Exam 1

Question 1

Describe the evolution of the terms entrepreneur and entrepreneurship.

Answer 1

Derived from French entreprendre (to undertake)

Question 2

Name and explain the ten major myths of entrepreneurs.

Answer 2

1: Entrepreneurs are doers, not thinkers.
2: Entrepreneurs are born, not made.
3: Entrepreneurs are always inventors.
4: Entrepreneurs are academic and social misfits.
5: Entrepreneurs must fit the profile.
6: All entrepreneurs need is money.
7: All entrepreneurs need is luck.
8: Entrepreneurship is unstructured and chaotic.
9: Most entrepreneurial initiatives fail.
10: Entrepreneurs are extreme risk takers.

Question 3

Gazelle

Answer 3

A business establishment with at least 20% sales growth in each year for five years, starting with a base of at least $100,000 in annual sales; produce twice as many innovations per employee

Question 4

Trends in entrepreneurship research

Answer 4

Venture financing, corporate entrepreneurship, social entrepreneurship, entrepreneurial cognition, women and minority entrepreneurs, the global entrepreneurial movement, family businesses, and entrepreneurial education

Question 5

Characteristics of the entrepreneurial mindset (5)

Answer 5

Determination and perseverance, drive to achieve, opportunity orientation, initiative and responsibility, persistent problem solving, seeking feedback, passion, vision

Question 6

Describe four specific areas of risk faced by entrepreneurs.

Answer 6

Financial risk, career risk, family and social risk, and psychic risk

Question 7

Code of conduct

Answer 7

A statement of ethical practices or guidelines to which an enterprise adheres

Question 8

Corporate entrepreneurship

Answer 8

A process whereby an individual or a group of individuals, in association with an existing organization, creates a new organization or instigates renewal or innovation within the organization

Question 9

Describe the specific elements of a corporate entrepreneurship strategy.

Answer 9

An entrepreneurial strategic vision, a pro-entrepreneurship organizational structure, entrepreneurial processes and behavior as exhibited throughout the organization

Question 10

Types of innovation

Answer 10

Radical innovation and incremental innovation

Question 11

Radical innovation

Answer 11

The launching of inaugural breakthroughs

Question 12

Incremental innovation

Answer 12

The systematic evolution of a product or service into newer or larger markets

Question 13

Social entrepreneurship

Answer 13

Entrepreneurship applied to social problem solving in addition to the traditional focus of innovation, risk-taking, and large scale transformation

Question 14

Ecovision

Answer 14

A leadership style that encourages open and flexible structures that encompass the employees, the organization, and the environment, with attention to evolving social demands

Question 15

What are the major sources of innovative ideas?

Answer 15

Unexpected occurrences, incongruities, process needs, industry and market changes, demographic changes, perceptual changes, and knowledge-based concepts

Question 16

Example of an unexpected occurrence

Answer 16

Apple Computer

Question 17

Example of an incongruity

Answer 17

Overnight package delivery

Question 18

Example of process needs

Answer 18

Sugar-free products, caffeine-free coffee

Question 19

Example of industry and market changes

Answer 19

Health care industry

Question 20

Example of demographic changes

Answer 20

Rest communities for older people

Question 21

Example of perceptual changes

Answer 21

Exercise and growing concern for fitness

Question 22

Example of knowledge-based concepts

Answer 22

Mobile technology

Question 23

Creativity

Answer 23

The generation of ideas that result in the improved efficiency or effectiveness of a system

Question 24

Two aspects of creativity

Answer 24

Process (goal-oriented) and people (the resources)

Question 25

List and briefly explain the components of the creative process.

Answer 25

Background or knowledge accumulation, the incubation process, the idea experience, and evaluation and implementation

Question 26

How can creativity be developed?

Answer 26

Recognize relationships; develop a functional perspective; use your brains

Question 27

Innovation

Answer 27

The process by which entrepreneurs convert opportunities into marketable solutions

Question 28

Invention

Answer 28

Totally new product, service, or process

Question 29

Example of invention

Answer 29

Airplane

Question 30

Extension

Answer 30

New use or different application of an already existing product, service, or process

Question 31

Example of extension

Answer 31

McDonald's

Question 32

Duplication

Answer 32

Creative replication of an existing concept

Question 33

Example of duplication

Answer 33

Walmart from department stores

Question 34

Synthesis

Answer 34

Combination of existing concepts and factors into a new formulation or use

Question 35

Example of synthesis

Answer 35

Starbucks

Question 36

What are the advantages of buying an on-going business?

Answer 36

Less fear about successful future operation, reduced time and effort, purchasing at a good price

Question 37

Franchise

Answer 37

Any arrangement in which the owner of a trademark, trade name, or copyright has licensed others to use it in selling goods or services

Question 38

What are the advantages of buying a franchise?

Answer 38

Training and guidance, brand-name appeal, a proven track record, financial assistance

Question 39

What are the process approaches to entrepreneurship that examine the activities involved in entrepreneurship?

Answer 39

The integrative approach and the dynamic states approach

Question 40

Integrative approach

Answer 40

Built around inputs and outcomes of entrepreneurial process; focuses on five key elements to the process

Question 41

Dynamic states approach

Answer 41

Stresses the dependency of the venture on the environment and interaction of various elements

Question 42

How dominant have new and small ventures been in the economy?

Answer 42

Small firms supply 49.6% of private sector jobs, make up 99.7% of employing firms; 600,000 to 800,000 new businesses created annually; integral part of process that defines market economies

Question 43

What are some of the recent trends that are changing the nature of entrepreneurs?

Answer 43

Venture financing, corporate entrepreneurship, social entrepreneurship, entrepreneurial cognition, women and minority entrepreneurs, the global entrepreneurial movement, family businesses, and entrepreneurial education

Question 44

Three major sources of information that supply data related to the entrepreneurial mindset

Answer 44

Research and popular publications; direct observation; speeches, seminars, and presentations

Question 45

Four distinct roles that managers may take in rationalizing morally questionable acts “against the firm” or “on behalf of the firm”

Answer 45

Nonrole, role failure, role distortion, role assertion

Question 46

Nonrole

Answer 46

Against the firm; ex. embezzlement

Question 47

Role failure

Answer 47

Against the firm; ex. not confronting expense account cheating

Question 48

Role distortion

Answer 48

For the firm; ex. bribery

Question 49

Role assertion

Answer 49

For the firm; ex. investing in unethically governed countries

Question 50

Ethics

Answer 50

Provides the basic rules or parameters for conducting any activity in an "acceptable" manner; represents a set of principles prescribing a behavioral code of what is good and right or bad and wrong

Question 51

Conflicts over the ethical nature of decisions

Answer 51

Pressure from inside and outside interests; changes in societal norms

Question 52

What steps can entrepreneurs take to establish a position of ethical leadership in business?

Answer 52

Code of ethics that encompass ethical consciousness, ethical process and structure, and institutionalization