Test Bank for BUS 401- Questions and Correct Answers (Already Passed)
What is the GEM? - Answers - Global Entrepreneurship Monitor (GEM). GEM, which is a joint research
effort among several international universities and the Interna- tional Council for Small Business, tracks
entrepreneurship in 112 countries, including the United States.
- interest to GEM is total early stage entrepreneurial activity (TEA), which consists of businesses that are
just being started and businesses that have been in existence for less than three and a half years.
- high- est rates of entrepreneurial start-up activities occur in low-income countries,
- identifies whether its respondents are starting a new business to take advantage of an attractive
opportunity or because of necessity to earn an income.
- criticism of entrepreneurship, which is often repeated in the press, is that the majority of new
businesses fail.
Are start ups successful? - Answers - United States, according to the Bureau of Labor Statistics, over half
the businesses started are still in existence five years later.4 The number drops to just over a third after
10 years, but some of the businesses disappeared because they were successful and were sold or were
acquired by another firm.
- motivation must be coupled with a solid business idea, good financial management, and effective
execution to maximize chances for success.
What Is Entrepreneurship and Why Is It Important? - Answers - entrepreneur derives from the French
words entre, meaning "between," and prendre, meaning "to take."
- originally used to describe people who "take on the risk" between buyers and sellers or who
"undertake" a task such as starting a new venture.5
- An inventor creates something new. An entrepreneur assembles and then integrates all the resources
needed—the money, the people, the business model, the strategy, and the risk-bearing ability—to
transform the invention into a viable business.
- Entrepreneurship is defined as the process by which individuals pursue opportunities without regard to
resources they currently control for the purpose of exploiting future goods and services.
- art of turning an idea into a business.
- tasks called for by this behavior can be accomplished by either an individual or a group and typically
require creativity, drive, and a willingness to take risks.
- established firms with an entre- preneurial emphasis are proactive, innovative, and risk-taking.
What is corporate entrepreneurship? What is entrepreneurial intensity? - Answers - established firms
with an orientation toward acting entrepreneurially practice corporate entrepreneurship.1
,- All firms fall along a conceptual continuum that ranges from highly conservative to highly
entrepreneurial.
- position of a firm on this continuum is referred to as its entrepreneurial intensity.
- entrepreneurial firms are typically proactive innovators and are not averse to taking calculated risks. I
- conservative firms take more of a "wait and see" posture, are less innovative, and are risk averse.
- Firms with higher entrepreneurial intensity regularly look for ways to cut bureaucracy.
Why Do People Become Entrepreneurs? - Answers - three primary reasons that people become
entrepreneurs and start their own firms are to be their own boss, pursue their own ideas, and pursue
financial rewards.
Why do people want to be their own bosses? - Answers - many entrepreneurs want to be their own boss
because either they have had a long-time ambition to own their own firm or because they have become
frustrated working in traditional jobs.
- Some entrepreneurs transition from a traditional job to owning their own business more gradually, as
shown by a decision to initially operate their firm on a part-time basis.
- starting a business part time individuals can gain valuable experience, tuck away the money they earn,
and find out if they really like the business before deciding to leave their job.
- takes time to build a client list.
- Some entrepreneurs will time their departure from their job with the point in time at which their client
list is large enough and profitable enough to support a full-time business.
Why do people want to pursue their own ideas? - Answers - Some people are naturally alert, and when
they recognize ideas for new prod- ucts or services, they have a desire to see those ideas realized.
- Corporate entre- preneurs who innovate within the context of an existing firm typically have a
mechanism for their ideas to become known.
- Established firms, however, often resist innovation. W
- Because of their passion and commitment, some employees choose to leave the firm employing them
in order to start their own business as the means to develop their own ideas.
- some people, through a hobby, leisure activity, or just everyday life, recog- nize the need for a product
or service that is not available in the marketplace.
- If the idea is viable enough to support a business, they commit tremendous time and energy to
converting the idea into a part-time or full-time firm.
,- Many entrepreneurs experience tremendous satisfaction when their entre- preneurial idea catches on,
and they see the positive results it creates.
Why do people pursue financial rewards? - Answers - motivation, however, is typically secondary to the
first two and often fails to live up to its hype.
- average entrepreneur does not make more money than someone with a similar amount of
responsibility in a traditional job.
- financial lure of entre- preneurship is its upside potential.
- Making a profit and increasing the value of a company is a solidifying goal that people can rally around.
- money is rarely the primary motivation behind the launch of an entrepreneurial firm.
- financial rewards associated with entrepreneurship can be bittersweet if they are accompanied by
losing control of their firm.
