Which one of the following statement about being an entrepreneur is incorrect?

solutions for students

Chapter 1

1 In real life, entrepreneurs are those that...

a) Robbers that exploit their workers b) Generate business success c) Generate business success through hard and long hours of work d) Robbers that exploit their workers and generate business success

2 The definition of entrepreneurship holds the promise of....

a) Financial difficulties and hardship b) Limited expansion c) Growth, unlimited expansion and long-term financial gain d) Growth, expansion and long term financial gain

3 The terms entrepreneur and owner manager is used interchangeable and describes a person that...

a) Manages a small business b) That starts up a small business c) That starts up and manages a small business d) All above statements are incorrect

4 Entrepreneurship can be defined as...

a) The act of initiating, creating, building, expanding and sustaining a venture and gathering The necessary resources to exploit an opportunity in the marketplace for long-term wealth and capital gain b) The act of creating, building, expanding and sustaining a venture, building an entrepreneurial team and gathering the necessary resources to exploit an opportunity in the marketplace for long-term wealth and capital gain c) The act of initiating, creating, building, expanding and sustaining a venture, building an entrepreneurial team and gathering the necessary resources to exploit an opportunity in the marketplace for long-term wealth and capital gain

d) The act of initiating, creating, building, building an entrepreneurial team and gathering the necessary resources to exploit an opportunity in the marketplace for long-term wealth and capital gain

5 A basic survivalist is...

a) This person operates as an entrepreneur to survive for the first three months after setting up a business. b) This person operates as an entrepreneur to survive until he or she obtains an entrepreneurial opportunity c) This person operates as an entrepreneur to survive until he or she obtains a formal- sector job or entrepreneurial opportunity d) This person operates as a small business manager until he or she obtains a formal- sector job or entrepreneurial opportunity.

6 A Pre-entrepreneur is...

a) Involved in welfare-based entrepreneurship where profit maximization is less important than the collective b) Involved where profit maximization is less important than the collective c) Involved in welfare-based entrepreneurship d) Involved in welfare-based entrepreneurship for profit maximization only

7 A subsistence entrepreneur is...

a) Involved in dependent income-generating activities operating as a small-scale vendor b) Involved in independent income-generating activities operating as a small-scale vendor c) Involved in independent income-spending activities operating as a small-scale vendor d) Involved in independent income-generating activities operating as a large-scale vendor

8 A Micro entrepreneur is....

a) A formal-sector entrepreneur with zero to 10 employees b) A formal-sector entrepreneur with 1 to 10 employees c) A formal-sector entrepreneur with zero to 15 employees d) A formal-sector entrepreneur with 1 to 15 employees

Chapter 2

1 Entrepreneurship is about.... a) People and guess what they need, it motivates the entrepreneur to start, set up and grow a business. b) People and knowing what they need, it motivates the entrepreneur to start a business. c) People and knowing what they need, it motivates the entrepreneur to start, set up and grow a business. d) People and knowing what they need, it motivates the entrepreneur to take an unknown risk.

2 The most important reason amongst others why people start their own business is to.... a) Survive financially b) Serve their community c) Live their entrepreneurial destiny d) To sell their innovative products

3 Five personality dimensions of entrepreneurs are... a) Achievement; autonomy; external locus of control; risk taking propensity and entrepreneurial self-efficacy b) Achievement; autonomy; external locus of control; risk taking propensity and entrepreneurial self-efficacy c) Achievement; autonomy; external locus of control; high risk taking propensity and entrepreneurial self-efficacy d) Achievement; autonomy; internal locus of control; risk taking propensity and entrepreneurial self-efficacy

4 A need to achieve can emerge in various ways... a) High energy levels to chase goals; confidence that success will be achieved soon; and non-measurement of success b) High energy levels to chase goals; confidence that success will be achieved soon; and measurement of success c) Low energy levels to chase goals; confidence that success will be achieved; and measurement of success d) High energy levels to chase goals; confidence that success will be achieved; and

measurement of success.

5 Autonomy refers to... a) The need to make decisions, having to abide by someone’s policies, rules and regulations b) The need to make decisions on an ad hoc basis and without having to abide by someone’s policies, rules and regulations c) The need to make decisions, without having to abide by someone’s policies, rules and regulations d) The need to make ad hoc decisions, without having to abide by someone’s policies, rules and regulations

6 Internal locus of control refers to... a) A belief that one can control one’s own environment b) A belief that someone else controls one’s environment c) A belief that one and someone lese control one’s environment d) A belief that no one controls one’s environment

7 Risk taking is referred to as... a) The willingness to pursue an opportunity knowing that there might be a unreasonable risk involve b) The willingness to pursue an opportunity knowing that there might be a reasonably risk involve c) The willingness to pursue an unrealistic opportunity knowing that there might be a reasonably risk involve d) The willingness to pursue an opportunity knowing that there might be a reasonably risk involve.

