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Entrepreneurship Robert Hisrich 11th Edition- Test Bank
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Entrepreneurship, 11e (Hisrich)
Chapter 2 Corporate Entrepreneurship
1) Developing a spirit of entrepreneurship within the existing organization, called corporate entrepreneurship, can lower resistance to flexibility, growth, and diversification.
Answer: TRUE
Difficulty: 2 Medium
Learning Objective: 02-01 To understand the causes of interest in corporate entrepreneurship.
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2) Entrepreneurial endeavors consist of new business venturing, innovativeness, self-renewal, and reactiveness.
Answer: FALSE
Difficulty: 2 Medium
Learning Objective: 02-01 To understand the causes of interest in corporate entrepreneurship.
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3) Corporate entrepreneurship is most strongly reflected in entrepreneurial activities as well as in top management orientations in organizations.
Answer: TRUE
Difficulty: 1 Easy
Learning Objective: 02-01 To understand the causes of interest in corporate entrepreneurship.
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4) Self-renewal includes the redefinition of the business concept, reorganization, and the introduction of system-wide changes to increase innovation.
Answer: TRUE
Difficulty: 2 Medium
Learning Objective: 02-01 To understand the causes of interest in corporate entrepreneurship.
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5) Internal corporate venturing consists of creating something new of value either by redefining the company’s current products or services, developing new markets, or forming more formally autonomous or semiautonomous units or firms.
Answer: TRUE
Difficulty: 2 Medium
Learning Objective: 02-01 To understand the causes of interest in corporate entrepreneurship.
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6) Traditionally managed firms commitment to opportunity is revolutionary with a long duration.
Answer: FALSE
Difficulty: 2 Medium
Learning Objective: 02-02 To introduce the entrepreneurial mode of managing firms and distinguish it from the traditional mode.
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7) Entrepreneurially managed firm structure is usually flat with multiple informal networks.
Answer: TRUE
Difficulty: 2 Medium
Learning Objective: 02-02 To introduce the entrepreneurial mode of managing firms and distinguish it from the traditional mode.
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8) Entrepreneurially run firms are driven by controlled resources whereas traditionally managed firms are driven by perception of opportunity.
Answer: FALSE
Difficulty: 2 Medium
Learning Objective: 02-02 To introduce the entrepreneurial mode of managing firms and distinguish it from the traditional mode.
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9) Entrepreneurs focus on how to minimize resources needed whereas traditional firms focus on accumulating resources.
Answer: TRUE
Difficulty: 2 Medium
Learning Objective: 02-02 To introduce the entrepreneurial mode of managing firms and distinguish it from the traditional mode.
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10) Traditionally managed firms typically punish failure.
Answer: TRUE
Difficulty: 2 Medium
Learning Objective: 02-02 To introduce the entrepreneurial mode of managing firms and distinguish it from the traditional mode.
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11) Organizations that require a rapid return on investment and a high sales volume usually encourage and support new ideas.
Answer: FALSE
Difficulty: 2 Medium
Learning Objective: 02-03 To provide a scale for capturing the extent to which management adopts entrepreneurial or traditional behaviors.
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12) In encouraging a culture for corporate entrepreneurship, using older, proven, technology is recommended in order to increase stability in the organization.
Answer: FALSE
Difficulty: 1 Easy
Learning Objective: 02-03 To provide a scale for capturing the extent to which management adopts entrepreneurial or traditional behaviors.
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13) In creating a culture for corporate entrepreneurship leadership is important.
Answer: TRUE
Difficulty: 1 Easy
Learning Objective: 02-03 To provide a scale for capturing the extent to which management adopts entrepreneurial or traditional behaviors.
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14) Most managers in a corporation are capable of being successful corporate entrepreneurs with the correct training.
Answer: FALSE
Difficulty: 1 Easy
Learning Objective: 02-03 To provide a scale for capturing the extent to which management adopts entrepreneurial or traditional behaviors.
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15) In an encouraging climate for corporate entrepreneurship, rewards should be based on the attainment of established performance goals.
Answer: TRUE
Difficulty: 1 Easy
Learning Objective: 02-03 To provide a scale for capturing the extent to which management adopts entrepreneurial or traditional behaviors.
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16) In corporate entrepreneurship, trial and error are encouraged.
Answer: TRUE
Difficulty: 1 Easy
Learning Objective: 02-03 To provide a scale for capturing the extent to which management adopts entrepreneurial or traditional behaviors.
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17) It is important for an entrepreneur to understand all aspects of the environment. Part of this ability is reflected in the individual’s level of creativity, which generally increases with age and education in most individuals.
Answer: FALSE
Difficulty: 3 Hard
Learning Objective: 02-03 To provide a scale for capturing the extent to which management adopts entrepreneurial or traditional behaviors.
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18) The corporate entrepreneur encourages teamwork and uses a multidisciplined approach, which violates organizational practices and structures taught in most business schools.
Answer: TRUE
Difficulty: 2 Medium
Learning Objective: 02-03 To provide a scale for capturing the extent to which management adopts entrepreneurial or traditional behaviors.
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19) For an organization with a traditional environment, it is best to facilitate an external process to establish an entrepreneurial environment.
Answer: TRUE
Difficulty: 2 Medium
Learning Objective: 02-04 To discuss how established firms can develop an entrepreneurial culture and the challenges of doing so.
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20) An organization that wants to become more entrepreneurial must learn to be more productive with fewer resources.
Answer: TRUE
Difficulty: 1 Easy
Learning Objective: 02-04 To discuss how established firms can develop an entrepreneurial culture and the challenges of doing so.
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21) Entrepreneurial activities tend to immediately affect the bottom line, and hence are seldom overlooked and receive extensive funding and support.
