Quiz 2_with Answers

Chapter 2 The Entrepreneurial and Intrapreneurial Mind

True/False Questions

1. Intrapreneurshi Intrapreneurship p is entrepre entrepreneurship neurship within an existing existing organizatio organization. n. Answer: True Page: 37 Difficulty: Easy 2. Because most good good business business opportunitie opportunitiess appear suddenly, suddenly, the entrepreneu entrepreneurr is rarely rarely able to identify opportunities early enough to exploit them. Answer: False Page: 38 Difficulty: Easy 3. Business Business venture risks and and rewards rewards are determined determined by the market market size size and the length of the window of opportunity. Answer: True Page: 39 Difficulty: Easy 4. An opportunity opportunity assessm assessment ent plan is is simply simply another another word for for a business business plan. plan. Answer: False Page: 39 Difficulty: Medium 5. When acquiring acquiring resourc resources, es, most entrepreneurs entrepreneurs find find that it is best best to give give up as much much control as possible to secure financing. Answer: False Page: 40 Difficulty: Medium 6. The administra administrative tive domain, domain, when when compared compared with the the entrepreneuria entrepreneuriall domain, is slower slower to act on an opportunity, but commits for shorter time spans than the entrepreneur. Answer: False Page: 42 Difficulty: Hard 7. The entrepreneur entrepreneur,, as compared compared with with the administr administrator ator or manager manager,, generally generally has a drive drive to accumulate as much resources as possible. Answer: False Page: 44 Difficulty: Medium 8. In the entrepreneur entrepreneurial ial domain, the the organizational organizational structure structure is formal formalized ized and hierarchical hierarchical in nature. Answer: False Difficulty: Medium

Hisrich, Entrepren Entrepreneurship, eurship, Sixth Sixth Edition

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9. The push from individuals within the organization who have a strong drive for freedom and are interested in "doing their own thing" has helped drive the current interest in intrapreneurship. Answer: True Page: 43 Difficulty: Easy 10. The inherent resistance to flexibility and diversification within large organizations can be overcome by developing intrapreneurship within the firm. Answer: True Page: 44 Difficulty: Medium 11. A key element in implementing intrapreneurship in a firm is to avoid being proactive. Answer: False Page: 45 Difficulty: Medium 12. The typical corporate culture favors conservative decision making. Answer: True Page: 45 Difficulty: Easy 13. The guiding principles of intrapreneurship are do not make mistakes and protect your turf. Answer: False Page: 45 Difficulty: Medium 14. Intrapreneurs and entrepreneurs are motivated by promotion and corporate rewards. Answer: False Page: 45 Difficulty: Medium 15. Managers have a short-run time orientation, while entrepreneurs have a long-run orientation. Answer: True Page: 46 Difficulty: Medium 16. To successfully implement the intrapreneurial environment, trail and error should be discouraged. Answer: False Page: 48 Difficulty: Medium 17. One key to intrapreneurial success has been the existence of “skunkworks.” Answer: True Page: 49 Difficulty: Medium

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Hisrich, Entrepreneurship, Sixth Edition


18. Intrapreneurs are rarely motivated by the offer of an equity position. Answer: False Page: 49 Difficulty: Medium 19. An entrepreneurial leader should be flexible and create management options. Answer: True Page: 50 Difficulty: Easy 20. The first step in establishing intrapreneurship in an organization is to secure commitment from top, upper, and middle managers. Answer: True Page: 51 Difficulty: Medium 21. The organization attempting to establish intrapreneurship should learn to be more productive with fewer resources. Answer: True Page: 52 Difficulty: Easy 22. For intrapreneurial ventures to be successful, the intrapreneurs should have only limited authority over expenditures and access to sufficient funds. Answer: False Page: 52 Difficulty: Medium 23. To encourage intrapreneurship, organizations must tie the rewards to the performance of the intrapreneurial unit. Answer: True Page: 52 Difficulty: Medium 24. New ventures started within a corporation perform better than those started independently by entrepreneurs. Answer: False Page: 52 Difficulty: Medium 25. Because of its large size, 3M has not been successful in implementing intrapreneurial ventures. Answer: False Page: 52 Difficulty: Medium


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Multiple Choice Questions

26. The spirit of entrepreneurship within the existing organization is called: A) venture formation. B) intrapreneurship C) entrepreneurship D) a joint venture. Answer: B Page: 37 Difficulty: Easy 27. One entrepreneur monitors the play habits and toys of her nieves and nephews. This is a good example of: A) opportunity identification. B) developing a business plan. C) identifying resources and resource gaps. D) implementing a growth strategy. Answer: A Page: 38 Difficulty: Medium 28. According to the text, channel members of the distribution system are good sources to identify business opportunities. Which of the following would not be such a channel member? A) wholesaler B) teacher C) retailer D) manufacturer's rep Answer: B Page: 39 Difficulty: Easy 29. An opportunity assessment plan: A) should focus on the opportunity and not the entire plan. B) is shorter than a business plan C) provides the basis for making the decision. D) all the above are true. Answer: D Page: 39 Difficulty: Medium

