Innovation and Entrepreneurship Test
Bank
Course Introduction
This course explores the fundamental concepts and practices of innovation and entrepreneurship, providing students with a comprehensive understanding of how new ideas are generated, evaluated, and transformed into successful ventures. Through a combination of theoretical frameworks, case studies, and hands-on projects, students will examine the characteristics of innovative organizations, the processes of opportunity recognition, business model development, and resource acquisition. The course also addresses entrepreneurial leadership, risk management, and the impact of innovation on society and the global economy. By the end of the course, students will be equipped with the skills and mindset necessary to identify opportunities and launch new products, services, or businesses.
Recommended Textbook
New Venture Creation Entrepreneurship for the 21st Century 10th Edition by
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Page 2
Stephen Spinelli
Chapter 1: The Global Entrepreneurial Revolution for a Flatter World
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Sample Questions
Q1) Briefly discuss the role of successful American entrepreneurs as philanthropists.
Answer: A lesser known and largely ignored role of American entrepreneurs is that of philanthropists and creative community leaders.A majority of new buildings,classrooms,athletic facilities,and universities have been funded by an entrepreneur who wanted to give back.When a successful entrepreneur gets involved in the nonprofit sector,the engagement involves strategic business skills like long-term planning,board and executive recruitment,coaching,and leveraging relationships.These high-engagement philanthropists have a stronger focus and deeper investments in a smaller,more select number of investment partners,and a healthy ambition for the long-term reach of their efforts.
Q2) The best entrepreneurship faculties are generally able to determine in advance who among their incoming students will be the most effective entrepreneurs.
A)True
B)False
Answer: False
Q3) _____ entrepreneurship means new venture creation.
Answer: Classical
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Chapter 2: The Entrepreneurial Mind: Crafting a Personal
Entrepreneurial
Strategy
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Q1) Based on the entrepreneurial leadership paradigm,when the competencies of others are sought and used,it is referred to as ___.
Answer: mentoring
Q2) According to research studies on the career paths of entrepreneurs and the self-employed,which of the following is the central factor for a successful venture creation?
A) Networking
B) The ability to marshal resources
C) Experience and know-how
D) The ability to attract and motivate an effective team
Answer: C
Q3) Although the skills of a manager and an entrepreneur overlap in the area of solid management skills,a manager is more driven by the conservation of resources,while the entrepreneur is more ___.
Answer: opportunity-driven
Q4) Entrepreneurs who are internally driven by a strong desire to compete and attain challenging goals are typically known as ___.
Answer: self-starters
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Chapter 3: The Entrepreneurial Process
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Q1) Building a ________ venture means achieving economic,environmental,and social goals without compromising the same opportunity for future generations.
Answer: sustainable
Q2) Fast-growth firms maintain control by selectively granting employee stock ownership.
A)True
B)False
Answer: True
Q3) Considering that the entrepreneurial process is opportunity-driven,in which of the following circumstances is there a possibility of greater opportunity?
A) When there are greater gaps in available information and knowledge
B) When there are greater consistencies in existing services and quality
C) When there are fewer inconsistencies in lead and lag times
D) When there is less robustness of the gross and net margins
Answer: A
Q4) Rounding out the Timmons model of the three driving forces is the concept of _____ between and among these forces.
Answer: fit and balance
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Chapter 4: Clean Commerce and Sustainable Enterprise
Movements Are an Opportunity Sea Change
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Sample Questions
Q1) Which of the following countries is setting a high bar for international manufacturing standards?
A) China
B) Japan
C) Mexico
D) Australia
Q2) What is green chemistry?
Q3) Which of the following is one of the 12 principles in green chemistry?
A) Using raw materials and feedstocks that are depleting rather than renewable
B) Using catalysts,and not stoichiometric reagents
C) Using chemical derivatives whenever possible
D) Using solvents,separation agents,or other auxiliary chemicals rather than innocuous chemicals
Q4) The Waste Electrical and Electronic Equipment Directive (WEEE)places responsibility for the disposal of waste electrical and electronic equipment on ____.
Q5) The _____ standards provide sustainable building rating systems under the U.S.Green Building Council.
Q6) Briefly discuss the concept of thinking like a molecule.
Q7) Define sustainability.
6
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Chapter 5: Opportunity Recognition
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Q1) _____ is defined as the period of revenue growth in the life cycle of target industry when the slope of the revenue growth is increasing.
Q2) With regard to the capital markets,what is most critical in initial public offerings?
A) Audited documentation
B) Timing
C) Market adoption
D) The underwriter
Q3) The positive attributes of an opportunity diminish when the time to breakeven and achieve positive cash flow exceeds _____ years.
Q4) The context in which the sale or acquisition of a company occurs is largely driven by the _____ at that particular time.
Q5) The key to succeeding is failing slowly.
A)True
B)False
Q6) Briefly discuss cost structure as a criterion in evaluating a high-potential venture opportunity.