Answer: FALSE
Difficulty: 2 Medium
Learning Objective: 02-04 To discuss how established firms can develop an entrepreneurial culture and the challenges of doing so.
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22) Corporate ventures are totally independent units, hence the equity portion of the compensation is particularly difficult to handle.
Answer: FALSE
Difficulty: 2 Medium
Learning Objective: 02-04 To discuss how established firms can develop an entrepreneurial culture and the challenges of doing so.
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23) One study found that new ventures started within a corporation performed better than those started independently by entrepreneurs.
Answer: FALSE
Difficulty: 1 Easy
Learning Objective: 02-04 To discuss how established firms can develop an entrepreneurial culture and the challenges of doing so.
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24) Generally, independent, venture-capital-based start-ups by entrepreneurs tend to outperform corporate start-ups significantly.
Answer: TRUE
Difficulty: 2 Medium
Learning Objective: 02-04 To discuss how established firms can develop an entrepreneurial culture and the challenges of doing so.
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25) A dual process model of coping with negative emotions is an approach to negative emotions based on both avoidance and a proactiveness toward secondary sources of stress arising from a major loss.
Answer: FALSE
Difficulty: 2 Medium
Learning Objective: 02-05 To acknowledge that projects fail and people feel bad about it, and to introduce the dual process model for maximizing learning from failure experiences.
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26) An entrepreneur with loss-orientation would talk about the business-failure with a close friend or relative.
Answer: TRUE
Difficulty: 1 Easy
Learning Objective: 02-05 To acknowledge that projects fail and people feel bad about it, and to introduce the dual process model for maximizing learning from failure experiences.
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27) An entrepreneur’s recovery from grief is detrimental to society.
Answer: FALSE
Difficulty: 2 Medium
Learning Objective: 02-05 To acknowledge that projects fail and people feel bad about it, and to introduce the dual process model for maximizing learning from failure experiences.
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28) ________ includes a redefinition of the business concept, reorganization, and the introduction of system-wide changes to increase innovation.
- A) Innovativeness
- B) New business venturing
- C) Self-renewal
- D) Proactiveness
Answer: C
Difficulty: 1 Easy
Learning Objective: 02-01 To understand the causes of interest in corporate entrepreneurship.
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29) Entrepreneurial activities that create something new of value either by redefining the company’s current products or services, developing new markets, or forming more formally autonomous or semiautonomous units or firms best defines:
- A) new business venturing.
- B) proactiveness.
- C) innovativeness.
- D) self-renewal.
Answer: A
Difficulty: 1 Easy
Learning Objective: 02-01 To understand the causes of interest in corporate entrepreneurship.
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30) Corporate entrepreneurship is best described as:
- A) the hiring of former entrepreneurs.
- B) entrepreneurial action within an established organization.
- C) the process of buying, or acquiring, entrepreneurial firms.
- D) the process of hiring consultants to teach a firm how to be more creative.
Answer: B
Difficulty: 1 Easy
Learning Objective: 02-01 To understand the causes of interest in corporate entrepreneurship.
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31) ________ includes initiative and risk taking, as well as competitive aggressiveness and boldness.
- A) New business venturing
- B) Self-renewal
- C) Innovativeness
- D) Proactiveness
Answer: D
Difficulty: 2 Medium
Learning Objective: 02-01 To understand the causes of interest in corporate entrepreneurship.
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32) New product development falls under which of the four major components of corporate entrepreneurship?
- A) New business venturing
- B) Self-renewal
- C) Innovativeness
- D) Proactiveness
Answer: C
Difficulty: 2 Medium
Learning Objective: 02-01 To understand the causes of interest in corporate entrepreneurship.
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33) With regard to the differences between the entrepreneurial and administrative focuses which of the following is correct?
- A) Entrepreneurs focus on slow steady growth and managers focus on rapid growth
- B) Entrepreneurs rent or sporadically use resources; managers like to own resources
- C) Entrepreneurs are driven by controlled resources; managers by opportunity
- D) Entrepreneurs tend to use a hierarchical management structure; managers use a more fluid, flat approach
Answer: B
Difficulty: 2 Medium
Learning Objective: 02-02 To introduce the entrepreneurial mode of managing firms and distinguish it from the traditional mode.
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34) Having an entrepreneurial orientation toward the control of resources means:
- A) that one focuses on accessing others’ resources.
- B) that one focuses on purchasing resources.
- C) that one has a belief that resources are unlimited and therefore easy to obtain.
- D) that one focuses on using a hierarchy management structure in allocating resources.
Answer: A
Difficulty: 2 Medium
Learning Objective: 02-02 To introduce the entrepreneurial mode of managing firms and distinguish it from the traditional mode.
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35) Entrepreneurial culture and growth orientation consists of all of the following except:
- A) encouraging employees to generate ideas.
- B) focusing on opportunities.
- C) the desire to grow at a slow and controlled pace.
- D) being creative.
Answer: C
Difficulty: 1 Easy
Learning Objective: 02-02 To introduce the entrepreneurial mode of managing firms and distinguish it from the traditional mode.
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36) All these are characteristics of an entrepreneurial environment except:
- A) there are short term horizons.
- B) new ideas are encouraged.
- C) the organization operates on frontiers of technology.
- D) it uses a multidiscipline teamwork approach.
Answer: A
Difficulty: 2 Medium
Learning Objective: 02-03 To provide a scale for capturing the extent to which management adopts entrepreneurial or traditional behaviors.
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37) Which of the following is true about corporate entrepreneurship?
- A) Equity in a new venture should not be used as a reward due to its uncertain value
- B) A company must be willing to invest money without a guarantee of a return in the short term
- C) Teams should be segmented by department
- D) Top management should not be involved in the process
Answer: B
Difficulty: 2 Medium
Learning Objective: 02-03 To provide a scale for capturing the extent to which management adopts entrepreneurial or traditional behaviors.
