Organizational Behavior Test Bank Chapter 19 PDF

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Chapter 19 ENTREPRENEURSHIP

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TRUE-FALSE QUESTIONS Title: ANSWER: T REFERENCE: Entrepreneurship Today LEARNING OUTCOME: 1 1. An entrepreneur is a person who opens and manages his or her own business. a. True b. False Title: ANSWER: F REFERENCE: Entrepreneurship Today LEARNING OUTCOME: 1 RATIONALE: By definition, entrepreneurs are risk takers. 2. Entrepreneurs, as a general group, dislike risk taking. a. True b. False Title: ANSWER: T REFERENCE: Entrepreneurship Today LEARNING OUTCOME: 1 3. Entrepreneurs are people with vision, drive, and creativity, who are willing to take the risk of starting and managing a business to make a profit. a. True b. False Title: ANSWER: T REFERENCE: Entrepreneurship Today LEARNING OUTCOME: 1 4. Entrepreneurs typically are innovators who start companies to pursue their ideas for a new product or service. a. True b. False Title: ANSWER: T REFERENCE: Entrepreneurship Today LEARNING OUTCOME: 1 5. Micropreneurs are entrepreneurs who start small and plan to stay small. a. True b. False Title: ANSWER: F REFERENCE: Entrepreneurship Today LEARNING OUTCOME: 1 RATIONALE: Multipreneurs are entrepreneurs who start a series of companies. 6. Multipreneurs are businesspeople who have tried a succession of entrepreneurial start-ups without finding an area in which they could be successful. a. True b. False Title: ANSWER: F REFERENCE: Characteristics of Successful Entrepreneurs LEARNING OUTCOME: 2 RATIONALE: Entrepreneurs need the managerial ability required to organize a company. 7. A positive aspect of opening a small business is that it takes very little management skill because it is small. a. True b. False Title: ANSWER: F REFERENCE: Small Business: Driving America's Growth LEARNING OUTCOME: 3 RATIONALE: Established small businesses are defined as companies that have been in business at least five years and employ at least one, but less than 50, employees. 8. Established small businesses are defined as companies that have been in business at least fifteen years and employ between 50 to 500 employees. a. True

b. False Title: ANSWER: T REFERENCE: Small Business: Driving America's Growth LEARNING OUTCOME: 3 9. More than half of small businesses have between one and four employees. a. True b. False Title: ANSWER: F REFERENCE: Ready, Set, Start Your Own Business LEARNING OUTCOME: 4 RATIONALE: The first step in starting your own business is a self-assessment. 10. The first step in starting your own business is the creation of a unique marketable idea. a. True b. False Title: ANSWER: F REFERENCE: Ready, Set, Start Your Own Business LEARNING OUTCOME: 4 RATIONALE: All types of businesses need a business plan. 11. Unlike large corporations, sole proprietorships do not need a business plan. a. True b. False Title: ANSWER: T REFERENCE: Ready, Set, Start Your Own Business LEARNING OUTCOME: 4 12. The most common use of a business plan is to persuade lenders and investors to finance the venture. a. True b. False Title: ANSWER: F REFERENCE: Ready, Set, Start Your Own Business LEARNING OUTCOME: 4 RATIONALE: Those are the two sources of equity financing. 13. The two sources for debt financing are angel investors and venture capitalists. a. True b. False Title: ANSWER: T REFERENCE: Ready, Set, Start Your Own Business LEARNING OUTCOME: 4 14. Inadequate early planning is often at the core of small business failures. a. True b. False Title: ANSWER: F REFERENCE: Managing a Small Business LEARNING OUTCOME: 5 RATIONALE: One way to ease the burden of managing a business is to hire outside consultant. 15. It is not advisable for small businesses to use the services of CPAs and lawyers because most businesses are too small to afford the expense. a. True b. False Title: ANSWER: T REFERENCE: Managing a Small Business LEARNING OUTCOME: 5 16. Many small businesses that sell their products internationally use the services of export management companies (EMCs). a. True b. False Title: ANSWER: T REFERENCE: Small Business, Large Impact LEARNING OUTCOME: 6 17. An advantage of a small manufacturer over a large manufacturer is the speed with which new products can be introduced to the marketplace. May 14, 2019