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30. In order to gain the financing needed to create a venture, entrepreneurs must often give up: A) some control of the new venture. B) a share of the ownership. C) patent rights. D) both a and b. Answer: D Page: 40 Difficulty: Medium 31. An entrepreneur's commitment to an opportunity is typically characterized by: A) a short time span. B) negotiations of strategy. C) management of fit. D) long-term evolution. Answer: A Page: 42 Difficulty: Medium 32. The commitment of resources for an entrepreneur: A) is usually for the total amount needed. B) requires the entrepreneur to reach significant milestones with few resources. C) requires the resource provides to have a large exposure to risk. D) all of the above are true. Answer: B Page: 42 Difficulty: Hard 33. What type of organizational structure does an entrepreneur employ? A) A formal structure B) A hierarchical structure C) A structure based on management theory D) A flat structure Answer: D Page: 42 Difficulty: Medium 34. New business venturing involves: A) organizational innovativeness. B) self-renewal. C) proactiveness. D) all of the above. Answer: D Page: 45 Difficulty: Easy


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35. The typical corporate culture has a climate and reward system that favor: A) risk taking. B) conservative decision making. C) innovation. D) obsequiousness. Answer: B Page: 45-46 Difficulty: Medium 36. Intrapreneurial cultures foster: A) flat organizational structures B) lines of authority. C) standardized hours. D) reporting systems. Answer: A Page: 45-46 Difficulty: Medium 37. Relative time orientation for entrepreneurs is: A) immediate or instant return. B) short run. C) long run. D) medium range. Answer: C Page: 46 Difficulty: Medium 38. One of the key elements to developing an intrapreneurial climate is to encourage: A) R&D to operate on the cutting edge of technology. B) a multidiscipline, teamwork approach. C) a short-term time horizon. D) both a and b. Answer: D Page: 48-49 Difficulty: Medium 39. Which of the following statements about the intrepreneurial climate is (are) true? A) Trial and error are encouraged. B) Resources of the firm need to be available and easily accessible. C) A multidisciplinary approach is encouraged. D) All of the above are true. Answer: D Page: 48-49 Difficulty: Easy

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40. The spirit of intrapreneurship: A) involves conservative decision making. B) must be voluntary. C) is genetic. D) all of the above Answer: D Page: 49 Difficulty: Medium 41. Which of the following adjectives describes an intrapreneur? A) Visionary B) Loner C) Protective of turf D) Undiplomatic Answer: A Page: 50 Difficulty: Medium 42. Intrapreneurship thrives in an atmosphere of: A) Machiavellian politics. B) compartmentalized work processes. C) open discussion. D) harmony. Answer: C Page: 50 Difficulty: Medium 43. The first step toward establishing an intrapreneurial environment is: A) identifying leaders. B) identifying market opportunities. C) securing commitment of top management. D) providing seminars for the company. Answer: C Page: 51 Difficulty: Medium 44. In order to establish intrapreneurship within the organization, top management should: A) commit to intrapreneurship for at least three years. B) discourage the development of mentors. C) avoid setting program expectations and target results. D) All of the above Answer: A Page: 51 Difficulty: Hard


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45. Which of the following is (are) elements necessary to implement intrapreneurship within an organization? A) The company should use technology to make itself more flexible. B) Comitment must be secured from top management. C) The organization must develop ways to get closer to its customers. D) All of the above are true. Answer: D Difficulty: Medium 46. Formation of new ventures within a corporate structure is difficult due to: A) lack of intrapreneurial talent. B) lack of freedom to make autonomous decisions. C) lack of market opportunity. D) all of the above. Answer: B Page: 52 Difficulty: Medium 47. Which of the following companies was not mentioned as having successfully implemented the intrapreneurial climate? A) 3M B) Hewlett-Packard C) General Motors D) IBM Answer: C Page: 52-53 Difficulty: Medium Exam 1 - Business Entrepreneurship 50 Questions at 2pts each for 100 points, plus 1 Bonus Question 1. According to entrepreneur Paul Hawken, good entrepreneurs are risk avoiders, not risk takers. a. True b. False 2. The Bureau of Labor Statistics projects that the U.S. small business sector will grow faster than the large company sector over the next 15 years. a. True b. False 3. An entrepreneur is one who creates a new business in the face of risk and uncertainty, for the purpose of achieving profit and growth by identifying opportunities, and assembles the necessary resources to capitalize on those opportunities.

