Essentials of Entrepreneurship and Small Business Management 6th Edition by Scarborough Test Bank

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Essentials of Entrepreneurship and Small Business Management 6th Edition by Scarborough Test Bank

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COMPLETE TEST BANK WITH ANSWERS
Essentials of Entrepreneurship and Small Business Management 6th Edition by Scarborough Test Bank

 

Essentials of Entrepreneurship & Small Business Management, 6e (Scarborough)

Chapter 2   Inside the Entrepreneurial Mind: From Ideas to Reality

 

1) The ability to develop new ideas and to discover new ways of looking at problems and opportunities is called:

  1. A) entrepreneurship.
  2. B) innovation.
  3. C) creativity.
  4. D) creative thinking.

Answer:  C

Diff: 1             Page Ref: 33

AACSB:  Reflective Thinking

 

2) An entrepreneurial secret for creating value in the marketplace is:

  1. A) applying creativity and innovation to solve problems.
  2. B) creating new products and services.
  3. C) learning by doing.
  4. D) applying lessons learned from history.

Answer:  A

Diff: 2             Page Ref: 33-34

AACSB:  Analytic Skills

 

3) The ability to apply creative solutions to problems and opportunities to enhance or to enrich peoples lives is called:

  1. A) entrepreneurship.
  2. B) innovation.
  3. C) creativity.
  4. D) creative thinking.

Answer:  B

Diff: 1             Page Ref: 33-34

AACSB:  Reflective Thinking

 

4) Harvards Ted Levitt says that creativity is ________ new things, and innovation is ________ new things.

  1. A) thinking; doing
  2. B) doing; thinking
  3. C) seeing; doing
  4. D) thinking; applying

Answer:  A

Diff: 2             Page Ref: 33-34

AACSB:  Reflective Thinking

 

 

5) Entrepreneurship is a constant process that relies on:

  1. A) creativity, innovation, and profit.
  2. B) the ability to win over the consumer.
  3. C) creativity, innovation, and application in the marketplace.
  4. D) intellectual property rights.

Answer:  C

Diff: 3             Page Ref: 33-35

AACSB:  Analytic Skills

6) ________ is necessary for building a competitive advantage and for business survival.

  1. A) One single idea
  2. B) A motivated owner
  3. C) Creativity
  4. D) A low-priced product

Answer:  C

Diff: 1             Page Ref: 35

AACSB:  Reflective Thinking

 

7) Creativity often involves creating something from nothing.  However, it is more likely to result in:

  1. A) elaborating on the present.
  2. B) putting old things together in new ways.
  3. C) taking something away to create something simpler or better.
  4. D) All of the above

Answer:  D

Diff: 3             Page Ref: 35-36

AACSB:  Reflective Thinking

 

8) When developing creative solutions to modern problems, entrepreneurs must:

  1. A) go beyond merely using whatever has worked in the past.
  2. B) limit the creative process to only profitable ventures.
  3. C) remember what has worked in the past.
  4. D) pay attention to limiting factors.

Answer:  A

Diff: 2             Page Ref: 35-36

AACSB:  Reflective Thinking

 

9) Research shows that anyone can learn to be creative.  The problem is:

  1. A) many organizations fail to foster an environment that encourages creativity.
  2. B) most people never tap into their pools of innate creativity.
  3. C) most people have never been taught to be creative.
  4. D) All of the above

Answer:  D

Diff: 2             Page Ref: 36-37

AACSB:  Analytic Skills

 

 

10) Research into the operation of the human brain shows that each hemisphere of the brain:

  1. A) develops symmetrically.
  2. B) controls similar functions.
  3. C) does not dominate the other hemisphere.
  4. D) processes information differently.

Answer:  D

Diff: 2             Page Ref: 36-37

AACSB:  Analytic Skills

11) The left brain is guided by:

  1. A) kaleidoscopic, lateral thinking.
  2. B) linear, vertical thinking.
  3. C) asymmetrical thinking.
  4. D) intuitive thinking.

Answer:  B

Diff: 2             Page Ref: 36-37

AACSB:  Analytic Skills

 

12) The right brain is guided by:

  1. A) kaleidoscopic, lateral thinking.
  2. B) linear, vertical thinking.
  3. C) asymmetrical thinking.
  4. D) logical thinking.

Answer:  A

Diff: 2             Page Ref: 36-37

AACSB:  Analytic Skills

 

13) Which hemisphere of the brain is responsible for language, logic, and symbols?

  1. A) Right hemisphere
  2. B) Left hemisphere
  3. C) Lateral hemisphere
  4. D) Intuitive hemisphere

Answer:  B

Diff: 1             Page Ref: 37

AACSB:  Analytic Skills

 

14) Which hemisphere of the brain is responsible for the bodys emotional, intuitive, and spatial functions?

  1. A) Right hemisphere
  2. B) Left hemisphere
  3. C) Vertical hemisphere
  4. D) Logical hemisphere

Answer:  A

Diff: 1             Page Ref: 37

AACSB:  Analytic Skills

 

 

15) Which hemisphere of the brain processes information in a step-by-step fashion?

  1. A) Right hemisphere
  2. B) Left hemisphere
  3. C) Lateral hemisphere
  4. D) Intuitive hemisphere

Answer:  B

Diff: 2             Page Ref: 37

AACSB:  Analytic Skills

16) Which hemisphere of the brain processes information all at once and by relying heavily on images?

  1. A) Right hemisphere
  2. B) Left hemisphere
  3. C) Vertical hemisphere
  4. D) Logical hemisphere

Answer:  A

Diff: 2             Page Ref: 37

AACSB:  Analytic Skills

 

17) ________ vertical thinking is narrowly focused and systematic, proceeding in a highly logical fashion from one point to the next.