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38) Which of the following is not a leadership characteristic of a corporate entrepreneur according to the text?
- A) Flexibility and vision
- B) Persistence
- C) Encourages teamwork
- D) Encourages colleagues to follow hierarchy
Answer: D
Difficulty: 1 Easy
Learning Objective: 02-03 To provide a scale for capturing the extent to which management adopts entrepreneurial or traditional behaviors.
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39) The first step in establishing corporate entrepreneurship in an organization is:
- A) finding mid-level managers to champion ideas
- B) developing ways to get closer to customers
- C) learn to be more productive with fewer resources
- D) securing commitment from top management
Answer: D
Difficulty: 2 Medium
Learning Objective: 02-04 To discuss how established firms can develop an entrepreneurial culture and the challenges of doing so.
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40) A sufficient time for top management to be committed to corporate entrepreneurship is:
- A) at least one year.
- B) at least two years.
- C) at least three years.
- D) at least ten years.
Answer: C
Difficulty: 1 Easy
Learning Objective: 02-04 To discuss how established firms can develop an entrepreneurial culture and the challenges of doing so.
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41) Which of the following would not occur in the second stage of establishing corporate entrepreneurship in an organization?
- A) Ideas that top management is interested in supporting are identified.
- B) Identify an evaluation system for involved employees.
- C) The amount of risk money available is specified.
- D) Overall program expectations and target results of each corporate venture are established.
Answer: B
Difficulty: 2 Medium
Learning Objective: 02-04 To discuss how established firms can develop an entrepreneurial culture and the challenges of doing so.
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42) When establishing corporate entrepreneurship in an organization rewards should:
- A) be tied to the department in which the idea originated
- B) be tied to the parent company’s stock performance
- C) be tied to the performance of the entrepreneurial unit created from the idea
- D) not be changed from whatever current system is being used so that risk is encouraged
Answer: C
Difficulty: 2 Medium
Learning Objective: 02-04 To discuss how established firms can develop an entrepreneurial culture and the challenges of doing so.
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43) Which of the following is true?
- A) Independent, venture-capital-based start-ups by entrepreneurs tend to outperform corporate start-ups significantly.
- B) New ventures started within a corporation performed better than those started independently by entrepreneurs.
- C) Independent entrepreneurs find difficulty in maintaining a long-term commitment.
- D) Corporate ventures become profitable twice as fast as independent ventures.
Answer: A
Difficulty: 2 Medium
Learning Objective: 02-04 To discuss how established firms can develop an entrepreneurial culture and the challenges of doing so.
Accessibility: Keyboard Navigation
44) When would an entrepreneur be pronounced to have recovered from the grief of a lost business?
- A) On the availability of equally challenging entrepreneurial opportunities
- B) Upon a simultaneous engagement in an analysis of the failed business
- C) On having evaluated and absorbed the lessons learnt from the failed business
- D) When thoughts about the events surrounding, and leading up to the loss of the business, no longer generate a negative emotional response
Answer: D
Difficulty: 2 Medium
Learning Objective: 02-05 To acknowledge that projects fail and people feel bad about it, and to introduce the dual process model for maximizing learning from failure experiences.
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45) Which of the following statements is not true of the loss orientation approach to negative emotions?
- A) Loss orientation is based on both avoidance and proactiveness.
- B) Loss orientation involves working through, and processing, some aspect of the loss experience.
- C) Loss orientation breaks emotional bonds to the object lost.
- D) Loss orientation focuses on the loss event to create an account of the failure.
Answer: A
Difficulty: 1 Easy
Learning Objective: 02-05 To acknowledge that projects fail and people feel bad about it, and to introduce the dual process model for maximizing learning from failure experiences.
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46) Which of the following statements is not true of the restoration orientation approach to negative emotions?
- A) The restoration orientation approach is based on avoidance and proactiveness toward secondary sources of stress.
- B) The restoration orientation approach requires oscillating between two alternate approaches to loss.
- C) The restoration orientation approach involves distracting oneself from thinking about the failure.
- D) The restoration orientation approach focuses one’s energy on addressing problems that arise as a result of the failure.
Answer: B
Difficulty: 2 Medium
Learning Objective: 02-05 To acknowledge that projects fail and people feel bad about it, and to introduce the dual process model for maximizing learning from failure experiences.
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47) Which of the following is a practical implication of using the dual process of learning from failure?
- A) Recovery from loss offers an opportunity to increase one’s knowledge of entrepreneurship.
- B) Distracting oneself from thinking about the failure reduces the long-term level of negative emotions.
- C) Allocating attention to the events surrounding the failure provide little opportunity to learn.
- D) The recovery process can be enhanced by focusing on either loss orientation or restoration orientation.
Answer: A
Difficulty: 2 Medium
Learning Objective: 02-05 To acknowledge that projects fail and people feel bad about it, and to introduce the dual process model for maximizing learning from failure experiences.
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48) Which of the following is most effective in grief-recovery?
- A) Restoration-orientation
- B) Loss-orientation
- C) Dual process
- D) Grief recovery process
Answer: C
Difficulty: 1 Easy
Learning Objective: 02-05 To acknowledge that projects fail and people feel bad about it, and to introduce the dual process model for maximizing learning from failure experiences.
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49) Identify and briefly describe the four key elements of corporate entrepreneurship.
Answer: 1. New business venturing: These entrepreneurial activities consist of creating something new of value either by redefining the company’s current products or services, developing new markets, or forming more formally autonomous or semiautonomous units or firms.
- Organizational innovativeness refers to product and service innovation. It includes new product development, product improvements, and new production methods and procedures.
- Self-renewal is the transformation of an organization through the renewal of the key ideas on which it is built. Self-renewal includes a redefinition of the business concept, reorganization, and the introduction of system wide changes to increase innovation.