- thrill of building the business and of seeing the success o
What are Characteristics of Successful Entrepreneurs? - Answers - Passion for the business
- Product/customer focus
- Tenacity despite failure
- Execution intelligence
What does it mean to have passion for the business? - Answers - whether it is in the context of a new
firm or an existing business.
- passion for an idea that gets a business going and keeps it going when times are tough.
- Making a difference in people's lives is the primary motivator behind many social enterprises, which
are often started by people who set aside promising careers to pursue a social goal.
- Passion is particularly important for both for-profit and not-for-profit entre- preneurial organizations
because although rewarding, the process of starting a firm or building either a profit-making corporation
or a social enterprise is demanding.
- important to be enthusiastic about a business idea, but it is also important to understand its potential
flaws and risks.
- Reasons passion is important:
o 1. The ability to learn and iterate
o 2. A willingness to work hard for an extended period of time
, o 3. Ability to overcome setbacks and "no's"
o 4. The ability to listen to feedback on the limitations of your organization and yourself
o 5. Perseverance and persistence when the going gets tough
- most effective business ideas take hold when their passion is consis- tent with their skills and is in an
area that represents a legitimate business opportunity.
Why is product/customer focus crucial to entrepreneurship? - Answers - two most important elements
in any business—products and customers.
- everything we build has to provide real value to both our users and customers.
- best measure- ment of whether or not we are successful at delivering something valuable is if our
customers, advertisers in our case, are willing to pay.
- product/customer focus also involves the diligence to spot product opportunities and to see them
through to completion.
Why is it important to have tenacity despite failure for an entrepreneur? - Answers - developing a new
business idea may require a certain degree of experimentation before success is attained.
- Setbacks and failures inevitably occur during this process.
- litmus test for entrepreneurs is their ability to persevere through setbacks and failures.
- important that entrepreneurs have sufficient tenacity to overcome personal obstacles along with
professional ones.
Why is execution intelligence important for entrepreneurship? - Answers - ability to fashion a solid idea
into a viable business
- execution intelligence is the factor that determines whether a start-up is successful or fails.
- ability to effectively execute a business idea means developing a busi- ness model, putting together a
new venture team, raising money, establishing partnerships, managing finances, leading and motivating
employees, and so on.
- also demands the ability to translate thought, creativity, and imagination into action and measurable
results.
- One way early-stage companies learn execution intelligence is by partici- pating in start-up incubator
and accelerator programs.
What are common traits and characteristics of entrepreneurs? - Answers A moderate risk taker
Persuasive
What is the GEM? - Answers - Global Entrepreneurship Monitor (GEM). GEM, which is a joint research
effort among several international universities and the Interna- tional Council for Small Business, tracks
entrepreneurship in 112 countries, including the United States.
- interest to GEM is total early stage entrepreneurial activity (TEA), which consists of businesses that are
just being started and businesses that have been in existence for less than three and a half years.
- high- est rates of entrepreneurial start-up activities occur in low-income countries,
- identifies whether its respondents are starting a new business to take advantage of an attractive
opportunity or because of necessity to earn an income.
- criticism of entrepreneurship, which is often repeated in the press, is that the majority of new
businesses fail.
Are start ups successful? - Answers - United States, according to the Bureau of Labor Statistics, over half
the businesses started are still in existence five years later.4 The number drops to just over a third after
10 years, but some of the businesses disappeared because they were successful and were sold or were
acquired by another firm.
- motivation must be coupled with a solid business idea, good financial management, and effective
execution to maximize chances for success.
What Is Entrepreneurship and Why Is It Important? - Answers - entrepreneur derives from the French
words entre, meaning "between," and prendre, meaning "to take."
- originally used to describe people who "take on the risk" between buyers and sellers or who
"undertake" a task such as starting a new venture.5
- An inventor creates something new. An entrepreneur assembles and then integrates all the resources
needed—the money, the people, the business model, the strategy, and the risk-bearing ability—to
transform the invention into a viable business.
- Entrepreneurship is defined as the process by which individuals pursue opportunities without regard to
resources they currently control for the purpose of exploiting future goods and services.
- art of turning an idea into a business.
- tasks called for by this behavior can be accomplished by either an individual or a group and typically
require creativity, drive, and a willingness to take risks.
- established firms with an entre- preneurial emphasis are proactive, innovative, and risk-taking.
What is corporate entrepreneurship? What is entrepreneurial intensity? - Answers - established firms
with an orientation toward acting entrepreneurially practice corporate entrepreneurship.1
,- All firms fall along a conceptual continuum that ranges from highly conservative to highly
entrepreneurial.
- position of a firm on this continuum is referred to as its entrepreneurial intensity.
- entrepreneurial firms are typically proactive innovators and are not averse to taking calculated risks. I
- conservative firms take more of a "wait and see" posture, are less innovative, and are risk averse.
