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Questions and Answers
What is a nonrole morally questionable act?
What characterizes role failure morally questionable acts?
Role distortion morally questionable acts have what kind of effect?
What is a reason for unethical behaviors to occur?
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A code of ethics promotes ethical behavior of employees.
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What does corporate entrepreneurship involve?
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Define social entrepreneurship.
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Which of the following describes sustainable entrepreneurship?
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Impediments to creativity include _____ thinking.
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What is a key function of innovation?
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What is entrepreneurship?
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What does creative destruction mean?
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What is one misconception about entrepreneurship?
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Why is entrepreneurship important today?
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What defines a novice entrepreneur?
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What characterizes a habitual entrepreneur?
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What does the term 'nascent entrepreneur' refer to?
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What is a serial entrepreneur?
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What defines a portfolio entrepreneur?
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What demographic traits are common among entrepreneurs?
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Which of the following is NOT a common characteristic of entrepreneurial personality profiles?
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Define the entrepreneurial process.
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All entrepreneurs are extreme risk-takers.
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What is a 'gazelle' in business terms?
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What are some characteristics of 'gazelles' as leaders in innovation?
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What are common sources of entrepreneurial stress?
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All firms fail in the first year.
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What role do entrepreneurs play in the economic lifecycle?
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What is the entrepreneurial mind-set characterized by?
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Which factor does NOT contribute to exceptional entrepreneurial activity in the U.S.?
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What is a key aspect of the global entrepreneurship monitor (GEM)?
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Study Notes
Entrepreneurship Overview
- Entrepreneurship involves organized efforts to exploit opportunities, creating value through innovation and uniqueness.
- It encompasses the pursuit of opportunities to fulfill unmet wants and needs.
Creative Destruction
- Refers to the replacement of existing products, processes, and ideas with superior alternatives, driving innovation and market shifts.
Misconceptions About Entrepreneurship
- A great idea alone does not guarantee successful entrepreneurship; execution is critical.
- Entrepreneurship is often perceived as easy, but it requires effort and risk assessment.
- Not confined to small businesses; intrapreneurship exists within larger organizations.
- Entrepreneurial ventures and small businesses differ, particularly in their focus on growth potential.
Importance of Entrepreneurship
- Innovations drive economic development, enhancing productivity and efficiency.
- Many new start-ups contribute significantly to job creation, supporting long-term economic health.
The Entrepreneurial Process
- Involves exploring opportunities, leveraging competitive advantages, and managing the venture effectively.
- Requires identifying trends and assessing funding options, alongside ongoing management practices.
Types of Entrepreneurs
- Novice Entrepreneur: No previous ownership experience.
- Habitual Entrepreneur: Has prior business ownership experience.
- Nascent Entrepreneur: Actively in the process of starting a new business.
- Serial Entrepreneur: Continually establishes new businesses after selling/closing previous ones.
- Portfolio Entrepreneur: Maintains an original business while developing multiple additional businesses.
Demographic and Personality Profiles of Entrepreneurs
- Demographics: First-born individuals and men are more likely to start businesses; prior experience and education also increase the likelihood.
- Personality Traits: Successful entrepreneurs possess high motivation, self-confidence, persistent problem-solving skills, and moderate risk tolerance.
Integrated Definitions of Entrepreneurship
- Entrepreneurial activity is defined as a dynamic process requiring vision, change, and the ability to take calculated risks while building effective teams and recognizing opportunities.
Myths of Entrepreneurship
- Many common myths exist, such as the belief entrepreneurs are born, always inventors, and extreme risk-takers, which misrepresent the entrepreneurial reality.
Contemporary Small Business Dynamics
- Entrepreneurs, managers, and technicians each play distinct roles in small businesses to ensure effective operations and result production.
Schools of Thought in Entrepreneurship
- Macro View: Focuses on environmental and capital factors affecting entrepreneurship, including external influences and economic displacement.
- Micro View: Examines specific traits necessary for successful ventures and strategic planning processes.
Entrepreneurial Stages
- Startup/Acquisition Stage: Involves obtaining seed capital and making crucial decisions on proceeding with the venture.
- Ongoing Venture Stage: Focus on cash flow management, decision-making about maintaining or expanding the business.
- Decline/Succession Stage: Evaluates profitability and considers options for selling, retirement, or closing operations.
