Chapter 10
The primary difference between entrepreneurial ventures and small businesses is that
entrepreneurial ventures ________.
innovate and pursue growth
Starting a new business in pursuit of an opportunity to introduce a new product or service to
market through innovation is engaging in the process of ________.
entrepreneurship
All of the following are questions entrepreneurs might ask themselves when they evaluate
marketplace considerations for potential ideas EXCEPT ________.
Do you have a realistic picture of the venture's potential?
Which of the following areas of a business plan is likely to address any broad trends in the
technological environment?
Analysis of context
Which of the following forms of business organizations has two or more owners who share
business management and risk but also have unlimited personal liability?
General partnership
Which of the following forms of business ownership does not encounter a tax treatment that
involves income/losses passing through the owner(s)/partners and taxed at a personal rate?
C corporation
What is one of the most common causes for a new business' failure?
The inability for the entrepreneur to provide the required leadership
Which of the following is NOT a characteristic of a proactive personality?
Resist delegating to others
Which of the following is NOT considered a potential problem requiring monitoring and control?
Maintain regular contact with top recruiters for talent.
Which of the following is NOT an exit option for an entrepreneur?
Devalue the business
The process of starting new businesses, generally in response to opportunities, is ________.
entrepreneurship
Which of the following defines an entrepreneurial venture?
It pursues opportunities, is characterized by innovative practices, and has growth and profitability as its
main goal.
In comparison to large firms, entrepreneurs ________.
play a disproportionate role in commercializing new products
What is the first step in the entrepreneurial process?
Exploring the entrepreneurial context
Which of the following defines high risk-takers?
They understand when to take risks and when to avoid them.
The creation of ATMs in the 1960s paved the way for today's online banking. According to Peter
Drucker, the creation of ATMs is an example of which potential source of opportunity?
The process need
Many start-ups today ________.
are integrating revenue-generating and philanthropy
The success of eBay as an online intermediary between buyers and sellers to connect people
(versus selling them things) is an example of which of Drucker's sources of opportunity?
Industry and market structures
As a source of opportunity for entrepreneurs, new knowledge ________.
requires that entrepreneurs be able to do something with that knowledge
In one survey, the highest number of responses came from entrepreneurs who said their idea for
a business came from ________.
sudden insight/chance
When an organization has a competitive advantage, ________.
it has something that other companies don't, does something better than other organizations, or does
something that others can't
Which of the following describes a feasibility study?
It can serve as a basis for a business plan.
Which of the following is the most important thing an entrepreneur develops when planning a
venture?
Business plan
The two primary factors affecting an entrepreneur's choice of legal ownership for a venture are
________ and ________.
taxes; legal liability
An entrepreneur has decided to structure her business as a distinct legal entity with its own
charter. She wants to be sure the business entity is separate from herself as owner and separate
from her managers. Which of the basic types of ownership has she chosen?
Corporation
The legal organization in which the owner maintains complete control over the business and is
personally liable for business debts is the ________.
Sole proprietorship
Martina has decided to structure her new business venture to provide liability protection while
gaining tax benefits over alternative structures. Her attorney has prepared the operating
agreement and advised her of the complexities and expense of setting up this structure. Which of
the basic types of ownership has Martina chosen?
LLC
When would a fluid or flexible organizational structure be most appropriate?
When innovation is critical to the organization's competitive advantage
In recruiting employees, entrepreneurs tent to focus on ________.
matching the person to the organization
In identifying personality characteristics of entrepreneurs, it is likely that entrepreneurs ________.
Are more proactive
Which of the following is an important motivational tool entrepreneurs can use?
Employee empowerment
Entrepreneurs tend to ________.
be able to manage high-risk situations
Which of these areas does NOT represent a potential problem that entrepreneurs should develop
controls to address?
Physical structure
Which of these exit options involves shutting down the business and selling the assets?
Liquidation
An entrepreneur's decision to exit the venture may be based on the fact that he or she hopes to
capitalize financially on the investment in the venture. This is known as ________.
harvesting