- Firms with higher entrepreneurial intensity regularly look for ways to cut bureaucracy.
Why Do People Become Entrepreneurs? - Answers - three primary reasons that people become
entrepreneurs and start their own firms are to be their own boss, pursue their own ideas, and pursue
financial rewards.
Why do people want to be their own bosses? - Answers - many entrepreneurs want to be their own boss
because either they have had a long-time ambition to own their own firm or because they have become
frustrated working in traditional jobs.
- Some entrepreneurs transition from a traditional job to owning their own business more gradually, as
shown by a decision to initially operate their firm on a part-time basis.
- starting a business part time individuals can gain valuable experience, tuck away the money they earn,
and find out if they really like the business before deciding to leave their job.
- takes time to build a client list.
- Some entrepreneurs will time their departure from their job with the point in time at which their client
list is large enough and profitable enough to support a full-time business.
Why do people want to pursue their own ideas? - Answers - Some people are naturally alert, and when
they recognize ideas for new prod- ucts or services, they have a desire to see those ideas realized.
- Corporate entre- preneurs who innovate within the context of an existing firm typically have a
mechanism for their ideas to become known.
- Established firms, however, often resist innovation. W
- Because of their passion and commitment, some employees choose to leave the firm employing them
in order to start their own business as the means to develop their own ideas.
- some people, through a hobby, leisure activity, or just everyday life, recog- nize the need for a product
or service that is not available in the marketplace.
- If the idea is viable enough to support a business, they commit tremendous time and energy to
converting the idea into a part-time or full-time firm.
,- Many entrepreneurs experience tremendous satisfaction when their entre- preneurial idea catches on,
and they see the positive results it creates.
Why do people pursue financial rewards? - Answers - motivation, however, is typically secondary to the
first two and often fails to live up to its hype.
- average entrepreneur does not make more money than someone with a similar amount of
responsibility in a traditional job.
- financial lure of entre- preneurship is its upside potential.
- Making a profit and increasing the value of a company is a solidifying goal that people can rally around.
- money is rarely the primary motivation behind the launch of an entrepreneurial firm.
- financial rewards associated with entrepreneurship can be bittersweet if they are accompanied by
losing control of their firm.
- thrill of building the business and of seeing the success o
What are Characteristics of Successful Entrepreneurs? - Answers - Passion for the business
- Product/customer focus
- Tenacity despite failure
- Execution intelligence
What does it mean to have passion for the business? - Answers - whether it is in the context of a new
firm or an existing business.
- passion for an idea that gets a business going and keeps it going when times are tough.
- Making a difference in people's lives is the primary motivator behind many social enterprises, which
are often started by people who set aside promising careers to pursue a social goal.
- Passion is particularly important for both for-profit and not-for-profit entre- preneurial organizations
because although rewarding, the process of starting a firm or building either a profit-making corporation
or a social enterprise is demanding.
- important to be enthusiastic about a business idea, but it is also important to understand its potential
flaws and risks.
- Reasons passion is important:
o 1. The ability to learn and iterate
o 2. A willingness to work hard for an extended period of time
, o 3. Ability to overcome setbacks and "no's"
o 4. The ability to listen to feedback on the limitations of your organization and yourself
o 5. Perseverance and persistence when the going gets tough
- most effective business ideas take hold when their passion is consis- tent with their skills and is in an
area that represents a legitimate business opportunity.
Why is product/customer focus crucial to entrepreneurship? - Answers - two most important elements
in any business—products and customers.
- everything we build has to provide real value to both our users and customers.
- best measure- ment of whether or not we are successful at delivering something valuable is if our
customers, advertisers in our case, are willing to pay.
- product/customer focus also involves the diligence to spot product opportunities and to see them
through to completion.
Why is it important to have tenacity despite failure for an entrepreneur? - Answers - developing a new
business idea may require a certain degree of experimentation before success is attained.
- Setbacks and failures inevitably occur during this process.
- litmus test for entrepreneurs is their ability to persevere through setbacks and failures.
- important that entrepreneurs have sufficient tenacity to overcome personal obstacles along with
professional ones.
Why is execution intelligence important for entrepreneurship? - Answers - ability to fashion a solid idea
into a viable business
- execution intelligence is the factor that determines whether a start-up is successful or fails.
- ability to effectively execute a business idea means developing a busi- ness model, putting together a
new venture team, raising money, establishing partnerships, managing finances, leading and motivating
employees, and so on.
- also demands the ability to translate thought, creativity, and imagination into action and measurable
results.
- One way early-stage companies learn execution intelligence is by partici- pating in start-up incubator
and accelerator programs.
What are common traits and characteristics of entrepreneurs? - Answers A moderate risk taker
Persuasive