  1. A) Left-brained
  2. B) Right-brained
  3. C) Unconventional
  4. D) Intuitive

Answer:  A

Diff: 2             Page Ref: 37

AACSB:  Analytic Skills

 

18) ________ lateral thinking is somewhat unconventional and unstructured.

  1. A) Left-brained
  2. B) Right-brained
  3. C) Systematic
  4. D) Logical

Answer:  B

Diff: 2             Page Ref: 37

AACSB:  Analytic Skills

 

19) In his book A Whack on the Side of the Head, Roger von Oech views a playful attitude as:

  1. A) frivolous.
  2. B) fundamental to creative thinking.
  3. C) a mental block.
  4. D) limiting individual creativity.

Answer:  B

Diff: 1             Page Ref: 39

AACSB:  Reflective Thinking

 

 

20) All of the following represent barriers to creativity that entrepreneurs impose upon themselves except:

  1. A) focusing on being too logical.
  2. B) being too practical.
  3. C) blindly following rules.
  4. D) searching for more than one answer.

Answer:  D

Diff: 2             Page Ref: 39-42

AACSB:  Reflective Thinking

21) Roger von Oech believes that blindly following rules leads to:

  1. A) order, which stimulates creativity.
  2. B) a clearer vision and business venture.
  3. C) new ways of doing things.
  4. D) a mental block towards creativity.

Answer:  D

Diff: 2             Page Ref: 39

AACSB:  Reflective Thinking

 

22) Joseph Schumpeter wrote that entrepreneurs perform the vital function of:

  1. A) challenging accepted ways of doing things.
  2. B) creative destruction.
  3. C) revolutionizing current patterns of production.
  4. D) All of the above

Answer:  D

Diff: 2             Page Ref: 41

AACSB:  Reflective Thinking

 

23) Entrepreneurs can stimulate their own creativity and encourage it among workers by:

  1. A) expecting and tolerating failure.
  2. B) avoiding problems.
  3. C) limiting rewards.
  4. D) not taking chances.

Answer:  A

Diff: 2             Page Ref: 41-42

AACSB:  Reflective Thinking

 

24) Which of the following is not one of the ways entrepreneurs can stimulate their own creativity and encourage it among their workers?

  1. A) Provide creativity training.
  2. B) Encourage curiosity.
  3. C) View challenges as problems.
  4. D) Develop a corporate culture that both fosters and rewards creativity.

Answer:  C

Diff: 3             Page Ref: 41-42

AACSB:  Reflective Thinking

 

 

25) Employees must be given the tools and resources they need to be creative.  One of the most valuable resources is:

  1. A) providing challenges.
  2. B) rules and guidelines.
  3. C) time.
  4. D) money.

Answer:  C

Diff: 3             Page Ref: 43

AACSB:  Communication

26) Hiring a diverse workforce:

  1. A) helps in enhancing organizational creativity.
  2. B) allows for different ideas and varying methods of problem solving.
  3. C) brings in people from different backgrounds, with different cultural experiences, hobbies, and interests.
  4. D) All of the above

Answer:  D

Diff: 1             Page Ref: 43

AACSB:  Multicultural & Diversity

 

27) The ________ environment has an impact on the level of peoples creativity.

  1. A) physical
  2. B) sounds in the
  3. C) extermal
  4. D) internal

Answer:  A

Diff: 1             Page Ref: 44

AACSB:  Reflective Thinking

 

28) All of the following are enhancements to individual creativity except:

  1. A) keeping a journal to record thoughts and ideas.
  2. B) limiting your reading sources.
  3. C) taking time off.
  4. D) allowing yourself to be creative.

Answer:  B

Diff: 1             Page Ref: 46-48

AACSB:  Analytic Skills

 

29) Which of the following is not an enhancement to individual creativity?

  1. A) Listening to other people
  2. B) Recognizing the creative power of mistakes
  3. C) Keeping a toy box in your office
  4. D) Working without breaks until the project is complete or the problem is solved

Answer:  D

Diff: 2             Page Ref: 46-48

AACSB:  Reflective Thinking

 

 

30) Which stage of the creative process includes on-the-job training?

  1. A) Implementation
  2. B) Preparation
  3. C) Illumination
  4. D) Verification

Answer:  B

Diff: 2             Page Ref: 49

AACSB:  Reflective Thinking

31) Which stage of the creative process requires one to develop a solid understanding of the problem or decision?

  1. A) Investigation
  2. B) Preparation
  3. C) Illumination
  4. D) Verification

Answer:  A

Diff: 2             Page Ref: 49-50

AACSB:  Analytic Skills

 

32) Which stage of the creative process involves viewing the similarities and differences in the information collected?

  1. A) Transformation
  2. B) Incubation
  3. C) Illumination
  4. D) Verification

Answer:  A

Diff: 2             Page Ref: 50

AACSB:  Analytic Skills

 

33) The ability to see the similarities and the connections among various data and events is called:

  1. A) convergent thinking.
  2. B) divergent thinking.
  3. C) transformational thinking.
  4. D) illumination.

Answer:  A

Diff: 2             Page Ref: 50

AACSB:  Analytic Skills

 

34) The ability to see the differences among various data and events is called:

  1. A) convergent thinking.
  2. B) divergent thinking.
  3. C) transformational thinking.
  4. D) illumination.

Answer:  B

Diff: 2             Page Ref: 50

AACSB:  Analytic Skills

 

35) ________ thinking is the ability to see similarities and ________ thinking is the ability to see differences among various data and events.