8 Self-efficacy is ... a) The self believe a person has that they are able to start a specific activity. Entrepreneurs will pursue a matter if the resources are at hand or not. They handle rejection and pursue new opportunities b) The self believe a person has that they are able to complete a specific activity. Entrepreneurs will pursue a matter if the resources are at hand or not. They handle rejection and pursue new opportunities c) The self believe a person has that they are able to start and complete a specific

Chapter 3

1. Which ONE of the following is not a creativity barrier? a) Negative beliefs and habits b) Environment not willing to risk c) Full financial support d) Making assumptions

2. The reality of the myth that fear forces breakthrough is: a) High pressure situations may lead to creativity b) Competition causes a lot of ideas c) Creativity is positively associated with joy d) Rewarding creativity may lead to unhealthy competition

3. The first step in the entrepreneurial creativity process is: a) Information gathering b) Ignoring all existing information c) Idea generation d) Preparation

4. Idea generation is one of the steps in the creativity process. What actions are performed during this step? a) Analysing the problem or situation b) Developing information about the problem or situation c) Generating possible solutions to identified problems d) Applying different decision-making and assessment techniques

5. Which of the following is a source that could be utilised to become an entrepreneur? a) State of the economy b) Accumulation of knowledge c) Libraries

6. What can a prospective entrepreneur use to gather information on needs and problems that exist in industry? a) Research reports and dissertations b) Availability of capital c) Quality toolbox

7. Which one is not a method to generate product-service ideas? a) Accumulation of Knowledge b) Marketability c) Delphi technique

8. Which advantages exist for the potential entrepreneur in using exhibits to gain information and products or markets? a) More relaxing environment to speed up the idea experiences b) Opportunities to assess the different franchising possibilities and compare them with other c) To negotiate loans from potential investors

9. The internet as a source of information can provide the entrepreneur with: a) Information on negative attitudes from people b) Information regarding new developments in products and services c) Information on difficult steps for entrepreneurs

10. Which of the following is NOT a method to generate product-service ideas? a) Observation b) Workshops c) Brainstorming

ANSWERS

1. c
2. c
3. d
4. c
5. c
6. a
7. b
8. b
9. b
10. b

5 ___________________ is evident when the entrepreneur tries to mislead the investor a) Knowledge and experience b) Lack of openness and honesty c) Lack of financial planning d) Commitment of the entrepreneur

6 Which ONE of the following is NOT a characteristic of a successful product or service? a) Niche market appeal b) Fulfilling a need or want c) Personal preference of entrepreneur d) Buyer will understand it

7 In testing the feasibility of products or services, one of the questions related to the product or service that should be asked, is: a) Will the venture make or buy what it wants to sell? b) Can suitable personnel be recruited? c) Does the entrepreneur know how to sell the product or service? d) Does the entrepreneur understand the market?

8 The test for marketability could be divided into the following four categories: a) Products, services, needs and wants b) Industries, organisations, entrepreneur and staff c) Budgeting, cost control, credit management and managing debtors d) Customers, competitors, suppliers and marketing of products and services

9 The mere fact that there are ______________ could be an indication that the market is large enough to absorb a new product a) Suppliers b) Customers c) Competitors d) Products and services

1. ________________ skill refers to: communication, listening, conflict management and networking a) Interpersonal b) Management c) Financial d) Business

ANSWERS

1. c
2. d
3. a
4. d
5. b
6. c
7. a
8. d
9. c
10. a

d) Expect more employee productivity

7 Information Technology cannot a) Provide international access to a single database b) Integrate data and workflow across multiple locations c) Substitute for a strong business plan d) Capture information from all sources in the business system

8 When purchasing hardware, first consider a) The brand name b) The cost c) What your business IT needs are d) The warranty offered

9 An important unknown element of cloud computing is: a) The upfront costs b) The hidden costs c) The difficulty of access d) The long-term information security

10 The extended system of your business includes a) Your family members b) Your suppliers and customers c) The entire community d) Only certain customers

ANSWERS:

1. d
2. c
3. a
4. c
5. d
6. b
7. c
8. c
9. d
10. b

Chapter 6

1 Which of the following factors does NOT form part of the analysis of the external environment? a) Technological b) Physical location and environment. c) International and national economies. d) Communications and infrastructure.

2 When developing a mission for a new venture, the entrepreneur should refrain from developing a mission, which does NOT apply? a) Focuses on making a profit b) Reflects sentiments c) Uses words that cannot be measured d) Provide a framework of objectives

3 Why is knowledge of the communication and infrastructure environment important? Which does NOT apply?

a) You have the ability to communicate your products and services to potential customers. b) Communication of the geographical area of the products and services c) To be able to buy the right technology d) To be able to withhold information to your suppliers

4 Strategic management consist of three phases; which does NOT apply?

a) The strategy implementation phase b) The strategy performance phase c) The strategy evaluation phase d) The strategy formulation phase

5 Which of the following other infrastructures will NOT have an effect on a business? a) Support facilities. b) Accommodation c) Building and planning d) Transport

6 For any form of business, the environment will contain a wide range of institutions, which can influence the operation, and development of their business. Which of the following institutions may NOT have an influence on the majority of entrepreneurial ventures?

a) Organised commerce b) Law enforcement agencies c) Trade unions d) Local school

1. Local government have requirements that you will have to adhere to and should take into consideration when planning your venture. Which requirement

Chapter 7

1 Why is it important to do market research? a) It will reflect the need in the present market, as well as potential markets for the relevant products and services b) It will reflect the eventual success of the venture. c) It will reflect the survival of the business.

