Verified Test Bank Chapter 16 Creating Organizations

Package Title: Neubert 1e Testbank

Course Title: Organizational Behaviour

Chapter Number: 16

Shuffle: No

Multiple Choice

1. Alfred plans to start Crystal Distilleries Inc., a purifying plant that will supply distilled water to various other industries. He interacts closely with the community where he plans on setting up the plant. He ensures that all business plans take into consideration the local water requirements and laws, as well as the ecological impacts that his plant might have. Alfred wants to implement a number of community welfare programs and chooses vendors that adopt eco-friendly business practices. From the given example, it can be seen that Alfred is practicing _____.

a) Conventional entrepreneurship

b) Sustainable entrepreneurship

c) Corporate entrepreneurship

d) Internal entrepreneurship

Difficulty: Hard

Learning Objective: Discuss how entrepreneurs focus on identifying needs that can provide financial payoffs and/or enhance well-being.

Section Reference: 16.1 Identify Opportunity

AACSB: Reflective thinking skills

Bloom’s: Application

2. Which of the following statements is true of conventional entrepreneurs?

a) They look at needs that, once met, can enhance a variety of forms of well-being.

b) They seek to eliminate needs or demand for their products or services.

c) They are constantly looking for better and more financially rewarding ways to meet needs.

d) They often explore ways to improve employment opportunities for the marginalized of society.

Difficulty: Medium

Learning Objective: Discuss how entrepreneurs focus on identifying needs that can provide financial payoffs and/or enhance well-being.

Section Reference: 16.1 Identify Opportunity

AACSB: Analytic skills

Bloom’s: Comprehension

3. Which of the following is a difference between conventional entrepreneurs and sustainable entrepreneurs?

a) Conventional entrepreneurs look for places where they can outperform existing competitors, whereas sustainable entrepreneurs explore ways to improve employment opportunities for the marginalized of society.

b) Conventional entrepreneurs look at meeting needs that enhance a variety of forms of well-being, whereas sustainable entrepreneurs focus on identifying needs that can provide financial payoffs.

c) Conventional entrepreneurs focus on divergent thinking, whereas sustainable entrepreneurs seek to find a single precise answer for a problem.

d) Conventional entrepreneurs recognize the importance of nonfinancial resources, whereas sustainable entrepreneurs focus on achieving tangible and quantifiable financial goals.

Difficulty: Medium

Learning Objective: Discuss how entrepreneurs focus on identifying needs that can provide financial payoffs and/or enhance well-being.

Section Reference: 16.1 Identify Opportunity

AACSB: Analytic skills

Bloom’s: Analysis

4 Which of the following best exemplifies conventional entrepreneurship?

a) Karen, the owner of Best Café, uses paper bags for packing food instead of plastic containers.

b) Pauline, who runs a department store, always looks to provide unique offers to increase sales.

c) Philip, a tea plantation owner, uses rainwater-harvesting systems for irrigation.

d) Duncan, a cement factory owner, has a facility for recycling the byproducts of the cement manufacturing process.

Difficulty: Hard

Learning Objective: Discuss how entrepreneurs focus on identifying needs that can provide financial payoffs and/or enhance well-being.

Section Reference: 16.1 Identify Opportunity

AACSB: Reflective thinking skills

Bloom’s: Application

5. How do sustainable entrepreneurs differ from conventional entrepreneurs?

a) Sustainable entrepreneurs look for places where they can outperform existing competitors, whereas conventional entrepreneurs explore ways to improve employment opportunities for the marginalized of society.

b) Sustainable entrepreneurs look at meeting needs that enhance a variety of forms of well-being, whereas conventional entrepreneurs focus on identifying needs that can provide financial payoffs.

c) Sustainable entrepreneurs look for opportunities to invest resources that will yield a higher financial return than they currently get, whereas conventional entrepreneurs seek to invent new ways of taking care of the environment.

d) Sustainable entrepreneurs often seek to create needs or demand for their products or services, whereas conventional entrepreneurs seek to eliminate needs or demand for their products or services.

Difficulty: Medium

Learning Objective: Discuss how entrepreneurs focus on identifying needs that can provide financial payoffs and/or enhance well-being.

Section Reference: 16.1 Identify Opportunity

AACSB: Analytic skills

Bloom’s: Analysis

5. Rich Chemicals Inc. is a major supplier of specialty chemicals to a large number of industries and research laboratories. When seeking to implement sustainable business practices, Rich Chemicals should focus on:

a) Outperforming competitors by providing unique added value.

b) Creating a need or demand for their products or services.

c) Identifying needs that can provide financial payoffs.

d) Meeting needs that can enhance a variety of forms of well-being.

Difficulty: Hard

Learning Objective: Discuss how entrepreneurs focus on identifying needs that can provide financial payoffs and/or enhance well-being.

Section Reference: 16.1 Identify Opportunity

AACSB: Reflective thinking skills

Bloom’s: Application

6. Which of the following examples best exemplifies sustainable entrepreneurship?

a) Caroline, a boutique owner, plans to expand her business to increase profit and overcome competition.

b) Arthur, the owner of a beach resort, creates special offers to attract foreign tourists in order to generate revenue.

c) Karen, the owner of a small company, uses paper packaging as an ecofriendly alternative to plastic.

d) Pauline, who runs a department store, always looks to provide unique offers to increase sales.

Difficulty: Hard

Learning Objective: Discuss how entrepreneurs focus on identifying needs that can provide financial payoffs and/or enhance well-being.

Section Reference: 16.1 Identify Opportunity

AACSB: Reflective thinking skills

Bloom’s: Application

7. Paul is the owner of Best Chemicals Inc. In order to follow a sustainable business approach, Paul should aim to:

a) Maximize financial returns for himself and other investors.

b) Invent new ways of taking care of the environment.

c) Find places where he can outperform existing competitors by providing unique added value.

d) Invest resources that will yield a higher financial return than he currently gets.

Difficulty: Medium

Learning Objective: Discuss how entrepreneurs focus on identifying needs that can provide financial payoffs and/or enhance well-being.

