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1 Chapter 02 The Entrepreneurial Mind: Crafting a Personal Entrepreneurial Strategy True / False Questions 1. (p. 41) Since entrepreneurs are internally motivated, high-energy people with a passion for discovery and innovation, they are distinct from seasoned business managers with the skill to scale the enterprise. 2. (p. 43) After years of research, it is now possible to take a number of people, give them a specialized test, and determine those in the group that do and do not possess entrepreneurial minds. 3. (p. 43) Behavioral scientists, venture capitalists, investors, and entrepreneurs believe that the eventual success of a new venture is largely dependent upon the talent and behavior of the lead entrepreneur and of his or her team. TRUE 2-1
2 4. (p. 44) A study of 118 entrepreneurs revealed that those who moved quickly and were profitoriented were much more likely to excel in business than those who were planners. 5. (p. 44) One predictable research finding was that driven, successful entrepreneurs are generally not patient individuals. 6. (p. 45) While certain individuals possess such inborn characteristics as energy and raw intelligence, these characteristics do not necessarily mean that they will succeed as entrepreneurs. TRUE 7. (p. 48) Almost without exception, entrepreneurs live under huge, constant pressures until their firms have survived the startup phase; after that, it typically gets easier. 8. (p. 48) Founders should compete with peers in the company as a way of fostering team cohesion and spirit. 2-2
3 9. (p. 49) In the face of tasks that are deemed unsolvable, entrepreneurs will actually give up sooner than others do. TRUE 10. (p. 51) Successful entrepreneurs possess a well-developed capacity to exert influence without formal power. TRUE 11. (p. 51) Successful entrepreneurs often exhibit a strong need to control, influence, and maintain power as the lead entrepreneur. 12. (p. 53) Rather than willingly put themselves in situations where they are personally responsible for the success or failure of the operation, the best entrepreneurs find ways to distribute risk among the various stakeholders and constituents. 13. (p. 54) The need to possess an objective way of keeping score, such as changes in profits, sales, or stock price, often makes money the primary motivator for driven entrepreneurs. 2-3
4 14. (p. 56) Evidence suggests that the most durable entrepreneurial careers, those found to last 25 years or more, were begun at an earlier age before the person had made any substantial commitments to a specific career path. 15. (p. 59) Entrepreneurs work longer and harder than managers in big companies. 16. (p. 59) The average age of entrepreneurs starting high-potential businesses is in the mid-40s. Multiple Choice Questions 17. (p. 42) When Marion Labs founder Ewing Marion Kauffman sent his financial officer back to Germany to re-negotiate a supplier contract that favored his own company, what was his primary business motivation? A. Maintaining positive international relations B. Satisfying demand C. Maintaining high ethical standards D. Supporting the value chain Type: Application 2-4
5 18. (p. 44) Which of the following is not a persistent myth about entrepreneurs? A. Leaders are born, not made B. Entrepreneurs are gamblers C. Solo entrepreneurs limit their potential for growth D. Entrepreneurs should be young and energetic 19. (p. 43, 44) Research has found that people are motivated by which of the following? A. The need for achievement B. The need for power C. The need for affiliation D. All of the above 20. (p. 46) Which of the following was not one of the three principle success factors cited by the first 21 inductees into Babson College's Academy of Distinguished Entrepreneurs? A. The ability to respond positively to challenges and learn from mistakes B. The ability to attract and motivate an effective team C. Personal initiative D. Perseverance and determination 2-5
6 21. (p. 47) According to the authors, which of the seven dominant themes of entrepreneurship is the most important? A. Leadership B. Opportunity Obsession C. Courage D. Commitment and Determination E. Tolerance of Risk, Ambiguity and Uncertainty F. Creativity, Self-Reliance, and Adaptability G. Motivation to Excel 22. (p. 48) Which of the following are Non-entrepreneurial Attributes? A. Invulnerability B. Perfectionist C. Outer control D. All of the above 23. (p. 50) Building a substantial enterprise that will contribute something lasting and relevant to the world while realizing a capital gain can typically take how long? A. 1-3 years B. 3-5 years C years D years 2-6
7 24. (p. 50) An organization's needs are satisfied those of the other constituents the enterprise serves. A. in parallel with B. before C. after D. None of the above; depends on the situation 25. (p. 51) Successful entrepreneurs initially focus on what? A. Money B. Resources C. Networking D. Opportunity 26. (p. 51) What was the primary business principle that entrepreneur Tom Stemberg applied as he formulated his concept for his chain of office supply stores? A. Point-of-sale marketing B. Franchising C. Mass distribution D. Volume economies 27. (p. 54) "Veridical awareness" refers to entrepreneurs' ability to A. Understand their limitations B. Believe in themselves C. Maintain a sense of perspective D. All of the above 2-7
