Instructor Resource
Neck, Entrepreneurship
SAGE Publishing, 2018
Chapter 11: Learning From Failure
Test Bank
Multiple Choice
1. A change in direction in response to a small failure is called a ________
a. failure
b. pivot
c. termination
d. retrenchment
2. According to the text, what is the major advantage of business failure?
a. Once the business is closed, stress is reduced.
b. Avoiding failure makes the entrepreneur more vigilant.
c. Failure makes learning for future performance more intensive.
d. Those who aren’t suited for business get out early.
3. What behavior is at the top of the failure spectrum?
a. inattention
b. uncertainty
c. deviance
d. lack of ability
4. A pivot would be described as which of the following?
a. a difficult situation that changes the nature of your business
b. the nature of the obstacle that must be overcome to avoid failure
c. a change in direction in response to a small failure
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d. a change in direction in response to a catastrophic failure
5. What can be said of small failures in the entrepreneurial journey?
a. They usually lead to the overall failure of the company.
b. They usually have no ultimate effect on the business or the entrepreneur.
c. They are the low points but are manageable and help the entrepreneur learn.
d. They cannot be reversed.
6. Pedro just learned that a competitor to his fast-food restaurant is opening up. Pedro
responds by revising his menu to include more ethnic specialties and starts a customer
loyalty club that gives free drinks for every five visits. This is an example of which of the
following?
a. a marketing plan
b. a pivot
c. a small failure
d. an over reaction
7. Describe a successful entrepreneur’s typical reaction to failures, particularly small
ones.
a. They have very few failures because they do everything to avoid them.
b. They get out of the business as early as possible in order to cut their losses.
c. They see failures as opportunities to build on what they learned or capture new
opportunities.
d. They try to make failures happen to increase the overall creative tension.
Instructor Resource
Neck, Entrepreneurship
SAGE Publishing, 2018
8. If we develop the ability to “see” the learning opportunity in failure, which of the
following will occur?
a. We will be able to potentially mitigate the risks of big failure.
b. We will be able to expect failure.
c. We will be able to embrace the learning opportunity.
d. all of these
9. Failure as a result of the wrong procedures being set up in the organization so
communication breaks down among employees and things begin to fall through the
cracks is known as _______________.
a. uncertainty
b. process inadequacy
c. deviance
d. lack of ability
10. Justin opened a physical therapy business in a new location and hired two well-
known therapists. Once the business was up and running, Justin began work on
launching a restaurant in a neighboring town. With Justin at the restaurant most days,
the physical therapy business began to flounder. Which startup failure was represented
in this scenario?
a. uncertainty
b. process inadequacy
c. inattention
d. deviance
Instructor Resource
Neck, Entrepreneurship
SAGE Publishing, 2018
11. Nour operated a successful massage and health spa in a lucrative resort location.
She handled all reservations herself and if a customer called to make an appointment
when she wasn’t in the spa, she asked her employees to leave her a note. The notes
sometimes go missing, resulting in angry customers. Which startup failure would most
likely be represented in this scenario?
a. uncertainty
b. process inadequacy
c. inattention
d. deviance
12. Amy C. Edmondson, professor of leadership and management at Harvard Business
School, describes a spectrum for failure that runs from blameworthy to praiseworthy.
According to Edmondson, a praiseworthy reason for failure is ______.
a. uncertainty—taking unreasonable actions due to lack of clarity
c. deviance—defying ethical and legal boundaries
b. inattention—getting sidetracked from the core business
d. exploratory experimentation—conducting market tests to get early feedback
13. ______ is caused by crossing an ethical boundary, leading to mismanagement of
the venture.
a. Inattention
b. Deviance
c. Lack of ability
d. Uncertainty
14. Rory and Katie manufactured a smartphone-related product marketed for personal
safety. Unsure about the best market segment to target, they developed a product for
Instructor Resource
Neck, Entrepreneurship
SAGE Publishing, 2018
older adults and the general public. They also had a version of the product for children.
