Entrepreneurship: The Practice and Mindset 1st Edition by Heidi M. Neck Test bank
Learning Objective: 1.4. Compare and contrast the different forms of entrepreneurship in practice today.
Cognitive Domain: Application
Answer Location: Buying a Franchise
Difficulty Level: Hard
AACSB Standard: Analytical thinking
8. Discuss “social entrepreneurship” and describe the debate between entrepreneurship and nonprofit.
Ans: There has been some debate as to how to define social entrepreneurship. Some argue that all types of entrepreneurship are social, while others define it as purely an activity of the nonprofit sector. These blurred lines imply that entrepreneurs are forced to choose between making a social or an economic impact. We contend that social entrepreneurs can do both. It is possible to address a social issue and make a profit—keeping a company economically stable ensures its capability consistently meets the needs of its customers without relying on fundraising or other methods to keep it afloat. We therefore define social entrepreneurship as the process of sourcing innovative solutions for particular problems.
Learning Objective: 1.4. Compare and contrast the different forms of entrepreneurship in practice today.
Cognitive Domain: Analysis
Answer Location: Social Entrepreneurship
Difficulty Level: Medium
AACSB Standard: Social responsibility
9. Analyze the benefit corporation (B Corp.) and describe its purpose and role for entrepreneurs.
Ans: A sub-category of social entrepreneurship is the Benefit Corporation, or B-Corp. This is a form of organization certified by the nonprofit B Lab which ensures that strict standards of social and environmental performance, accountability, and transparency are met. The voluntary certification is designed for for-profit companies aiming to achieve social goals alongside business ones. To be certified as a B-Corp, the organization is rated on how its employees are treated, its impact on the environment, and how it benefits the community in which it operates. B-Corp certification ensures that the for-profit company fulfils its social mission as well as protecting it from lawsuits from stakeholders that may claim that the company is spending more time or resources on social issues rather than maximizing profit.
Learning Objective: 1.4. Compare and contrast the different forms of entrepreneurship in practice today.
Cognitive Domain: Analysis
Answer Location: Social Entrepreneurship
Difficulty Level: Hard
AACSB Standard: Social responsibility
10. Describe family enterprise and apply the concept to your business concept.
Ans: This essay will have different answers depending on the student’s business concept. Here is the information on family enterprise: A family enterprise is a business which is owned and managed by multiple family members. What makes family enterprising part of the portfolio of entrepreneurship types is that each generation has an opportunity to bring the organization forward in new, innovative ways. An entrepreneurial agenda to move the family business forward is essential to business survival, as demonstrated by the fact that the survival rate of family businesses transitioning from the first to the second generation is less than 30%. However, another 50% of family businesses don’t survive when they move from the second to third generation. This may be because the family owners become stuck in the old ways of doing things and are unwilling to change their business structure as a result.
Many leading organizations which are family businesses are generally considered to be more stable, not only because of their past history and experience, but because of their ability to take a long-term view, which inspires commitment and loyalty from their employees. Yet, a long-term view that becomes stagnant is detrimental and can lead the company into a downward spiral.
Family enterprises are the dominant form of business organization worldwide. It is estimated that 80% to 90% of US businesses are family-owned or controlled by a family and 65% of the US workforce is employed by a family business (see Figure 1.3). Widely known businesses such as Wal-Mart in the US, supermarket chain Carrefour in France, and auto company Fiat in Italy are all long-standing family businesses that continue to go from strength to strength. To continue their cycle of growth and continuity, family members must pass on their entrepreneurial mindsets as well as their business ethos. It is this mindset that ensures the survival of the family business for many years to come.
Learning Objective: 1.4. Compare and contrast the different forms of entrepreneurship in practice today.
Cognitive Domain: Analysis
Answer Location: Family Enterprise
Difficulty Level: Hard
AACSB Standard: Interpersonal relations and teamwork