Essentials of Entrepreneurship and Small Business Management 9e PDF

Chapter 1: Essentials of Entrepreneurship and Small Business Management, 9e (Scarborough) Chapter 1 The Foundations of Entrepreneurship 1) Social entrepreneurs use their skills to create profitable businesses and also to achieve economic, social and environmental goals for the common good. Answer:...

Chapter 1: Essentials of Entrepreneurship and Small Business Management, 9e (Scarborough) Chapter 1 The Foundations of Entrepreneurship 1) Social entrepreneurs use their skills to create profitable businesses and also to achieve economic, social and environmental goals for the common good. Answer: TRUE Diff: 1 Learning Obj: 1-3A Describe the benefits of entrepreneurship. AACSB: Ethical Understanding and Reasoning 2) Technology offers a significant advantage for entrepreneurs. Answer: TRUE Diff: 2 Learning Obj: 1-3A Describe the benefits of entrepreneurship. AACSB: Information Technology 3) Entrepreneurs choose to enter their particular business fields because they have an interest in them and enjoy those lines of work. They have often made their hobbies their business. Answer: TRUE Diff: 2 Learning Obj: 1-3A Describe the benefits of entrepreneurship. AACSB: Reflective Thinking 4) Entrepreneurs are not willing to give up a steady paycheck. Answer: FALSE Diff: 2 Learning Obj: 1-3A Describe the benefits of entrepreneurship. AACSB: Reflective Thinking 5) There is concern over the future of entrepreneurship because so few high school and college students want to start their own companies. Answer: FALSE Diff: 1 Learning Obj: 1-3A Describe the benefits of entrepreneurship. AACSB: Reflective Thinking 6) Research has isolated a set of characteristics that can predict who will succeed as an entrepreneur. Answer: FALSE Diff: 2 Learning Obj: 1-2 Describe the entrepreneurial profile. AACSB: Diverse and Multicultural Work Environments 7) Surveys show that small business owners believe that, as entrepreneurs, they work harder, earn more money, and are happier than if they worked for a large company. Answer: TRUE Diff: 2 Learning Obj: 1-2 Describe the entrepreneurial profile. AACSB: Reflective Thinking 8) The opportunity to reap impressive profits is the primary motivation for most entrepreneurs. Answer: FALSE Diff: 2 Learning Obj: 1-2 Describe the entrepreneurial profile. AACSB: Reflective Thinking 9) One advantage of being your own boss and owning a small business is that work hours are very flexible and leisure time is abundant. Answer: FALSE Diff: 1 Learning Obj: 1-3B Describe the drawbacks of entrepreneurship. AACSB: Reflective Thinking 10) The shift to a service economy has not had a significant impact on entrepreneurial opportunities. Answer: FALSE Diff: 1 Learning Obj: 1-4 Explain the forces that are driving the growth of entrepreneurship. AACSB: Reflective Thinking 11) Cloud computing allows businesses to use a variety of applications and has reduced costs and added flexibility. Answer: TRUE Diff: 1 Learning Obj: 1-4 Explain the forces that are driving the growth of entrepreneurship. AACSB: Information Technology 12) Women play a minor role in the entrepreneurial arena. Answer: FALSE Diff: 2 Learning Obj: 1-5 Explain the cultural diversity of entrepreneurship. AACSB: Diverse and Multicultural Work Environments Learning Obj: 1-5 Explain the cultural diversity of entrepreneurship. AACSB: Reflective Thinking 13) Increasing numbers of women are discovering that the best way to break the "glass ceiling" that prevents them from rising to the top of many organizations is to start their own companies. Answer: TRUE Diff: 1 Learning Obj: 1-5 Explain the cultural diversity of entrepreneurship. AACSB: Diverse and Multicultural Work Environments 14) Diversity may be considered a characteristic of entrepreneurs, as they don't fit any statistical norm. Answer: TRUE Diff: 1 Learning Obj: 1-5 Explain the cultural diversity of entrepreneurship. AACSB: Diverse and Multicultural Work Environments 15) A major advantage of launching a business part-time is the lower risk it offers in case the business fails. Answer: TRUE Diff: 1 Learning Obj: 1-5 Explain the cultural diversity of entrepreneurship. AACSB: Analytical Thinking 16) Most home-based businesses are simple cottage industries such as crafts or sewing. Answer: FALSE Diff: 1 Learning Obj: 1-5 Explain the cultural diversity of entrepreneurship. AACSB: Reflective Thinking 17) Small businesses actually create more jobs than the number of jobs big businesses create. Answer: TRUE Diff: 1 Learning Obj: 1-6 Describe the important role that small businesses play in our nation's economy. AACSB: Analytical Thinking 18) Large companies create significantly more patents and other forms of innovations per research and development dollars spent than small firms. Answer: FALSE Diff: 2 Learning Obj: 1-6 Describe the important role that small businesses play in our nation's