- Proactiveness includes initiative and risk taking, as well as competitive aggressiveness and boldness, which are particularly reflected in the orientations and activities of top management. A proactive organization tends to take risks by conducting experiments; it also takes initiative and is bold and aggressive in pursuing opportunities. Organizations with this proactive spirit attempt to lead rather than follow competitors in such key business areas as the introduction of new products or services, operating technologies, and administrative techniques.
Difficulty: 2 Medium
Learning Objective: 02-01 To understand the causes of interest in corporate entrepreneurship.
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50) Discuss three major ways in which managerial and entrepreneurial decision making differs.
Answer: Eight areas of difference students can choose from:
- strategic orientation
- commitment to opportunity
- commitment of resources
- control of resources
- management structure
- reward philosophy
- growth orientation
- entrepreneurial culture
Basic differences in each dimension:
TABLE 2.1 Distinguishing Entreprenuerially from Traditionally Managed Firms
| Entreprenuerial Focus
|
Conceptual Dimension
|
Administrative Focus
|
| Driven by perception of opportunity
|
Strategic orientation
|
Driven by controlled resources
|
| Revolutionary with short duration
|
Commitment to opportunity
|
Evolutionary with long duration
|
| Many stages with minimal exposure
|
Commitment of resources
|
A single stage with complete commitment out of decision
|
| Episodic use or rent of required resoures
|
Control of resources
|
Owndership or eo\mployment of required resources
|
| Flat with multiple informal networks
|
Management structure
|
Hierarchy
|
| Based on value creation
|
Reward philosophy
|
Based on responsibility and seniority
|
| Rapid growth is top priority; risk accepted to achieve growth
|
Growth orientation
|
Safe, slow, and steady
|
| Promoting broad search for opportunities
|
Entrepreneurial culture
|
Opportunity search restricted by controlled resources; failure punished |
Source: This table is taken from T. Brown, P. Davidsson, and J. Wiklund, “An Operationalization of Stevenson’s Conceptualization of Entrepreneurship as Opportunity-Based Firm Behavior,” StrategicManagementJournal 22 (2001), p. 955.
Difficulty: 2 Medium
Learning Objective: 02-02 To introduce the entrepreneurial mode of managing firms and distinguish it from the traditional mode.
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51) Identify five of the twelve characteristics of an entrepreneurial environment.
TABLE 2.3 Characteristics of an Entrepreneurial Environment
- Organization operates on frontiers of technology
- New ideas encouraged
- Trial and error encouraged
- Failures allowed
- No opportunity parameters
- Resources available and accessible
- Multidiscipline teamwork approach
- Long time horizon
- Volunteer program
- Appropriate reward system
- Sponsors and champions available
- Support of top management
Students can choose five of the twelve from table 2.3 above.
Answer: Answers will vary.
Difficulty: 2 Medium
Learning Objective: 02-03 To provide a scale for capturing the extent to which management adopts entrepreneurial or traditional behaviors.
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52) An organization wanting to establish a more entrepreneurial firm must implement a procedure for its creation. Identify and briefly explain the first three steps of the process.
Answer: The first step in this process is to secure a commitment to corporate entrepreneurship in the organization by top and middle management levels. Without top management commitment, the organization will never be able to go through all the cultural changes necessary for implementation.
Second, ideas and general areas that top management is interested in supporting should be identified, along with the amount of risk money that is available to develop the concept further. It is also useful to establish overall program expectations and the target results of each corporate venture.
Third, a company needs to use technology to make itself more flexible. Small companies can compete against larger companies. Larger companies can make themselves responsive and flexible like smaller firms.
Difficulty: 2 Medium
Learning Objective: 02-04 To discuss how established firms can develop an entrepreneurial culture and the challenges of doing so.
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53) Define and explain the dual process model of coping with negative emotions.
Answer: Student should define process as shifting between a loss orientation and a restoration orientation. The student should also explain the two alternate approaches to loss:
loss orientation An approach to negative emotions that involves working through, and processing, some aspect of the loss experience and, as a result of this process, breaking emotional bonds to the object lost.
restoration orientation An approach to negative emotions based on both avoidance and a proactiveness toward secondary sources of stress arising from a major loss.
The entrepreneur can benefit from both orientations while minimizing the costs of maintaining either for too long.
Difficulty: 2 Medium
Learning Objective: 02-05 To acknowledge that projects fail and people feel bad about it, and to introduce the dual process model for maximizing learning from failure experiences.
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54) Explain the benefits, or practical implications, of using the dual process model of coping with negative emotions.
Answer:
- Helps to reduce feelings of shame and embarrassment.
- Realizing that psychological and physiological outcomes caused by the feelings of loss are “symptoms” can reduce secondary sources of stress and may also assist with the choice of treatment.
- Understanding that there is a process can provide entrepreneurs some comfort that their current feelings of loss, sadness, and helplessness will eventually diminish.
- The recovery and learning process can be enhanced by some degree of oscillation between a loss orientation and a restoration orientation.
- Recovery from loss offers an opportunity to increase one’s knowledge of entrepreneurship. This provides benefits to the individual and society.
Difficulty: 2 Medium
Learning Objective: 02-05 To acknowledge that projects fail and people feel bad about it, and to introduce the dual process model for maximizing learning from failure experiences.
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Entrepreneurship, 11e (Hisrich)
Chapter 4 Creativity and the Business Idea
1) Augmented reality, body monitoring, and point of view reference are all trend categories in the wearable tech industry.
Answer: TRUE
Difficulty: 1 Easy
Learning Objective: 04-01 To identify various sources of ideas for new ventures.
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2) Trends often provide one of the greatest opportunities for starting a new venture.
Answer: TRUE
Difficulty: 1 Easy
Learning Objective: 04-01 To identify various sources of ideas for new ventures.
