Questions and Answers
What is the primary function of an entrepreneur according to the text?
Accepting risks on behalf of others
How does innovation differ from invention based on the text?
Innovation includes developing, diffusing, and exploiting new ideas, whereas invention only involves creating ideas
Which activity is crucial for making markets more efficient, according to the passage?
Processing under-exploited market information
Why do entrepreneurs play a significant role in accepting risks?
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What differentiates innovation from mere idea creation according to the text?
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What is the key contribution of entrepreneurs to market efficiency based on the passage?
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What is the main difference between an inventor and an entrepreneur?
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What is a key motivation for individuals to become entrepreneurs?
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Which type of entrepreneurship involves an independent organization started, acquired, or franchised by an individual?
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Why do many entrepreneurs want to be their own boss?
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What does the term 'corporate entrepreneurship' refer to?
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Why is the motivation for pursuing financial rewards as an entrepreneur considered secondary?
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What is the main difference between an entrepreneur and an inventor?
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How can an entrepreneur effectively monitor and evaluate competitive products on the market?
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What role do distribution channels play in generating new product ideas?
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How can an entrepreneur use focus groups in the process of generating new ideas?
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Why is having a formal research and development department advantageous for an entrepreneur?
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Which method can entrepreneurs use to generate and test new ideas?
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Study Notes
Innovation and Entrepreneurship
- Innovation is both an outcome (new product, process, or service) and a process of organizational and managerial combinations and decisions.
- Innovation can be limited or short-lived if not successful.
Inventors and Entrepreneurs
- An inventor creates something new, while an entrepreneur assembles and integrates resources to transform the invention into a viable business.
- Entrepreneurs differ from inventors in their ability to take risks and manage resources.
Reasons to Become an Entrepreneur
- Three primary reasons: to be one's own boss, to pursue one's own ideas, and to pursue financial rewards.
- The last reason is often secondary to the first two and may not live up to expectations.
Forms of Entrepreneurship
- Two main forms: individual entrepreneurship (starting one's own independent organization) and corporate entrepreneurship (an established firm with an entrepreneurial orientation).
Entrepreneurial Functions
- Accepting risk on behalf of others, maximizing investor returns, and processing market information to create economic efficiency.
- Entrepreneurs create markets, maximize profit, and generate overall economic efficiency.
Innovation vs. Invention
- Innovation is the creation and successful exploitation of a new idea, involving development, diffusion, and exploitation.
- Invention is just the creation of a new idea.
Sources of New Ideas
- Existing companies, distribution channels, federal government, research and development, and one's own efforts.
- Entrepreneurs can use methods like focus groups, brainstorming, and problem inventory analysis to generate and test new ideas.
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