Section Reference: 16.1 Identify Opportunity

AACSB: Analytic skills

Bloom’s: Application

8. Focus Corporation follows a conventional business model. Therefore, the company lays emphasis on:

a) Including key external stakeholders in its ongoing operations.

b) Creating needs or demand for its products or services.

c) Using stakeholders to create an effective business plan.

d) Meeting needs that can enhance a variety of forms of well-being.

Difficulty: Medium

Learning Objective: Discuss how entrepreneurs focus on identifying needs that can provide financial payoffs and/or enhance well-being.

Section Reference: 16.1 Identify Opportunity

AACSB: Analytic skills

Bloom’s: Application

9. Which of the following personality characteristics from the Big Five is most often associated with entrepreneurs?

a) Humanitarianism

b) Introversion

c) Conscientiousness

d) Benevolence

Difficulty: Easy

Learning Objective: Identify the factors that influence taking the initiative to act on an opportunity.

Section Reference: 16.2 Take Initiative

AACSB: Analytic skills

Bloom’s: Comprehension

11. Which of the following statements is true of the personality characteristics of entrepreneurs from the Big Five?

a) The emotional stability of an entrepreneur predicts only the entrepreneur’s intention to start a business.

b) The success of a business is the only thing that can be predicted by the personality characteristics of entrepreneurs.

c) These personality characteristics of entrepreneurs can predict both the intention to start a business as well as its performance.

d) Risk propensity is the only personality characteristic that can predict the performance of a business started by entrepreneurs.

Difficulty: Medium

Learning Objective: Discuss how entrepreneurs focus on identifying needs that can provide financial payoffs and/or enhance well-being.

Section Reference: 16.1 Identify Opportunity

AACSB: Analytic skills

Bloom’s: Comprehension

12. Which of the following is a personal characteristic that can influence an entrepreneur to take the initiative to act on an opportunity?

a) Push factors

b) Risk propensity

c) Pull factors

d) Times of transition

Difficulty: Easy

Learning Objective: Identify the factors that influence taking the initiative to act on an opportunity.

Section Reference: 16.2 Take Initiative

AACSB: Analytic skills

Bloom’s: Comprehension

13. Abraham has completed a diploma in hotel management and plans to start his own bed and breakfast. Which of the following life circumstances has influenced Abraham’s decision in the given example?

a) Being in the midst of a transition

b) Being pushed away from the status quo

c) Being pulled into an entrepreneurial venture

d) Being able to identify opportunities.

Difficulty: Hard

Learning Objective: Identify the factors that influence taking the initiative to act on an opportunity.

Section Reference: 16.2 Take Initiative

AACSB: Reflective thinking skills

Bloom’s: Application

14. In which of the following examples does one acquire entrepreneurial urges after being pushed away from a status quo?

a) Gavin completes his degree in architecture and starts an architectural firm focusing on eco-friendly architecture.

b) Pauline feels she is being treated unfairly by her boss and quits her job as a server to start her own coffee shop.

c) Lara becomes a partner in the beauty salon started by a group of her university mates upon their repeated requests.

d) Sarah opens a fashion boutique to earn her livelihood after a divorce.

Difficulty: Hard

Learning Objective: Identify the factors that influence taking the initiative to act on an opportunity.

Section Reference: 16.2 Take Initiative

AACSB: Reflective thinking skills

Bloom’s: Application

15. Which of the following is a pull factor that influences people to become entrepreneurs?

a) Membership in a group of people starting a new venture

b) Completion of an education or training program

c) Dissatisfaction with their current job

d) A desire to escape the pursuits and pressures of the status quo

Difficulty: Medium

Learning Objective: Identify the factors that influence taking the initiative to act on an opportunity.

Section Reference: 16.2 Take Initiative

AACSB: Analytic skills

Bloom’s: Comprehension

16. Which of the following examples illustrates a positive pull influence that makes people become entrepreneurs?

a) Geraldine opens a fashion boutique after her recent divorce.

b) Hans feels he is being treated unfairly by his boss and quits his job as a waiter to start his own coffee shop.

c) Gavin completes his degree in architecture and starts an architectural firm that focuses on eco-friendly architecture.

d) Layla plans to start a beauty salon with financial help from her mother, who is also going to work in the salon as a cashier.

Difficulty: Hard

Learning Objective: Identify the factors that influence taking the initiative to act on an opportunity.

Section Reference: 16.2 Take Initiative

AACSB: Reflective thinking skills

Bloom’s: Application

17. Which of the following is the first step of the entrepreneurial process?

a) Initiating changes

b) Mobilizing resources

c) Developing a plan

d) Identifying an opportunity

Difficulty: Easy

Learning Objective: Identify the factors that influence taking the initiative to act on an opportunity.

Section Reference: 16.2 Take Initiative

AACSB: Analytic skills

Bloom’s: Knowledge

18. Martin and his colleagues at First Technologies Inc. leave the company as their supervisor vetoes their new product idea. They want to start their own firm that will work on the new product. What will be the next step for Martin and his colleagues?

a) Developing plans

b) Identifying an opportunity

c) Mobilizing resources

d) Initiating changes

Difficulty: Hard

Learning Objective: Identify the factors that influence taking the initiative to act on an opportunity.

Section Reference: 16.2 Take Initiative

AACSB: Reflective thinking skills

Bloom’s: Application

19. Ivan is an entrepreneur following conventional business practices. Which of the following would be his major objective?

a) Using inputs from all his stakeholders to develop a convincing business plan

b) Gaining the cooperation of stakeholders

c) Achieving tangible and quantifiable financial goals

d) Including environmental and social implications in his business plan

Difficulty: Hard

Learning Objective: Identify the factors that influence taking the initiative to act on an opportunity.

Section Reference: 16.2 Take Initiative

AACSB: Reflective thinking skills

Bloom’s: Application

20. A pull factor that drives people to become entrepreneurs is:

a) Frustration resulting from the lack of acceptance of their ideas.

b) Empathy for a needy segment of the population.

c) Dissatisfaction with their current job.

d) Completion of an education or training program.

Difficulty: Medium

Learning Objective: Identify the factors that influence taking the initiative to act on an opportunity.