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3) Members of the distribution channel are usually good sources of ideas for new products.
Answer: TRUE
Difficulty: 2 Medium
Learning Objective: 04-01 To identify various sources of ideas for new ventures.
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4) The files of the U.S. Patent Office are kept confidential and entrepreneurs cannot study their contents.
Answer: FALSE
Difficulty: 2 Medium
Learning Objective: 04-01 To identify various sources of ideas for new ventures.
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5) The largest source of new ideas is the U.S. Patent Office.
Answer: FALSE
Difficulty: 1 Easy
Learning Objective: 04-01 To identify various sources of ideas for new ventures.
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6) Focus groups consist of 15 to 25 participants in a loosely structured, freewheeling atmosphere.
Answer: FALSE
Difficulty: 2 Medium
Learning Objective: 04-02 To discuss methods for generating new venture ideas.
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7) The focus group is an excellent method for initially screening ideas and concepts.
Answer: TRUE
Difficulty: 2 Medium
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8) Most of the ideas generated by a brainstorming group progress into further development.
Answer: FALSE
Difficulty: 2 Medium
Learning Objective: 04-02 To discuss methods for generating new venture ideas.
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9) The drawback with problem inventory analysis is that it is not effective in relating known products to suggested problems.
Answer: FALSE
Difficulty: 2 Medium
Learning Objective: 04-02 To discuss methods for generating new venture ideas.
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10) Results from product inventory analysis need minimal evaluation as they most likely reflect a new business opportunity.
Answer: FALSE
Difficulty: 2 Medium
Learning Objective: 04-02 To discuss methods for generating new venture ideas.
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11) Brainwriting is a written form of brainstorming.
Answer: TRUE
Difficulty: 1 Easy
Learning Objective: 04-02 To discuss methods for generating new venture ideas.
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12) Creativity tends to decrease with age.
Answer: TRUE
Difficulty: 1 Easy
Learning Objective: 04-03 To discuss creativity and creative problem solving techniques.
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13) Brainstorming is an unstructured process used for generating possible ideas about a problem within a limited time frame through the spontaneous contributions of participants.
Answer: TRUE
Difficulty: 1 Easy
Learning Objective: 04-03 To discuss creativity and creative problem solving techniques.
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14) In reverse brainstorming the focus is on all the things that are right about an idea.
Answer: FALSE
Difficulty: 1 Easy
Learning Objective: 04-03 To discuss creativity and creative problem solving techniques.
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15) The Gordon method, like most other methods, begins with group members not knowing the exact nature of the problem.
Answer: FALSE
Difficulty: 2 Medium
Learning Objective: 04-03 To discuss creativity and creative problem solving techniques.
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16) In the checklist method, a new idea is developed through a list of related issues or suggestions.
Answer: TRUE
Difficulty: 1 Easy
Learning Objective: 04-03 To discuss creativity and creative problem solving techniques.
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17) Developing a new idea through a chain of word associations is known as the checklist method.
Answer: FALSE
Difficulty: 1 Easy
Learning Objective: 04-03 To discuss creativity and creative problem solving techniques.
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18) Forced relationships is a method of forcing confrontations in focus groups.
Answer: FALSE
Difficulty: 2 Medium
Learning Objective: 04-03 To discuss creativity and creative problem solving techniques.
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19) The collective notebook method involves members recording their ideas at least once a day for about a week.
Answer: TRUE
Difficulty: 1 Easy
Learning Objective: 04-03 To discuss creativity and creative problem solving techniques.
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20) Attribute listing is an idea-finding technique that requires the entrepreneur to list the attributes of an item or problem and then look at each from a variety of viewpoints.
Answer: TRUE
Difficulty: 2 Medium
Learning Objective: 04-03 To discuss creativity and creative problem solving techniques.
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21) In parameter analysis a new idea is developed through a list of related issues or suggestions.
Answer: FALSE
Difficulty: 2 Medium
Learning Objective: 04-03 To discuss creativity and creative problem solving techniques.
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22) Using the big-dream approach, a new idea is developed through a list of related issues or suggestions.
Answer: FALSE
Difficulty: 2 Medium
Learning Objective: 04-03 To discuss creativity and creative problem solving techniques.
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23) The big-dream approach requires the entrepreneur to dream about the problem and its solution, thinking big.
Answer: TRUE
Difficulty: 1 Easy
Learning Objective: 04-03 To discuss creativity and creative problem solving techniques.
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24) Creative synthesis is closely connected to the technique of parameter analysis.
Answer: TRUE
Difficulty: 2 Medium
Learning Objective: 04-03 To discuss creativity and creative problem solving techniques.
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25) Nanotechnology would be classified as a breakthrough technology.
Answer: TRUE
Difficulty: 1 Easy
Learning Objective: 04-04 To discuss the importance of innovation.
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26) The product Spanx is an example of an ordinary innovation.
Answer: TRUE
Difficulty: 2 Medium
Learning Objective: 04-04 To discuss the importance of innovation.
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27) New products may be classified from the viewpoint of either the consumer or the firm.
Answer: TRUE
Difficulty: 2 Medium
Learning Objective: 04-04 To discuss the importance of innovation.
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28) Discontinuous innovations have the least disrupting influence on established consumption patterns.
Answer: FALSE
Difficulty: 1 Easy
Learning Objective: 04-04 To discuss the importance of innovation.
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29) When a firm classifies a new product the two key factors used are market and technology newness.
Answer: TRUE
Difficulty: 2 Medium
Learning Objective: 04-04 To discuss the importance of innovation.
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30) The entrepreneur’s ability to recognize a business opportunity is a result of his or her knowledge and experience.
Answer: TRUE
Difficulty: 2 Medium
Learning Objective: 04-05 To understand and be able to develop an opportunity assessment plan.
