Course Name: Entrepreneurship and Developments

Assignment Questions and Answers

1.What is entrepreneurship? how can one differentiate an entrepreneurial firm from called
any other type of firm?

Ans: Entrepreneurship is the process of developing, organizing, and running a new business to
generate profit while taking on financial risk. A person who undertakes the risk of starting a new
business venture is called an entrepreneur. An entrepreneur creates a firm to realize their idea,
known as entrepreneurship, which aggregates capital and labor in order to produce goods or
services for profit. Entrepreneurship is the process by which individuals pursue opportunities
without regard to resources they currently control. There are three types of firms – salary-substitute
firms, lifestyle firms, and entrepreneurial firms. Salary substitute firms are small firms that afford
their owner or owners a level of income similar to what they would earn in a conventional job
(i.e. convenience store, dry cleaner, restaurant). Lifestyle firms provide their owner or owners the
opportunity to pursue a particular lifestyle and earn a living while doing so (i.e., ski instructor, tour
guide, home-based eBay business). Entrepreneurial firms, which are the focus of this book, bring
new products and services to market by seizing opportunities. The person who just launched a
restaurant is bringing a new product or service to market, and is assuming the risk associated with
doing that. The person who just took a job as the general manager of a restaurant isn’t bringing
something new to market. While the person is assuming employment risk, he/she isn’t assuming
the risk of owning a business.

2.What are the three primary reason people become entrepreneurs? which reason is given
most commonly?

Ans: 1. They want to be their own boss: The best major degree to become an entrepreneur inside
a company with no money. This doesn’t mean, however, that entrepreneur is difficult to work with
or that they have trouble accepting authority. Instead, many entrepreneurs want to be their own
boss because either they have had a longtime ambition to own their own firm or because they have
become frustrated working in tradition a job.

2. Pursue their own ideas: The second reason people start their own firms is to pursue their own
ideas. Some people are naturally alert, and when they recognize ideas for new products or services;
they have a desire to see those ideas realized. Corporate entrepreneurs 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. When this happens, employees are left with
good ideas that go unfulfilled. Because of their passion and commitment; some employees choose
to leave the firm employing them to start their own business as the means to develop their own
ideas. This chain of events can take place in noncorporate settings, too. For example, some people,
through a hobby, own activity, or just everyday life; recognize 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 convert the idea into a part-time or full-time firm.

3. Pursue financial rewards: Finally, people start their own firms to pursue financial rewards.
This motivation, however, is typically secondary to the first two and often fails to live up to its
hype. The average entrepreneur does not make more money than someone with a similar amount
of responsibility in a traditional job. The financial lure of entrepreneurship is its upside potential.
People such as Jeff Bezos of Amazon, Mark Zuckerberg of Facebook, and Larry Page, and Google
made hundreds of millions of dollars building their firms. Money is also a unifier. Making a profit
and increasing the value of a company is a solidifying goal that people can rally around.

3.What are the four primary traits and characteristics of successful entrepreneurs?
Ans:The four primary primary traits and characteristics of successful entrepreneurs are:

Risk taker: Risk-taking in entrepreneurship is the process of identifying, evaluating, mitigating,

and trying out potential opportunities and strategies that may help you build or grow your business
but could also lead to personal or professional loss. A risk-taker is someone who will risk
everything in the hope of achieving their goals. I think the risktaker is the first character who has
an successful entrepreneur. So it is necessary that the entrepreneur has an adventurous and risk-
taking personality.
passion for the business: Passion may be one of the most important characteristics of
entrepreneurs. Most entrepreneurs will tell you that it's this, rather than the promise of money or
fame, that drives them on.Entrepreneurs can be passionate about many things. They may be
passionate about the products they create or the services they provide. They might be passionate
about the problems they feel their businesses solve or about the desire to improve the lives of their
customers. Passion helps you set a solid foundation for your business and establish core values.
Passion gives you the motivation and confidence that you need to deliver your mission and purpose
for what you do and why you do it. Passion helps you network with the right people who share
similar perspectives.

Leader: One of the other important qualities of a successful entrepreneur is leadership. All good
entrepreneur are good leaders. They have the ability to motivate and lead their employees to
success. They also have the tenacity, knowledge, and skill to pull their businesses from a tight
corner like good leaders.