Section Reference: 16.2 Take Initiative

AACSB: Analytic skills

Bloom’s: Comprehension

21. Which of the following examples shows how a positive pull factor drives people to become sustainable entrepreneurs?

a) Jason opens a retail store after losing his job because of a financial downturn.

b) Sharon starts a candle-making business and employs women from the lower economic strata of society, thereby improving their financial conditions.

c) Richard completes his degree in art and art history and starts an art appraisal firm.

d) Lara becomes a partner in the beauty salon owing to her creative marketing ideas that could help generate a higher profit margin.

Difficulty: Hard

Learning Objective: Identify the factors that influence taking the initiative to act on an opportunity.

Section Reference: 16.2 Take Initiative

AACSB: Reflective thinking skills

Bloom’s: Application

22. Which of the following statements is true of sustainable entrepreneurs?

a) They focus on achieving tangible and quantifiable financial goals.

b) They are more likely to want to accomplish something significant and timeless.

c) They ground their confidence in themselves rather than finding it in a community.

d) They look for places where they can outperform existing competitors.

Difficulty: Medium

Learning Objective: Identify the factors that influence taking the initiative to act on an opportunity.

Section Reference: 16.2 Take Initiative

AACSB: Analytic skills

Bloom’s: Comprehension

23. Which of the following examples illustrates the personality of a conventional entrepreneur?

a) Pamela, the owner of a paper mill, supports community welfare programs taken up by local organizations to earn goodwill from customers and suppliers.

b) Carl aims to double his profits by introducing new flavours of beverages produced by his company.

c) Leonardo plans to hire local people to work in his tire factory and thus reduce unemployment in the area.

d) Robert uses solar energy to run most of the machines in his metal mold manufacturing plant to minimize the usage of fossil fuel.

Difficulty: Hard

Learning Objective: Identify the factors that influence taking the initiative to act on an opportunity.

Section Reference: 16.2 Take Initiative

AACSB: Reflective thinking skills

Bloom’s: Application

24. Which of the following examples illustrates the personality of a sustainable entrepreneur?

a) Robert uses solar energy to run most of the machines in his metal processing plant to minimize the usage of fossil fuel.

b) Carl aims to double his profits by introducing new flavours of beverages produced by his company.

c) Sharon, the owner of a luxury hotel, plans to diversify her business to increase profits and keep up with competition.

d) Eva, a fashion designer, introduces new designs targeted at the upper classes of society to outperform her competitors.

Difficulty: Hard

Learning Objective: Identify the factors that influence taking the initiative to act on an opportunity.

Section Reference: 16.2 Take Initiative

AACSB: Reflective thinking skills

Bloom’s: Application

25. Alice is an entrepreneur with a leather product-manufacturing unit. She wants to establish business practices that maximize the well-being of her customers, suppliers, and other stakeholders. Hence, Alice is most likely to:

a) Work toward creating a demand for her products and services.

b) Look for opportunities to outperform existing competitors.

c) Concentrate on accomplishing goals that defy measurement.

d) Focus on achieving tangible and quantifiable financial goals.

Difficulty: Hard

Learning Objective: Identify the factors that influence taking the initiative to act on an opportunity.

Section Reference: 16.2 Take Initiative

AACSB: Reflective thinking skills

Bloom’s: Application

26. For a sustainable entrepreneur, transitions result from:

a) Achieving tangible and quantifiable financial goals.

b) Realizing the need to escape the pursuits of the status quo.

c) Grounding confidence in himself or herself.

d) Looking for opportunities to outperform existing competitors.

Difficulty: Medium

Learning Objective: Identify the factors that influence taking the initiative to act on an opportunity.

Section Reference: 16.2 Take Initiative

AACSB: Analytic skills

Bloom’s: Knowledge

27. Which of the following is a push factor that influences people to become entrepreneurs?

a) Completion of an education or training program

b) Completion of a major project

c) Membership in a group of people starting a new venture

d) Frustration due to lack of acceptance of one’s ideas

Difficulty: Medium

Learning Objective: Identify the factors that influence taking the initiative to act on an opportunity.

Section Reference: 16.2 Take Initiative

AACSB: Analytic skills

Bloom’s: Knowledge

28. Which of the following constitutes the first part of a business plan?

a) Concept of the venture

b) Executive summary

c) Discussion of operational plans

d) Description of the team

Difficulty: Easy

Learning Objective: Discuss how entrepreneurs develop a plan for their new venture.

Section Reference: 16.3 Develop Plans

AACSB: Analytic skills

Bloom’s: Knowledge

29. Stephanie is writing the executive summary of her business plan to start a fast food restaurant. For a sustainable approach, which of the following information must be present in the executive summary?

a) Strategies for enhancing financial well-being

b) Strategies for outperforming competitors

c) Strategies for enhancing multiple forms of well-being

d) Strategies for creating a demand for products and services

Difficulty: Hard

Learning Objective: Discuss how entrepreneurs develop a plan for their new venture.

Section Reference: 16.3 Develop Plans

AACSB: Reflective thinking skills

Bloom’s: Application

30. Which of the following components of a business plan describes customers and other organizations in a business’s external environment?

a) Concept of the venture

b) Description of the team

c) Discussion of operational plans

d) Executive summary

Difficulty: Easy

Learning Objective: Discuss how entrepreneurs develop a plan for their new venture.

Section Reference: 16.3 Develop Plans

AACSB: Analytic skills

Bloom’s: Knowledge

31. Zack is developing a business plan for the restaurant he plans to start. He is working on the section of the plan that describes the types of cuisine and new dishes that will make up the menu. Which of the following sections of a start-up business plan is Zack working on in the given example?

a) Executive summary

b) Concept of the venture

c) Long-term goals

d) Discussion of operational plans

Difficulty: Hard

Learning Objective: Discuss how entrepreneurs develop a plan for their new venture.

Section Reference: 16.3 Develop Plans

AACSB: Reflective thinking skills

Bloom’s: Application

32. New Corporation invests money in various businesses in exchange for a share in ownership and profits. Therefore, New Corporation is a(n) _____.

a) Innovation capitalist

b) Vulture capitalist

c) Venture capitalist

d) Operating partner

Difficulty: Hard

Learning Objective: Discuss how entrepreneurs develop a plan for their new venture.