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31) Entrepreneurs are unable to carefully assess each and every innovative idea and opportunity.
Answer: FALSE
Difficulty: 2 Medium
Learning Objective: 04-05 To understand and be able to develop an opportunity assessment plan.
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32) The product life cycle consists of five main stages.
Answer: FALSE
Difficulty: 2 Medium
Learning Objective: 04-06 To discuss the aspects of the product planning and development process.
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33) One evaluation method successfully used in the concept stage is the systematic market evaluation checklist.
Answer: FALSE
Difficulty: 2 Medium
Learning Objective: 04-06 To discuss the aspects of the product planning and development process.
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34) In the concept stage, the refined idea is tested to determine consumer acceptance.
Answer: TRUE
Difficulty: 2 Medium
Learning Objective: 04-06 To discuss the aspects of the product planning and development process.
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35) In the test market stage of product planning, the refined product idea is tested to determine customer acceptance.
Answer: FALSE
Difficulty: 2 Medium
Learning Objective: 04-06 To discuss the aspects of the product planning and development process.
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36) Only the test marketing phase of product planning provides actual sales results to judge the product’s customer appeal.
Answer: TRUE
Difficulty: 2 Medium
Learning Objective: 04-06 To discuss the aspects of the product planning and development process.
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37) In the product development stage, consumer reaction to the physical product/service is determined.
Answer: TRUE
Difficulty: 2 Medium
Learning Objective: 04-06 To discuss the aspects of the product planning and development process.
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38) The entrepreneur should always design and build his own webpage to maintain strategic control.
Answer: FALSE
Difficulty: 2 Medium
Learning Objective: 04-07 To discuss aspects of e-commerce.
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39) An online company’s front-end operations involve integration of customer orders with distribution channels.
Answer: FALSE
Difficulty: 2 Medium
Learning Objective: 04-07 To discuss aspects of e-commerce.
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40) Trends for the next decade include all of the following except:
- A) Green products
- B) New age music
- C) Clean energy
- D) Health Maintenance
Answer: B
Difficulty: 1 Easy
Learning Objective: 04-01 To identify various sources of ideas for new ventures.
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41) Which of the following statements is true?
- A) Customers form the largest source of new ideas for entrepreneurs.
- B) While members of the distribution channel may be willing to provide new ideas for entrepreneurs, they may not help market them.
- C) The Federal Government is not a source of new ideas since the patent information they collect is confidential.
- D) Potential entrepreneurs should establish a formal method for monitoring and evaluating competitive products and services on the market.
Answer: D
Difficulty: 2 Medium
Learning Objective: 04-01 To identify various sources of ideas for new ventures.
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42) Patents filed with the U.S. Patent Office:
- A) are not disclosed to the public.
- B) are the property of the U.S. Government.
- C) frequently suggest other new products.
- D) are only accessible to government agencies.
Answer: C
Difficulty: 2 Medium
Learning Objective: 04-01 To identify various sources of ideas for new ventures.
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43) The Occupational Safety and Health Act (OSHA) mandated that first-aid kits be available in business establishments employing more than three people. A newly formed company was successful in developing first-aid kits that allowed companies to comply with the standards of the act. This is an example of:
- A) distribution channels as an excellent source for new ideas.
- B) existing products and services as a source for new ideas.
- C) potential consumers as a source for new ideas.
- D) government regulations as a source for new product ideas.
Answer: D
Difficulty: 2 Medium
Learning Objective: 04-01 To identify various sources of ideas for new ventures.
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44) The largest source of new product ideas is:
- A) the U.S. Patent Office.
- B) the entrepreneur’s research and development.
- C) customers.
- D) the federal government.
Answer: B
Difficulty: 2 Medium
Learning Objective: 04-01 To identify various sources of ideas for new ventures.
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45) Focus groups use which of the following methods?
- A) A moderator leads the group in an open, in-depth discussion.
- B) A moderator asks each individual in the group questions, interview style.
- C) Each participant fills out a questionnaire, followed by individual exit interviews.
- D) Each participant obtains new ideas and solutions by focusing on problems.
Answer: A
Difficulty: 2 Medium
Learning Objective: 04-02 To discuss methods for generating new venture ideas.
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46) Brainstorming groups should:
- A) contain an expert in the field to be discussed.
- B) be serious and work-oriented.
- C) try to generate as many ideas as possible.
- D) encourage criticism of ideas from other participants in the group.
Answer: C
Difficulty: 2 Medium
Learning Objective: 04-02 To discuss methods for generating new venture ideas.
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47) ________ is not desirable when brainstorming is in process.
- A) “Freewheeling”
- B) Idea combination and improvement
- C) Generating a large quantity of ideas
- D) Criticism
Answer: D
Difficulty: 2 Medium
Learning Objective: 04-02 To discuss methods for generating new venture ideas.
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48) In this method, instead of generating new ideas themselves, consumers are provided with a list of problems in a general product category.
- A) Reverse brainstorming
- B) Problem inventory analysis
- C) Brainstorming
- D) Focus groups
Answer: B
Difficulty: 2 Medium
Learning Objective: 04-02 To discuss methods for generating new venture ideas.
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49) Creativity declines with:
- A) training and tradition.
- B) education and work experience.
- C) age, education, lack of use, and bureaucracy.
- D) mental health and work experience.
Answer: C
Difficulty: 2 Medium
Learning Objective: 04-03 To discuss creativity and creative problem solving techniques.
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50) Probably the most well-known and widely used technique for creative problem solving is:
- A) brainstorming.
- B) focus groups.
- C) forced relationships.
- D) scientific method.
Answer: A
Difficulty: 2 Medium
Learning Objective: 04-03 To discuss creativity and creative problem solving techniques.
