Test Bank for Patterns of Entrepreneurship

Management 5th Edition Kaplan Warren

1119355281 9781119355281

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Chapter 5: Using the Crowd

True/False

1. In crowdsourcing, problems and needs are broadcast to a large and diverse

audience in the form of an “open call” for solutions.
Ans: True Page: 108

2. Crowdpleasing has emerged to broadly describe a fundamental set of tools that

can be used at various stages of creating and implementing new ideas along an
entrepreneur’s journey.
Ans: False Page: 108

3. In crowdfunding, a need for cash is publicized broadly and contributors, in addition

to gaining personal satisfaction, may receive rewards, and share in the posting
company.
Ans: True Page: 108

4. Members of the crowd usually identify themselves to remove stereotyping.

Ans: False Page: 109
5. A lack of experience and exposure to knowledge in another field are key ingredients
required for breakthrough thinking.
Ans: True Page: 109

6. Factors that reportedly influence whether or not crowds are willing to contribute
their knowledge relate to the extent to which they perceive the crowdsourcing
initiative to be fair and how much they are attached to the product or brand of the
firm.
Ans: True Page: 111

7. Bricoleurs do not seek attribution for their work—the sheer excellence

of their output is sufficient.
Ans: True Page: 112

8. Studies comparing the quality of crowd-sourced ideas and those from within an
organization i have found that on average ideas generated by external users of a
product or service score lower in novelty and customer benefit.
Ans: False Page: 114

9. Crowd wisdom is a term first coined by a French social sciences researcher, who
observed machinists creating complex and personal ornaments that they placed
close to their workplace.
Ans: False Page: 111

10. In the case of patents, trademarks, and copyrights, the “solver” can have found
their contribution from another source, as they are free to transfer the rights to the
challenger.
Ans: False Page: 116

Short Answer / Fill in the Blank

11. The practice of funding a project or venture by raising monetary contributions

from a large number of people, typically via the Internet is called _______________.
Ans: Crowdfunding Page: 115

12. The process of obtaining needed services, ideas, or content by soliciting

contributions from a large group of people, and especially from an online
community, rather than from traditional employees or suppliers is called -
_____________.
Ans: Crowdsourcing Page: 108

13. ____________ is a mechanism that leverages the community’s judgment to organize,

filter and rank content such as newspaper articles, music movies and even ideas.
Ans: Crowd Voting Page: 113
14. ________________is a term that describes being motivated by the satisfaction of
exercising one’s skills to their utmost—a kind of “celebration of excellence.”
Ans: Bricolage Page: 111

15. ________________ is a principle attempts to harness many people’s knowledge in

order to solve problems or predict future outcomes.
Ans: Crowd wisdom Page: 113

16. __________________is the most common form as it avoids the regulatory and
organizational problems arising from equity-based funding , used for a wide range
of purposes such as film-making, music production and software development.
Ans: Reward-based crowdfunding Page: 122

17. _______________ benefits everyone in the community; crowdsourcing benefits just

the challengers.
Ans: Open collaboration Page: 114

18. Leveraging existing internal knowledge via licensing and other mechanisms,
called ___________________, can be highly effective.
Ans: Inside-out approach Page: 110

19. ________________________________ is a type of participative online activity in which an

individual, an institution, a non-profit organization, or company proposes to a group
of individuals of varying knowledge, heterogeneity, and number, via a flexible open
call, the voluntary undertaking of a task.
Ans: Crowdsourcing Page: 108

20. The traditional model for new product or service development (NPD) uses
internal resources entirely in what is termed the _______________________.
Ans: closed model of innovation Page 110

Multiple Choice

21. Successfully accessing the wisdom of a crowd needs four conditions. Which one
is not a condition?
a. Common experiences and opinions
b. Individuals must be independent and not influenced by others in the
crowd
c. Must be an effective mechanism to aggregate the inputs
d. Individuals must be decentralized and immersed in different locations
cultures, experiences
Ans: A Page: 113

22. Some of the main factors driving crowd contributions include all but which of
the following?
 a. An opportunity to build a reputation,
b. The chance of working on “a cool” project,
c. Opportunity to meet new people
d. Addiction to the platform community
Ans: C. Page: 111

23. Benefits of crowdfunding include all but which one of the following?
a. Promotion to a large audience/customers
b. Receiving market feedback/beta testing
c. Retention of operating control
d. Low valuation when selling shares
Ans: D. Page: 124

24. If it is necessary to protect your ideas before posting them on a crowdfunding

site, it is recommended to use the all of the following methods except for which one
below?
a. Patent applications
b. Copyright and trademark protection
c. Creative Barcodes
d. Journal entries
Ans: D. Page: 125

