BUS 401 UPDATED ACTUAL Questions
and CORRECT Answers
What is the GEM? - CORRECT ANSWER- ✔✔- Global Entrepreneurship Monitor (GEM).
GEM, which is a joint research effort among several international universities and the
Interna- tional Council for Small Business, tracks entrepreneurship in 112 countries,
including the United States.
- interest to GEM is total early stage entrepreneurial activity (TEA), which consists of
businesses that are just being started and businesses that have been in existence for less than
three and a half years.
- high- est rates of entrepreneurial start-up activities occur in low-income countries,
- identifies whether its respondents are starting a new business to take advantage of an
attractive opportunity or because of necessity to earn an income.
- criticism of entrepreneurship, which is often repeated in the press, is that the majority of
new businesses fail.
Are start ups successful? - CORRECT ANSWER- ✔✔- United States, according to the
Bureau of Labor Statistics, over half the businesses started are still in existence five years
later.4 The number drops to just over a third after 10 years, but some of the businesses
disappeared because they were successful and were sold or were acquired by another firm.
- motivation must be coupled with a solid business idea, good financial management, and
effective execution to maximize chances for success.
What Is Entrepreneurship and Why Is It Important? - CORRECT ANSWER- ✔✔-
entrepreneur derives from the French words entre, meaning "between," and prendre, meaning
"to take."
- originally used to describe people who "take on the risk" between buyers and sellers or who
"undertake" a task such as starting a new venture.5
- An inventor creates something new. An entrepreneur assembles and then integrates all the
resources needed—the money, the people, the business model, the strategy, and the risk-
bearing ability—to transform the invention into a viable business.
- Entrepreneurship is defined as the process by which individuals pursue opportunities
without regard to resources they currently control for the purpose of exploiting future goods
and services.
- art of turning an idea into a business.
- tasks called for by this behavior can be accomplished by either an individual or a group and
typically require creativity, drive, and a willingness to take risks.
,- established firms with an entre- preneurial emphasis are proactive, innovative, and risk-
taking.
What is corporate entrepreneurship? What is entrepreneurial intensity? - CORRECT
ANSWER- ✔✔- established firms with an orientation toward acting entrepreneurially
practice corporate entrepreneurship.1
- All firms fall along a conceptual continuum that ranges from highly conservative to highly
entrepreneurial.
- position of a firm on this continuum is referred to as its entrepreneurial intensity.
- entrepreneurial firms are typically proactive innovators and are not averse to taking
calculated risks. I
- conservative firms take more of a "wait and see" posture, are less innovative, and are risk
averse.
- Firms with higher entrepreneurial intensity regularly look for ways to cut bureaucracy.
Why Do People Become Entrepreneurs? - CORRECT ANSWER- ✔✔- three primary reasons
that people become entrepreneurs and start their own firms are to be their own boss, pursue
their own ideas, and pursue financial rewards.
Why do people want to be their own bosses? - CORRECT ANSWER- ✔✔- many
entrepreneurs want to be their own boss because either they have had a long-time ambition to
own their own firm or because they have become frustrated working in traditional jobs.
- Some entrepreneurs transition from a traditional job to owning their own business more
gradually, as shown by a decision to initially operate their firm on a part-time basis.
- starting a business part time individuals can gain valuable experience, tuck away the money
they earn, and find out if they really like the business before deciding to leave their job.
- takes time to build a client list.
- Some entrepreneurs will time their departure from their job with the point in time at which
their client list is large enough and profitable enough to support a full-time business.
Why do people want to pursue their own ideas? - CORRECT ANSWER- ✔✔- Some people
are naturally alert, and when they recognize ideas for new prod- ucts or services, they have a
desire to see those ideas realized.
- Corporate entre- preneurs who innovate within the context of an existing firm typically have
a mechanism for their ideas to become known.
- Established firms, however, often resist innovation. W
,- Because of their passion and commitment, some employees choose to leave the firm
employing them in order to start their own business as the means to develop their own ideas.
- some people, through a hobby, leisure activity, or just everyday life, recog- nize the need for
a product or service that is not available in the marketplace.
- If the idea is viable enough to support a business, they commit tremendous time and energy
to converting the idea into a part-time or full-time firm.
- Many entrepreneurs experience tremendous satisfaction when their entre- preneurial idea
catches on, and they see the positive results it creates.
Why do people pursue financial rewards? - CORRECT ANSWER- ✔✔- motivation,
however, is typically secondary to the first two and often fails to live up to its hype.
- average entrepreneur does not make more money than someone with a similar amount of
responsibility in a traditional job.
- financial lure of entre- preneurship is its upside potential.
- Making a profit and increasing the value of a company is a solidifying goal that people can
rally around.
- money is rarely the primary motivation behind the launch of an entrepreneurial firm.
- financial rewards associated with entrepreneurship can be bittersweet if they are
accompanied by losing control of their firm.
- thrill of building the business and of seeing the success o
What are Characteristics of Successful Entrepreneurs? - CORRECT ANSWER- ✔✔- Passion
for the business
- Product/customer focus
- Tenacity despite failure
- Execution intelligence
What does it mean to have passion for the business? - CORRECT ANSWER- ✔✔- whether it
is in the context of a new firm or an existing business.
- passion for an idea that gets a business going and keeps it going when times are tough.
- Making a difference in people's lives is the primary motivator behind many social
enterprises, which are often started by people who set aside promising careers to pursue a
social goal.
, - Passion is particularly important for both for-profit and not-for-profit entre- preneurial
organizations because although rewarding, the process of starting a firm or building either a
profit-making corporation or a social enterprise is demanding.
- important to be enthusiastic about a business idea, but it is also important to understand its
potential flaws and risks.
- Reasons passion is important:
o 1. The ability to learn and iterate
o 2. A willingness to work hard for an extended period of time
o 3. Ability to overcome setbacks and "no's"
o 4. The ability to listen to feedback on the limitations of your organization and yourself
o 5. Perseverance and persistence when the going gets tough
- most effective business ideas take hold when their passion is consis- tent with their skills
and is in an area that represents a legitimate business opportunity.
Why is product/customer focus crucial to entrepreneurship? - CORRECT ANSWER- ✔✔-
two most important elements in any business—products and customers.
- everything we build has to provide real value to both our users and customers.
- best measure- ment of whether or not we are successful at delivering something valuable is
if our customers, advertisers in our case, are willing to pay.
- product/customer focus also involves the diligence to spot product opportunities and to see
them through to completion.
Why is it important to have tenacity despite failure for an entrepreneur? - CORRECT
ANSWER- ✔✔- developing a new business idea may require a certain degree of
experimentation before success is attained.
- Setbacks and failures inevitably occur during this process.
- litmus test for entrepreneurs is their ability to persevere through setbacks and failures.
- important that entrepreneurs have sufficient tenacity to overcome personal obstacles along
with professional ones.
Why is execution intelligence important for entrepreneurship? - CORRECT ANSWER- ✔✔-
ability to fashion a solid idea into a viable business
- execution intelligence is the factor that determines whether a start-up is successful or fails.
