Management-Chapter 6

Question 1

Entrepreneurship

Answer 1

The process of initiating a business, organizing the necessary resources, and assuming the associated risks and rewards.

Question 2

Entrepreneur

Answer 2

Recognizes a viable idea for a business product or service and combines the necessary resources to carry it out by finding and assembling the necessary resources.

Question 3

Idealists

Answer 3

Rewarded by chance to work on something new and creative.

Question 4

Optimizers

Answer 4

Get personal satisfaction from being business owners.

Question 5

Hard Workers

Answer 5

Thrive on the challenge of building a larger, more profitable business.

Question 6

Jugglers

Answer 6

High-energy people who enjoy handling every detail of their own businesses.

Question 7

Sustainers

Answer 7

Enjoy chance to balance work and personal life.

Question 8

Small Business (SBA)

Answer 8

One that is independently owned and operated and which is not dominant in its field of operation.

Question 9

Internal Locus of Control

Answer 9

A belief by individuals that their future is within their control and that external forces have little influence.

Question 10

External locus of Control

Answer 10

A belief by individuals that their future is not within their control but rather influenced by external forces.

Question 11

Need to Achieve

Answer 11

A human quality linked to entrepreneurship in which people are motivated to excel and pick situations in which success is likely.

Question 12

Tolerance for Ambiguity

Answer 12

The psychological characteristic that allows a person to be untroubled by disorder and uncertainty.

Question 13

Social Entrepreneur

Answer 13

An entrepreneurial leader who is committed to both good business and changing the world for the better.

Question 14

Business Plan

Answer 14

Prior to opening a business, an entrepreneur should prepare a document specifying the details of the business.

Question 15

Sole Proprietorship

Answer 15

An unincorporated for-profit business owned by an individual.

Question 16

Partnership

Answer 16

Is formed when two or more people choose to own an unincorporated business.

Question 17

Corporation

Answer 17

An artificial entity created by the state and existing apart from its owners.

Question 18

Debt Financing

Answer 18

Involves borrowing money, such as from friends, family or a bank, that has to be repaid at a later date in order to start a business.

Question 19

Angel Financing

Answer 19

Occurs when a wealthy individual who believes in the idea for a start-up provides personal funds and advice to help the business get started.

Question 20

Equity Financing

Answer 20

Consists of funds that are invested in exchange for ownership in the company.

Question 21

Venture Capital Firms

Answer 21

A group of companies or individuals that invests money in new or expanding businesses for ownership and potential profits.

Question 22

Franchising

Answer 22

An arrangement by which the owner of a product or service allows others to purchase the right to distribute the product or service with help from the owner.

Question 23

Business Incubators

Answer 23

Help start-up companies by connecting them with a range of experts and mentors who nurture them, thus increasing their likelihood of success.

Question 24

1. Start-up

Answer 24

Stage of growth. Main problems are producing the product or service and obtaining customers.

Question 25

2. Survival

Answer 25

The business demonstrates that it is a workable business entity.

Question 26

3. Success

Answer 26

The company is solidly based and profitable.

Question 27

4. Takeoff

Answer 27

Here the key problem is how to grow rapidly and finance that growth.

Question 28

5. Resource Maturity

Answer 28

At this stage, the company’s substantial financial gains may come at the cost of losing its advantages of small size, including flexibility and entrepreneurship.