25. Which of the following is a benefit of crowdfunding?

a. Inability to raise further funds from existing donors/investors or
institutional investors.
b. Low valuation when selling shares
c. Promotion to a large audience/customers
d. Heavy commitment to communication to a large crowd
Ans. C. Page: 124

26. ___________________is the hybrid model, designed to offer a one-stop platform to

take the young company through the different stages of cash needs, has risks
associated with starting on a route that incorporate equity participation from the
crowd.
a. Follow-on funding
b. Equity based
c. Credit or loan based
d. Donation based
Ans: A. Page: 124

27. ______________________________ enables broad groups of investors to fund startup

companies and small businesses in return for ownership participation in the form of
shares.
a. Hybrid funding
 b. Equity based crowdfunding
c. Credit or loan based
d. Donation-based crowdfunding
Ans. B. Page: 123

28. ________________________is the most common form as it avoids the regulatory and
organizational problems arising from equity-based funding (see below). It has been
used for a wide range of purposes such as filmmaking, music production and software
development.
a. Donation based
b. Reward based
c. Hybrid funding
d. Equity based
Ans. B. Page: 122

29. ____________________________ can breach various securities laws, because soliciting

investments from the general public can be deemed illegal, unless the opportunity
has been filed with an appropriate securities regulatory authority.
a. Hybrid based funding
b. Equity investment
c. Credit or Loan based
d. Reward based
Ans: B. Page: 123

30. In ____________________________ , only the highest-value solutions are selected either

by the crowd using voting schemes or by the solution-seeking firm itself.
a. collaboration- based crowdsourcing
b. tournament-based crowdsourcing
c. open source development
d. ideation
Ans. B Page: 111

31. ____________________________is a task can be parceled into smaller, less demanding

sub-tasks that crowd members with limited capabilities can perform, improving the
likelihood of obtaining higher-value and/or lower-cost solutions.
a. Collaboration-based crowdsourcing
b. Tournament-based crowdsourcing
c. Open source development
d. Ideation
Ans: A Page: 114

32. Which of the following is not a key ingredient required for breakthrough
thinking?
a. Smartest people who attended similar universities with similar courses
b. Employees who are strongly influenced by the workplace culture and
expectations.
 c. Lack of experience or exposure to knowledge in another field
d. Students who are currently enrolled in business courses
Ans: C. Page: 109

33. In crowdsourcing, problems and needs are broadcast to a large and diverse
audience in the form of a(n) _______________ for solutions.
a. open call for solutions
b. personal invitation
c. professional referral
d. personal reference
Ans: A. Page: 108

34. Members of the public submit solutions, which are then usually, but not always,
owned by the __________________
a. originating entity.
b. public
c. crowdfunders
d. crowd members
Ans: A. Page: 108

35. Personal reasons or contributing knowledge to crowdsourcing initiatives include

all but which one of the following?
a. Philosophy of Life
b. Altruism
c. Bricolage
d. Self-esteem
Ans: D Page: 111

36. In the model __________, the entrepreneurial firm sets a fundraising goal and keeps
the entire amount raised regardless of whether or not they meet their funding target.
a. Keep-it-All (KIA)
b. All-or-Nothing' (AON)
c. Win Some/Lose Some (WS/LS)
d. Fund Sum/Gain Sum (FS/GS)
Ans: A Page: 122

37. The model _____________, the firm sets a fundraising goal and keeps nothing unless
the goal is achieved.
a. Win Some/Lose Some (WS/LS
b. All-or-Nothing (AON)
c. Keep-it-All (KIA)
d. Fund Sum/Gain Sum (FS/GS)
Ans: B. Page: 122
38. In all cases, have about _______% of funding already verbally committed within
your own network prior to starting the campaign, then prime the campaign and
create momentum in the early days.
a. 5 %
b. 10%
c. 25%
d. 50%
Ans: C Page: 125

39. Crowdfunding was an idea used by _______ who received financial backing from
176 backers in 1783.
a. Columbus
b. Benjamin Franklin
c. Mozart
d. Gabriel Fahrenheit
Ans: C. Page: 120

40. The process of ___________________occurs at the earlier stages on your journey – the
identification and refining of the central idea of your venture.
a. maturation
b. collaboration
c. incubation
d. idea generation, or ideation
Ans: D Page: 116

41. __________________________circumvents the traditional corporate establishment to

offer financing to individuals or groups that might otherwise be denied credit or
opportunity
a. Altruism
b. Crowdfunding
c. Crowd voting
d. Bricolage
Ans: B Page: 115

42. _________________________ has a range of options for accessing external knowledge and
leveraging internal competencies.
a. Open model
b. Closed model
c. Creative Barcodes
d. World Intellectual Property Organization
Ans: A. Page: 110