economy. AACSB: Analytical Thinking 19) About 75 percent of the businesses in the U.S. can be considered "small" businesses. Answer: FALSE Diff: 1 Learning Obj: 1-6 Describe the important role that small businesses play in our nation's economy. AACSB: Analytical Thinking 1) One of the most significant economic developments in recent business history relates to the ________. A) growth of blue-chip corporations B) development of Pacific Rim countries C) entrepreneurial spirit D) additional employment opportunities offered by government institutions Answer: C Diff: 1 Learning Obj: 1-1 Define the role of the entrepreneur in business in the United States and around the world. AACSB: Reflective Thinking 2) Globally, one in eight adults is actively engaged in launching a business. Answer: TRUE Diff: 1 Learning Obj: 1-1 Define the role of the entrepreneur in business in the United States and around the world. AACSB: Analytical Thinking 3) One study conducted by the Global Entrepreneurship Monitor (GEM) reports that nearly one in eight people in the United States is working to start a business. Answer: TRUE Diff: 2 Learning Obj: 1-1 Define the role of the entrepreneur in business in the United States and around the world. AACSB: Analytical Thinking 4) The profile of an entrepreneur includes ________. A) a desire for responsibility and moderate risk B) confidence in the ability to succeed and determination C) a high level of energy, a desire for immediate feedback and a future orientation D) All the above Answer: D Diff: 1 Learning Obj: 1-2 Describe the entrepreneurial profile. AACSB: Reflective Thinking 5) All of the following are characteristics of the typical entrepreneur except ________. A) confidence in his/her ability to succeed B) value of money over achievement C) desire for immediate feedback D) a future orientation Answer: B Diff: 1 Learning Obj: 1-2 Describe the entrepreneurial profile. AACSB: Reflective Thinking 6) Entrepreneurs are characterized by ________. A) skill at organizing B) desire for immediate feedback C) high energy levels D) All of the above Answer: D Diff: 1 Learning Obj: 1-2 Describe the entrepreneurial profile. AACSB: Reflective Thinking 7) Entrepreneurs who repeatedly start businesses and grow to a sustainable size before striking out again are known as ________ entrepreneurs. A) opportunistic B) persistent C) serial D) classic Answer: C Diff: 1 Learning Obj: 1-2 Describe the entrepreneurial profile. AACSB: Reflective Thinking 8) In addition to the opportunity to create their own destiny and enjoy what they do, entrepreneurs also benefit from the ability to ________. A) earn tremendous wealth without risk and uncertainty B) make a difference in an area important to them and be recognized for those efforts C) create wealth without providing true value D) exploit the opportunities that the free enterprise system offers Answer: B Diff: 2 Learning Obj: 1-3A Describe the benefits of entrepreneurship. AACSB: Reflective Thinking 9) ________ entrepreneurs are business builders who seek innovative solutions to some of society's most vexing problems. A) Social B) Opportunistic C) Serial D) Necessity Answer: A Diff: 2 Learning Obj: 1-3A Describe the benefits of entrepreneurship. AACSB: Reflective Thinking 10) Which of the following is a benefit of entrepreneurship? A) The opportunity to gain control over your own destiny. B) The opportunity to reach your full potential. C) The opportunity to do what you enjoy. D) All of the above Answer: D Diff: 1 Learning Obj: 1-3A Describe the benefits of entrepreneurship. AACSB: Reflective Thinking 11) Potential drawbacks of entrepreneurship may include ________. A) uncertainty of income, risk, long hours, and high stress B) uncertainty of income, risk, easy hours, and frequent vacations C) uncertainty of income, risk, long hours, and the immediate accumulation of wealth D) certainty of income, risk, long hours, and high stress Answer: A Diff: 2 Learning Obj: 1-3B Describe the drawbacks of entrepreneurship. AACSB: Reflective Thinking 12) Within five years, ________ percent of new businesses will fail. A) 21 B) 45 C) 52 D) 65 Answer: C Diff: 2 Learning Obj: 1-3B Describe the drawbacks of entrepreneurship. AACSB: Analytical Thinking 13) The majority of new business owners work ________. A) fewer than 40 hours per week B) more than 40 hours per week C) more than 70 hours per week D) more than 80 hours per week Answer: B Diff: 2 Learning Obj: 1-3B Describe the drawbacks of entrepreneurship. AACSB: Analytical Thinking 14) Factors that feed the economic boom behind entrepreneurship include ________. A) demographic and economic factors B) technology and cloud computing C) the shift to a service-based economy and international opportunities D) All of the above Answer: D Diff: 1 Learning Obj: 1-4 Explain the forces that are driving the growth of entrepreneurship. AACSB: Analytical Thinking 15) The demographic