Section Reference: 16.3 Develop Plans

AACSB: Reflective thinking skills

Bloom’s: Application

33. Anna is a venture capitalist. Hence, she will:

a) Invest in businesses only if they are socially and environmentally sustainable.

b) Look at opportunities that benefit an organization and take action to pursue them.

c) Invest money in an organization in exchange for a share of its ownership and profits.

d) Completely take over a company by using the clauses in the agreement with the company.

Difficulty: Hard

Learning Objective: Discuss how entrepreneurs develop a plan for their new venture.

Section Reference: 16.3 Develop Plans

AACSB: Reflective thinking skills

Bloom’s: Application

34. Which of the following statements is true of a sustainable start-up plan?

a) It includes external stakeholders in the ongoing operation of the organization.

b) It focuses on achieving tangible and quantifiable financial goals.

c) It highlights opportunities available for outperforming existing competitors.

d) It focuses on creating a demand for a company’s products or services.

Difficulty: Medium

Learning Objective: Discuss how entrepreneurs develop a plan for their new venture.

Section Reference: 16.3 Develop Plans

AACSB: Analytic skills

Bloom’s: Knowledge

35. In his business plan, George describes the raw materials needed for his plastic product-manufacturing unit. He also names the suppliers of the raw materials and provides details of the financing options for the company. Which section of a business plan contains the information given in this scenario?

a) Description of the team

b) Concept of the venture

c) Executive summary

d) Discussion of operational plans

Difficulty: Hard

Learning Objective: Discuss how entrepreneurs develop a plan for their new venture.

Section Reference: 16.3 Develop Plans

AACSB: Reflective thinking skills

Bloom’s: Application

36. Which of the following is the most distinct feature of a sustainable start-up plan?

a) The description of customers and other organizations in the new venture’s external environment

b) The inclusion of environmental and social implications for the new venture

c) The inclusion of the skills required to carry out the work of the new venture

d) The description of the organizational structure and systems

Difficulty: Easy

Learning Objective: Discuss how entrepreneurs develop a plan for their new venture.

Section Reference: 16.3 Develop Plans

AACSB: Analytic skills

Bloom’s: Knowledge

37. Which of the following examples shows a sustainable business plan?

a) Prime Cosmetic Inc. describes its products, marketing strategy, projected sales, and expansion plans in its business start-up plan.

b) Best Foods Inc. develops a business plan, which highlights the impact of its manufacturing processes on the local community, along with other details.

c) Shine Healthcare Inc. provides details of potential markets and lists the strategies required to overcome competition in the healthcare industry.

d) Dailies, a supermarket chain, focuses only on promotional strategies and projected profit margins in its business plan.

Difficulty: Hard

Learning Objective: Discuss how entrepreneurs develop a plan for their new venture.

Section Reference: 16.3 Develop Plans

AACSB: Reflective thinking skills

Bloom’s: Application

38. The final section of a business start-up plan gives information about _____.

a) The venture’s products and services

b) The resources required for operating the venture

c) How resources will be mobilized over time

d) Organizational members and partners of the new venture

Difficulty: Easy

Learning Objective: Discuss how entrepreneurs develop a plan for their new venture.

Section Reference: 16.3 Develop Plans

AACSB: Analytic skills

Bloom’s: Knowledge

39. Which of the following examples shows a conventional business plan?

a) Nefertiti Cosmetics Corp. describes its plans to expand to other cities after opening three retail stores locally.

b) Best Foods Inc. develops a business plan, which highlights the impact of its manufacturing processes on the local community, along with other details.

c) Shine Healthcare Inc. provides information on its planned sourcing of alternate energy as well as the environmental impact of its drug producing processes.

d) BBQ Planet, a restaurant, describes its planned initiative to send its food waste to a processing facility to be converted to animal feed.

Difficulty: Hard

Learning Objective: Discuss how entrepreneurs develop a plan for their new venture.

Section Reference: 16.3 Develop Plans

AACSB: Reflective thinking skills

Bloom’s: Application

40. Which of the following statements is true of sustainable entrepreneurship?

a) A sustainable business plan highlights only financial concerns and measures.

b) Sustainable entrepreneurs use a business plan to convince stakeholders to support the organization.

c) Sustainable entrepreneurs use stakeholders to write a convincing business plan.

d) The goal of sustainable entrepreneurship is to maximize the financial wealth of the entrepreneurs and other investors.

Difficulty: Medium

Learning Objective: Discuss how entrepreneurs develop a plan for their new venture.

Section Reference: 16.3 Develop Plans

AACSB: Analytic skills

Bloom’s: Comprehension

41. How does conventional entrepreneurship differ from sustainable entrepreneurship?

a) Conventional entrepreneurs eliminate needs or demand for their products or services, whereas sustainable entrepreneurs often seek to create needs or demand for their products.

b) Conventional entrepreneurs use a business plan to convince stakeholders to support the organization, whereas sustainable entrepreneurs use stakeholders to write a convincing plan.

c) The goal of conventional entrepreneurship is to maximize multiple forms of well-being, whereas sustainable entrepreneurship focuses on maximizing financial wealth.

d) Conventional entrepreneurs explore ways to improve employment opportunities for the marginalized of society, whereas sustainable entrepreneurs look for opportunities where they can outperform existing competitors.

Difficulty: Medium

Learning Objective: Discuss how entrepreneurs develop a plan for their new venture.

Section Reference: 16.3 Develop Plans

AACSB: Analytic skills

Bloom’s: Analysis

42. Abel is an ambitious entrepreneur, who intends to start a construction material business with the primary goal of maximizing profits. When developing a business plan, Abel will look to:

a) Adopt a triple bottom-line approach.

b) Use inputs from various stakeholders to write a convincing plan.

c) Use the plan to convince stakeholders to support his business.

d) Supplement financial concerns and measures with social and ecological measures of performance.

Difficulty: Hard

Learning Objective: Discuss how entrepreneurs develop a plan for their new venture.