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Chapter 2 The Entrepreneurial and Intrapreneurial Mind a. True b. False 4. Which of the following is not a characteristic of the typical entrepreneur? a. confidence, in their ability to succeed b. value of money over achievement c. desire for immediate feedback d. a future orientation 5. Which sector dominates the U.S. economy today? a. retal b. services c. manufacturing d. wholesale e. real estate and financial

6. The primary cause of small business failures is, a. lack of capital b. management incompetence c. poor location d. improper inventory control 7. The business plan has two essential functions: it helps the entrepreneur determine if the business will succeed, and it helps recruit management talent to run the new company. a. True b. False 8. The wise entrepreneur will hire a professional to prepare his business plan for him. a. True b. False 9. ( _ ) is an entrepreneur's best insurance against launching a business destined to fail or mismanaging a prtentially successful company. a. Bankrolling the business with plenty of startup capital b. Creating a solid business plan c. Spending lots of money on marketing and advertising d. Hiring a team of accountants and attorneys as advisors 10. The primary purpose of a business plan is to a. attract lenders and investors. b. enable an entrepreneur to take his or her company public.


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Chapter 2 The Entrepreneurial and Intrapreneurial Mind c. guide a company by plotting a strategy for its success. d. meet SEC and other legal requirements designed to protect lenders and investors. 11. ( _ ) define a company's overall direction and answer the fundamental question, "Why am I in business"? a. Goals b. Strategies c. Objectives d. Key performance factors 12. ( _ ) are short term, specific targets which are attainable, measurable, and controllable. a. Objectives b. Policies c. Goals d. Standard operating procedures 13. The business strategy section of the business plan, a. should be built around a "me too" strategy, one that imitates the products, sources, and images of already successful businesses. b. should describe how the entrepreneur plans to satisfy the key success factors he has identified in the business. c. should describe how the entrepreneur plans to achieve the mission, goals, and objectives he or she has established for their business venture d. two of the above e. all of the above Questions 14 and 15 refer to the following information Describing her company's revolutionary design for a bottle cap, Kyoto says. "It has a special locking mechanism that you know is engaged when a red panel is showing through this little window on top of the cap. If you want to keep unauthorized hands, for instance, those of children from opening the bottle, you engage the locking mechanism. Unlike other childproof caps, however, this design does not frustrate adults who might have arthritis and elderly people whose grip may not be as strong as it once was." Removing the cap from the bottle in no time with just a few turns, Kyoto says, "They can open the cap quite, easily by disengaging the locking mechanism this way... see? You get the safety of a childproof cap without the problems most adults have getting them off." 14. The fact that with Kyoto's new cap "you get the safety of a childproof cap without the problems most adults have getting them off" is a, a. feature. b. trait. c. benefit. d. none of the above.

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15. Which of the following would be considered a feature of Kyoto's new cap? a. The special locking mechanism b. The red panel showing through the little window on top of the cap signaling that the locking mechanism is engaged c. The fact that you get the safety of a childproof cap without the problems most adults have getting them off d. Two of the above 16. Which of the following questions should be in the marketing strategy section of the business plan addresses? a. Who are my target customers? b. How many potential customers are in my company's trading area? c. What should be the basis for differentiating my business from its competitors in my customers' minds? d. All of the above 17. To be effective, the small business manager should limit strategic analysis to only the two or three most significant opportunities facing the firm. a. True b. False 18. "Improving the company's cash flow" is a good example of an effective objective. a. True b. False 19. Before an entrepreneur can build a successful strategy, they must establish a clear mission, goals, and objectives in order to have appropriate targets at which to aim their strategy. a. True b. False 20. The focus strategy depends on creating value for the customer either by being the low cost producer or by differentiating the product or service in a unique fashion, but doing it in a narrow target segment. a. True b. False 21. ( _ ) involves developing a game plan to guide a company as it strives to accomplish its mission, goals, and objectives to keep it on its desired course. a. Competitive advantage b. Mission c. Strategic management d. Market segmentation


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Chapter 2 The Entrepreneurial and Intrapreneurial Mind 22. The aggregation of factors that sets a company apart from its competitors and gives it a unique position in the market is its, a. mission statement b. competitive advantage c. competitive profile d. strategic plan

23. The relationship between core competencies and competitive advantage is best described by which statement? a. Strengthening a company's competitive advantage strengthens its core competencies. b. A company's core competencies become the nucleus of its competitive advantage. c. As a company's core competencies become stronger, its competitive advantage becomes weaker. d. There is no relationship between core competencies and competitive advantage. 24. Skatell's, a small jewelry store with three locations, designs and manufactures much of its own jewelry while its competitors (many of them large department stores) sell standard, "off the shelf' jewelry. As a result, many customers see, Skatell’s as the place to go for unique pieces of jewelry. Skatell's reputation for selling unique and custom designed jewelry is a(n), a. strength b. weakness c. opportunity d. threat 25. Refer to the previous question. Skatell's business strategy would best be described as a. low cost b. differentiation c. focus d. generic 26. The relationship between a company's mission, goals, and objectives and its strategy is best described by which of the following statements? a. Developing a company's strategy lays the groundwork for creating its mission, goals, and objectives. b. The mission, goals, and objectives spell out the ends the company wants to achieve, and the strategy defines the means for reaching them. c. Although managers must change a company's mission, goals, and objectives as competitive conditions change, they should avoid adjusting the company's strategy to prevent the company from losing its focus and momentum.

