BM2104 The Challenge of Entrepreneurship

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Questions and Answers

What is one significant consequence of business failure for entrepreneurs?

Financial ruin (correct)

Reduction in time spent at work

Increased market competition

Loss of employee trust

How many hours on average does a small business owner work per week?

45 hours

51 hours (correct)

40 hours

50 hours

What factor contributes significantly to the high levels of stress among entrepreneurs?

Job security

Delegation of responsibilities

Financial investments in the business (correct)

A strong support system

Which of the following is a common emotion entrepreneurs face when encountering obstacles?

Discouragement Signup and view all the answers

What primary motivation drives most entrepreneurs to launch their businesses?

Opportunity to make impressive profits Signup and view all the answers

What is a notable challenge that many entrepreneurs experience related to decision-making?

Inadequate knowledge on various issues Signup and view all the answers

What term describes the unique pressures of being solely responsible for business outcomes?

Complete responsibility Signup and view all the answers

Which aspect does not typically contribute to an entrepreneur's sense of empowerment?

Financial stability Signup and view all the answers

What defines social entrepreneurs as distinct from traditional entrepreneurs?

Their desire to solve societal problems Signup and view all the answers

What personal trait do successful entrepreneurs typically exhibit when facing tough times?

Abundant optimism Signup and view all the answers

Which of the following is a potential drawback of entrepreneurship?

Risk of financial instability Signup and view all the answers

What drives entrepreneurship in the economy according to the forces mentioned?

Entrepreneurs as heroes Signup and view all the answers

How do successful entrepreneurs typically feel about their work?

They have a strong passion for it. Signup and view all the answers

What is often a characteristic of business relationships among small business owners?

Business deals based on trust Signup and view all the answers

What can significantly impact an entrepreneur's income during the initial phase of business?

Ability to offer attractive salaries Signup and view all the answers

Which of the following might NOT be a reason for entrepreneurship?

Guaranteed economic security Signup and view all the answers

What is the primary role of an entrepreneur in society?

To act as a change agent and innovate Signup and view all the answers

The concept of 'creative destruction' refers to what aspect of entrepreneurship?

The process where new businesses make existing ones obsolete Signup and view all the answers

Which characteristic is NOT typically associated with entrepreneurs?

Preference for high-risk ventures Signup and view all the answers

How does high entrepreneurial activity benefit an economy?

It creates a flexible economy capable of adapting to changes Signup and view all the answers

What motivates entrepreneurs to take risks in their ventures?

A deep sense of accountability and achieving personal goals Signup and view all the answers

What does the entrepreneurial process of business formation indicate about an economy?

It reflects overall growth and improvement in service delivery Signup and view all the answers

What is one common role an entrepreneur might perform in the early stages of a startup?

Handling all operational tasks independently Signup and view all the answers

What ultimately drives entrepreneurs to act on their business ideas?

A vision for growth and profit against uncertainty Signup and view all the answers

What characteristic defines the majority of entrepreneurs in terms of age?

More than 75 percent start their businesses between 20 and 44 Signup and view all the answers

Which of the following statements regarding the services sector is accurate?

The United States service sector accounts for 79.7 percent of private-sector GDP Signup and view all the answers

What trend is observed among students regarding entrepreneurship education?

More students are starting businesses while still in college Signup and view all the answers

Which entrepreneur is known for founding Microsoft Corporation?

Bill Gates Signup and view all the answers

How has technology impacted small businesses in recent years?

Technology has leveled the playing field for small businesses against larger companies Signup and view all the answers

Which of the following is not a reason for the popularity of service businesses?

Difficult entry barriers Signup and view all the answers

Who among the following is recognized as a notable entrepreneur in the Philippines?

Tony Tan Caktiong Signup and view all the answers

What economic trend has been observed in the Philippines regarding the services sector?

The services sector's value-added share has grown over the years Signup and view all the answers

What percentage of businesses in the Philippines are estimated to be family-owned?

80% Signup and view all the answers

What is a common characteristic of copreneurs?