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51) Reverse brainstorming is much like brainstorming except that:
- A) criticism is not allowed.
- B) the technique is based on finding solutions.
- C) the group need not be careful to maintain good morale.
- D) the process usually involves identification of everything wrong with an idea.
Answer: D
Difficulty: 2 Medium
Learning Objective: 04-03 To discuss creativity and creative problem solving techniques.
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52) Which of the following problem-solving techniques begins with group members not knowing the exact nature of the problem?
- A) Parameter analysis
- B) Matrix charting
- C) The Gordon method
- D) Free association
Answer: C
Difficulty: 2 Medium
Learning Objective: 04-03 To discuss creativity and creative problem solving techniques.
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53) In the ________ method a new idea is developed through a list of related issues or suggestions.
- A) Gordon
- B) checklist
- C) collective notebook
- D) matrix charting
Answer: B
Difficulty: 2 Medium
Learning Objective: 04-03 To discuss creativity and creative problem solving techniques.
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54) In the ________ method, a word is written down, then another, creating a chain of ideas.
- A) reverse brainstorming
- B) matrix charting
- C) heuristic
- D) free association
Answer: D
Difficulty: 2 Medium
Learning Objective: 04-03 To discuss creativity and creative problem solving techniques.
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55) Which of the following creative methods involves having participants write down their ideas several times a day?
- A) Collective notebook method
- B) Parameter analysis
- C) Brainstorming
- D) Forced relationship
Answer: A
Difficulty: 2 Medium
Learning Objective: 04-03 To discuss creativity and creative problem solving techniques.
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56) This problem-solving method requires the entrepreneur to list the properties of an item or problem and then look at each from a variety of viewpoints.
- A) Value analysis
- B) Attribute listing
- C) Brainwriting
- D) Big-dream approach
Answer: B
Difficulty: 2 Medium
Learning Objective: 04-03 To discuss creativity and creative problem solving techniques.
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57) This problem-solving method involves developing new ideas by thinking without constraints.
- A) Value analysis
- B) Attribute listing
- C) Big-dream approach
- D) Brainwriting
Answer: C
Difficulty: 2 Medium
Learning Objective: 04-03 To discuss creativity and creative problem solving techniques.
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58) Creative synthesis is an important aspect of the ________ method of creative problem solving.
- A) brainwriting
- B) forced association
- C) attribute listing
- D) parameter analysis
Answer: D
Difficulty: 2 Medium
Learning Objective: 04-03 To discuss creativity and creative problem solving techniques.
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59) Parameter analysis consists of two main aspects that are:
- A) creative synthesis and parameter identification.
- B) breakthrough innovation and forced association.
- C) attribute listing and parameter identification.
- D) parameter variation and verification.
Answer: A
Difficulty: 2 Medium
Learning Objective: 04-03 To discuss creativity and creative problem solving techniques.
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60) What type of innovation is illustrated by the ideas of the airplane and penicillin?
- A) Ordinary innovation
- B) Continuous innovation
- C) Technological innovation
- D) Breakthrough innovation
Answer: D
Difficulty: 2 Medium
Learning Objective: 04-04 To discuss the importance of innovation.
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61) Which of the following was not discussed in the text as a breakthrough innovation?
- A) The airplane
- B) The Internet
- C) Spanx
- D) Penicillin
Answer: C
Difficulty: 2 Medium
Learning Objective: 04-04 To discuss the importance of innovation.
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62) Which of the following is defined as having some disruptive influence on established consumption patterns?
- A) Continuous Innovations
- B) Dynamically Continuous Innovations
- C) Discontinuous Innovations
- D) Breakthrough Innovations
Answer: B
Difficulty: 2 Medium
Learning Objective: 04-04 To discuss the importance of innovation.
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63) Continuous innovations are described as:
- A) having the least disrupting influence on established consumption patterns.
- B) having some disruptive influence on established consumption patterns.
- C) having no disruptive influence on established consumption patterns.
- D) having to establish new consumption patterns due to the creation of a previously unknown product.
Answer: A
Difficulty: 2 Medium
Learning Objective: 04-04 To discuss the importance of innovation.
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64) The opportunity recognition process contains all of the following except:
- A) work experience
- B) reformation
- C) entrepreneurial alertness
- D) networks
Answer: B
Difficulty: 2 Medium
Learning Objective: 04-05 To understand and be able to develop an opportunity assessment plan.
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65) The ________ is defined as the stages each product goes through from introduction to decline.
- A) entrepreneurial decision making process
- B) test marketing process
- C) product planning and development process
- D) product life cycle
Answer: D
Difficulty: 2 Medium
Learning Objective: 04-06 To discuss the aspects of the product planning and development process.
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66) How many stages are in the product planning and development process?
- A) Two
- B) Three
- C) Four
- D) Five
Answer: D
Difficulty: 2 Medium
Learning Objective: 04-06 To discuss the aspects of the product planning and development process.
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67) In what stage would you use the systematic market evaluation checklist?
- A) Idea stage
- B) Concept stage
- C) Product development stage
- D) Commercialization stage
Answer: A
Difficulty: 2 Medium
Learning Objective: 04-06 To discuss the aspects of the product planning and development process.
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68) In the idea stage of the product planning and development process:
- A) conversational interviewing is used.
- B) product samples are given out.
- C) systematic market evaluation is used.
- D) multiple brand comparison is used.
Answer: C
Difficulty: 2 Medium
Learning Objective: 04-06 To discuss the aspects of the product planning and development process.
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69) In what stage would it be most beneficial to use conversational interviews?
- A) Idea stage
- B) Concept stage
- C) Product development stage
- D) Commercialization stage
Answer: B
Difficulty: 2 Medium
Learning Objective: 04-06 To discuss the aspects of the product planning and development process.
