the following statements is true?
Entrepreneurship is the ability to create and build a vision from practically nothing.
The "corridor principle" is best described by which of the following statements?
With every new venture launched, new and unintended opportunities arise.
dark side of entrepreneurship
a destructive side that exists within the energetic drive of successful entrepreneurs
Which of the following practices is important for establishing innovation-driven organizations?
create a system of feedback and positive reinforcement
The macro view of entrepreneurship presents factors exhibiting a strong
external locus of control
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.
intracapital
special capital set aside for the corporate entrepreneur to use whenever investment money is needed for further research ideas
incremental innovation
the systematic evolution of a product or service into newer or larger markets
grief recovery
the traditional process of recovering from grief involves focusing on the particular loss to construct an account that explains why the loss occurred