Management, Ch 7 – Flashcards
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entrepreneurship occurs when an enterprising individual pursues a lucrative opportunity
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Allegra independently owns and operates Southwest Style, a small business with about 30 employees. She is happy with the size of her business and the average profits it generates. From this scenario, Allegra's business can be considered an entrepreneurial venture
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there is a difference between a small business and an entrepreneurial venture
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a small business is typically defined as having fewer than 20 employees and characterized by many innovations
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an entrepreneurial venture has growth and high profitability as primary objectives
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entrepreneurs are best characterized as gamblers in their approach to risk
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new venture creators working inside big companies are called intrapreneurs
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entrepreneurs' primary motivation to start their own firms is most often to get rich quickly
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successful entrepreneurs are innovators and also have good knowledge and skills in management, business, and networking
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a great idea is one of the essential ingredients in a successful entrepreneurial venture
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many great organizations have been built on the founder's desire to offer a product
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entrepreneurs spot, create, and exploit opportunities in a variety of ways
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natural disasters can provide opportunities for entrepreneurs
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franchising is an entrepreneurial alliance between two organizations
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a franchisor is an innovator who has created at least one successful store and seeks partners to operate the same concept in other local markets
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in the subscription model for e-commerce, fees are charged to bring buyers and sellers together
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in e-commerce, the advertising support model involves advertisers paying for access to the demographic group that visits the operator's site
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online travel agents typically use the transaction fee model for e-commerce
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an example of the intermediary model of e-commerce is eBay
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magazines and newspapers that are available online frequently use an affiliate model for e-commerce
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successful entrepreneurs often exhibit creativity, self-reliance, and the ability to adapt
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the entrepreneurial strategy matrix allows one to conceptualize ventures along two dimensions: investment and risk
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start ups have at least two major liabilities: completeness and effectiveness
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entrepreneurs with plenty of business experience tend to overlook the risk factor involved in starting a new business
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bad economic conditions make it especially difficult for an entrepreneurial organization to expand
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protected environments for new, small businesses are known as business incubators
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the reason for nearly all financial failures of entrepreneurial ventures is the lack of adequate start up capital
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entrepreneurs are frequently challenged by an aversion to record keeping
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initial public stock offerings provide a way to raise capital through federally registered and underwritten sales of shares in the company
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a business plan would best be described as the initial rough sketch of an idea for starting a new venture
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the best business plans convey five key factors: the people, the opportunity, the competition, the context, and risk and reward
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a business is legitimate if its goals and methods are consistent with societal values
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social capital is a competitive advantage in the form of relationships with other people and the image other people have of you
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large corporations are merely passive bystanders in the entrepreneurial explosion
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skunkworks are project teams designated to produce new, innovative products
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bootlegging refers to creating official job assignments for employees to create new products and processes of their own choosing
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organizations that encourage intrapreneurship face the obvious risk that the effort can fail
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an entrepreneurial orientation includes being proactive and competitively aggressive
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entrepreneurship
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___occurs when an enterprising individual pursues a lucrative opportunity
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entrepreneurship
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Jake worked as an engineer for Z-T Solutions. He had many innovative ideas for the company, but most were never explored to his satisfaction. Therefore, he left the corporation to start his own business. He applied his ideas and thoughts to this business and finally succeeded. This is an example of...
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small business
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a business having fewer than 100 employees, independently owned and operated, not dominant in the field, and not characterized by many innovative practices is an...
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entrepreneurial venture
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a new business having growth an high profitability as primary objectives is an..
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acquire growth and high profitability
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the primary objective of an entrepreneurial venture is to...
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entrepreneur
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an individual who establishes a new organization without the benefit of corporate sponsorship is called an...
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intrapreneurs
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best described as new venture creators working inside big companies
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intrapreneur
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while working at Giggles Corp, Kelly has created a new venture based solely on her idea and Giggles' proprietary technology. Kelly can be described as an...
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entrepreneurship
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using his own money and resources, Justin --who recently resigned from his job-- started a new business based on the innovative ideas that he himself had generated. this is an example of...
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dislike the bureaucracy in corporate life
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entrepreneurs start their own firms because they...
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great ideas
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according to many entrepreneurs and observers, when creating a new business, one should start with...
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lifestyle and taste changes
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when spotting an opportunity, which of the following possibilities involves capitalizing on new clothing and music trends, the desire for fast food, and growing interest in sports?
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economic dislocations
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Quad Inc, a car manufacturer, has started to sell electric cars in response to the rising fuel prices. In what category did Quad Inc spot an opportunity?
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franchisee
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leah is interested in running a business and decides to open a branch of a successful fashion store that her sister owns in another town. in this case, leah could be best described as...
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for goods and services
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the transaction fee model involves companies charging fee:
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advertising support model
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with what model does a site pay commissions to other sites to drive business to its own sites?
