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Indian Institute of Technology Kharagpur

Entrepreneurship Essentials
Assignment- Week 1
TYPE OF QUESTION: MCQ/MSQ
Number of questions: 10 Total mark: 10 X 1 = 10
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QUESTION 1:

Entrepreneurs are some of the most envied persons all over the world. They earn name, fame, and money.
But still, why don’t most people attempt to create their own ventures? Which of the following is the most
inappropriate?

a) Many entrepreneurs make avoidable mistakes leading to menacing statistics showing too many
failures. Such data scare aspiring entrepreneurs.
b) To be an entrepreneur one must love to take risks which many don’t like.
c) Execution of attractive opportunities for entrepreneurship involves many risks though the returns
may be very attractive. But the risks outweigh the aspirations.
d) There is immense parental demotivation to consider entrepreneurship as a career option.

Answer: b
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Statistics on the failure of entrepreneurship are highly menacing though most of the failures occur due to
mistakes that are avoidable with some prior knowledge. Entrepreneurship courses and books can play
some role in alleviating some of the mistakes and misconceptions. As such, any big opportunity is
associated with difficult problems that only a few people can handle. A balanced team with conviction is
the answer. Given our long oppressive colonial past, most parents desire secure jobs for posterity and are
averse to them taking unspecified risks.
The statement that entrepreneurs love to take risks is the most inappropriate. Entrepreneurs identify
opportunities in adversities. They calculate the risks and returns and take up the opportunities if the risks
appear to be manageable. They are not afraid to take calculated risks provided the returns are attractive
and the risks are manageable.
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QUESTION 2

A country prospers if its top leader is a visionary and smart executor. The same is true for corporate houses.
Look at the TATA conglomerate now, each of its businesses has been performing exceedingly well under
the leadership of Chandrasekharan. Replace the leader with an incapable but adequately qualified person,
and the chances are the performance of the country or the business will go down. Thus, finding the right
leader is the hardest thing in business. Corporate entrepreneurship is almost like a laboratory where top
talents are provided with all the required resources and are empowered to take full responsibility to generate
ideas and turn them into products and businesses. Not only the ones with creativity and leadership quality,
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contrary to ones capable of rote learning, will emerge victorious but also they will imbibe in them the
quality of great corporate leaders. Thus, corporate entrepreneurship is a great opportunity for companies to
find the right leaders to lead them in the future. The same is true for employees who discover their own
capabilities and hone the skills necessary to become decision-makers and to take up bigger responsibilities.
Both the companies and the employees potentially reap more benefits. In the event, the employees pursuing
corporate entrepreneurship develop valuable products and the companies providing the resources will have
the option to buy the technology giving market-driven values to the employees or promoting joint ventures.
The concerned employees will have the option either to sell the technologies or adopt them in new
entrepreneurial ventures. The moot question is which of the employees will succeed? Intuitively, persons
with creativity (also referred to as lateral thinking and thinking out of the box), leadership qualities, and
knowledge of entrepreneurship usually succeed.

Given the above background, which of the following options is NOT right about Corporate
Entrepreneurship?

a) Corporate entrepreneurship is the process by which teams within an established company

conceive, foster, launch and manage a new business that is distinct from the parent company but
leverages the parent’s assets, market position, capabilities or other resources.
b) Under Corporate Entrepreneurship environment, employees within the organization are
encouraged to behave as entrepreneurs, be creative, proactive, embrace calculated risk to achieve
higher goals in pursuing disruptive innovation within the larger mission of the organization using
the resources, capabilities and security of the company to draw upon.
c) Under Corporate Entrepreneurship environment, a person within a large corporation takes direct
responsibility for turning a Strategic Business Unit (SBU) into a profitable unit through assertive
risk-taking, proactive leadership actions, and disruptive innovation.
d) Intrapreneurship has evolved as a corporate management style integrating risk-taking, innovative
approaches, motivational techniques – more traditionally the province of ENTREPRENEURSHIP
- in the work culture.

Correct answer: c
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Detailed solution:
A strategic business unit or SBU is a relatively smaller unit of a large enterprise. These units enjoy certain
autonomy and estimate their own profit & loss though these statements are just a part of the larger
enterprise. Corporate Entrepreneurship is not related to a strategic business unit. It is about taking up an
initiative to convert one’s own idea into a successful product or service using company resources almost
like an entrepreneur. The strategic business units are headed by managers as profit center heads and is not
similar to corporate entrepreneurship.
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QUESTION 3:

Which of the following will NOT be achieved by a company by promoting corporate entrepreneurship?
Choose the most appropriate answer:
a) Reduce attrition rate by providing challenging assignments to creative employees.
b) Companies can manage their venture better and increase profitability in the short run.
c) Companies can derive the best from creative talents and can quickly develop new products.
d) Companies can add to their competitive advantage using innovations by such employees.