  1. A) Divergent; convergent
  2. B) Convergent; divergent
  3. C) Convergent; transformational
  4. D) None of the above

Answer:  B

Diff: 2             Page Ref: 50

AACSB:  Analytic Skills

36) During the incubation phase of the creative process, the entrepreneur might do all of the following EXCEPT which one to let ideas marinate in his mind?

  1. A) Do something totally unrelated for awhile.
  2. B) Relax and play regularly.
  3. C) Work on the problem or opportunity in a different environment.
  4. D) Dont allow ones self to daydream.

Answer:  D

Diff: 2             Page Ref: 50-51

AACSB:  Analytic Skills

 

37) At which stage of the creative process does a spontaneous breakthrough occur, allowing all of the previous stages to come together to produce the Eureka factor or the light bulb goes on?

  1. A) Implementation
  2. B) Preparation
  3. C) Illumination
  4. D) Verification

Answer:  C

Diff: 2             Page Ref: 51

AACSB:  Analytic Skills

 

38) Verification refers to:

  1. A) validating the idea as accurate and useful.
  2. B) possibly conducting experiments, running simulations, test marketing a product or service.
  3. C) possibly asking questions such as will it work? and is it really a better solution?
  4. D) All of the above

Answer:  D

Diff: 2             Page Ref: 51-52

AACSB:  Analytic Skills

 

39) The focus of this step in the creative process is to transform the idea into reality.

  1. A) Implementation
  2. B) Preparation
  3. C) Illumination
  4. D) Verification

Answer:  A

Diff: 2             Page Ref: 52

AACSB:  Analytic Skills

40) ________ is a process in which a small group of people interacts to produce a large quantity of imaginative ideas.

  1. A) Groupthink
  2. B) Mind-mapping
  3. C) Brainstorming
  4. D) Prototyping

Answer:  C

Diff: 1             Page Ref: 54

AACSB:  Communication

41) Effective brainstorming involves all of the following except:

  1. A) a small group of people.
  2. B) an open uninhibited environment.
  3. C) an effective method to evaluate ideas.
  4. D) very little structure.

Answer:  C

Diff: 2             Page Ref: 54-55

AACSB:  Communication

 

42) ________ is a graphical technique that encourages thinking on both sides of the brain, visually displays the various relationships among the ideas, and improves the ability to view a problem from many sides.

  1. A) Brainstorming
  2. B) Mind-mapping
  3. C) Prototyping
  4. D) Groupthink

Answer:  B

Diff: 1             Page Ref: 55

AACSB:  Analytic Skills

 

43) Mind-mapping is a useful tool for jump-starting creativity.  It includes all of the following except:

  1. A) sketching a picture to symbolize the problem or area of focus in the center of a sheet of paper.
  2. B) writing down every idea that comes into your mind, connecting each idea to the central picture.
  3. C) allowing your mind to rest for a few minutes before integrating the ideas.
  4. D) forcing creativity when ideas start to trickle.

Answer:  D

Diff: 2             Page Ref: 55

AACSB:  Analytic Skills

 

 

44) The theory of inventive problem solving is a left-brained, scientific, systematic process based on innovative patents and is referred to as:

  1. A) JIT.
  2. B) RP.
  3. C) TQM.
  4. D) TRIZ.

Answer:  D

Diff: 2             Page Ref: 56-58

AACSB:  Analytic Skills

 

45) The premise behind ________ is that transforming an idea into an actual model will lead to improvements in its design.

  1. A) rapid prototyping
  2. B) mind-mapping
  3. C) brainstorming
  4. D) inventions

Answer:  A

Diff: 2             Page Ref: 58

AACSB:  Analytic Skills

46) The three principles (three Rs) of rapid prototyping are:

  1. A) develop a rough model, rapidly, and for the right price.
  2. B) develop a complete model, rapidly, and for the right problem.
  3. C) develop a rough model, rapidly, and for the right problem.
  4. D) develop a right model, roughly, for the right price.

Answer:  C

Diff: 2             Page Ref: 58

AACSB:  Analytic Skills

 

47) Steps in the patent process include:

  1. A) establishing whether it is a novelty.
  2. B) documenting and verifying the date the idea was first conceived.
  3. C) searching existing patents.
  4. D) All of the above

Answer:  D

Diff: 2             Page Ref: 58-61

AACSB:  Analytic Skills

 

48) To which governmental office must applications for patents be submitted?

  1. A) The U.S. Patent and Trademark Office
  2. B) The individual State Offices of Patent Development
  3. C) The Federal Trade Commission
  4. D) The Securities and Exchange Commission

Answer:  A

Diff: 2             Page Ref: 58

AACSB:  Analytic Skills

 

 

49) To protect patent claims, an inventor should be able to verify and document the:

  1. A) research conducted to create the invention.
  2. B) fact that the invention was created in another country.
  3. C) date on which the idea was first conceived.
  4. D) initial sales of the invention.

Answer:  C

Diff: 2             Page Ref: 60

AACSB:  Analytic Skills

 

50) More than ________ percent of those holding patents win their infringement suits.

  1. A) 15
  2. B) 30
  3. C) 45
  4. D) 60

Answer:  D

Diff: 2             Page Ref: 61, Figure 2.5

AACSB:  Analytic Skills

51) Any distinctive word, phrase, symbol, name, or logo a firm uses to distinguish itself or its products is called a:

  1. A) trademark.
  2. B) patent.
  3. C) copyright.
  4. D) service mark.

Answer:  A

Diff: 1             Page Ref: 62

AACSB:  Analytic Skills

 

52) Which of the following questions should you consider before entering a lawsuit to protect intellectual property?