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a. True b. False Title: ANSWER: F REFERENCE: Small Business, Large Impact LEARNING OUTCOME: 6 RATIONALE: Small businesses tend to have greater flexibility than large businesses. 18. Due to their size large businesses tend to have greater flexibility than small businesses. a. True b. False Title: ANSWER: T REFERENCE: Small Business, Large Impact LEARNING OUTCOME: 6 19. One of the reasons small businesses continue to thrive in the United States is outsourcing. a. True b. False Title: ANSWER: T REFERENCE: Small Business, Large Impact LEARNING OUTCOME: 6 20. One of the biggest advantages that a small business has over a large business is a greater ability to serve specialized markets. a. True b. False Title: ANSWER: F REFERENCE: Small Business, Large Impact LEARNING OUTCOME: 6 RATIONALE: Complying with federal regulation is one of the disadvantages to being a small business owner. 21. In the past few years, the federal government has cut back burdensome government regulations and paperwork to the point that they are almost non-existent for small business owners. a. True b. False Title: ANSWER: T REFERENCE: The Small Business Administration LEARNING OUTCOME: 7 22. The Small Business Administration (SBA) assists small businesses by providing advice in management and financial matters. a. True b. False Title: ANSWER: F REFERENCE: The Small Business Administration LEARNING OUTCOME: 7 23. Direct Small Business Administration (SBA) loans are made from funds set aside each year by Congress. a. True b. False Title: ANSWER: F REFERENCE: Trends in Entrepreneurship and Small-Business Ownership LEARNING OUTCOME: 8 RATIONALE: Changes in demographics, technology, and society all have led to increases in entrepreneurship. 24. Entrepreneurial activities are not influenced by changes in the external environment. a. True b. False Title: ANSWER: T REFERENCE: Trends in Entrepreneurship and Small-Business Ownership LEARNING OUTCOME: 8 25. One of the reasons why there has been a dramatic increase in the number of small business startups is rapidly changing technology. a. True b. False Title: ANSWER: F REFERENCE: Trends in Entrepreneurship and Small-Business Ownership LEARNING OUTCOME: 8 May 14, 2019

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RATIONALE: Business ownership by minorities is increasing at a much faster rate than the national average. 26. Minorities are not interested in becoming entrepreneurs. a. True b. False

MULTIPLE-CHOICE QUESTIONS Title: ANSWER: A REFERENCE: Entrepreneurship Today LEARNING OUTCOME: 1 1. The person who takes the risk of starting and managing a business to make a profit is called a(n): A. entrepreneur B. venture capitalist C. capitalistic adventurer D. franchiser E. ultra capitalist Title: ANSWER: A REFERENCE: Entrepreneurship Today LEARNING OUTCOME: 1 RATIONALE: The person who takes the risk of starting and managing a business to make a profit is called an entrepreneur. 2. Andy Yocom saw prime advertising space on the flags on the golf course. He reasoned that any marketing messages would get prominent attention if they were placed on the flags since golfers focus on them when they take their shots. As a result, Yocom used his own initiative and money to start Invision Golf Group Inc. Yocom is an example of a(n): A. entrepreneur B. venture capitalist C. capitalistic adventurer D. franchiser E. ultra capitalist Title: ANSWER: D REFERENCE: Entrepreneurship Today LEARNING OUTCOME: 1 RATIONALE: The person who takes the risk of starting and managing a business to make a profit is called an entrepreneur. 3. Jon P. Farmer is the founder of Kolopua Hawaii LLC, a company that markets Pure Hawaiian Air. Bottles of Pure Hawaiian Air contain air that smells like the floral bouquet that greets tourists as they get off the plane in Hawaii. Retailing for about $5 apiece, the bottles are sold at gift shops in Hawaii, as well as to travel agents nationwide who give them to clients. As a(n) _____, Farmer's annual income exceeds $100,000 annually. A. venture capitalist B. franchisee C. franchisor D. entrepreneur E. financier Title: ANSWER: D REFERENCE: Entrepreneurship Today LEARNING OUTCOME: 1 4. An entrepreneur is a person who _____ a business. A. finances B. manages C. locates D. owns and operates E. works for Title: ANSWER: C REFERENCE: Entrepreneurship Today LEARNING OUTCOME: 1