Section Reference: 16.3 Develop Plans

AACSB: Reflective thinking skills

Bloom’s: Application

43. When creating a business start-up plan, sustainable entrepreneurs:

a) Use the plan to convince stakeholders.

b) Refer to multiple forms of well-being.

c) Look for places where they can outperform existing competitors.

d) Seek to create needs or demand for their products.

Difficulty: Medium

Learning Objective: Discuss how entrepreneurs develop a plan for their new venture.

Section Reference: 16.3 Develop Plans

AACSB: Analytic skills

Bloom’s: Knowledge

44. Writing a sustainable plan becomes a process of continual revisions because:

a) It concentrates on areas of a business where competition can be overcome.

b) It focuses on strategies for achieving tangible and quantifiable financial goals.

c) Sustainable entrepreneurs use the plan to convince stakeholders.

d) Sustainable entrepreneurs use stakeholders to write a convincing plan.

Difficulty: Medium

Learning Objective: Discuss how entrepreneurs develop a plan for their new venture.

Section Reference: 16.3 Develop Plans

AACSB: Analytic skills

Bloom’s: Knowledge

45. A sustainable new-venture plan focuses on the _____.

a) Triple bottom-line approach

b) Fiscal performance of an organization

c) Creation of a demand for products

d) Tangible benefits of a venture

Difficulty: Easy

Learning Objective: Discuss how entrepreneurs develop a plan for their new venture.

Section Reference: 16.3 Develop Plans

AACSB: Analytic skills

Bloom’s: Knowledge

46. Which of the following statements is true of a sustainable start-up plan?

a) It includes the environmental and social implications of the new venture.

b) It focuses on strategies for achieving tangible and quantifiable financial goals.

c) Opportunities for investing resources for a higher financial yield form a major part of the plan.

d) Strategies for outperforming competitors are the major focus of the plan.

Difficulty: Medium

Learning Objective: Discuss how entrepreneurs develop a plan for their new venture.

Section Reference: 16.3 Develop Plans

AACSB: Analytic skills

Bloom’s: Comprehension

47. Which of the following is the central feature of the final section of a business start-up plan?

a) The skills of the organizational members of the new venture

b) The resources required to operate the new venture

c) The set of goals and financial projections for the first five years

d) A description of the new venture’s products and services

Difficulty: Medium

Learning Objective: Discuss how entrepreneurs develop a plan for their new venture.

Section Reference: 16.3 Develop Plans

AACSB: Analytic skills

Bloom’s: Knowledge

48. Which of the following statements is true of the sustainable approach to planning?

a) It reinforces convergent thinking.

b) Managers seek to find a single precise answer.

c) It reinforces divergent thinking.

d) It does not permit a change of focus.

Difficulty: Medium

Learning Objective: Discuss how entrepreneurs develop a plan for their new venture.

Section Reference: 16.3 Develop Plans

AACSB: Analytic skills

Bloom’s: Comprehension

49. Victoria is a team manager and wants to implement sustainable practices in her team’s activities. Therefore, Victoria is most likely to:

a) Encourage convergent thinking when looking for solutions.

b) Encourage the team to find multiple solutions to problems.

c) Focus on seeking a single precise solution to a problem.

d) Concentrate on achieving goals rather than the overall success of the team.

Difficulty: Hard

Learning Objective: Discuss how entrepreneurs develop a plan for their new venture.

Section Reference: 16.3 Develop Plans

AACSB: Reflective thinking skills

Bloom’s: Application

50. The conventional approach to planning differs from the sustainable approach in that the conventional approach _____.

a) Reinforces convergent thinking.

b) Emphasizes finding multiple solutions to problems.

c) Reinforces divergent thinking.

d) Is flexible and permits a change of focus.

Difficulty: Medium

Learning Objective: Discuss how entrepreneurs develop a plan for their new venture.

Section Reference: 16.3 Develop Plans

AACSB: Analytic skills

Bloom’s: Analysis

51. With a detailed plan for the new venture in place, the next step for an entrepreneur is to:

a) Identify a potential business opportunity.

b) Acquire and mobilize the necessary resources.

c) Initiate changes.

d) Describe the products and services offered by the new venture.

Difficulty: Medium

Learning Objective: Identify how entrepreneurs acquire and mobilize the necessary resources for their new venture.

Section Reference: 16.4 Mobilize Resources

AACSB: Analytic skills

Bloom’s: Knowledge

52. Mobilizing resources for a new venture involves:

a) Identifying a potential business opportunity.

b) Explaining the appropriate skills required to carry out the venture.

c) Describing the products and services offered by the new venture.

d) Establishing relationships with suppliers and other stakeholders.

Difficulty: Medium

Learning Objective: Identify how entrepreneurs acquire and mobilize the necessary resources for their new venture.

Section Reference: 16.4 Mobilize Resources

AACSB: Analytic skills

Bloom’s: Knowledge

53. Which of the following forms of financing involves an entrepreneur borrowing funds from a source, which the entrepreneur is expected to pay back at some future date?

a) Equity financing

b) Venture capitalists

c) Debt financing

d) Angel investors

Difficulty: Easy

Learning Objective: Identify how entrepreneurs acquire and mobilize the necessary resources for their new venture.

Section Reference: 16.4 Mobilize Resources

AACSB: Analytic skills

Bloom’s: Knowledge

54. Ronaldo acquires a business loan from a bank to start a bookstore. Which of the following approaches is Ronaldo using to start his business in the given example?

a) Debt financing

b) Equity financing

c) Leveraging

d) Asymmetric funding

Difficulty: Hard

Learning Objective: Identify how entrepreneurs acquire and mobilize the necessary resources for their new venture.

Section Reference: 16.4 Mobilize Resources

AACSB: Reflective thinking skills

Bloom’s: Application

55. Macmillan & Son Finance Corp. provides loans to companies starting new ventures or expanding their current businesses. The loans need to be paid back at a particular date. Which of the following terms best describes the type of funds offered by Macmillan & Son Finance Corp.?

a) Asymmetric funding

b) Equity financing

c) Leveraging

d) Debt financing

Difficulty: Hard

Learning Objective: Identify how entrepreneurs acquire and mobilize the necessary resources for their new venture.