attributes of successful entrepreneurs are ________. A) limited to specific ages, genders, and ethnic backgrounds B) uncertain and have not been fully studied or analyzed C) are key predictors that determine how long the business will survive D) highly diverse relating to age, gender, and ethnicity Answer: D Diff: 2 Learning Obj: 1-5 Explain the cultural diversity of entrepreneurship 16) Small companies that operate globally from their inception are referred to as ________. A) micromultinationals B) intrapreneurial ventures C) global companies D) international companies Answer: A Diff: 1 Learning Obj: 1-4 Explain the forces that are driving the growth of entrepreneurship. AACSB: Reflective Thinking 17) Of the 28.8 million businesses in the United States, more than ________ percent are considered small. A) 50 B) 75 C) 88 D) 99 Answer: D Diff: 2 Learning Obj: 1-6 Describe the important role that small businesses play in our nation's economy. AACSB: Analytical Thinking  Chapter 2: True/False Questions 1. Ethical behavior involves doing what is “right” as opposed to what is “wrong.” o Answer: True 2. Social responsibility solely focuses on maximizing company profit. o Answer: False 3. Business ethics form the foundation of decision-making and interactions with stakeholders. o Answer: True 4. A solid ethical foundation makes it more difficult for companies to deal with stakeholders. o Answer: False 5. Protecting brand reputation is one reason for running a business ethically. o Answer: True 6. A company credo is a written document that outlines a company’s ethical principles and standards of behavior. o Answer: True 7. Social entrepreneurs prioritize creating social benefit over commercial success. o Answer: True 8. More than half of small businesses include social goals in their mission statements. o Answer: True 9. Socially responsible business owners should focus on reducing, reusing, and recycling. o Answer: True 10. Building long-term relationships with customers is not part of a business's responsibility. Answer: False 11. A key responsibility to employees includes providing regular feedback, both positive and negative. Answer: True 12. Diversity should be a core value within an organization to manage a culturally diverse workforce.  Answer: True 13. Businesses should abide by the Consumer Bill of Rights, which includes the right to safety and choice. Answer: True 14. Companies have a duty to report financial performance accurately to their investors. Answer: True 15. Contributing to the community, such as adopting a highway for cleanliness, is part of a business’s community responsibility. Answer: True There is a universal definition of ethical behavior for all businesses to follow. Answer: False 17) A company credo offers general guidance in ethical issues. Answer: TRUE Diff: 2 Learning Obj: 2-3 Explain how to establish and maintain high ethical standards. AACSB: Ethical Understanding and Reasoning 18) Few other stakeholders are as important to a business as its employees. Answer: TRUE Diff: 2 Learning Obj: 2-7 Describe business's responsibility to employees. AACSB: Analytical Thinking 19) Employees are at the heart of increases in productivity. Answer: TRUE Diff: 1 Learning Obj: 2-7 Describe business's responsibility to employees. AACSB: Reflective Thinking Multiple-Choice Questions 1. What does ethical behavior reflect in an entrepreneur? o A) Legal obligations o B) Personal values and beliefs o C) Business profits o D) Customer demands o Answer: B) Personal values and beliefs 2. What is the primary purpose of business ethics? o A) To set legal standards for businesses o B) To establish moral values and behavioral standards for organizational decisions o C) To determine the company’s profit goals o D) To create policies for product development o Answer: B) To establish moral values and behavioral standards for organizational decisions 3. Which of the following is NOT a benefit of moral management? o A) Avoiding damage to company reputation o B) Attracting quality workers o C) Positive impact on customer relationships o D) Reducing tax liabilities o Answer: D) Reducing tax liabilities 4. Which of the following is a reason to run a business ethically? o A) To avoid legal fines o B) To maintain investors' confidence o C) To reduce costs of operation o D) To increase product variety o Answer: B) To maintain investors' confidence 5. What is the first step in establishing an ethical framework? o A) Identify key stakeholders involved  o B) Recognize the ethical dimensions of a dilemma o C) Identify personal moral and ethical principles o D) Choose the best ethical response o Answer: C) Identify personal moral and ethical principles 6. What is a key feature of an ethical culture in an organization? o A) Ethics is part of the selection process o B) Financial goals are prioritized over ethics o C) Ethics is optional in performance evaluations o D) All employees have the same moral beliefs o Answer: A) Ethics is part of the selection process 7. Which of these is NOT a principle that guides ethical behavior? o A) Honesty o B) Fairness o C) Caring for others o D) Competitiveness o Answer: D) Competitiveness 8. What document defines the values and ethical responsibilities of a company? o A) Code of ethics o B) Mission statement o C) Company credo o D) Employee handbook o Answer: C) Company credo 9. What aspect do social entrepreneurs focus on? o A) Maximizing profits o B) Creating social benefit o C) Increasing shareholder dividends o D) Reducing product prices o Answer: B) Creating social benefit 10. Which action exemplifies a socially responsible business activity?  