8 28. (p. 55) What is one of the primary attributes that separates entrepreneurial types from Inventors, Promoters, and Managers? A. Creativity and insight B. Conservation of resources C. Long range planning D. Marshalling diverse resources 29. (p. 56) In general, how long will venture capitalists work with a start-up before declaring the company a 'lemon'? A. Up to a year B. About two and half years C. At least three years D. Three to five years 30. (p. 56) According to venture investors, what is a realistic time frame for growing a higher potential business to the point where a capital gain can be realized? A. 1-3 years B. 2-5 years C. 5-7 years D. 7-8 years 2-8
9 31. (p. 57) Which of the following is not a paradox of entrepreneurship? A. Flexibility vs. opportunity focus B. Resource requirements vs. ownership C. Age vs. experience D. Drive and ambition vs. wisdom and judgment 32. (p. 57) Increasingly, research studies on the career paths of entrepreneurs and the selfemployed suggest that which of the following is the central factor in 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 33. (p. 58) According to research, which of the following statements is false? A. Many successful entrepreneurs do not have prior industry experience B. Most successful entrepreneurs start companies by their late 20s C. Most successful entrepreneurs follow a pattern of apprenticeship D. Family firms spawn entrepreneurs 34. (p. 64, 65) Crafting a Personal Entrepreneurial Strategy can A. Create tension and pressure B. Heighten the fear of failure C. Spark action towards achievable goals D. All of the above 2-9
10 Short Answer Questions 35. (p. 42) Two of the three core principles that are the cornerstone of the values, philosophy, and culture of the Kauffman Foundation are Treat others as you would want to be treated, and Share the wealth that is created with all those who have contributed to it at all levels. What is the third core principle? Give back to the community. 36. (p. 65) Name the conceptual scheme for thinking about the self-assessment process where there are two sources of information about the self: the individual, and others. the Johari Window. Type: Vocabulary 37. (p. 65) What plays a significant role in influencing an entrepreneur's values, motivations, attitudes, and behaviors? personal history Fill in the Blank Questions 38. (p. 43) The is the need to excel and for measurable personal accomplishment. need for achievement 2-10
11 39. (p. 44) The is the need to build a warm relationship with someone else and/or to enjoy mutual friendship. need for affiliation 40. (p. 45) Successful entrepreneurs are not gamblers; they take. calculated risks 41. (p. 51) Entrepreneurs realize good ideas are a dime a dozen, but good are few and far between. opportunities 42. (p. 53) For a successful entrepreneur, seeking and using is central to the habit of learning from mistakes and setbacks, and of responding to the unexpected. feedback 43. (p. 56) Since entrepreneurs frequently evolve from an entrepreneurial heritage or are shaped and nurtured by their closeness to entrepreneurs and others, the concept of can be a useful one. an apprenticeship 2-11
12 44. (p. 58) Numerous studies show a strong connection between the presence of in their lives and the emergence of successful entrepreneurs. role models 45. (p. 62) Most successful entrepreneurs have had a to help them achieve their dreams and goals, both implicitly and explicitly. personal strategy 46. (p. 64) Crafting a personal entrepreneurial strategy can be viewed as the personal equivalent of developing a. business plan Essay Questions 2-12
13 47. (p. 51) Discuss the concept of 'hero maker' with regard to entrepreneurial leadership. Entrepreneurs who create and build substantial enterprises are not lone wolves and superindependent. They do not need to collect all the credit for the effort. They not only recognize the reality that it is rarely possible to build a substantial business working all alone, but also actively build a team. They have an uncanny ability to make heroes out of the people they attract to the venture by giving responsibility and sharing credit for accomplishments. Hero makers try to make the pie bigger and better, rather than jealously clutching and hoarding a tiny pie that is all theirs. They have a capacity for objective interpersonal relationships as well, which enables them to smooth out individual differences of opinion by keeping attention focused on the common goal to be achieved. 48. (p. 49) In what ways is having Courage an important part of being an entrepreneur? Courage has at least three important aspects in entrepreneurship. First, moral strength and principles: the character and the personal integrity to know right from wrong, and the will and commitment to act accordingly (to do the right thing). The second is being a fearless experimenter: a restlessness with convention and a rejection of the status quo. This relentless experimentation is enhanced by a third aspect of courage: a lack of fear of failing at the experiment and most undertakings for that matter and a lack of fear of conflicts that may arise. In other words, there is a mental toughness that is quite impervious to fears but is not ignorant or oblivious to possible consequences. 2-13
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