Ability to learn from mistakes: Failing is just about inevitable, but the most successful
entrepreneurs actually benefit from their failures. It is their ability to learn from their mistakes and
move forwards that significantly contributes to their professional and financial accomplishments.

Ambition and confidence: Ambition and confidence are two of the great drivers of career
success; confidence will often trump competence and ambition will often get you ahead where
ability doesn't. Conversely, even the most capable will languish if they lack one or both.
Confidence is perhaps the more obvious of the two traits

4.What are the five common myths of entrepreneurship?

Ans: The five common myths of entrepreneurship:

Myth 1: Entrepreneurs are born, not made. success in any field of life is not due to inborn traits.
Rather it is achieved through experiences, knowledge and passion. The same goes for
business. Entrepreneurs are not marked from birth; they are people who made a series of good
decisions in their businesses and lives. Passion and persistence may be in your genes, but it takes
work to develop the skills that entrepreneurs have.
Myth 2: Entrepreneurs are gamblers: The second myth about entrepreneurs is that they are
gamblers and take big risks. The truth is, entrepreneurs are usually moderate risk-takers, as are
most people. The idea that entrepreneurs are gamblers originates from two sources.

Myth 3: Entrepreneurs are motivated primarily by money: Money is not the primary motivation
for entrepreneurs. Entrepreneurs are primarily driven by the passion to make their mark. The whole
idea of bringing fresh business plans into existence deeply fascinates an entrepreneur. It is the
chase and the experience that matters most to successful entrepreneurs.

Myth 4: Entrepreneurs should be young and energetic. The idea that most entrepreneurs are young
is a myth. Once we think about it, it makes sense that people with experience, business skills, and
insight would be more likely to start a business than a twenty-something with fewer skills and
minimal experience.

Myth 5: Entrepreneurs love the spotlight: some entrepreneurs are flamboyant; however, the vast
majority of them do not attract public attention. Many entrepreneurs, because they are working on
proprietary products or services, avoid public notice.

5.What are the four distinctive parts of the entrepreneurial process and what is the
relationship among the parts?

Ans: The entrepreneurial process consists of four distinctive parts of the entrepreneurial process

Step 1: Decision to become an entrepreneur: Discuss three main reasons people decide to become
entrepreneurs The three primary reasons that people decide to become entrepreneurs and start their
own firms are as follows: to be their own boss, to pursue their own ideas and to realize financial
rewards.

Step 2: Developing successful business ideas: creating new ideas, new product development
through research and development, or improving existing services. Innovation can be the central
focus of a business and this can help them to grow and become a market leader if they execute
their ideas properly.

Step 3: Moving from an idea to an entrepreneurial firm: a business idea is the reason for setting
up a firm. It drives everything about the company, from what products and services are offered to
how these products are marketed. This idea doesn't need to be unique, but it must have the potential
to capture part of its target market.

Step 4: Managing and growing the entrepreneurial firm : Entrepreneurial management is the
practice of giving the innovation inherent in entrepreneurship a more solid management structure.
Many new entrepreneurs have ideas for businesses they want to start, or products they want to
create, but don't know how to manage a small business effectively.

the parts are interrelated and aren’t entirely sequential. For example, the decision to become an
entrepreneur and the development of successful business ideas are sometimes flip-flopped.
Sometimes the opportunity to develop an idea prompts a person to become an entrepreneur.

6.How would you characterize the risk taking propensity of the most entrepreneurs?

Ans: The personality of entrepreneurs can have an important influence on entrepreneurial startup
intentions and behaviors. Risk-taking propensity can be defined as a person’s orientation to take
risks. Risk-taking propensity, which is an element of the personality of entrepreneurs, is considered
to be critical for the decision to enter the entrepreneurship career. Despite the widely researched
relationship between one’s risk-taking propensity for entrepreneurial intentions and new firm
startups, a research gap exists because findings were not consistent and did not take into account
the cultural element of power distance. Multinominal logistic regression analysis was used to test
the hypothesis. Based on the findings, which are in support of the moderated hypothesis,
recommendations for research and practice are proposed. The key contribution of the study is the
explanation of the role of risk-taking propensity in entrepreneurship and the notion that the
relationship between risk-taking propensity and entrepreneurship tends to be moderated depending
on power distance.