  1. A) Can you afford the loss of time, money, and privacy the lawsuit will bring?
  2. B) Can the opponent afford to pay if you win?
  3. C) Do you expect to get enough from the suit to pay for the costs of hiring an attorney?
  4. D) All of the above

Answer:  D

Diff: 2             Page Ref: 62-63

AACSB:  Analytic Skills

 

53) A ________ is an exclusive right that protects the creators of original works such as literary, dramatic, musical, and artistic works.

  1. A) trademark
  2. B) patent
  3. C) copyright
  4. D) service mark

Answer:  C

Diff: 1             Page Ref: 64

AACSB:  Analytic Skills

 

54) Copyrights protect the creator of original works such as:

  1. A) software, choreography, and motion pictures.
  2. B) symbols, names, and designs.
  3. C) text and verbiage of any kind.
  4. D) slogans and designs.

Answer:  A

Diff: 2             Page Ref: 64

AACSB:  Use of IT

 

55) Creativity is the ability to apply creative solutions to problems and opportunities to enhance or enrich peoples lives.

Answer:  FALSE

Diff: 1             Page Ref: 33

AACSB:  Reflective Thinking

 

56) Innovation is the ability to develop new ideas and to discover new ways of looking at problems and opportunities.

Answer:  FALSE

Diff: 1             Page Ref: 33

AACSB:  Reflective Thinking

57) Creativity is the ability to develop new ideas and to discover new ways of looking at problems and opportunities.

Answer:  TRUE

Diff: 1             Page Ref: 33

AACSB:  Reflective Thinking

 

58) Innovation is the ability to apply creative solutions to problems and opportunities to enhance or enrich peoples lives.

Answer:  TRUE

Diff: 1             Page Ref: 33

AACSB:  Reflective Thinking

 

59) Successful entrepreneurs come up with ideas and then find ways to make them work to solve a problem or fill a need.

Answer:  TRUE

Diff: 2             Page Ref: 34

AACSB:  Reflective Thinking

 

60) Creativity and innovation are the signature of large, entrepreneurial businesses.

Answer:  FALSE

Diff: 1             Page Ref: 34

AACSB:  Reflective Thinking

 

61) Creativity and innovation are the signature of small, entrepreneurial businesses.

Answer:  TRUE

Diff: 1             Page Ref: 34

AACSB:  Analytic Skills

62) Although creativity sometimes involves generating something from nothing, it more likely results in elaborating on the present, putting old things together in new ways, or taking something away to create something simpler or better.

Answer:  TRUE

Diff: 2             Page Ref: 34

AACSB:  Analytic Skills

 

63) Innovation must be a constant process because most ideas do not work and most innovations fail.

Answer:  TRUE

Diff: 3             Page Ref: 34-35

AACSB:  Reflective Thinking

 

64) For every 3,000 new product ideas, four make it to the development stage, two are actually launched, and only one becomes successful in the market.

Answer:  TRUE

Diff: 3             Page Ref: 35

AACSB:  Analytic Skills

 

65) On average, new products account for two-thirds to three-fourths of companies sales.

Answer:  FALSE

Diff: 3             Page Ref: 35

AACSB:  Analytic Skills

66) Creativity is not only an important source for building a competitive advantage, but it also is necessary for survival.

Answer:  TRUE

Diff: 2             Page Ref: 35

AACSB:  Reflective Thinking

 

67) History is always a reliable predictor of the future of business.

Answer:  FALSE

Diff: 2             Page Ref: 35

AACSB:  Reflective Thinking

 

68) Entrepreneurs must embrace traditional assumptions and perspectives about how things ought to be because they support creativity.

Answer:  FALSE

Diff: 2             Page Ref: 35

AACSB:  Reflective Thinking

 

69) Creative thinking involves research into the operation of the human brain and the roles each hemisphere of the brain plays.

Answer:  TRUE

Diff: 1             Page Ref: 36

AACSB:  Analytic Skills

 

 

70) Successful entrepreneurship requires left-brain thinking.

Answer:  FALSE

Diff: 2             Page Ref: 37

AACSB:  Analytic Skills

 

71) The left brain is guided by linear, vertical thinking.

Answer:  TRUE

Diff: 1             Page Ref: 37

AACSB:  Analytic Skills

 

72) The left brain relies on kaleidoscopic, lateral thinking.

Answer:  FALSE

Diff: 1             Page Ref: 37

AACSB:  Analytic Skills

 

73) While most people see what they have always seen, creative entrepreneurs are able to see beyond preconceptions.

Answer:  TRUE

Diff: 2             Page Ref: 37

AACSB:  Analytic Skills

 

74) Research shows that each hemisphere of the human brain processes information differently and that one side of the brain tends to be dominant over the other.

Answer:  TRUE

Diff: 1             Page Ref: 37

AACSB:  Analytic Skills

75) The right brain is guided by linear, vertical thinking.

Answer:  FALSE

Diff: 1             Page Ref: 37

AACSB:  Analytic Skills

 

76) The right brain relies on kaleidoscopic, lateral thinking.

Answer:  TRUE

Diff: 1             Page Ref: 37

AACSB:  Analytic Skills

 

77) The left brain handles language, logic, and symbols.

Answer:  TRUE

Diff: 1             Page Ref: 37

AACSB:  Analytic Skills

 

78) The right brain takes care of the bodys emotional, intuitive, and spatial functions.

Answer:  TRUE

Diff: 1             Page Ref: 37

AACSB:  Analytic Skills

 

79) The right brain processes information intuitivelyall at once, relying heavily on images.