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d. There is no real link between a company’s mission, goals, and objectives and its strategy. 27. Shere Vincente operates a travel service that specializes in arranging trips for women, giving special attention to their needs and preferences from security and comfort to activities and events designed to appeal to her target customers. Vincente is pursuing a ( _ ) strategy. a. cost leadership b. differentiation c. focus d. positioning 28. The foundation of every business is satisfying the customer. a. True b. False 29. By 2050, the largest minority group in the U.S. will be Hispanics. a. True b. False 30. Modem consumers are more concerned about health, nutrition, and the environment than in the past, and they shop accordingly a. True b. False 31. Businesses currently marketing goods and services to the elderly will be forced to reformulate their strategies in the near future as that market segment continues to shrink in size. a. True b. False

32. One of the primary objectives of market research is to identify a small company's target market a. True b. False 33. In relationship marketing, the level of customer involvement which a company makes its customers an all encompassing part of its culture is "Customer Partnership" a. True b. False 34. Without a clear picture of its target market, a small company will try to reach almost


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Chapter 2 The Entrepreneurial and Intrapreneurial Mind everyone and usually ends up appealing to almost no one. a. True b. False 35. Because 70 percent of the average company's Wes come from present: customers, few can afford to alienate any customers. a. True b. False 36. It takes much less money and time to keep existing customers than it does to attract new ones. a. True b. False 37. When an employee in a business treats a customer poorly, that customer usually does not complain; however, she does tell her "horror story" about that business to at least nine other people. a. True b. False 38. Sales start a customer relationship service turns it into a profitable one. a. True b. False 39. The owner of a small sandwich shop who opens a second location in a town 20 miles away is using a market development strategy a. True b. False 40. Successful marketing requires a business owner to, a. understand what her target customers’ needs, demands, and wants before her competitor can b. offer customer products and services that will satisfy their needs, demands, and wants. c. provide customers with service, convenience, and value so that they will keep coming back. d. all of the above.

41. A marketing plan should, a. determine customer needs and wants through market research. b. pinpoint specific target markets the company will serve. c. analyze the firm's competitive advantages and build a marketing Strategy around them. d. create a marketing mix that meets customer needs and wants.

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Chapter 2 The Entrepreneurial and Intrapreneurial Mind e. all of the above 42. The first step in the market research process is to a. collect data. b. define the problem. c. design the research, d. determine the relevant information. 43. An individualized (one to one) marketing campaign requires business owners to a. collect information on their customers, linking their identities to their transactions. b. calculate the long term value of their customers so they know which ones are most desirable and most profitable. c. practice "just in time marketing" by knowing what their customers' buying cycle is and time their marketing efforts to coincide with it. d. all of the above 44. When managers and employees understand the central role of the customer and spend considerable time talking to them and about them, a company is at which level of customer involvement? a. Level 1 Customer Awareness b. Level 2 Customer Sensitivity c. Level 3 Customer Alignment d. Level 4 Customer Partnership 45. The majority of customers who stop patronizing a particular store do so because a. its prices are too high b. its quality is too low c. an indifferent employee treated them poorly d. it failed to advertise enough 46. Attracting a new customer costs as much as keeping an existing one. a. twice b. five times c. half d. three fourths 47. In the phase of the product life cycle, sales volume climbs, but profits peak and then begin to fall as competitors enter the market. a. introduction b. growth and acceptance c. maturity and competition d. market saturation e. product decline


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Chapter 2 The Entrepreneurial and Intrapreneurial Mind 48. What can a company do to achieve stellar customer service and satisfaction? a. Listen to customers with the help of suggestion boxes, focus groups, surveys, and other tools. b. Define what "superior service" means so that customers and employees know exactly what to expect and what to provide. c. Hire friendly, courteous sales and service representatives. d. Use technology to provide better customer service. e. All of the above 49. Which of the following is not an element of the marketing mix? a. Price b. Place c. Profit d. Promotion e. None. All of the above are part of the marketing mix. 50. The product life cycle concept means that small businesses must a. constantly be involved in product innovation. b. trace demographic and psychographic trends carefully. c. create both place and time utility if they are to survive. d. use a market penetration strategy if they are to be successful.

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Quiz 2_with Answers

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