Quiz 2 With Answers

Chapter 2 The Entrepreneurial and Intrapreneurial Mind

True/False Questions

1. Intrapreneurship is entrepreneurship within an existing organization.

Answer: True Page: 37 Difficulty: Easy

2. Because most good business opportunities appear suddenly, the entrepreneur is rarely able to identify opportunities early enough to exploit them.

Answer: False Page: 38 Difficulty: Easy

3. Business venture risks and rewards are determined by the market size and the length of the window of opportunity.


4. An opportunity assessment plan is simply another word for a business plan.

Answer: False Page: 39 Difficulty: Medium

5. When acquiring resources, most entrepreneurs find that it is best to give up as much control as possible to secure financing.


6. The administrative domain, when compared with the entrepreneurial domain, is slower to act on an opportunity, but commits for shorter time spans than the entrepreneur.

Answer: False Page: 42 Difficulty: Hard

7. The entrepreneur, as compared with the administrator or manager, generally has a drive to accumulate as much resources as possible.


8. In the entrepreneurial domain, the organizational structure is formalized and hierarchical in nature.

Answer: False Difficulty: Medium

Hisrich, Entrepreneurship, Sixth Edition 9


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.


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.


12. The typical corporate culture favors conservative decision making.


13. The guiding principles of intrapreneurship are do not make mistakes and protect your turf.


14. Intrapreneurs and entrepreneurs are motivated by promotion and corporate rewards.


15. Managers have a short-run time orientation, while entrepreneurs have a long-run orientation.


16. To successfully implement the intrapreneurial environment, trail and error should be discouraged.


17. One key to intrapreneurial success has been the existence of “skunkworks.”


10 Hisrich, Entrepreneurship, Sixth Edition


18. Intrapreneurs are rarely motivated by the offer of an equity position.


19. An entrepreneurial leader should be flexible and create management options.


20. The first step in establishing intrapreneurship in an organization is to secure commitment from top, upper, and middle managers.


21. The organization attempting to establish intrapreneurship should learn to be more productive with fewer resources.


22. For intrapreneurial ventures to be successful, the intrapreneurs should have only limited authority over expenditures and access to sufficient funds.


23. To encourage intrapreneurship, organizations must tie the rewards to the performance of the intrapreneurial unit.


24. New ventures started within a corporation perform better than those started independently by entrepreneurs.


25. Because of its large size, 3M has not been successful in implementing intrapreneurial ventures.




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



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.


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.


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


34. New business venturing involves: A) organizational innovativeness. B) self-renewal. C) proactiveness. D) all of the above.

Answer: D Page: 45 Difficulty: Easy



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



40. The spirit of intrapreneurship: A) involves conservative decision making. B) must be voluntary. C) is genetic. D) all of the above


41. Which of the following adjectives describes an intrapreneur? A) Visionary B) Loner C) Protective of turf D) Undiplomatic


42. Intrapreneurship thrives in an atmosphere of: A) Machiavellian politics. B) compartmentalized work processes. C) open discussion. D) harmony.


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.


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



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. Trueb. 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. Trueb. 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.



a. Trueb. False

4. Which of the following is not a characteristic of the typical entrepreneur? a. confidence, in their ability to succeedb. value of money over achievementc. desire for immediate feedbackd. a future orientation

5. Which sector dominates the U.S. economy today? a. retalb. servicesc. manufacturingd. wholesalee. real estate and financial

6. The primary cause of small business failures is, a. lack of capitalb. management incompetencec. poor locationd. 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. Trueb. False

8. The wise entrepreneur will hire a professional to prepare his business plan for him. a. Trueb. 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 capitalb. Creating a solid business planc. Spending lots of money on marketing and advertisingd. Hiring a team of accountants and attorneys as advisors

10. The primary purpose of a business plan is toa. attract lenders and investors. b. enable an entrepreneur to take his or her company public.



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. Goalsb. Strategiesc. Objectivesd. Key performance factors

12. ( _ ) are short term, specific targets which are attainable, measurable, and controllable. a. Objectivesb. Policiesc. Goalsd. 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 ventured. two of the abovee. 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.



15. Which of the following would be considered a feature of Kyoto's new cap? a. The special locking mechanismb. The red panel showing through the little window on top of the cap signaling that the locking mechanism is engagedc. 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. Trueb. False

18. "Improving the company's cash flow" is a good example of an effective objective. a. Trueb. 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. Trueb. 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. Trueb. 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 advantageb. Missionc. Strategic managementd. Market segmentation



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 statementb. competitive advantagec. competitive profiled. 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. strengthb. weaknessc. opportunityd. threat

25. Refer to the previous question. Skatell's business strategy would best be described asa. low costb. differentiationc. focusd. 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.



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 leadershipb. differentiationc. focusd. positioning

28. The foundation of every business is satisfying the customer. a. Trueb. False

29. By 2050, the largest minority group in the U.S. will be Hispanics. a. Trueb. False

30. Modem consumers are more concerned about health, nutrition, and the environment than in the past, and they shop accordinglya. Trueb. 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. Trueb. False

32. One of the primary objectives of market research is to identify a small company's target marketa. Trueb. 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. Trueb. False

34. Without a clear picture of its target market, a small company will try to reach almost



everyone and usually ends up appealing to almost no one. a. Trueb. False

35. Because 70 percent of the average company's Wes come from present: customers, few can afford to alienate any customers. a. Trueb. False

36. It takes much less money and time to keep existing customers than it does to attract new ones. a. Trueb. 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. Trueb. False

38. Sales start a customer relationship service turns it into a profitable one. a. Trueb. 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 strategya. Trueb. False

40. Successful marketing requires a business owner to, a. understand what her target customers’ needs, demands, and wants before her competitor canb. 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.



e. all of the above

42. The first step in the market research process is toa. 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 toa. 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 Awarenessb. Level 2 Customer Sensitivityc. Level 3 Customer Alignmentd. Level 4 Customer Partnership

45. The majority of customers who stop patronizing a particular store do so becausea. its prices are too highb. its quality is too lowc. an indifferent employee treated them poorlyd. it failed to advertise enough

46. Attracting a new customer costs as much as keeping an existing one. a. twiceb. five timesc. halfd. 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. introductionb. growth and acceptancec. maturity and competitiond. market saturatione. product decline



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. Priceb. Placec. Profitd. Promotione. None. All of the above are part of the marketing mix.

50. The product life cycle concept means that small businesses musta. 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.


Quiz 2 With Answers

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