o A) Reducing energy usage o B) Increasing prices to cover costs o C) Offering discounts to large corporations o D) Reducing staff numbers o Answer: A) Reducing energy usage 11. Which of the following is included in the Consumer Bill of Rights? o A) Right to a refund o B) Right to be informed o C) Right to select prices o D) Right to negotiate o Answer: B) Right to be informed 12) Ethical behavior is doing what is ________. A) "right" B) "profitable" C) "credible" D) All of the above Answer: A Diff: 1 Learning Obj: 2-1 Define business ethics and describe the three levels of ethical standards. AACSB: Ethical Understanding and Reasoning 13) The various groups and individuals who affect and are affected by a business are called ________. A) stockholders B) stakeholders C) owners D) managers Answer: B Diff: 1 Learning Obj: 2-1 Define business ethics and describe the three levels of ethical standards. AACSB: Ethical Understanding and Reasoning 14) Which of the following is not a stakeholder for an organization? A) Creditors B) Employees C) Suppliers D) All of the above are stakeholders. Answer: D Diff: 1 Learning Obj: 2-1 Define business ethics and describe the three levels of ethical standards. AACSB: Analytical Thinking 15) ________ responsibility is how an organization responds to the needs of the many elements in society. A) Moral B) Investor C) Social D) Ethical Answer: C Diff: 2 Learning Obj: 2-1 Define business ethics and describe the three levels of ethical standards. AACSB: Ethical Understanding and Reasoning 16) There are ________ levels of ethical standards. A) 1 B) 2 C) 3 D) 4 Answer: C Diff: 2 Learning Obj: 2-1 Define business ethics and describe the three levels of ethical standards. AACSB: Ethical Understanding and Reasoning 17) A company ________ is a statement that defines the values underlying the entire company and its ethical responsibilities to its stakeholders. A) credo B) annual report C) vision D) strategic plan Answer: A Diff: 2 Learning Obj: 2-3 Explain how to establish and maintain high ethical standards. AACSB: Ethical Understanding and Reasoning 18) A ________ is a written statement of the standards of behavior and ethical principles a company expects from its employees. A) company credo B) company annual report C) company vision D) code of ethics Answer: D Diff: 2 Learning Obj: 2-3 Explain how to establish and maintain high ethical standards. AACSB: Ethical Understanding and Reasoning 19) According to the ________, one should "choose the option that offers the greatest good for the greatest number of people." A) television test B) utilitarian principle C) family test D) golden rule Answer: B Diff: 2 Learning Obj: 2-3 Explain how to establish and maintain high ethical standards. AACSB: Ethical Understanding and Reasoning 10) According to the ________, one should "treat other people the way you would like them to treat you." A) television test B) utilitarian principle C) family test D) golden rule Answer: D Diff: 2 Learning Obj: 2-3 Explain how to establish and maintain high ethical standards. AACSB: Ethical Understanding and Reasoning  Chapter 3: True/False Questions 1. Creativity is the ability to apply solutions to problems or opportunities. o False 2. Innovation is about thinking new things rather than doing new things. o False 3. Failure is an essential part of the creative process. o True 4. Mind-mapping is a technique that encourages using both sides of the brain. o True 5. Force-Field Analysis focuses solely on the driving forces behind a change. o False 6. Entrepreneurship combines creativity with structured business actions. o True 7. Being practical and logical enhances creativity. o False 8. Hiring for creativity can help enhance organizational creativity. o True 9. Copyright protects the creator of a product for 20 years. o False 10. Rapid prototyping involves turning an idea into a model to find flaws. o True 11. Only one out of 5,000 to 10,000 new drug discoveries typically reach the market. o True 12. Trademark identifies the origin of a service, not a product. o False 13. Viewing problems as opportunities is a technique to enhance organizational creativity. o True 14. The mind-mapping process should involve forcing creativity at every stage.  