2 In establishing the presence of competitors, the entrepreneur should ask the following questions. Which one does NOT apply? a) What is the growth pattern of the competitor’s products? b) What is the pricing policy of the competitors? c) What share of the market does the competitor have?

3 Which of the following is NOT a resource need? a) Operating resources b) Competitor resources c) Financial resources d) Technology resources

4 Which of the following aspects will NOT have an influence on the initial extent of the activities of new ventures? a) The current size of the market b) The availability of raw material, equipment, labour and managerial skills c) Where the venture will be located

5 The geographical location refers to the premises that will be needed to produce the products to render the service. Which of the following is NOT a location factor that the entrepreneur should consider in choosing a location for the business? a) Sources of raw materials b) The proximity of and access to the markets c) The size of the building site d) The availability of power and water at a reasonable price

6 Which of the following is NOT a form of company that is distinguished in South

Africa? a) Private company b) Shared company c) Public company

7 Which of the following is NOT a form of ownership that the entrepreneur should consider? a) Sole ownership b) Partnership c) State owned company d) Private company

8 Why is a non-profit company established? a) To achieve a unique service of high quality. b) To calculate the disadvantages connected with both location and site. c) To achieve a public benefit d) To achieve a history of profitability.

9 The following factors effects the choice of the form of ownership. Which one does NOT apply? a) The legal juristic personality of the venture b) The size of the proposed enterprise c) The extent to which the owner has direct control d) The possibilities of change of ownership

10 Which of the following is NOT a form of extraordinary partnership? a) The anonymous partnership b) The commanditaire partnership c) The closed-partner partnership d) The sleeping partnership

ANSWERS:

1. c
2. a
3. b
4. c
5. a
6. b
7. c
8. c
9. b
10. c

a) The initial screening of the franchise b) Researching the core of the business c) Researching the history of the franchisor d) Researching existing franchisees to establish their experience with the franchisor

7 Where the initial fee for obtaining a franchise is relatively high, the prospective franchisee needs to be careful. He should scrutinise the franchise carefully. Which one does NOT apply in the scrutinising process? a) The chances for the business success. b) The potential long term profitability of the business. c) The geographical location of the franchise. d) Whether the franchisor is really good at marketing and purchasing.

8 Which one of the following does NOT form part of the disclosure document provided by FASA to franchisees, regarding relevant information about the company and the franchise opportunity. a) Company’s track record. b) Initial investment required. c) Description of the franchise. d) Financial data of the franchisees

9 According to Potgieter (1997a:a16) the franchise agreement is a founding document that describes the agreement between the franchisor and the franchisees. Which of the following aspects does NOT form part of the franchise agreement? a) Terms and conditions for termination of the contract. b) Accounting system to be used. c) Description of your heir’s rights in the event of your death. d) Guidelines in the location of the franchise.

10 The operation and production manual is sometimes referred to as the franchisee’s Bible. Which of the following is NOT a topic covered in this document? a) An introduction to the franchise covering the general business and related industries that the franchise is operating in. b) Step-by-step guidelines to address the specific legal and statutory requirements. c) The duties of the franchisees. d) The accounting and administration system to be used.

ANSWERS:

1. b

2. c

3. c

4. a

5. c

6. a

7. d

8. d

9. c

10. c

Chapter 9

1 Ethics is: a) Doing what others will do in the same situation b) Finding the balance between what is good for the self and the other c) What will ensure the best value for money d) Not different for each person in the company e) The outcome of discipline

2 Business ethics is: a) The responsibility of the stakeholders b) The laws and policies in the organisation c) How the customers feel about the business d) Is a prerequisite for sustainable business e) Punishable by using criminal law

3 An ethical dilemma: a) Refers to the grey area between what is wrong and right b) Is the conflict between the employer and the employees c) Can be resolved through the disciplinary procedure d) Is the problem of the employee and not the employer e) Must be referred to external dispute resolution institutions.

4 In which one of the modes of managing ethics are mechanisms put into place to enforce policies and procedures? a) Immoral b) Reactive c) Submission d) Compliance mode e) Integrity

5 The preamble of the Code of Ethics is usually written by: a) Consultants b) Customer c) The entrepreneur or the CEO d) Employees e) Suppliers

6 Which one of the following is not specifically regarded as an ethical issue: a) Conflict of interests b) Giving and receiving of gifts

Which of the following statement about entrepreneurs is incorrect?

Which of the following statement is true about intrapreneurs?

What is not correct of entrepreneurs?

Which of the following statements are correct An entrepreneur is someone who?