Module 1

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Doing more with less in terms of resources invested in a business, and, where possible, controlling the resources without owning them.

A code of ethics becomes increasingly appropriate and necessary as a small buiness

grows larger is a consequent lessing of the owners personal influence

A corportate manager chafes under red tape and bureaucratic regulations until finally deciding to start his own business. The apparent reward he seeks is:

independence

paradigm shift

A change in how we fundamentally see a situation.

lifestyle business

A microbusiness that permits the owner to follow a desired pattern of living.

reluctant entrepreneurs

A person who becomes an entrepreneur because of some severe hardship.

high-potential venture (gazelles)

A small firm that has great prospects for growth.

A digital ID is a

Cookie

Customers willing to pay what she asks...candace also supports local charities. What would likely happen if she lowered her prices and stopped her charity?

Customers would go elsewhere

social entrepreneurship

Entrepreneurial activity that provides innovative solutions for social issues.

The application of US standards to ethical issues that are clouded by cultural difference abroad is sometimes categorized as

Ethical imperialism

The term bootstrapping refers to the process of bartering rather than buying with cash or credit

FALSE

Which of the following sectors is one where women-owned businesses are performing especially well? a.​marketingb.​financial servicesc.​healthcared.​real estate

Healthcare

stakeholders

Individuals or groups that either can affect or are affected by the performance of the company.

Legend holds that Abraham LIncoln walked miles to return two cents change to a customer. His actions demonstrate

Integrity and responsibility

Businesses that do not attract investors, but allow their owners to live the way they want to live are called __________businesses. Lifestyle Failing Personal Hobby

LIfestyle

Henry is well respected by his employees. He models the highest integrity and encourages team work he displays what attribute?

Leadership

Sally is a single mother, opened a florist shop to support her family after losing her job in a corporate layoff, she is a

Reluctant Entrepreneur

ethical relativism

The belief that ethical standards are subject to local interpretation.

In a small business the most important key to ethical performance is

The personal integrity of the founder or owner; Strong, ethical managerial leadership.

Bernard praises his employees, often hosts family get togethers for employees

This will lead to employees being more engaged and productive

The purpose of the BBB is

To promote ethical conduct on the part of all business in a region

Providing inaccurate or misleading financial information to stakeholders can

damage critical relationships

Members of the community will react _________ to a business they trust

positively

PRO factors include

products, representatives, and organizations

Perhaps the greatest benefit of integrity in business is the _________ it generates

trust

The most widely recommended principle for ethical behavior is to do what

you would want others to do for you

intrapreneurship

A process within an existing corporation involving an employee who assumes the responsibility for taking a new idea and converting it into a profitable product, service, or a process.

sustainable small businesses

A profitable company that responds to customers' needs while showing reasonable concern for the environment.

The main difference between lifestyle business owners and entrepreneurs is the way they perceive Time Opportunity Other people Risk

Opportunity

Compared to large corporations, small businesses

Play just as important if not a larger part in the economy

ethical imperialism

The belief that the ethical standards of one's own country can be applied universally.

Bill Gates and Steve Ballmer, founders of MIcrosoft, would be consisdered

an Entrepreneuraial team

A knowledgeable person who can offer guidance based on experience in a given field is called a(n) a. entrepreneur. b. mentor. c. manager. d. corporate refugee.

b. mentor.

technician personality

A personality that focuses on an already developed technical skill, wants to be left alone to get the job done, and is primarily concerned about the present.

Ethical issue

are questions of right and wrong

small business

A business with growth potential that is small compared to large companies in an industry, has geographically localized operations, is financed by only a few individuals, and has a small management team.

social responsibilities

A company's ethical obligations to the community.

integrity

A general sense of honesty and reliability that is expressed in a strong commitment to doing the right thing, regardless of the circumstances.

entrepreneur personality

A personality that focuses on the business and providing results for the customer.

Although Abner started the business by making his own product, his greater talent is in planning and arranging for growth. Abner is a _____________personality

Entrepreneur

entrepreneurship

Entrepreneurial activity whose goal is to find innovative solutions to social needs, problems, and opportunities.

Entrepreneurs generally think differently about resources than do employee-managers in which of the following ways? a. Managers tend to barter for resources; entrepreneurs prefer cash transactions. b. Managers take on risk personally; entrepreneurs can offload the risk to equity investors. c. Managers prefer bootstrapping; entrepreneurs tend to use only their own resources. d. Managers want larger budgets; entrepreneurs work to do more with less.