Section Reference: 16.4 Mobilize Resources

AACSB: Reflective thinking skills

Bloom’s: Application

56. David is set to begin his new business of mineral water production. He mobilizes funds for his business by offering shares to the investors in return for cash. In the given example, _____ is being used as a means for mobilizing resources for a business venture.

a) Leveraging

b) Debt financing

c) Asymmetric funding

d) Equity financing

Difficulty: Hard

Learning Objective: Identify how entrepreneurs acquire and mobilize the necessary resources for their new venture.

Section Reference: 16.4 Mobilize Resources

AACSB: Reflective thinking skills

Bloom’s: Application

57. Natasha uses equity financing as a means to raise capital for her food processing company. Hence, Natasha will:

a) Obtain cash from investors separately for each of her business deals.

b) Borrow money from a bank and repay it at a future date.

c) Offer company shares to the investors in return for their infusion of cash.

d) Allot funds over a period of time to finance future business ventures.

Difficulty: Medium

Learning Objective: Identify how entrepreneurs acquire and mobilize the necessary resources for their new venture.

Section Reference: 16.4 Mobilize Resources

AACSB: Reflective thinking skills

Bloom’s: Application

58. How does debt financing differ from equity financing?

a) Debt financing occurs when entrepreneurs borrow from a bank, family members, friends, or financial institution money that must be paid back at some future date, while equity financing involves allocation of funds over a period of time to finance future business ventures.

b) Debt financing occurs when entrepreneurs borrow money from a bank, family members, friends, or a financial institution, while equity financing occurs when investors in a new venture receive shares in return for their infusion of cash and become part owners of the organization.

c) Debt financing occurs when investors in a new venture receive shares in return for their infusion of cash and become part owners of the organization, while equity financing involves obtaining cash from investors separately for each business deal.

d) Debt financing occurs when funds are allotted over a period of time to finance future business ventures, while equity financing occurs when entrepreneurs borrow from a bank, family members, friends, or financial institution money that must be paid back at some future date.

Difficulty: Medium

Learning Objective: Identify how entrepreneurs acquire and mobilize the necessary resources for their new venture.

Section Reference: 16.4 Mobilize Resources

AACSB: Analytic skills

Bloom’s: Analysis

59. Which of the following statements is true of sustainable entrepreneurs with regard to resources?

a) They do not attach significant importance to non-financial resources.

b) They are mindful of the way they mobilize the physical resources required for their new venture.

c) They are constantly looking for better and more financially rewarding ways to meet needs.

d) They always look for places where they can outperform existing competitors, either by lowering costs or by providing unique benefits.

Difficulty: Medium

Learning Objective: Identify how entrepreneurs acquire and mobilize the necessary resources for their new venture.

Section Reference: 16.4 Mobilize Resources

AACSB: Analytic skills

Bloom’s: Comprehension

60. Sustainable entrepreneurs differ from conventional entrepreneurs in that they _____.

a) Are sensitive to using the resources they require more responsibly

b) Focus on achieving tangible and quantifiable financial goals

c) Are constantly looking for better and more financially rewarding ways to meet needs

d) Always look for places where they can outperform existing competitors

Difficulty: Medium

Learning Objective: Identify how entrepreneurs acquire and mobilize the necessary resources for their new venture.

Section Reference: 16.4 Mobilize Resources

AACSB: Analytic skills

Bloom’s: Analysis

61. Ralph owns a meat processing plant. He plans to incorporate sustainable business practices in running the plant. Therefore, Ralph is most likely to:

a) Constantly look for better and more financially rewarding ways to meet needs.

b) Look for places where he can outperform existing competitors.

c) Invite stakeholders to support the values and basic concept of the venture.

d) Maximize his financial wealth and that of the stakeholders and other investors.

Difficulty: Hard

Learning Objective: Identify how entrepreneurs acquire and mobilize the necessary resources for their new venture.

Section Reference: 16.4 Mobilize Resources

AACSB: Communication Skills

Bloom’s: Application

62. Which of the following applies to the process of conceiving an opportunity to offer new or improved goods or services, taking the initiative to pursue the opportunity, making plans, and mobilizing the resources necessary to convert that opportunity into reality?

a) Entrepreneurship

b) Imitation

c) Leadership

d) Innovation

Difficulty: Medium

Learning Objective: Discuss how entrepreneurs focus on identifying needs that can provide financial payoffs and/or enhance well-being.

Section Reference: 16.1 Identify Opportunity

AACSB: Analytic Skills

Bloom’s: Analysis

63. Which of the following identifies the goal of sustainable entrepreneurship?

a) Maximizing multiple forms of well-being for the entrepreneur, other investors, and other stakeholders

b) Maximizing multiple forms of well-being for the entrepreneur only

c) Maximizing the financial wealth of the stakeholders

d) Maximizing the financial wealth of the entrepreneurs

Difficulty: Medium

Learning Objective: Discuss how entrepreneurs focus on identifying needs that can provide financial payoffs and/or enhance well-being.

Section Reference: 16.1 Identify Opportunity

AACSB: Analytic Skills

Bloom’s: Analysis

64. Which of the following explains the difference between a conventional and sustainable entrepreneur’s responses to transition, push, and pull?

a) For sustainable entrepreneurs, transitions often result from realizing they want to escape the pursuits and pressures of the status quo.

b) For conventional entrepreneurs, transitions often result from realizing they want to escape the pursuits and pressures of the status quo.

c) People may experience positive pulls to become conventional entrepreneurs from friends or from a compelling desire to make a difference.

d) People may experience positive pulls to become sustainable entrepreneurs from friends or others who are discouraging them.

Difficulty: Medium

Learning Objectivet: Identify the factors that influence taking the initiative to act on an opportunity.

Section Reference: 16.2 Take Initiative

AACSB: Reflective Thinking Skills

Bloom’s: Analysis

65. As you were talking to Tina, a successful entrepreneur, you noticed that she credits her success to the community, family, friends, and other stakeholders. Which of the following describes this entrepreneur?

a) Sustainable entrepreneur

b) Conventional entrepreneur

c) Organizational entrepreneur

d) Innovative entrepreneur

Difficulty: Medium

Learning Objective: Identify the factors that influence taking the initiative to act on an opportunity.