Answer:  TRUE

Diff: 1             Page Ref: 37

AACSB:  Analytic Skills

 

80) Right-brain thinking draws on the power of divergent reasoning, which is the ability to create a multitude of original, diverse ideas, while left-brain thinking counts on convergent reasoning, the ability to evaluate multiple ideas and choose the best solution to a given problem.

Answer:  TRUE

Diff: 3             Page Ref: 37

AACSB:  Analytic Skills

 

81) Entrepreneurship requires both left- and right-brained thinking.

Answer:  TRUE

Diff: 1             Page Ref: 37

AACSB:  Analytic Skills

 

82) The left brain processes information in a step-by-step fashion.

Answer:  TRUE

Diff: 1             Page Ref: 37-38

AACSB:  Analytic Skills

 

83) Entrepreneurs need to rely on left-brain thinking to generate innovative product, service, or business ideas and use right-brain thinking to judge the market potential of the ideas they generate.

Answer:  FALSE

Diff: 3             Page Ref: 37

AACSB:  Analytic Skills

84) Intuition is based on the accumulated knowledge and experiences a person encounters over the course of a lifetime and resides in the subconscious.

Answer:  TRUE

Diff: 1             Page Ref: 37

AACSB:  Analytic Skills

 

85) A paradigm is a preconceived idea of what the world is, what it should be like, and how it should operate and this can influence creativity.

Answer:  TRUE

Diff: 3             Page Ref: 38

AACSB:  Analytic Skills

 

86) The left brain processes information intuitivelyall at once, relying heavily on images.

Answer:  FALSE

Diff: 1             Page Ref: 37-38

AACSB:  Analytic Skills

 

 

87) The right brain processes information in a step-by-step fashion.

Answer:  FALSE

Diff: 1             Page Ref: 37-38

AACSB:  Analytic Skills

 

88) Right-brained individuals tend to challenge tradition, custom, and routine.

Answer:  TRUE

Diff: 2             Page Ref: 37-38

AACSB:  Analytic Skills

 

89) Left-brained individuals realize that there may be more than one right answer.

Answer:  FALSE

Diff: 2             Page Ref: 37-38

AACSB:  Analytic Skills

 

90) Successful entrepreneurs push technological and economic boundaries forward and sometimes make unconventional decisions.

Answer:  TRUE

Diff: 2             Page Ref: 39

AACSB:  Use of IT

 

91) The rapidly accelerating rate of change has created an environment in which staying in a leadership position requires constant creativity, innovation, and entrepreneurship.

Answer:  TRUE

Diff: 2             Page Ref: 39-41

AACSB:  Analytic Skills

 

92) Viewing play as frivolous is a mental block that stifles creativity.

Answer:  TRUE

Diff: 2             Page Ref: 40-41

AACSB:  Analytic Skills

93) Constantly being practical is a mental block that can stifle creativity.

Answer:  TRUE

Diff: 2             Page Ref: 40

AACSB:  Analytic Skills

 

94) Businesses typically foster an environment that encourages creativity.

Answer:  FALSE

Diff: 3             Page Ref: 43

AACSB:  Reflective Thinking

 

95) Ambiguity tends to destroy creativity.

Answer:  FALSE

Diff: 3             Page Ref: 41

AACSB:  Analytic Skills

 

 

96) Failure is an important part of the creative process, as it provides a chance to learn how to succeed.

Answer:  TRUE

Diff: 2             Page Ref: 41-42

AACSB:  Analytic Skills

 

97) Employees tend to riseor fallto the level of expectations entrepreneurs have of them.

Answer:  TRUE

Diff: 2             Page Ref: 42

AACSB:  Communication

 

98) Research shows that not everyone can be creative.

Answer:  FALSE

Diff: 2             Page Ref: 42

AACSB:  Analytic Skills

 

99) Hiring a diverse workforce makes it more difficult to achieve creativity in the workplace.

Answer:  FALSE

Diff: 2             Page Ref: 43

AACSB:  Multicultural & Diversity

 

100) Entrepreneurs can encourage creative thinking in their employees by setting examples of creative behavior and rewarding creative behavior when exhibited by their employees.

Answer:  TRUE

Diff: 2             Page Ref: 43-45

AACSB:  Reflective Thinking

 

101) Enhancing individual creativity may be cultivated through such activities as modeling, encouragement, recognition, allowing failure, listening, talking to children, and taking time off.

Answer:  TRUE

Diff: 2             Page Ref: 46-48

AACSB:  Reflective Thinking

102) The creative process involves seven distinct steps including preparation, investigation, transformation, incubation, illumination, verification, and implementation.

Answer:  TRUE

Diff: 3             Page Ref: 48-52

AACSB:  Analytic Skills

 

103) Convergent thinking is the ability to see the differences among data and events.

Answer:  FALSE

Diff: 1             Page Ref: 50

AACSB:  Analytic Skills

 

 

104) Divergent thinking is the ability to see similarities and connections among various data and events.

Answer:  FALSE

Diff: 1             Page Ref: 50

AACSB:  Reflective Thinking

 

105) It may appear in the incubation stage of the creative process that the entrepreneur is loafing, as he is taking time to reflect on the information collected.

Answer:  TRUE

Diff: 2             Page Ref: 50-51

AACSB:  Reflective Thinking

 

106) The illumination stage of the creative process is often called the Eureka factor and is characterized by a spontaneous breakthrough.