Which of the following might be a cause for failure?
a. inattention
b. deviance
c. lack of ability
d. uncertainty
15. Peter discovered difficulties in his business, a home-decorating company that sold
blinds, window wear, and fabric-based solutions. Peter won many awards for his
designs and was very well liked by his talented employees. They all worked hard and
the business began to grow quickly. As orders began coming in more quickly, the
company began to misplace orders that resulted in lost business. Which of the following
would be the most likely cause of the failure?
a. lack of ability
b. process inadequacy
c. uncertainty
d. inattention
16. Founding CEO Alison led a team of talented programmers. The company quickly
grew. Alison eventually stepped down as CEO because while she had strong technical
skills, she realized she lacked the vision and skillset a CEO needed to lead a large
corporation. Which of the following would be the likely reason Alison stepped down?
a. lack of ability
b. process inadequacy
c. uncertainty
d. inattention
Instructor Resource
Neck, Entrepreneurship
SAGE Publishing, 2018
17. Ellen has been in business for less than 3 months. Because she wants to build the
client base, she concentrated primarily on marketing and neglected the operations.
Which of the following would be the likely cause of failure?
a. lack of ability
b. process inadequacy
c. uncertainty
d. inattention
18. People with a strong fear of failure tend to exhibit which of the following
characteristics?
a. anxiety
b. low self-esteem
c. a reluctance to try new things
d. all of these
19. Why is it important for entrepreneurs to manage the negative emotions associated
with failure?
a. so they can begin the process of learning from failure
b. so they can avoid all the consequences of failure
c. so they can understand the external reasons for their failure
d. so they can blame others for their failure
20. According to the text, we don’t always hear about the reasons for business failures
because ______.
a. expressing the emotions of failure are difficult so people do not talk about the failure
b. people may be unaware of their role in the failure
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c. people blame external reasons for their failure
d. no one is interested in hearing about failures
21. According to the text, studies have shown that individuals who go out of their way to
avoid failure were ______.
a. raised in uncertain environments
b. raised to believe failure is unacceptable
c. raised to view failure as a learning opportunity
d. raised to believe failure is acceptable
22. Sasha developed a new technology for cordless charging of cellphones and other
devices, but she misled her investors about the cost of producing the new chargers and
the number of units she could supply. Which of the following would be the likely cause
of failure?
a. lack of ability
b. deviance
c. uncertainty
d. inattention
23. According to the text, which of the following is a good coping mechanism to deal
with fear of failure?
a. reframe specific goals so they are more achievable
b. separate your personal feelings from facts
c. allow yourself to feel your failure
d. all of these
Instructor Resource
Neck, Entrepreneurship
SAGE Publishing, 2018
24. Essential to the idea of intelligent failure is that this sort of failure
_______________.
a. is made only by smart people
b. provides valuable new knowledge
c. is intentional
d. has already been tried by the competition
25. After Pharrell Williams’ album failed, what mistake did he make?
a. he shouldered all the blame himself
b. he refused to try again
c. he blamed everyone but himself
d. he made the same mistakes again in his next album
26. The quality that enables people to work hard and sustain interest in their long-term
goals is _________.
a. fear of failure
b. grit
c. leadership
d. entrepreneurial mindset
Instructor Resource
Neck, Entrepreneurship
SAGE Publishing, 2018
27. According to Carol Dweck, people with _____________ tend to believe that
intelligence and talent is something we’re born with, and they avoid failure at all costs.
a. a growth mindset
b. a fixed mindset
c. grit
d. an entrepreneurial mindset
28. Once you establish the extent of your fear of failure, which of the following would be
a good step to cope with it?
a. reframe goals so that they are more achievable
b. keep your goals exactly the same
c. reframe goals so they are harder to achieve
d. stop being goal-oriented
29. Once you establish the extent of your fear of failure, which of the following would be
a good step to cope with it?
a. focus your attention on perfection
b. focus your attention on learning instead of achieving
c. focus your attention on others’ perceptions of you
d. focus your attention on avoiding failure
30. Once you establish the extent of your fear of failure, which of the following would be
a good step to cope with it?
