Ch7 Special Topic Social Entrepreneurship Complete Test Bank

Chapter 7: Special Topic: Social Entrepreneurship

True/False

1. It is generally believed that the term social entrepreneur was first coined by William Drayton in 1972.

2. Traditional business entrepreneurs typically choose a nonprofit form to operate their ventures, but social entrepreneurs unfortunately do not choose the nonprofit form.

3. A significant pro for a social entrepreneur of using the nonprofit form is that the owners can never take the value out of the venture for themselves.

4. Fortunately, profiting from curing social ill is not acceptable by law.

5. Social ventures tend to have greater stakeholder issues and challenges than traditional entrepreneurial ventures.

6. With growth come increased stresses on the ability of the venture to communicate internally.

7. People who believe in the social mission of the venture tend to be willing to pay a higher price for products and services.

8. An outline business plan is usually the first attempt at strategic planning.

9. If you tend to become a global force, then you will have to have managers in your team who have experience in managing small organizations.

10. Social ventures are usually a short-tem mission.

Short Answer / Fill in the Blank

1. A(n) _______ profit status is what most people think of when they think of a nonprofit.
2. The second class of models are called __________, in which a legal structure is created to enable both a social and a business mission to exist in a mutually supportive relationship.
3. The ___________ model usually requires the identification of a number of similar small businesses that individually cannot grow or even be sustainable.
4. The __________ is a term first introduced by Eric Raymond that is used to describe the result of sharing in which users of a “good” actually contribute to the overall value rather than detracting from it.
5. The ________ dates back to medieval England, where a “common” piece of land was set aside for the village to share, with each family being allowed to graze one cow on the commons.
6. The term __________ was first coined by a French social sciences researcher, who observed machinists creating complex and personal ornaments that they placed close to their workplace.
7. You can use ___________ to find people whose passion to help improve society aligns with your ideas for a social venture.
8. It is vital to realize and know how to deal with the various ______ that will be crucial to your success.
9. The ________ needs to demonstrate that the opportunity is expressed in a clear roadmap in order to compare and contrast where the business is going to where it was supposed to go.
10. Choosing an appropriate ________ is particularly important for a socially driven venture.

Multiple Choice

1. ______________ stakeholders to the social venture tend to place greater scrutiny on the venture.
   1. Internal
   2. Employee
   3. External
   4. Entrepreneurial
2. This type of model is a not-for-profit structure in which the enterprise is focused entirely on a social mission:
3. Pure
4. Hybrid
5. Dual-mission
6. Self-help
7. This type of model uses a normal business structure where profits can be attractive enough for external investors to participate while the company fulfills a major social need:

Pure

Hybrid

Dual-mission

Self-help

1. This type of model is where a legal structure is created to enable both a social and a business mission to exist in a mutually supportive relationship:

Pure

Hybrid

Dual-mission

Self-help

1. All of the following are classifications of cooperatives except:

purchasing

producer

consumer

community

1. Cooperative structures are much more common in all of the following places except:

India

United States

Europe

Asian countries

1. All of the following are pros of a “pure” model except:

Clear focus on social mission

Low or zero tax liability

Ease in attracting top talent

Can get foundation grants

1. All of the following are cons of a “pure” model except:

Difficult to attract top talent

Inability to attract equity investments

Too many conflict-of-interest issues

Inability for founders to participate financially

1. A nonprofit and a for-profit organization are linked in what model?

Hybrid model

Pure model

Co-operative model

Dual-mission model

1. All of the following are pros of choosing a dual mission model except:

Ease in maintaining social mission over time

Simple governance and tax structure

Can attract talent

Provide social benefits and wealth creation

1. All of the following are cons of choosing a dual mission model except:
   1. Exit strategies for investors limited
   2. Potential conflict of interests between founders and investors
   3. Difficult to maintain social mission over time
   4. High accounting and legal fees
2. All of the following are pros of choosing a cooperative model except:
   1. Low or zero tax payments
   2. Easier to sustain over long time
   3. Founders significantly benefit financially
   4. Members can extract profits
3. All of the following are cons of choosing a cooperative model except:
   1. Governance issues may be complex
   2. Deciding payments to management executives
   3. Difficult to maintain social mission over time
   4. Profit distributions can be contentious
4. Which motivation deals with individuals who are motivated by a spiritual need to “leave the world a better place” for others?
   1. Altruism
   2. Bricolage
   3. Philosophy of Life
   4. Peer recognition
5. Which motivation was the term first coined by a French social sciences researcher, who observed machinists creating complex and personal ornaments that they placed close to their workplace?
   1. Bricolage
   2. Peer recognition
   3. Fame
   4. Philosophy of Life
6. Which motivation is the term used to describe the personal satisfaction comes from having your peers witness the excellent work that you have contributed?
   1. Peer recognition
   2. Fame
   3. Altruism
   4. Bricolage
7. Which motivation is the term used to describe the individual wants to be known for the excellence of his or her contribution?
   1. Altruism
   2. Fame
   3. Philosophy of Life
   4. Peer recognition
8. When personal motivations create a(n) ____________, the network effects can be extremely powerful.
   1. physical activity
   2. social activity
   3. ethical activity
   4. physiological activity
9. All of the following are ways to use social networks to find people whose passion to help improve society aligns with your ideas for a social venture except:
   1. ask them to volunteer
   2. ask them to engage their friends
   3. host a fundraiser
   4. send them messages asking them repeatedly to help
10. Which of the following is a free social network for professionals?
    1. Huluplus
    2. Groupon
    3. LinkedIn
    4. Facebook
11. Entrepreneur can use a business plan as a guide for all of the following except:
    1. seeking partners
    2. Measuring customers’ feedback
    3. defining a hiring plan
    4. establishing the direction of the company and the action steps needed
12. Before drafting the plan, the entrepreneur will need to collect information on all of the following except:
    1. the “market”
    2. operating resources
    3. financial/cash flow
    4. the government
13. Which section of the business plan must establish the need for the product or service and the potential for the enterprise?
    1. marketing section
    2. company description section
    3. operations section
    4. finance section
14. Which section of the business plan describes how the business will reach the beneficiaries of the social venture?
    1. HR section
    2. company description section
    3. operations section
    4. marketing and sales strategy section
15. Which section of the business plan begins with a brief general description of the company?
    1. marketing section
    2. company description section
    3. marketing and sales strategy section
    4. operations section