Answer:  TRUE

Diff: 2             Page Ref: 51

AACSB:  Reflective Thinking

 

107) The typical entrepreneurial philosophy is Ready, aim, aim, aim

Answer:  FALSE

Diff: 2             Page Ref: 52

AACSB:  Analytic Skills

 

108) When brainstorming, individuals should be encouraged to use idea hitchhiking, or building new ideas on those already suggested.

Answer:  TRUE

Diff: 2             Page Ref: 54

AACSB:  Analytic Skills

 

109) During a brainstorming session, company rank and department affiliation are irrelevant.

Answer:  TRUE

Diff: 2             Page Ref: 54

AACSB:  Analytic Skills

 

110) Mind-mapping is a graphical technique that encourages thinking on both sides of the brain, visually displays the various relationships among ideas, and improves the ability to view a problem from many sides.

Answer:  TRUE

Diff: 2             Page Ref: 55

AACSB:  Analytic Skills

111) TRIZ is an acronym for a systematic approach to help solve technical problems based on the study of hundreds of the most innovative patents.

Answer:  TRUE

Diff: 2             Page Ref: 56-58

AACSB:  Analytic Skills

 

 

112) Rapid prototyping, transforming an idea into an actual model, typically does not lead to improvements in design.

Answer:  FALSE

Diff: 2             Page Ref: 58

AACSB:  Analytic Skills

 

113) A patent protects the creator of original works of authorship such as for software.

Answer:  FALSE

Diff: 2             Page Ref: 58-61

AACSB:  Analytic Skills

 

114) A patent gives the inventor the exclusive right to make, use, or sell an invention for 50 years.

Answer:  FALSE

Diff: 2             Page Ref: 58

AACSB:  Analytic Skills

 

115) Trademarks are distinctive words, symbols, designs, names, or logos used for company identification.

Answer:  TRUE

Diff: 1             Page Ref: 62

AACSB:  Analytic Skills

 

116) The major problem with relying on the legal system to enforce ownership rights is the cost of infringement lawsuits, which can quickly exceed the budget of most small businesses.

Answer:  TRUE

Diff: 2             Page Ref: 62-63

AACSB:  Analytic Skills

 

117) The U.S. Copyright Office does not require registering the creative work because registering it does not give creators greater protection over their work.

Answer:  FALSE

Diff: 2             Page Ref: 64

AACSB:  Analytic Skills

 

118) What is the entrepreneurial secret for creating value in the marketplace?

Answer:  Creativity and innovation should be used in combination to allow the entrepreneur to solve real-world problems and to exploit opportunities and the profits that come with them.  Creativity should always be directed and complement the business plan.  Creativity is the ability to develop new ideas and to discover new ways of looking at problems and to exploit opportunities that people face every day. Innovation is the ability to apply creative solutions to those problems and opportunities to enhance and enrich peoples lives.

Diff: 3             Page Ref: 33-35

AACSB:  Reflective Thinking

 

119) Explain the differences between the left and right sides of the brain.

Answer:  The left brain is guided by linear, vertical thinking, whereas the right brain relies on kaleidoscopic, lateral thinking.  The left brain handles language, logic, and symbols, whereas the right brain takes care of the bodys emotional, intuitive, and spatial functions.  The left brain processes information in a step-by-step fashion, whereas the right brain processes it intuitivelyall at once, relying heavily on images.  Left-brained vertical thinking is narrowly focused and systematic, whereas right-brained lateral thinking is somewhat unconventional, unsystematic, and unstructured.

Diff: 2             Page Ref: 36-39

AACSB:  Analytic Skills

 

120) List five of the barriers that limit creativity.

Answer:  The five barriers are a subset of the following list:

     Search for the one right answer

     Focus on being logical

     Blindly follow the rules

     Constantly be practical

     View play as frivolous

     Become overly specialized

     Avoid ambiguity

     Fear looking foolish

     Fear mistakes and failure

     Believe that Im not creative

Diff: 3             Page Ref: 39-42

AACSB:  Analytic Skills

 

121) List five ways entrepreneurs can stimulate their own creativity and encourage it among workers.

Answer:  The five ways entrepreneurs can stimulate their own creative and encourage it is a subset of the following list:

     Expect creativity

     Embrace diversity

     Expect and tolerate failure

     Encourage curiosity

     View problems as challenges

     Provide creativity training

     Provide support

     Reward creativity

     Model creative behavior

Diff: 3             Page Ref: 43-46

AACSB:  Analytic Skills

 

122) List five ways individuals can enhance their own creativity.

Answer:  The five ways individual creativity can be enhanced should come from the following list:

     Allow yourself to be creative.

     Give your mind fresh input every day.

     Recognize the creative power of mistakes.

     Keep a journal handy to record your thoughts and ideas.

     Listen to other people.

     Read books on stimulating creativity or take a class on creativity.

     Talk to a child.

     Keep a toy box in your office.

     Take some time off.

Diff: 3             Page Ref: 46-48

AACSB:  Reflective Thinking

 

123) List and briefly explain the seven steps in the creative process and discuss the step that you consider to be the most critical.

Answer:

  1. PreparationGet your mind ready for creative thinking through formal education, OJT, work experience, etc. This helps to build creativity and innovation.
  2. InvestigationDevelop a solid understanding of the problem or decision.
  3. TransformationView the similarities and differences in the information collected.
  4. IncubationTake time to reflect on the information collected.
  5. IlluminationA spontaneous breakthrough occurs, causing the light bulb to go on. All of the previous stages come together to produce the Eureka factor.
  6. VerificationValidate the idea as accurate and useful. May include conducting experiments, running simulations, test marketing a product or service, etc.to verify that the new idea will work and is practical.
  7. ImplementationTransform the idea into reality.