Section Reference: 16.2 Take Initiative

AACSB: Communication Skills

Bloom’s: Application

66. You have started working for a new company. Your superior asked you to include in the start-up plan a review of the environmental and social implications for the new venture. Which of the following applies to his request?

a) Sustainable approach

b) Organizational approach

c) Conventional approach

d) Traditional approach

Difficulty: Medium

Learning Objective: Discuss how entrepreneurs develop a plan for their new venture.

Section Reference: 16.3 Develop Plans

AACSB: Communication Skills

Bloom’s: Application

67. What is the most striking sign to differentiate between a sustainable and conventional new-venture plan?

a) A sustainable new-venture plan refers to multiple forms of well-being and the triple bottom-line approach.

b) A conventional new-venture plan refers to multiple forms of well-being and the triple bottom-line approach.

c) A sustainable new-venture plan refers to financial well-being of the stakeholders.

d) A conventional new-venture plan is to include financial concerns and measures with social and ecological measures of performance.

Difficulty: Medium

Learning Objective: Discuss how entrepreneurs develop a plan for their new venture.

Section Reference: 16.3 Develop Plans

AACSB: Analytic Skills

Bloom’s: Analysis

68. Which of the following explains one of the differences between conventional and sustainable entrepreneurs with respect to mobilizing financial resources?

a) Conventional financial institutions may prefer providing financing to conventional entrepreneurs.

b) Sustainable financial institutions may prefer providing financing to sustainable entrepreneurs.

c) Conventional entrepreneurs are more likely to recognize the importance of nonfinancial resources.

d) Conventional financial institutions may prefer providing financing to sustainable entrepreneurs.

Difficulty: Medium

Learning Objective: Identify how entrepreneurs acquire and mobilize the necessary resources for their new venture.

Section Reference: 16.4 Mobilize Resources

AACSB: Analytic Skills

Bloom’s: Analysis

69. As a manager for a new venture company, your CEO stated to you that “we have to recognize the importance of nonfinancial resources and the good relationships with stakeholders, which can reduce the need for financial resources.” Which of the following applies to his statement?

a) Sustainable entrepreneur

b) Conventional entrepreneur

c) Organizational entrepreneur

d) Innovative entrepreneur

Difficulty: Medium

Learning Objective: Identify how entrepreneurs acquire and mobilize the necessary resources for their new venture.

Section Reference: 16.4 Mobilize Resources

AACSB: Communication Skills

Bloom’s: Application

70. Which of the following types of new ventures are more concerned about the effect of operations on the ecological footprint?

a) Sustainable entrepreneurs

b) Conventional entrepreneurs

c) Organizational entrepreneurs

d) Innovative entrepreneurs

Difficulty: Medium

Learning Objective: Identify how entrepreneurs acquire and mobilize the necessary resources for their new venture.

Section Reference: 16.4 Mobilize Resources

AACSB: Reflective Thinking Skills

Bloom’s: Analysis

71. Which of the following explains the difference between conventional and sustainable ventures with respect to financial and nonfinancial resources?

a) Sustainable ventures give more attention to nonfinancial resources and benefits, which make them more attractive to certain investors.

b) Conventional ventures give more attention to nonfinancial resources and benefits, which make them more attractive to certain investors.

c) Sustainable ventures are more concerned about the financial resources and benefits.

d) Conventional ventures give attention to the nonfinancial resources and benefits more than the financial resources.

Difficulty: Medium

Learning Objective: Identify how entrepreneurs acquire and mobilize the necessary resources for their new venture.

Section Reference: 16.4 Mobilize Resources

AACSB: Reflective Thinking Skills

Bloom’s: Analysis

Fill In The Blanks

72. _____ is the process of conceiving an opportunity to offer new or improved goods or services, taking the initiative to pursue that opportunity, making plans, and mobilizing the resources necessary to convert that opportunity into reality.

Difficulty: Easy

Learning Objective: Discuss how entrepreneurs focus on identifying needs that can provide financial payoffs and/or enhance well-being.

Section Reference: 16.1 Identify Opportunity

AACSB: Analytic skills

Bloom’s: Knowledge

73. _____ is entrepreneurship that occurs within existing organizations.

Difficulty: Easy

Learning Objective: Discuss how entrepreneurs focus on identifying needs that can provide financial payoffs and/or enhance well-being.

Section Reference: 16.1 Identify Opportunity

AACSB: Analytic skills

Bloom’s: Knowledge

74. _____ focuses on maximizing the financial wealth of the entrepreneurs and other investors.

Difficulty: Easy

Learning Objective: Discuss how entrepreneurs focus on identifying needs that can provide financial payoffs and/or enhance well-being.

Section Reference: 16.1 Identify Opportunity

AACSB: Analytic skills

Bloom’s: Knowledge

75. _____ are constantly looking for better and more financially rewarding ways to meet needs.

Difficulty: Easy

Learning Objective: Discuss how entrepreneurs focus on identifying needs that can provide financial payoffs and/or enhance well-being.

Section Reference: 16.1 Identify Opportunity

AACSB: Analytic skills

Bloom’s: Knowledge

76. _____ constitute transitions, push factors, and pull factors that influence the likelihood of a person taking the initiative to act on an opportunity.

Difficulty: Easy

Learning Objective: Identify the factors that influence taking the initiative to act on an opportunity.

Section Reference: 16.2 Take Initiative

AACSB: Analytic skills

Bloom’s: Knowledge

77. _____ include risk propensity, achievement, and motivation, which influence entrepreneurship.

Difficulty: Easy

Learning Objective: Identify the factors that influence taking the initiative to act on an opportunity.

Section Reference: 16.2 Take Initiative

AACSB: Analytic skills

Bloom’s: Knowledge

78. A _____ is a company or individual that invests money in an organization in exchange for a share of its ownership and profits.

Difficulty: Easy

Learning Objective: Discuss how entrepreneurs develop a plan for their new venture.