They divide labor based on expertise. Signup and view all the answers

Which of the following companies is identified as being family-owned?

Ayala Corporation Signup and view all the answers

What is essential for aspiring entrepreneurs to prevent business failures?

Understanding industry dynamics through education and research Signup and view all the answers

How can entrepreneurs gain valuable information before starting a business?

Attending trade shows and networking events Signup and view all the answers

What role does a founding family play in companies with dispersed ownership?

They may still occupy influential positions in management. Signup and view all the answers

What is one strategy to build a viable business model?

Engaging with industry trade associations for insights Signup and view all the answers

Why is personal contact with industry stakeholders important for entrepreneurs?

It helps in building personal relationships that can lead to business. Signup and view all the answers

Study Notes

What Is an Entrepreneur?

An entrepreneur launches a new business amid risk and uncertainty, aiming for profit and growth through opportunity recognition and resource assembly.
Joseph Schumpeter identified entrepreneurs as agents of change, driving the process of creative destruction within economies.
High levels of entrepreneurial activity signal a flexible economy, adapting to competition and creating better services to meet evolving needs.

Characteristics of Entrepreneurs

Desire for Responsibility: Entrepreneurs take accountability for their ventures and prefer control over their resources.
Preference for Moderate Risk: They engage in calculated risks rather than reckless gambles.
Self-Reliance: Especially in start-ups, entrepreneurs often fulfill multiple roles to drive success, compensating for limited resources.
Social Entrepreneurs: Focus on solving societal issues while building profitable ventures; they aim for social and environmental impact.
Self-Actualization: Owning a business allows entrepreneurs to express creativity and reach personal goals, empowered by their achievements.
Profit Motivation: While not the sole driver, profits are a significant factor in business decisions.
Community Contribution: Entrepreneurs positively impact local economies and are often trusted community members.
Pursuit of Passion: Successful entrepreneurs frequently turn their interests and hobbies into their business ventures.

Potential Drawbacks of Entrepreneurship

Uncertainty of Income: No guarantee of sufficient income; initial wages may be low as businesses establish.
Investment Risks: Business failure can lead to financial ruin, reflecting a high failure rate among new ventures.
Long Hours: Small business owners average 51 hours of work weekly, significantly more than traditional employees.
High Stress Levels: Entrepreneurs risk total financial loss, leading to anxiety and stress related to company outcomes.
Complete Responsibility: Entrepreneurs face pressure to make informed decisions without adequate guidance, which can be overwhelming.
Discouragement: Building a business is challenging; entrepreneurs must navigate obstacles and maintain optimism despite setbacks.

Forces Driving Entrepreneurship

Hero Status of Founders: Entrepreneurs like Bill Gates and Jeff Bezos are celebrated, inspiring new generations and establishing models for success.
Rising Interest in Entrepreneurial Education: Increasing numbers of students are pursuing entrepreneurship as a primary career option.
Demographics and Economics: Over 75% of entrepreneurs emerge between ages 20-44, capitalizing on economic opportunities developed during their formative years.
Shift to a Service Economy: Services have become a significant part of economies due to their low start-up costs and increasing demand, especially in the Philippines.
Technological Advancements: Modern technology enables small businesses to compete effectively with larger firms, previously hampered by high costs.
Family Businesses: A significant portion of businesses, especially in the Philippines (80%), are family-owned, impacting economic dynamics.
Copreneurs: Entrepreneurial couples often share responsibilities based on expertise rather than gender biases.

Avoiding Business Pitfalls

In-Depth Industry Knowledge: Aspiring entrepreneurs should gain experience and education relevant to their chosen business sectors for informed decision-making.
Networking: Engaging with industry peers through trade associations and events can provide crucial insights and connections for business success.
Building a Viable Business Model: Developing a strong business model is essential for startup sustainability and growth.

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Description

This quiz explores the fundamental concepts of entrepreneurship as presented in Cornwall & Scarborough's 2016 work. Learn about the attributes of an entrepreneur, the importance of taking risks, and how significant opportunities can lead to business success. Test your understanding of key entrepreneurial principles and theories.