Q7) In the United States,the economy is dominated by _____ businesses.
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Chapter 6: Opportunities for Social Entrepreneurship
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Q1) The primary difference between traditional ventures and social purpose ventures is the primary market impact.
A)True
B)False
Q2) What is the result of social entrepreneurship?
Q3) _____ is a type of social venture capital whose purpose is typically economic development and job creation in impoverished areas.
A) Focused fund
B) Community fund
C) VC with a conscience
D) Philanthropy fund
Q4) A venture that invests in early-stage companies operating in the education and health care areas of social concern and explicitly promotes the environmental and social focus of its funds is an example of a(n)_____ fund,a type of social venture capital.
Q5) How do social and enterprising nonprofits differ from hybrid models?
Q6) What are the two types of enterprising nonprofits and how do they differ?
Q7) _____ provides value-added funding for nonprofit organizations to increase their potential for social impact.
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Chapter 7: The Business Plan
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Sample Questions
Q1) When speaking with venture capitalists,the entrepreneurial team should be prepared to provide the complete details of ongoing talks with other venture capitalists.
A)True
B)False
Q2) There is not much difference between developing a business plan and screening an opportunity.
A)True
B)False
Q3) Who develops a business plan?
Q4) The _____ is a blueprint that helps those involved convert ideas into opportunities,articulate and manage risks and rewards,and set a realistic time schedule.
Q5) A business plan carefully articulates the market,business model,investment requirements,and returns from an opportunity but does not include the risks involved.
A)True
B)False
Q6) Briefly discuss the guidelines to be followed for writing an effective business plan.
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Chapter 8: The Entrepreneurial Leader and the Team
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Q1) The _____ stage of venture growth is by far the most perilous stage requiring the drive and talent of a lead entrepreneur.
Q2) Which stage of venture growth follows the research and development stage?
A) The nascent stage
B) The startup stage
C) The high-growth stage
D) The mature stage
Q3) The fairness concept of equity and compensation implies that everyone should have equal ownership in an organization.
A)True
B)False
Q4) Which stage of venture growth offers one of the most difficult challenges as new layers of management are created to enable scale?
A) The nascent stage
B) The startup stage
C) The high-growth stage
D) The mature stage
Q5) Name the different types of contributions that should be considered when slicing up the equity pie.
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Chapter 9: Ethical Decision Making and the Entrepreneur
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Q1) According to Kohlberg's construct of moral judgment,being moral in Stage 1 is synonymous with being ____.
A) obedient
B) courageous
C) virtuous
D) honest
Q2) Discuss why entrepreneurs who truly know themselves make the best ethical decisions.
Q3) _____ is most likely to prevent someone from unknowingly making an ethical mistake when considering what to do in a situation with ethical overtones.
A) Using an approach that one is most comfortable with
B) Adopting an approach similar to that of a competitor's
C) Taking a multifaceted approach
D) Employing a single standard approach
Q4) Statutes do not always have the effect they were intended to have.
A)True
B)False
Q5) How does the concept known as "the fog of war" relate to ethical behavior and the entrepreneurial experience?
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Chapter 10: Resource Requirements
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Sample Questions
Q1) When hiring consultants for a firm,the best referral system is ____.
Q2) The ______ requires companies to file paperwork with the Securities and Exchange Commission faster,to create a more transparent means of collecting and posting financial data,and to test their procedures for posting accurate,timely information.
A) International Organizations Immunity Act
B) Interest Equalization Act
C) Sarbanes-Oxley Act
D) Smoot-Howley Act
Q3) Why are members of a board of advisors not exposed to personal liability like formal board directors?
Q4) Describe the use of other people's resources (OPR)as an approach for entrepreneurs.
Q5) Consultants should not be employed by a startup to compensate for a lower level of professional experience in the team.
A)True
B)False
Q6) How can new venture entrepreneurs without law degrees save money on legal work?
Q7) Minimal financing is colloquially referred to as ____.
Q8) State the hypotheses concerning networks and entrepreneurial effectiveness.
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Chapter 11: Franchising
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Q1) The capital outlay requirements to become a franchisee with a dominant national player are generally less than what it costs to join a regionally successful operation.
A)True
B)False
Q2) The service delivery system is the basis for a franchise venture's competitive advantage.
A)True
B)False
Q3) Which of the following is the most valuable asset in a franchise system?
A) Tying agreement
B) Trade name
C) Product specification list
D) Transaction analysis
Q4) In the Franchise Relationship Model (FRM),the financial structure flows from pro forma analysis of customer demand and the cost associated with development and execution of the ____.
Q5) Describe the Service Delivery System (SDS)component of a franchise offering.
Q6) In the Franchise Relationship Model (FRM),franchisor functions are typically centered on ____.
Page 13
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Chapter 12: Entrepreneurial Finance
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Sample Questions
Q1) An entrepreneur's bargaining power with various sources of equity and debt capital is influenced by the cash flow of the venture.