o False Multiple Choice Questions 1. What is the primary goal of brainstorming? o A) To find the perfect solution o B) To generate a large number of ideas o C) To analyze existing ideas o D) To improve team communication o Answer: B 2. In force-field analysis, the forces that work against a proposed change are called: o A) Driving forces o B) Restraining forces o C) Neutral forces o D) Supportive forces o Answer: B 3. Which of the following is NOT a barrier to creativity? o A) Embracing failure o B) Fear of looking foolish o C) Constant practicality o D) Believing oneself as “not creative” o Answer: A 4. An individual can use a mind map to: o A) Focus on a single solution o B) Identify relationships among ideas o C) Avoid ambiguity in thinking o D) List logical solutions only o Answer: B 5. The exclusive right to make, use, or sell an invention is provided by a: o A) Trademark  o B) Copyright o C) Patent o D) Service mark o Answer: C 6. Which of the following is a technique to improve individual creativity? o A) Staying awake longer o B) Ignoring other people’s ideas o C) Keeping a journal for ideas o D) Avoiding failure o Answer: C 7. Which term best describes a company symbol used to identify the source of a product? o A) Copyright o B) Service mark o C) Trademark o D) Patent o Answer: C 8. Rapid prototyping helps entrepreneurs to: o A) Perfect an idea without changes o B) Identify flaws and improve designs o C) Find the only correct solution o D) Increase product costs o Answer: B 9. Copyright protects creators of which type of work? o A) Industrial designs o B) Original works of authorship o C) Product models o D) Brand logos o Answer: B 10. One of the steps in mind-mapping involves:  o A) Forcing new ideas o B) Creating a single path of thought o C) Sketching a central problem or focus o D) Ignoring unrelated ideas o Answer: C 11. What is a service mark used for? o A) Protecting literary works o B) Identifying the source of a product o C) Identifying the source of a service o D) None of the above o Answer: C 12. The following is a method to foster organizational creativity EXCEPT: o A) Encouraging diversity o B) Expecting perfection o C) Providing creativity training o D) Designing creative workspaces o Answer: B 13. Which approach enhances creativity by visually organizing ideas? o A) Brainstorming o B) Force-Field Analysis o C) Mind-Mapping o D) Prototyping o Answer: C 14. One barrier to creativity is: o A) Embracing ambiguity o B) Being overly practical o C) Asking the right questions o D) Including creativity in values o Answer: B 15. For creativity enhancement, it is important to: o A) Avoid all forms of ambiguity o B) Rely on logical solutions only o C) Embrace the possibility of mistakes o D) Be rigid in approach o Answer: C Here are 15 fill-in-the-blank sentences from the three chapters, with a mix of easy, moderate, and three difficult ones. Each chapter is represented by five sentences, covering key concepts. Chapter 1: Entrepreneurship Basics 1. An entrepreneur is someone who takes on ________ in the face of uncertainty to achieve profit and growth. 2. A ________ is something that can be physically touched and is made or found in nature. 3. One characteristic of successful entrepreneurs is their ________ for responsibility and independence. 4. Schumpeter identifies ________ as a way for entrepreneurs to create new products using existing resources. 5. Entrepreneurs often seek a ________ in the market that others have overlooked. Chapter 2: Ethics and Social Responsibility 6. ________ behavior means acting in a way that is right, rather than wrong, in business decisions. 7. ________ is the concept of an organization meeting the needs of society and contributing positively to it. 8. Social ________ is essential for businesses as it reflects their impact on society beyond profit. 9. A strong ethical ________ guides individuals in making decisions when facing moral dilemmas. 10. Social entrepreneurs focus on solving ________ issues that are unmet by both the government and the market. Chapter 3: Creativity and Innovation 11. ________ is the ability to develop new ideas and see opportunities from unique perspectives. 12. ________ is when creative solutions are applied to enhance people’s lives and solve problems. 13. Recognizing the creative power of ________ can lead to new insights and ideas. 14. ________ analysis is a technique used to evaluate forces that both support and resist a proposed change. 15. Rapid ________ is a process of quickly creating a model to test and improve an idea. Word Choices 1. Risk 2. Product 3. Desire 4. Technology 5. Opportunity 6. Ethical 7. Responsibility 8. Social Responsibility 9. Framework 10. Problems 11. Creativity 12. Innovation 13. Mistakes 14. Force-Field 15. Prototyping 16. Potential 17. Service 18. Value 19. Resourcefulness 20. Contribution