The Global Entrepreneurship Monitor (GEM)
- Assesses the entrepreneurial environment across over 100 countries, highlighting the U.S.'s support for entrepreneurship.
Contributions of Entrepreneurs to Economic Growth
- Entrepreneurs thrive by entering existing markets, creating new ones, and increasing diversity while supporting minority participation.
New Venture Statistics
- Each year, entrepreneurs launch over 400,000 new businesses. Small firms account for almost half of private-sector jobs.
"Gazelles" in Entrepreneurship
- Defined as rapidly growing businesses with strong sales growth, they play a significant role in innovation and economic vitality, responsible for a large percentage of industry's innovations.
Entrepreneurial Components of the U.S. Economy
- Growth of entrepreneurial companies, especially those established by diverse demographic groups, contributes significantly to economic resilience.
Research Themes in Entrepreneurship
- Key areas of study include venture financing, corporate entrepreneurship, social entrepreneurship, cognitive aspects, and the growth of women and minority entrepreneurs.
Entrepreneurial Mind-Set Attributes
- Successful entrepreneurs exhibit determination, creativity, a drive for achievement, and the ability to embrace risk while fostering team collaboration.
Ethical Considerations in Entrepreneurship
- Entrepreneurs must navigate ethical dilemmas, influenced by various rationalizations and the pressures of business dynamics, including interactions in digital commerce spaces.### Ethics in Administration
- A code of ethics clarifies the importance of ethical decision-making, employee behavior, and the establishment of rewards and consequences related to ethics.
Entrepreneurial Concepts
- Entrepreneurial Motivation: Driven by the desire to create and sustain new ventures.
- Entrepreneurial Persistence: Continual commitment to pursue entrepreneurial opportunities despite challenges.
Key Terms in Entrepreneurship
- Familiarity with terms such as career risk, code of conduct, cognitive adaptability, and entrepreneurial mind-set is vital for understanding entrepreneurship.
Innovation-Driven Organizations
- Important practices include setting clear goals, creating feedback systems, emphasizing individual accountability, and rewarding based on results without punishing failures.
Rules for Fostering Innovation
- Encourage active participation, informal meetings, tolerance for failure, and small team dynamics to support creative processes.
Corporate Entrepreneurship
- Defined as individuals or groups within an existing organization driving new ventures or innovation. Strategies for success include supportive leadership and fostering collaborative environments.
Innovation Types
- Radical Innovation: Introduces groundbreaking ideas; requires experimentation and vision (e.g., cloud storage).
- Incremental Innovation: Systematic improvements on existing products (e.g., frozen yogurt, microwave popcorn).
Corporate Innovation Practices
- 3M's rules emphasize resilience in projects, maintaining small divisions, and valuing customer relationships.
Social Entrepreneurship
- Aimed at social impact through innovative solutions, combining elements of non-profits with business strategies for societal betterment.
- Social entrepreneurs are visionaries and change agents focused on addressing root causes of social issues.
Environmental and Sustainable Entrepreneurship
- Sustainable Entrepreneurship: Concentrates on enhancing nature and community, balancing economic and societal benefits.
- Ecopreneurship: Involves environmental initiatives aimed at preserving biodiversity and natural ecosystems.
Corporate Social Responsibility
- Organizations engage in practices that promote social good beyond legal requirements.
Economic and Social Value
- The Triple Bottom Line (TBL) evaluates performance based on economic, environmental, and social factors, shifting traditional business thinking.
Creativity in Entrepreneurship
- Key steps in creativity: accumulating knowledge, incubation, idea generation, and implementation. Innovative ideas stem from recognizing shifts in trends and understanding opportunities within the environment.
Impediments to Creativity
- Barriers include binary thinking, risk aversion, stereotyping, and seeking predictability, which hinder innovation processes.
Innovation vs. Invention
- Innovation is the process of transforming ideas into marketable solutions and stems from the vision to address opportunities.
- Invention refers to the creation of entirely new products or processes (e.g., the airplane, light bulb, telephone).
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Description
Test your knowledge on the foundational concepts of entrepreneurship with these flashcards. Understand essential terms such as entrepreneurship itself and creative destruction. Prepare effectively for your Exam 1 in the Principles of Entrepreneurship course.