Diff: 3             Page Ref: 48-52

AACSB:  Reflective Thinking

 

124) Why is it important for an entrepreneur to use techniques like mind-mapping, which use both sides of the brain?

Answer:  Mind-mapping, a graphical technique that encourages thinking on both sides of the brain, visually displays the various relationships among ideas, and improves the ability to view a problem from many sides.  Since entrepreneurs themselves tend to be left- or right-brained thinkers, techniques like mind-mapping encourage them to look at problems and opportunities in a different way.  Mind-mapping is also a useful tool that includes: sketching a picture symbolizing the problem, connecting each idea to the central picture or words with a line, and allowing your mind to rest for a few minutes before beginning to integrate the ideas.

Diff: 2             Page Ref: 55

AACSB:  Reflective Thinking

 

125) List the steps an entrepreneur should follow in order to enhance his/her chances of receiving a patent.

Answer:  An entrepreneur should follow these six steps to enhance his/her success in receiving a patent:

  1. Establish the inventions novelty.
  2. Document the device.
  3. Search existing patents.
  4. Study search results.
  5. Submit the patent application.
  6. Prosecute the patent application.

Diff: 2             Page Ref: 58-60

AACSB:  Analytic Skills

 

126) Explain brainstorming and list at least five of the guidelines for a successful brainstorming session.

Answer:  Brainstorming is a process in which a small group of people interact with very little structure with the goal of producing a large quantity of novel and imaginative ideas.  The goal is to create an open, uninhibited atmosphere that allows member of the group to freewheel ideas.  Five guidelines should come from the following list:

 

     Keep the group smallfive to eight members.

     Have a well-defined problem for the group to address, but do not reveal it ahead of time.

     Limit the session to 40-60 minutes.

     Appoint someone to be the recorder and write every idea on a flip chart.

     Use a seating pattern that encourages communication and interaction.

     Encourage all ideas from the team, even wild and extreme ones.

     Establish a goal of quantity of ideas rather than quality.

     Forbid evaluation or criticism of any idea during the session.

     Encourage participants to use idea hitchhiking or to piggyback/build new ideas on those already suggested.

Diff: 2             Page Ref: 69

AACSB:  Analytic Skills


Mini Case 2-1: Protecting Your Intellectual Property

 

Devo, Anthony, and Spencer were childhood friends who had always talked about starting a business together after college graduation. Devo had the financial background and startup capital to contribute and Spencer and Anthony had the technical knowledge they believed would give them the competitive advantage needed to become an industry leader.

 

During their early college years, Anthony and Spencer developed a new and innovative way to manufacture computer components. When they shared their idea with Devo, he was able to draw up a detailed business plan to present to potential investors when the three were ready to launch their venture. They had been very careful not to disclose anything about their innovative idea to other colleagues or any of their friends and were anxious to get started.

 

After selecting the company name Millennium Computers the three friends come to you for advice on intellectual property rights.

 

127) To protect their innovative process for manufacturing computer components from unauthorized use, which type of intellectual property should the threesome apply for? Identify the office to which they should apply and outline the steps involved in the process.

Answer:  They should apply for a patent through the Patents and Trademark Office (PTO). To receive a patent, the inventor must follow these steps:

  1. Establish the inventions novelty
  2. Document the device or process
  3. Search existing patents
  4. Study search results
  5. Submit the patent application
  6. Prosecute the patent application

Diff: 3             Page Ref: 58-63

AACSB:  Reflective Thinking

 

128) Should they consider protecting or registering their company name? Which intellectual property would cover this concern? Could they use the name without registering it?

Answer:  Entrepreneurs do not have to register trademarks to establish their rights to use those marks; however, registering a mark with the (PTO) does give entrepreneurs greater power in protecting their marks.

Diff: 2             Page Ref: 63-63

AACSB:  Analytic Skills

 

 

129) Since the primary weapon to protect intellectual property is the legal system, what would you advise the friends if they have to protect intellectual property sometime in the future by threatening a lawsuit?

Answer:  The major problem with relying on the legal system to enforce ownership rights is the cost of infringement lawsuits, which can quickly exceed the budget of most small firms. Before bringing a lawsuit, the entrepreneurs must consider the following issues:

     Can the opponent afford to pay them if they win?

     Will they expect to get enough from the suit to cover the costs of hiring an attorney and preparing a case?

     Can they afford the loss of time, money, and privacy from the ensuing lawsuit?

Diff: 2             Page Ref: 62-63

AACSB:  Analytic Skills

Essentials of Entrepreneurship & Small Business Management, 6e (Scarborough)

Chapter 4   Conducting a Feasibility Analysis and Crafting a Winning Business Plan

 

1) The process of determining whether an entrepreneurs idea is a viable foundation for creating a successful business is known as a:

  1. A) business plan.
  2. B) strategic analysis.
  3. C) industry analysis.
  4. D) feasibility analysis.

Answer:  D

Diff: 1             Page Ref: 101

AACSB:  Analytic Skills

 

2) Porters five forces model assess industry attractiveness by surveying these five factors:

  1. A) potential entrants, suppliers, buyers, substitutes, and rivalry among existing firms.
  2. B) potential entrants, suppliers, buyers, similar products, and rivalry among existing firms.
  3. C) potential entrants, suppliers, raw materials, substitutes, and rivalry among existing firms.
  4. D) potential entrants, competitors, buyers, substitutes, and rivalry among existing firms.