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5. The difference between the small business owner and the entrepreneur is that the entrepreneur: A. manages the business B. files taxes for the business C. assumes the risk of the business D. is responsible for the profits of the business E. is accurately described by all of the above Title: ANSWER: D REFERENCE: Entrepreneurship Today LEARNING OUTCOME: 1 6. The difference between small business owners and entrepreneurs is that small business owners: A. are innovators B. started the business to pursue their idea for a new product or service C. are risk takers D. accept the status quo and take a short-term view of the future E. are accurately described by all of the above Title: ANSWER: B REFERENCE: Entrepreneurship Today LEARNING OUTCOME: 1 RATIONALE: Classic entrepreneurs are risk takers who start their own company based on innovative ideas. 7. When Art Baer read that Singapore would lift its ban on chewing gum, he thought to himself, "There has to be a market there." Baer, 26, knew if he was going to move beyond the daydreaming stage, he had to move fast. After investing $20,000 of his own money into developing a product he called Impress Gum, Baer quit his job, flew to Singapore, talked to the right people in the government, lined up a manufacturer, and hired a marketing firm to promote his gum, which fights tooth decay. Baer is an example of a(n) ______ entrepreneur. A. growth-oriented B. classic C. opportunistic D. risk-aversive E. debt-based Title: ANSWER: B REFERENCE: Entrepreneurship Today LEARNING OUTCOME: 1 RATIONALE: Classic entrepreneurs are risk takers who start their own company based on innovative ideas. 8. When he read Chicken Soup From the Soul, Joe Farmer was struck by how many of the stories mentioned the scent of the islands. So Farmer created bottles filled with Hawaiian air and some scented essence beads. When customers shake the bottles up and open the lids, they're transported back to paradise. While many marketing experts did not think that consumers would buy bottles of air, Farmer has earned more than half a million dollars of sale during his first year of operation. Farmer was an example of a _____ entrepreneur. A. growth-oriented B. classic C. opportunistic D. risk-aversive E. debt-based Title: ANSWER: E REFERENCE: Entrepreneurship Today LEARNING OUTCOME: 1 RATIONALE: Micropreneurs are classic entrepreneurs that start small and plan to stay small. 9. When Suzanne Pogell wanted to learn to sail, but she could find no one to teach her because men were the ones who sailed, and women were their crew. She finally convinced someone to teach her to sail, and after mastering sailing, she started an all-woman sailing school called Womanship. Pogell started small and plans to stay small. She would be correctly called a(n): A. interpreneur B. multipreneur C. intrapreneur D. growth entrepreneur May 14, 2019

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E. micropreneur Title: ANSWER: E REFERENCE: Entrepreneurship Today LEARNING OUTCOME: 1 RATIONALE: Micropreneurs are classic entrepreneurs that start small and plan to stay small. 10. When Allison Logue found out her children were allergic to corn, she started looking for sweets and starches that were corn-free and was dismayed to find very few such products on the market. As a result, she has started her own small business to produce and market corn-free desserts. It is a small market, and Logue plans to keep her business small. Logue is an example of a(n): A. interpreneur B. multipreneur C. intrapreneur D. growth entrepreneur E. micropreneur Title: ANSWER: E REFERENCE: Entrepreneurship Today LEARNING OUTCOME: 1 11. Many classic entrepreneurs are _____ who start small and plan to keep their business small. A. interpreneurs B. multipreneurs C. intrapreneurs D. growth entrepreneurs E. micropreneurs Title: ANSWER: D REFERENCE: Entrepreneurship Today LEARNING OUTCOME: 1 RATIONALE: Growth-oriented entrepreneurs want their businesses to grow into a major corporation. 12. In 2000, Eric Baker and Jeff Fluhr came up with a concept that would do away with scalping if they had their wish, and everyone used StubHub.com. The Internet company brings people who want tickets and people who have tickets that they are not using together. The company has assisted in the sale of tens of millions dollars worth of tickets annually and is always trying to sell more. It charges a small fee for its assistance. Baker and Fluhr would be classified as: A. interpreneur B. multipreneur C. intrapreneur D. growth-oriented entrepreneur E. micropreneur Title: ANSWER: A REFERENCE: Entrepreneurship Today LEARNING OUTCOME: 1 13. _____ are entrepreneurs who start a series of companies. A. Multipreneurs B. Intrapreneurs C. Multi-venturists D. Multi-faceted venturists E. Growth capitalists Title: ANSWER: B REFERENCE: Entrepreneurship Today LEARNING OUTCOME: 1 RATIONALE: Multipreneurs are entrepreneurs that start a series of companies. 14. Michael Bronner made a killing in the direct marketing business as the cofounder and CEO of Bronner Slosberg Humphrey, a wildly successful direct-marketing firm. His newest venture, Upromise Inc., enlists some of America's largest corporations to help families pay for college and is extremely successful. The 40-year-old Bronner will more than likely start at least one more new company before he retires because Bonner is a(n): A. interpreneur B. multipreneur May 14, 2019