Managers want larger budgets; entrepreneurs work to do more with less.

intellectual property

Original intellectual creations, including inventions, literary creations, and works of art, that are protected by patents, copyrights, trademarks, design rights, and trade secrets.

Natalie enjoyed yarn crafts so she opened a yarn and craft store in her small town. Sales have ....people visit her store. What mistake did Natalie make?

She failed to understand her market

The most important influence on ethics in a small business is

The founder or owner whose values are put into practice

A primary reason for becoming an entrepreneur should be to create a product or service that improves the life of customers.

True

Josie's position was eliminated when the company moved its operations to another state so she started her won business. Josie is a reluctant entrepreneiur

True

Many small business owners fail to identify and capture new opportunities to grow their business

True

Successful entrepreneurs should be aware of their strengths and weaknesses and be willing to strive towards goals.

True

Small companies are particularly adept at competing with larger companies when they focus on: a. Customer service. b. Gaining a large market share. c. Becoming a low-cost producer. d. Mass market advertising.

a. Customer service.

Eduardo took out a second mortgage on his home to finance his new business. He makes all the ...keeps all the profits. Eduardo is:

an entrepreneur

Doing more with less in terms of resources invested in business, and, where possible, controlling the resources without owning them refers to a. gazelle. b. bootstrapping. c. corporate refugee. d. job security.

b. bootstrapping.

Using the textbook's criteria for defining a small business, a new venture isn't a small business if it a. is financed by one or only a few individuals. b. is considerably smaller than larger firms in the industry. c. is engaged in geographically dispersed operations. d. is managed by two or more people.

c. is engaged in geographically dispersed operations.

A specific group of customers with an identifiable but narrow range of product or service interests refers to a. customer focus. b. quality performance. c. niche market. d. bootstrapping.

c. niche market.

Small businesses can gain a competitive advantage through all of the following EXCEPT: a. customer focus. b. quality performance. c. niche markets. d. bootstrapping.

d. bootstrapping.

All of the following are entrepreneurial qualities EXCEPT: a. commitment. b. creativity. c. motivation. d. domineering attitude.

d. domineering attitude.

The term for when an employee steals money from a firm is

embezzlement

When a FOrtune 500 business lays off workers, some displaced employees may decide to open their own businesses, They are best described as

reluctant entrepreneurs

An ethical business not only treats customers and employees honestly, but also acts as a good ....community. These broader obligations of citizenship are called

social responsibilities

In drawing up a code of ethics a small business owner should adopt a code

that fits the owners integrity and values

The price of intregrity is high, but the potential payoff is incalculable because it is impossible to compute

the price of a clear concious

After issues related to customers and competitors, the second most common category of ethical issues that challenge small businesses is concerned with

the treatment of employees

niche market

A specific group of customers with an identifiable but narrow range of product or service interests.

franchisee

An entrepreneur whose power is limited by a contractual relationship with a franchising organization.

underlying values

Beliefs that provide a foundation for ethical behavior in an individual or a firm.

A camera hobbyist starts a photographic supplies store. The most obvious reward for this entrepreneur is the opportunity to

Enjoy satisfying work

social entrepreneurship

Entrepreneurial activity whose goal is to find innovative solutions to social needs, problems, and opportunities.

Self-employed people are less likely to be millionares than those who are not

FALSE - they are more likely

Most entrepreneurs work shorter hours in their own business than they did when working for someone else because they have no boss to report to

FALSE - they work MORE

A corporate refugee is a person who tried entrepreneurship, failed, and sought refuge in corporate employment. a. True b. False

False

According to the text, the term entrepreneur referes to small business founders only

False

Microbusinesses are firms that provide substantial profits to their owners. a. True b. False

False

True or False? A home catering service that specializes in providing meals that are most suitable for young school children attending birthday parties, which the company's founder recognized as an underserved niche market, is an example of social entrepreneurship.

False

True or False? A snack maker that produces specialty crackers that sell at a premium, allowing the company to expand its business and provide jobs to its growing workforce, is an example of social entrepreneurship.

False

The universally accepted definition of the term small business is based on the number of people employed at the firm.

False - Size and Growth Potential

According to the U.S. Small Business Administration, small enterprises hire 83 percent of all high-tech employees. a. True b. False

False - it is 43%

A significant number of entrepreneurs are motivated by

Financial Rewards

code of ethics

Formally established standards of employee behavior communicated by a business owner.