Answer:  A

Diff: 3             Page Ref: 102-104

AACSB:  Analytic Skills

 

3) The strongest of the five forces in most industries is:

  1. A) rivalry among companies competing in the industry.
  2. B) bargaining power of buyers.
  3. C) threat os new entrants to the industry.
  4. D) threat of substitute products or services.

Answer:  A

Diff: 2             Page Ref: 102

AACSB:  Analytic Skills

 

4) Switching costs, the number of buyers, and if  the items represent a relatively small portion of the cost of finished products are key consideration regarding the:

  1. A) threat of new entrants to the industry.
  2. B) rivalry among companies competing in the industry.
  3. C) bargaining power of suppliers.
  4. D) bargaining power of buyers.

Answer:  D

Diff: 2             Page Ref: 103

AACSB:  Analytic Skills

 

 

5) Low capital requirements, cost advantages that are not related to company size, and the lack of brand loyalty are considerations regarding the:

  1. A) threat of new entrants to the industry.
  2. B) threat of substitute products.
  3. C) bargaining power of buyers.
  4. D) rivalry among companies competing in the industry.

Answer:  A

Diff: 2             Page Ref: 103

AACSB:  Analytic Skills

6) Products or services that may be sought as alternative solutionssuch as purchasing tax planning software rather than paying a CPA to assist with preparing your taxesare referred to as:

  1. A) buyers products.
  2. B) rivalry products.
  3. C) substitute products.
  4. D) competitive alternatives.

Answer:  C

Diff: 3             Page Ref: 104

AACSB:  Analytic Skills

 

7) The force from the five forces model that considers economies of scale, initial capital requirements, cost advantages relevant to company size, and lack of brand loyalty is the:

  1. A) barganinig power of suppliers.
  2. B) threat of new entrants.
  3. C) threat of substitute products or services.
  4. D) rivalry among companies competing.

Answer:  B

Diff: 3             Page Ref: 104

AACSB:  Analytic Skills

 

8) The primary purpose of the five forces matrix is to:

  1. A) assign values to each of the five elements.
  2. B) provide a graphic.
  3. C) list the five forces in rank order.
  4. D) assess the five forces as compared to a standard value.

Answer:  A

Diff: 2             Page Ref: 104, Table 4.1

AACSB:  Analytic Skills

 

 

9) The process in which entrepreneurs test their business models on a small scale before committing serious resources to launch a business that might not work is known as:

  1. A) business modeling.
  2. B) business prototyping.
  3. C) business planning.
  4. D) product or service feasibility analysis.

Answer:  B

Diff: 2             Page Ref: 105

AACSB:  Analytic Skills

 

10) An analysis that determines the degree to which a product or service idea appeals to potential customers and identifies the resources necessary to produce the product or provide the service is refereed to as:

  1. A) product or service feasibility analysis.
  2. B) business prototyping.
  3. C) business plan analysis.
  4. D) financial feasibility analysis.

Answer:  A

Diff: 1             Page Ref: 105

AACSB:  Analytic Skills

11) Conducting ________ research involves collecting data firsthand and analyzing it while ________ research involves gathering data that has already been complied and is available.

  1. A) primary; secondary
  2. B) secondary; primary
  3. C) primary; industry
  4. D) product; secondary

Answer:  A

Diff: 1             Page Ref: 106

AACSB:  Analytic Skills

 

12) One form of primary research is:

  1. A) to review published articles.
  2. B) Internet research.
  3. C) library research.
  4. D) a focus group.

Answer:  D

Diff: 1             Page Ref: 107

AACSB:  Analytic Skills

 

13) The financial feasibility analysis takes these aspects into consideration:

  1. A) capital requirements, human resources, and return on investment.
  2. B) capital requirements, estimated earnings, and return on investment.
  3. C) capital requirements, estimated earnings, and return on sales.
  4. D) capital requirements, estimated earnings, and return on owners equity.

Answer:  B

Diff: 2             Page Ref: 109

AACSB:  Analytic Skills

14) The final aspect of the financial feasibility analysis combines the estimated earings and the capital requirements to determine the:

  1. A) estimated earnings.
  2. B) total capital requirements.
  3. C) net profit.
  4. D) rate of return on the capital invested.

Answer:  D

Diff: 2             Page Ref: 109

AACSB:  Analytic Skills

 

15) The primary purpose of a business plan is to:

  1. A) attract lenders and investors.
  2. B) enable an entrepreneur to take her company public.
  3. C) guide a company by charting its future course and devising a strategy for success.
  4. D) meet SEC and other legal requirements designed to protect lenders and investors.

Answer:  C

Diff: 2             Page Ref: 109-110

AACSB:  Analytic Skills

16) A business plan is a written summary of:

  1. A) an entrepreneurs proposed business venture.
  2. B) a business ventures operational, financial, and marketing details.
  3. C) the skills and abilities of a business ventures managers.
  4. D) All of the above

Answer:  D

Diff: 1             Page Ref: 110

AACSB:  Communication

 

17) A business plan:

  1. A) is a valuable managerial tool that helps an entrepreneur focus on developing a course for the business in the future.
  2. B) is a valuable tool for convincing lenders or investors to put money into the business.
  3. C) forces an entrepreneur to think a business idea through, considering both its positive and its negative aspects.
  4. D) All of the above

Answer:  D

Diff: 1             Page Ref: 110

AACSB:  Communication

 

18) A solid business plan:

  1. A) forces potential entrepreneurs to look at their business idea in the harsh light of reality.
  2. B) requires a potential entrepreneur to assess the ventures chances of success more objectively.
  3. C) helps prove to outsiders, such as potential lenders and investors, that a business idea can be successful.
  4. D) All of the above

Answer:  D

Diff: 1        &nbs

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