Section Reference: 16.3 Develop Plans

AACSB: Analytic skills

Bloom’s: Knowledge

79. _____ consists of funds that entrepreneurs borrow from family and friends, a bank, or another financial institution that must be paid back at some future date.

Difficulty: Easy

Learning Objective: Identify how entrepreneurs acquire and mobilize the necessary resources for their new venture.

Section Reference: 16.4 Mobilize Resources

AACSB: Analytic skills

Bloom’s: Knowledge

80. _____ occurs when investors in a new venture receive shares in return for their infusion of cash and become part owners of the organization.

Difficulty: Easy

Learning Objective: Identify how entrepreneurs acquire and mobilize the necessary resources for their new venture.

Section Reference: 16.4 Mobilize Resources

AACSB: Analytic skills

Bloom’s: Knowledge

81. _____ is required to guarantee a debt loan.

Difficulty: Easy

Learning Objective: Identify how entrepreneurs acquire and mobilize the necessary resources for their new venture.

Section Reference: 16.4 Mobilize Resources

AACSB: Analytic skills

Bloom’s: Knowledge

82. Both conventional and sustainable _________________ think about how new products or services can meet people’s needs.

Difficulty: Easy

Learning Objective: Discuss how entrepreneurs focus on identifying needs that can provide financial payoffs and/or enhance well-being.

Section Reference: 16.1 Identify Opportunity

AACSB: Analytic skills

Bloom’s: Knowledge

83. Whereas conventional entrepreneurs focus on identifying needs that can provide financial payoffs, sustainable entrepreneurs look at needs that, once met, can enhance a variety of forms of well-being such as ______________________________.

Difficulty: Easy

Learning Objective: Discuss how entrepreneurs focus on identifying needs that can provide financial payoffs and/or enhance well-being.

Section Reference: 16.1 Identify Opportunity

AACSB: Analytic skills

Bloom’s: Knowledge

84. Personal characteristics and __________________ (situations that people face at a particular point in their lives) have an effect on whether people take entrepreneurial initiative.

Difficulty: Easy

Learning Objective: Identify the factors that influence taking the initiative to act on an opportunity.

Section Reference: 16.2 Take Initiative

AACSB: Analytic skills

Bloom’s: Knowledge

85. Entrepreneurship is not for the _________________ .

Difficulty: Easy

Learning Objective: Identify the factors that influence taking the initiative to act on an opportunity.

Section Reference: 16.2 Take Initiative

AACSB: Analytic skills

Bloom’s: Knowledge

86. People are more likely to start a new organization if their current job is _______________ or if they have little hope of finding satisfying employment.

Difficulty: Easy

Learning Objective: Identify the factors that influence taking the initiative to act on an opportunity.

Section Reference: 16.2 Take Initiative

AACSB: Analytic skills

Bloom’s: Knowledge

87. The first part of the start-up plan is the __________________ .

Difficulty: Easy

Learning Objective: Discuss how entrepreneurs develop a plan for their new venture.

Section Reference: 16.3 Develop Plans

AACSB: Analytic skills

Bloom’s: Knowledge

88. A sustainable plan is likely to include key __________________ stakeholders in the design and ongoing operation of the organization.

Difficulty: Easy

Learning Objective: Discuss how entrepreneurs develop a plan for their new venture.

Section Reference: 16.3 Develop Plans

AACSB: Analytic skills

Bloom’s: Knowledge

89. For most new ventures, ______________is the key resource that needs to be mobilized.

Difficulty: Easy

Learning Objective: Identify how entrepreneurs acquire and mobilize the necessary resources for their new venture.

Section Reference: 16.4 Mobilize Resources

AACSB: Analytic skills

Bloom’s: Knowledge

90. _____________________ often become quite heavily involved in the operations of a business, sometimes providing advice or even requiring that they approve any major decisions regarding the organization.

Difficulty: Easy

Learning Objective: Identify how entrepreneurs acquire and mobilize the necessary resources for their new venture.

Section Reference: 16.4 Mobilize Resources

AACSB: Analytic skills

Bloom’s: Knowledge

91. __________________ entrepreneurs are more likely to recognize the importance of nonfinancial resources, and especially the fact that good relationships with stakeholders can reduce the need for financial resources.

Difficulty: Easy

Learning Objective: Identify how entrepreneurs acquire and mobilize the necessary resources for their new venture.

Section Reference: 16.4 Mobilize Resources

AACSB: Analytic skills

Bloom’s: Knowledge

Short Answer Questions

92. What are the characteristics of conventional entrepreneurs?

Difficulty: Medium

Learning Objective: Discuss how entrepreneurs focus on identifying needs that can provide financial payoffs and/or enhance well-being.

Section Reference: 16.1 Identify Opportunity

AACSB: Communication abilities

Bloom’s: Comprehension

93. What are the personality characteristics often associated with entrepreneurs from the Big Five?

Difficulty: Medium

Learning Objective: Identify the factors that influence taking the initiative to act on an opportunity.

Section Reference: 16.2 Take Initiative

AACSB: Communication abilities

Bloom’s: Comprehension

94. List the life circumstances that affect the likelihood that someone will start a new organization.

● In the midst of a transition in life,

● Being pushed away from the status quo, or

● Being pulled into an entrepreneurial venture.

Difficulty: Medium

Learning Objective: Identify the factors that influence taking the initiative to act on an opportunity.

Section Reference: 16.2 Take Initiative

AACSB: Communication abilities

Bloom’s: Comprehension

95. What are the benefits of preparing a plan for a new venture prior to start-up?

● It forces entrepreneurs to set standards or milestones against which to measure performance.

● It helps win the support of other stakeholders, whether they are financiers, employees, suppliers, or customers. Having a plan improves both the likelihood of success and the potential for securing outside funding.

Difficulty: Medium

Learning Objective: Discuss how entrepreneurs develop a plan for their new venture.

Section Reference: 16.3 Develop Plans

AACSB: Communication abilities

Bloom’s: Comprehension

96. Describe equity financing.

Difficulty: Medium

Learning Objective: Identify how entrepreneurs acquire and mobilize the necessary resources for their new venture.

Section Reference: 16.4 Mobilize Resources

AACSB: Communication abilities

Bloom’s: Comprehension