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70) In which stage of the product planning and development process would it be appropriate to give product samples to a panel of potential customers?
- A) Idea stage
- B) Concept stage
- C) Product development stage
- D) Commercialization stage
Answer: C
Difficulty: 2 Medium
Learning Objective: 04-06 To discuss the aspects of the product planning and development process.
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71) The stage in the product planning and development process in which actual sales results are available is the:
- A) idea stage.
- B) concept stage.
- C) product development stage.
- D) test marketing stage.
Answer: D
Difficulty: 2 Medium
Learning Objective: 04-06 To discuss the aspects of the product planning and development process.
Accessibility: Keyboard Navigation
72) Which of the following statements is true of mobile-optimized websites?
- A) It is important to include all core features and content from the web-optimized site.
- B) Decrease the size of interface elements.
- C) Internet connectivity is typically faster than a web-optimized site.
- D) The key is to know your audience and the nature of the device they are using.
Answer: D
Difficulty: 2 Medium
Learning Objective: 04-07 To discuss aspects of e-commerce.
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73) Discuss both the Gordon method and Forced Relationship creative problem solving techniques.
Answer:
- Gordon method—unlike many other creative problem-solving techniques, begins with group members not knowing the exact nature of the problem. This ensures that the solution is not clouded by preconceived ideas and behavioral patterns. The entrepreneur starts by mentioning a general concept associated with the problem. The group responds by expressing a number of ideas. Then a concept is developed, followed by related concepts, through guidance by the entrepreneur. The actual problem is then revealed later, enabling the group to make suggestions for implementation or refinement of the final solution.
- Forced relationships—is the process of forcing relationships among some product combinations. It asks questions about objects or ideas in an effort to develop a new idea. The new combination and concept is developed through a five-step process:
- Isolate the elements of the problem.
- Find the relationships between these elements.
- Record the relationships in an orderly form.
- Analyze the resulting relationships to find ideas or patterns.
- Develop new ideas from these patterns.
Difficulty: 2 Medium
Learning Objective: 04-03 To discuss creativity and creative problem solving techniques.
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74) Briefly summarize the five fruitful sources of new ideas for entrepreneurs discussed in the textbook.
Answer: Some of the more fruitful sources of new ideas for entrepreneurs include: consumers, existing products and services, distribution channels, the federal government, and research and development.
Potential entrepreneurs should pay close attention to potential customers. This can take the form of informally monitoring potential ideas and needs or formally arranging for consumers to have an opportunity to express their opinions. Potential entrepreneurs should also establish a method for monitoring and evaluating competitive products/services on the market. Frequently, this analysis uncovers ways to improve on these competitive offering that may result in a new product/service that has more market appeal, sales, and profit potential.
Members of the distribution channels are also good sources for new ideas reflecting their familiarity with the needs of the market. Not only do channel members frequently have suggestions for completely new products, but they can also help in marketing the entrepreneur’s newly developed products.
The federal government can also be a source of new product ideas in two ways. First, the files of the Patent Office frequently suggest other more feasible product ideas. Second, new product ideas can evolve in response to government regulations.
The largest source of new ideas is the entrepreneur’s own research and development efforts, which may be a formal endeavor connected with current employment or an informal one in a basement or garage.
Difficulty: 2 Medium
Learning Objective: 04-01 To identify various sources of ideas for new ventures.
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75) E-commerce offers the entrepreneur the opportunity to be very creative and innovative and e-commerce continues to increase on an annual basis. Discuss the three broad e-commerce channels that companies offer to consumers. There are three e-commerce channels that companies offer to consumers: traditional website, dedicated mobile-enabled websites and mobile apps.
Answer: In developing a website, the most important questions is: who is the audience? User complaints are fairly consistent: problems with text legibility, task flow, links to privacy and security policies, and use of space.
The key to a mobile-optimized site is to know your audience and the nature of the device they are using. Three key guidelines when adapting a web-optimized site to a mobile-optimized site: Cut features to eliminate things that are not core to the mobile use case; Cut content to reduce word count and defer secondary information to secondary pages; and Enlarge interface elements to accommodate the “fat finger” problem.
Mobile apps are computer programs developed for Smartphones that can be downloaded from an online store. There are at least three benefits to having a dedicated app: streamlined customer experience, new methods of engaging different audiences, and general visibility.
Difficulty: 2 Medium
Learning Objective: 04-07 To discuss aspects of e-commerce.
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76) Identify and describe the three major types of innovation.
Answer:
- Breakthrough—fewest in number, protection is important via patents, trademarks, copyrights, examples given by the text include: penicillin, the steam engine, the computer, the airplane, the automobile, the Internet, and nanotechnology.
- Technological—occurs more frequently than breakthrough innovation and in general is not at the same level of scientific discovery and advancement. These are very meaningful innovations, as they do offer advancements in the product/market area. As such, they usually need to be protected. Such innovations as the personal computer, the flip watch for containing pictures, voice and text messaging, and the jet airplane are examples of technological innovations.
- Ordinary—occurs most frequently, these more numerous innovations usually extend an existing innovation into a better product or service or one that has a different—usually better—market appeal. These innovations usually come from market analysis and pull, not technology push. In other words, the market has a stronger effect on the innovation (market pull) than the technology (technology push). One ordinary innovation (Spanx) was developed by Sara Blakely, who wanted to get rid of unsightly panty lines. Examples used Spanx and gloves/slippers for yoga.
Difficulty: 2 Medium
Learning Objective: 04-04 To discuss the importance of innovation.
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77) List, in order, the stages of the product planning and development process.
Answer:
- Idea
- Concept
- Product Development
- Test marketing stage
- Commercialization stage
Difficulty: 1 Easy
Learning Objective: 04-06 To discuss the aspects of the product planning and development process.
Accessibility: Keyboard Navigation
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