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intermediary
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bringing buyers and sellers together and charging a commission for each sale is known as the __ model
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subscription
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the Draconian Times requires regular viewers of its online articles to pay a monthly fee to maintain uninterrupted access to its content. this is an example of the ___ model
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social entrepreneurship
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Dr. Gerry began helping women in South Rhodia obtain micro loans. this act is a typical example of...
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tolerance of risk and uncertainty
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generally, what characteristic contributes to entrepreneurs' success
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commitment and determination
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what characteristic do successful entrepreneurs who are decisive, tenacious, disciplined, and willing to sacrifice possess?
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motivation to excel
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Sean worked in a hospital for several years before starting a medical equipment company. He has a clear vision of the result he is working to get. Moreover, he is aware of his strengths and weaknesses, and always sets realistic goals. In this case, what characteristic of successful entrepreneurs does Sean possess?
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opportunity obsession
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what is a characteristic that increases the likelihood of an entrepreneur's success
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upper left quadrant
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a product that represents a novel idea requiring little financial investment would be displayed in the ___ of the entrepreneurial strategy matrix
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low innovation/high risk
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most small business ventures are in the ____ category of the entrepreneurial strategy matrix
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lower right quadrant
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Benjamin wishes to open a new home furnishing company that will have no services that are particularly distinctive compared to competitors in this well established field; the business will require a sizable investment. In what part of the entrepreneurial strategy matrix is new company likely to be located?
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high innovation/high risk
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a novel product idea that involves a large financial investment would be categorized as involving...
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smallness
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what is one of the major liabilities of start ups?
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offer more opportunities to expand
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bad economic times can...
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business incubators
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protected environments for new, small companies
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access to shared services
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benefits of business incubators include...
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formal control systems
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entrepreneurs, in part because they are very busy, often fail to use...
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adequate succession planning
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success of entrepreneurial ventures is often jeopardized by the death of the founder. what is an important measure to minimize this problem?
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fill at least one key position with a non family member
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in order for family-managed businesses to survive and prosper, management guru Peter Drucker advises them to...
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someone outside the family and the business
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according to Peter Drucker, who should help plan succession for a family managed business?
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initial public stock offering
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IPO is an acronym that stands for
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to raise more capital
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what is a reason for companies to go public
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creation of a long term relationship with non beneficial banking institutions
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a disadvantage of going public is the...
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feel they would lose control
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a reason why many entrepreneurs prefer to avoid going public is that they...
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conduct an opportunity analysis
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generally, the first formal planning step is to...
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opportunity analysis
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includes a description of the good or service, an assessment of the opportunity, an assessment of the entrepreneur, a specification of activities and resources needed to translate the idea into a viable business, and the individual's source of capital
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to analyze whether or not to proceed
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what is a fundamental reason for creating an opportunity analysis?
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business plan
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a formal planning step that focuses on an entire venture and describes all the elements involved in starting it
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opportunity
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what is a key planning element that provides competitive advantage that can be defeated?
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legitimacy
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people's judgment of a company's acceptance, appropriateness, and desirability, generally stemming from company goals and methods that are consistent with societal values, is known as...
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social capital
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a competitive advantage from relationships with other people and the image other people have of the entrepreneur is known as...
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social capital
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provides a lasting source of competitive advantage
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top management teams
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what is a non financial resource that is crucial to the success of a new business?
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clearing the investment
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the first step to building organizational support for an intrapreneur's idea that involves explaining the idea and seeking approval to look for wider support is called:
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making cheerleaders
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while building support for one's idea, getting together people will offer support before formal approval from higher levels is known as...
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getting the blessing
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what stage includes building support for an idea that involves guaranteeing the project's technical and political feasibility, often with a formal presentation to higher management
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horsetrading
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amelie decides to offer one of her subordinates, jason, his pick of tasks on a new project in exchange for his vocal support of it at an upcoming meeting. in this case, amelia is...
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building support for an intrapreneurial idea
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horse trading, making cheerleaders, getting the blessing, and clearing the investment are the steps in..
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skunkworks
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nathan works as a materials scientist for a carpet manufacturer. he has developed a material that does not work well in carpeting, but it could have applications in hard flooring or other construction products. nathan has been made the team lead of scientists tasked with determining some marketable uses for the new material. the group could be referred to as...
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bootlegging
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refers to informal efforts- as opposed to official job assignments- in which employees work to create new products and processes of their own choosing and initiative
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rewarding risk taking
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successfully fostering and managing intrapreneurship involves...
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bootlegging
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viviana works in the software development team for a large corporation. her employer encourages employees to pursue new ideas on company premises and therefore she has a side project involving applications for small kitchen appliances. in this scenario, viviana's employer appears to support....
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relying too heavily on a single large project
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the most dangerous risk in corporate entrepreneurship is possibility of