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Neck, Entrepreneurship
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a. deliberately allow yourself to feel the fear
b. try to suppress your fear
c. try to distract yourself so you don’t feel your fear
d. pretend you are fearless
31. To help cope with the emotions associated with fear, which of the following would
help shift negative feelings and trigger a calm response?
a. deep breathing
b. avoiding high stress situations
c. lowering your expectations of success
d. not recognizing the fear
32. According to The Global Entrepreneurship Monitor report, which area of the world
has the lowest fear of failure?
a. Africa
b. Oceania
c. Asia
d. Europe
33. According to The Global Entrepreneurship Monitor report, the fear of failure in the
United States is higher than which region?
a. Latin America
b. Oceania
c. Asia
Instructor Resource
Neck, Entrepreneurship
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d. Europe
34. In studying failure around the world, The Global Entrepreneurship Monitor report
recognized three types of economies. Which one of the following represents an
economy focused on unskilled labor and natural resources?
a. efficiency-driven
b. factor-driven
c. people-driven
d. innovation-driven
35. In studying failure around the world, The Global Entrepreneurship Monitor report
recognized three types of economies. Which one of the following represents an
economy focused on innovative products and services?
a. efficiency-driven
b. factor-driven
c. people-driven
d. innovation-driven
36. In studying failure around the world, The Global Entrepreneurship Monitor report
recognized three types of economies. Which one of the following represents an
economy that is helped by more efficient processes, higher wages, and better product
quality?
a. efficiency-driven
b. factor-driven
c. people-driven
Instructor Resource
Neck, Entrepreneurship
SAGE Publishing, 2018
d. innovation-driven
37. What economic environment is associated with the highest entrepreneurial self-
perceptions (feeling they could start a business)?
a. efficiency-driven
b. factor-driven
c. people-driven
d. innovation-driven
38. What economic environment is associated with the lowest entrepreneurial self-
perceptions (feeling they could start a business)?
a. efficiency-driven
b. factor-driven
c. people-driven
d. innovation-driven
39. The United States in an example of a(n) ______.
a. factor-driven economy
b. efficiency-driven economy
c. innovation-driven economy
d. manufacturing-driven economy
Instructor Resource
Neck, Entrepreneurship
SAGE Publishing, 2018
40. What is the reason that people in innovation-driven economies may be less likely to
start a business?
a. lack of confidence
b. cultural differences
c. the different types of businesses that exist in this type of economy
d. all of these
41. In the context of experimentation, what is another way to think about the word
failure?
a. intentional iteration
b. bad failures
c. controlled research
d. unnecessary mistakes
42. A way of describing failures that provide valuable new knowledge that can help a
startup innovate and stride ahead of its competition is called ______.
a. constructive failures
b. intentional failures
c. intelligent failures
d. planned failures
Instructor Resource
Neck, Entrepreneurship
SAGE Publishing, 2018
43. The process of prototyping, testing, analyzing, and refinement is called ______.
a. unintentional iteration
b. intentional iteration
c. intelligent failure
d. constructive failure
44. According to Carol Dweck, people with _____________ develop their abilities
through dedication, effort, and hard work.
a. a growth mindset
b. a fixed mindset
c. grit
d. an entrepreneurial mindset
45. Which of the following is NOT an attribute of grit?
a. impatience
b. resilience
c. excellence
d. courage
46. In the context of grit, the strength to recover from failure and overcome obstacles in
order to persevere toward the achievement of long-term goals is called __________.
a. excellence
b. resilience
c. conscientiousness
d. courage
Instructor Resource
Neck, Entrepreneurship
SAGE Publishing, 2018
47. In the context of grit, the commitment to long-term goals through purposeful
deliberate practice is called ___________.
a. resilience
b. excellence
c. conscientiousness
d. perseverance
48. In the context of grit, committing to activities that enhance skills, as well as
prioritizing improvement over perfection is called __________.
a. courage
b. excellence
c. conscientiousness
d. perseverance
49. What is described as a blame-free environment?
a. an environment where entrepreneurs can never be blamed
b. an environment where everyone in the business is comfortable admitting mistakes
and learning from them
c. an environment where mistakes are not acknowledge or discussed
d. an environment where blame is always directed at the entrepreneur rather than the
employee