Answer: b
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Detailed solution:
Corporate entrepreneurship provides satisfaction to creative employees who do not think of quitting the
company. Such employees use their talent to build new products or services thereby giving competitive
advantage to the company. However, all the benefits accrue in the long run. The company invest a lot of
money to these employees who can potentially create value in the long run.
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QUESTION 4:

Choose the correct statement from the following.

a) Vision statement states the short-term goal of an enterprise.
b) Mission statement states the purpose of an enterprise and its short to medium-term objectives.
c) Mission statement states where the enterprise wants to see itself in the long run.
d) Companies use strategies to achieve short-term visions for eventually achieving the long-term
mission.

Correct Answer: b
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Detailed solution
Vision is where a company wants to reach in the long run. A mission statement is a written statement
showing how the company has planned to attain the vision and the purpose of its existence. A strategy is a
particular action that is intended to improve some of the business processes or performance for achieving
the mission. The differences between mission and strategies are slightly blurred, but they are different.
Objectives are goals to be achieved against a certain strategic action. The values are the principles and
ethics that the company follows and would not compromise on.]
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QUESTION 5:

Which of the following is not part of the core values of a company?

a) There will be absolute transparency in our deals.
b) We shall maintain the best quality in our products, services, and all other transactions.
c) We are gender agnostic in selecting manpower and determining employee benefits.
d) We shall not compromise on our margin to maintain the value of our company and investors’ trust.

Correct Answer: d
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Detailed solution
The core values are related to ethics, governance, quality of product or service, honesty, compliance of
regulations, national & social responsibilities, and environmental protection. Profitability is primarily
related to the owners of an enterprise and is not part of the core values. [It is, however, noteworthy that
companies that maintain great values sustain in the long run and remain profitable.]

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QUESTION 6:

What does effective communication mean?

a) Fluency in speaking without blubbering and using less jargons.
b) Explaining as elaborately as possible for effective conveying the message so that the listener
understands what is being conveyed.
c) Communicate in a manner that helps the receivers to clearly understand what is intended to be
communicated.
d) Explaining repeatedly to drive home the point clearly and effectively so that the listener
understands what is being conveyed.

Correct Answer: c
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Detailed solution
Effective communication is to convey maximum message with minimum words and minimum time without
ambiguity and without requiring repeating. If the message is not clear and requires repetition, it is bad
communication. Some people traditionally try to explain in a lengthy roundabout way and the target
audience gets more confused than becoming clear as to what is being tried to convey. In most such cases,
the audience either take no action or take wrong action. If the communication is clear, the target people will
take the right action and it will serve the purpose well.
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QUESTION 7:

Which of the following is the MOST compelling motivation for one to become an entrepreneur?

a) Starting a venture to solve a problem through innovation of new solution that is

superior to those already available in the market.
b) For creating personal, neighbor's, and societal wealth.
c) Economic value creation for the country through the creation of jobs, payment of
direct and indirect taxes, and promoting social value creation.
d) Be one’s own boss, take charge of one’s own life and create your own future.
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Correct Answer: a
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Detailed Solution: While all options are correct to some extent, but a new venture should be created
to solve a pain/problem with a better solution than what exists. If one truly fulfills this objective,
most other objectives will naturally be fulfilled. In my lecture, I have pointed out that one should
not start a venture for personal wealth creation alone. This is because new businesses mostly go
through a lot of stress and founders with a vision remain less perturbed with early failures. Whereas
those who create new ventures only for earning money and they can’t withstand the inextricable
early failure and lose all motivation to fight any longer. They would soon give up.
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QUESTION 8:
Which of the following is not part of the entrepreneurial qualities based on whatever have been
discussed in the lecture?
a. Tolerant to ambiguity
b. Disciplined and self-starter
c. Profit orientation.
d. Remain surrounded by great people
Answer: c

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Detailed solution
Entrepreneurs must be tolerant to ambiguity, disciplined and self-starter. The old thinking that
business is to make profits is akin to believing that breathing is the purpose of life. Yes, you have
to breathe to live, just as businesses must make profits. But the purpose of business is usually
determined by a passionate entrepreneur chasing a dream to change the world such as solving an
acute pain. Entrepreneurs try to remain surrounded by great people since it is a fact that one is the
average of the people with whom s/he keeps company.
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QUESTION 9:

Which of the following is NOT recognized as a misconception or myth about entrepreneurship?

a. Entrepreneurs are born into business families.

b. Starting an entrepreneurial venture requires a lot of capital
c. One need not be an extrovert to succeed in entrepreneurship
d. Knowing and applying cutting-edge technologies in a product ensures success.

Correct Answer: c
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Detailed Solution: It has been exemplified with data that many successful entrepreneurs are
introvert. Therefore, this is not a misconception.

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QUESTION 10:
Which of the following statements is most inappropriate?
a. Entrepreneurship is risky and is not for the weak-hearted.
b. Entrepreneurship is for the children of business families who are likely to be
successful.
c. There are reasons to believe that anybody can become an entrepreneur.
d. Entrepreneurship intensity of a country explains its per-capita GDP.
Correct Answer: b

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Detailed Solution: Historical data from across the world clearly show that entrepreneurship
intensity is positively correlated with the per-capita GDP of a nation.

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Why repeat customers are always regarded as a testimony of business success?