A)True
B)False
Q2) The core concept in determining the external financing requirements of a venture is
Q3) What are the three core principles of entrepreneurial finance?
Q4) An existing business seeking expansion capital or funds for temporary use has a much easier job obtaining both debt and equity.
A)True
B)False
Q5) Banks are typically willing to provide long-term debt to new ventures if the business has a substantial asset base of property and equipment.
A)True
B)False
Q6) What are the three vital corollaries determining the external financing requirement of a venture?
Q7) Short-term debt is incurred for _____ months or less.
Page 14
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Chapter 13: Obtaining Venture and Growth Capital
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Q1) It is best to be vague about other investors one is considering for a venture while discussing with a potential venture capitalist.
A)True
B)False
Q2) The single most important criterion for selecting an investor is the size of fund it can provide to an organization.
A)True
B)False
Q3) Although corporate venture capitalists look for promising young companies on the verge of a spike in sales like traditional venture capitalists,corporations tend to be more risk-averse and specialized.
A)True
B)False
Q4) Companies preparing for initial public offerings (IPOs)are attractive to mezzanine investors.
A)True
B)False
Q5) Discuss how timing is a critical aspect of raising risk capital.
Q6) ESOP stands for ____.
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Chapter 14: The Deal: Valuation, Structure, and Negotiation
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Sample Questions
Q1) Staged capital commitments give strategic advantage to the: A) investor.
B) entrepreneur.
C) underwriters.
D) advisors.
Q2) A venture investment round that is priced less than the previous round is referred to as a _____ round.
Q3) In the context of venture capital investment,discuss the consequences of venturing into an unknown territory.
Q4) In the venture capital valuation method,terminal value is found by multiplying net income and the P/E ratio.
A)True
B)False
Q5) Investors can tender their shares of stock before an initial public offering using _____ provision.
Q6) _____ are defined as economic agreements between at least two parties.
Q7) Strategic circumference is never an intentional outcome.
A)True
B)False
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Chapter 15: Obtaining Debt Capital
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Q1) Unlike equity investors,banks place very little weight on the quality of the management team.
A)True
B)False
Q2) Commercial finance companies have less flexible lending arrangements than banks.
A)True B)False
Q3) Following the restructuring of debt in a turnaround situation,forgiven debt becomes _____ for the entrepreneur who owns the company and who has personally had to guarantee the loans.
Q4) What kind of leases does not appear in the balanace sheet?
A) Domestic leases
B) Building leases
C) Auto leases
D) Operating leases
Q5) For an established and financially sound company,interest rates are frequently quoted using a(n)_____ with an added premium.
Q6) Finance companies have reasonable prepayment penalties.
A)True B)False
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Chapter 16: Leading Rapid Growth, Crises, and Recovery
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Q1) Which approach to management requires managing and working with peers and subordinates outside the formal chains of command?
A) Systems approach
B) Consensus approach
C) Commune approach
D) Operational approach
Q2) The prospect of bankruptcy can provide a foundation for bargaining with creditors in a turnaround situation.
A)True
B)False
Q3) Bankruptcy law defines the priority of creditors' claims when a firm is liquidated.
A)True
B)False
Q4) Explain how a "big project" can get a company into trouble.
Q5) Which bankruptcy law gives a firm immediate protection from creditors?
A) Chapter 7
B) Chapter 11
C) Chapter 13
D) Chapter 6
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Chapter 17: The Family As Entrepreneur
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Q1) In family enterprising,"team" encompasses the family ownership group as well as the family and nonfamily entrepreneurial capabilities.
A)True
B)False
Q2) Enterprising families _____ the opportunity-seeking processes in the mind-set and methods of both their family ownership group and their business organizations.
Q3) Business families who are interested in transgenerational entrepreneurship and wealth creation should ideally cultivate the more formal approach to entrepreneurship.
A)True
B)False
Q4) Define enterprising.
Q5) The goal of dialogue is to find solutions that are not constrained by the boundaries of either of the original positions.
A)True
B)False
Q6) List five attributes of relationship capital.
Q7) What are the six dimensions for family enterprising?
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Chapter 18: The Harvest and Beyond
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Q1) _____ are harvest vehicles through which founders can realize some liquidity from their stock by sales to the plan and other employees.
Q2) Successful entrepreneurs create _____ that results in capital gain.
Q3) If impatience is the enemy of an attractive harvest,then fear is its executioner.
A)True
B)False
Q4) A _____ is one in which a founder can realize a gain from a business by selling it to existing partners or to other key managers in the business.
Q5) Ignoring outside advice is one of the guidelines in shaping a harvest strategy.
A)True
B)False
Q6) What are the three anchors of entrepreneurial process that loom above the rest?
Q7) Which of the following harvest options is most likely to produce the most cash for a founder at the time of sale?
A) IPO
B) MBO
C) Outright sale
D) Strategic alliance
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