________________ are entrepreneurs who make contractual arrangements with established business chains rather than doing everything themselves.

Franchisers

Attractive Small Firm

A small firm that provides substantial profits to its owner.

manager personality

A personality that is pragmatic and likes order and planning operations.

microbusiness

A small firm that provides minimal profits to its owner.

Sabrina has figured out how to recycle clear plastic bottles into woven fabric and has launched a new business. Sabrina is:

a social entrepreneur

Small firms represent about which of the following percentage of all U.S. exporters? a. 97% b. 38% c. 81% d. 63%

a. 97%

Small business accounts for about what proportion of U.S. firms with employees? a. 99% b. 62% c. 55% d. 31%

a. 99%

Which of the following statements is NOT one of the desirable traits of entrepreneurs listed by Spinelli and Adams? a. A domineering attitude b. Tolerance of risk c. Opportunity obsession d. Determination

a. A domineering attitude

Which of the following is MOST descriptive of entrepreneurial passion? a. An entrepreneur must have passion, but unchecked passion can be destructive. b. Entrepreneurs should eliminate emotion from consideration and focus only on the facts. c. Passion makes entrepreneurs open to hearing criticism of their ideas. d. The more passion an entrepreneur has, the more success he/she tends to have.

a. An entrepreneur must have passion, but unchecked passion can be destructive.

Which of the following best fits the definition of a small business?

A hardware store franchise with 20 employees

Corporate Refugee

A person who becomes an entrepreneur to escape an undesirable job situation.

Entrepreneur

A person willing to create value, in either a new or an existing business, while assuming both the risks and the reward for his or her efforts.

entrepreneurial legacy

Material assets and intangible qualities passed on to both heirs and society.

environmentalism

The effort to protect and preserve the environment.

An economically attractive and timely opportunity that creates value for interested buyers and end users refers to entrepreneurial opportunity. a. True b. False

True

The entrepreneur personality thinks in terms of opportunities rather than skills.

True

True or False? A cattle-feedlot operation that collects great quantities of animal waste and processes it into ethanol alcohol, which is then mixed with gasoline and sold at service stations as clean-burning fuel for automobiles, is an example of social entrepreneurship.

True

True or False? A company that markets bottle water but contributes 25 percent of its earnings to a relief organization that provides water wells where there is currently very little fresh water available, is an example of social entrepreneurship.

True

True or False? A grocery store that purchases its inventory from supermarkets, buying canned goods and fruits and vegetables just before their expiration date and selling them at a discount to the poor and needy, is an example of social entrepreneurship.

True

True or False? An outdoor advertising company that offers free advertising to charities and nonprofit organizations in its region is an example of social entrepreneurship.

True

Xdavier had many ideas about new products but no one in his corporations seemed interested. So he founded his own company to create these new products. ZXavier is a corporate refugee.

True

entrepreneurial teams

Two or more people who work together as entrepreneurs on one endeavor.

According to Spinelli and Adams, desirable entrepreneurial characteristics include all of these EXCEPT: a. being a domineering manager. b. having an opportunity obsession. c. having the motivation to excel. d. being self-starters and team builders.

a. being a domineering manager.

According to Gerber, all of the following are personalities that come into play when you are starting a business EXCEPT: a. Technician Personality. b. Administrative Personality. c. Manager Personality. d. Entrepreneur Personality.

b. Administrative Personality.

A change in how we fundamentally see a situation is called a a. niche market. b. paradigm shift. c. manager personality. d. gazelle.

b. paradigm shift.

A microbusiness that permits the owner to follow a desired pattern of living refers to which of the following? a. Gazelle b. Microbusiness c. Lifestyle business d. High-potential venture

c. Lifestyle business

Calvin knew his small local hardware could not compete on price with the huge chain so he started offereing classes for new homeowners and found other ways to provide service that gave him a competative edge is: c

customer focus

Entrepreneurs who start and lead small businesses contribute to the economy in which of the following ways? a. They make up the overwhelming majority of all businesses. b. They hire nearly half of all high-tech employees. c. They are increasingly going global, representing 97 percent of all exporters. d. All of the above.

d. All of the above

Which of these is NOT a motivation for founding a company? a. Personal fulfillment b. Independence c. Financial rewards d. Community satisfaction

d. Community satisfaction

Skimming is an unethical business practice involving

failure to report all income on tax returns