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C. intrapreneur D. growth entrepreneur E. micropreneur Title: ANSWER: C REFERENCE: Entrepreneurship Today LEARNING OUTCOME: 1 15. _____ are entrepreneurs who apply their creativity, vision, and risk taking within a large corporation rather than starting a company of their own. They enjoy a high degree of autonomy while receiving a regular salary and financial backing from their employer. A. Multipreneurs B. Insourced entrepreneurs C. Intrapreneurs D. Corporate entrepreneurs E. Classic entrepreneurs Title: ANSWER: C REFERENCE: Entrepreneurship Today LEARNING OUTCOME: 1 RATIONALE: Intrapreneurs are entrepreneurs who apply their creativity, vision, and risk taking within a large corporation rather than starting a company of their own. 16. Gord Larose and his friend David Allan worked in Ottawa at Nortel Networks, a giant telecommunicationsequipment maker. One Friday afternoon, over a few beers in Larose's kitchen, they dreamed up a scheme for renting software over the Internet. Instead of quitting their jobs, they reported to work on Monday, explained their plan to their boss, and began working to make their idea a reality. Four years later, their idea has evolved into an important division of Nortel called Channelware. Larose and Allan are examples of: A. interpreneurs B. multipreneurs C. intrapreneurs D. growth-oriented entrepreneurs E. Insourced entrepreneurs Title: ANSWER: C REFERENCE: Entrepreneurship Today LEARNING OUTCOME: 1 RATIONALE: Intrapreneurs are entrepreneurs who apply their creativity, vision, and risk taking within a large corporation rather than starting a company of their own. 17. Lachlan Stuart is employed by International Paper, a company that values his vision and creativity. To stay ahead in a very competitive industry, International Paper gives Stuart, and his division has almost complete autonomy to develop innovative and effective communications. Stuart is an example of a(n): A. multipreneur B. insourced entrepreneur C. intrapreneur D. corporate entrepreneur E. classic entrepreneur Title: ANSWER: E REFERENCE: Entrepreneurship Today LEARNING OUTCOME: 1 18. Intrapreneurs: A. have a high degree of autonomy in spite of the fact they work for a large corporation B. have the characteristics of creativity, vision, and risk taking. C. receive regular salaries and employee benefits D. run mini-companies within large corporations E. are accurately described by all of the above Title: ANSWER: E REFERENCE: Characteristics of a Successful Entrepreneur LEARNING OUTCOME: 2 19. All of the following are characteristics of an entrepreneurial personality EXCEPT: A. the willingness to take risks May 14, 2019

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B. creativity C. problem solving skills D. a high energy level E. the willingness to be a follower rather than a leader Title: ANSWER: E REFERENCE: Characteristics of a Successful Entrepreneur LEARNING OUTCOME: 2 20. Which of the following is a characteristic of the entrepreneurial personality? A. Risk-aversion B. Willingness to be a follower rather than a leader C. Dependence on others D. Dependence on others for motivation E. Ambitious Title: ANSWER: E REFERENCE: Characteristics of a Successful Entrepreneur LEARNING OUTCOME: 2 21. Michael Bronner made a fortune in the direct marketing business as the cofounder and CEO of Bronner Slosberg Humphrey, a wildly successful direct-marketing firm. His newest venture, Upromise Inc., enlists some of America's largest corporations to help families pay for college and is extremely successful. Entrepreneur Bonner would more than likely have which of the following characteristics? A. Ambitious B. Independent C. Self-confident D. Visionary E. All of the above Title: ANSWER: B REFERENCE: Ready, Set, Start Your Own Business LEARNING OUTCOME: 4 22. The first step in starting your own business is: A. to determine where the funding will come from B. a self-assessment C. a business plan D. find an idea for a new product or service E. choose a form of business organization Title: ANSWER: D REFERENCE: Ready, Set, Start Your Own Business LEARNING OUTCOME: 4 23. Once Arnold Patel had decided he wanted to quit working as a Web designer for a large advertising agency and go into some kind of business for himself, he did a self-assessment, which indicated that he had an entrepreneurial spirit. His next step will be to: A. determine where the funding will come from B. look for customers C. create a business plan D. find the idea for his business E. choose a form of business organization Title: ANSWER: E REFERENCE: Ready, Set, Start Your Own Business LEARNING OUTCOME: 4 24. Hannah Li wants to quit her job as a legal secretary and start her own small business. She knows that she will be successful if she can find the right idea. Where can Li look for ideas for her new business? A. Problems she noticed in her old job B. Her interest in the history of Asian art C. Suggestions from her family D. Other businesses in other regions of the country E. All of the above May 14, 2019

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Title: ANSWER: B REFERENCE: Ready, Set, Start Your Own Business LEARNING OUTCOME: 4 25. Mark Ghermizian had quit his job and was looking to start a small business so he could be his own boss. When he read that people spend up to fifteen minutes every day staring at a bathroom stall door, he decided he would find advertisers who wanted to pay to have their advertising messages on bathroom stall doors. Since he has his idea, Ghermizian’s next step is to: A. determine if he has the right personality to run a business B. choose a form of business organization C. create a name for his business D. get financing for his new business E. create prototype ads Title: ANSWER: E REFERENCE: Ready, Set, Start Your Own Business LEARNING OUTCOME: 4 26. Andy Yocom was looking to start a small business so he could be his own boss. While golfing one day, he saw prime advertising space on the flags on the course. He has decided to call his new venture Invision Golf Group Inc. What should he include in his business plan? A. a management plan B. the elements of the company that make it unique C. an analysis of the market in which the company will operate D. a fi...