978-1259912191 Chapter 2 Solutions Manual Part 2

Ch. 2: Individual Leadership and Entrepreneurial Start-Ups

Bonus Internet Exercise 2.3: Personality and the Entrepreneu

The authors in the text emphasized that individuals who are outgoing are considered to

be extroverted. Those individuals who have limited interpersonal interactions are said to

be introverted. Potential entrepreneurs that are extroverted will thrive in a business that

has extensive interpersonal interactions. By comparison, potential entrepreneurs that

are introverted will thrive in a business that has limited interpersonal interactions.

Conduct research on the internet to discover a business owner that is extroverted. Next,

conduct research to discover a business owner that is introverted.

Discussion Questions:

1. What two businesses did you research? Who are the owners?

2. Discuss the type of business or industry that each business owner performs

work.

3. Does an extroverted business owner work well in an industry that has extensive

interactions with people? Does an extroverted business owner work well in an

industry that has limited interactions with people? Discuss the outcome of your

research.

4. Do you believe that an individual’s personality type has an impact on the

individual’s business? Explain your belief.

Bonus Internet Exercise 2.3: Personality and the Entrepreneur

(LO 2-3) – Notes

Student responses will vary depending on the business selected. Some choices may

include Bill Gates, Mark Zuckenburg, Steve Jobs, Michael Dell.

Critical Thinking Exercises

Critical Thinking Exercise 2.1: The Elements of Entrepreneurial Orientation

(LO 2-2)

As you learned in the text, the three elements of entrepreneurial orientation include risk

tolerance, prior experience, and personality orientation of the individual. Entrepreneurs

must analyze these elements and make sound business decisions based on the

outcome of their assessments.

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Ch. 2: Individual Leadership and Entrepreneurial Start-Ups

Summarize your individual personal traits for each of the three elements. Be specific

and include an assessment of your break-even point, your bounded rationality, and

include the personality test that you focused on to analyze your individual personality.

1. Risk tolerance:

2. Prior experience:

3. Personality orientation:

4. Break-even point analysis:

5. Bounded rationality:

6. Personality test choice

Critical Thinking Exercise 2.1: The Elements of Entrepreneurial Orientation

(LO 2-2) – Notes

1. Risk Tolerance: Risk tolerance is the amount of risk an entrepreneur is willing to

NOTE: Answers will vary based on the student’s personal risk tolerance.

2. Prior Experience: Students define and discuss bounded rationality as the

NOTE: Answers will vary based on the student’s prior business experience.

3. Personality Orientation of the Individual: This is self-examination of one’s own

NOTE: Answers will vary based on the student’s prior business experience.

4. Brek-even Point Analysis: The time when a new business has reached a level

5. Bounded Rationality: Rational discussion-making that is constrained by the

NOTE: Answers will vary based on the student’s prior business experience.

6. Personality Test Choice: Examination of your own personality.

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Ch. 2: Individual Leadership and Entrepreneurial Start-Ups

Critical Thinking Exercise 2.2: The Two Categories of Triggers

(LO 2-3)

As we learned in this chapter, triggers can encourage the formation of new business

ventures. They are a result of positive and negative stimuli that encourage an individual

or group to initiate a new business.

Discussion Questions:

1. Provide specific examples of triggers that encourage the formation of new business

ventures.

2. List the two categories of triggers and provide specific examples of each.

3. Which trigger is considered the strongest motivator? Why? Be specific.

4. Discuss which motivator results in defense positioning and explain why.

Critical Thinking Exercise 2.2: The Two Categories of Triggers

(LO 2-3) – Notes

1. Provide specific examples of triggers that encourage the formation of new

small business ventures. Examples of triggers include having lost employment;

2. List the two categories of triggers and provide specific examples of each.

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Ch. 2: Individual Leadership and Entrepreneurial Start-Ups

3. Which triggers are considered the strongest motivations? Personal

4. Discuss which motivations result in defense positioning and explain why.

5. Critical Thinking Exercise 2.3: Business Assessment

(LO 2-5)

As you learned in the text, entrepreneurs are expected to experience increased success

if they enjoy their businesses. Consider your likes and dislikes as they relate to

business and entrepreneurship.

Business Assessment

Business Type Likes Dislikes

Discussion Questions:

1. Summarize the businesses that you listed in the assessment. Why did you

choose these businesses? Be specific.

2. Discuss the business type that you like. What do you like about these

businesses? Be specific.

3. Discuss the business type that you dislike. What do you dislike about these

businesses? Be specific.

4. Evaluate the businesses that you like. How likely are you to establish this type of

business?

Critical Thinking Exercise 2.3: Business Assessment

(LO 2-5) – Notes

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Ch. 2: Individual Leadership and Entrepreneurial Start-Ups

The answers will vary. The purpose of this exercise is for students to examine what they

like or dislike about a specific business type. Students will evaluate a potential business

and discuss whether or not they would open that business.

Bonus Cases

Bonus Case 2.1: The Current State of the Entrepreneur

(LO 2-1, 2-2, 2-3, 2-4, 2-5, 2-6)

Many individuals implement new businesses for a variety of reasons. There are many

details to consider on the quest to entrepreneurship. One of most critical issues that an

entrepreneur must consider is where they will obtain financing for their new business.

Existing Financial Resources

(assets)

Existing Financial

Obligations (debt)

New Business

Needs

Potential

Resources

The purpose of this analysis is to review your existing financial resources (assets),

evaluate your existing financial obligations (debts), list what you believe you might need

to start the new business, and list all of your supports that might help you achieve your

entrepreneurial goals.

For the purpose of this exercise, your assets are considered as your cash, savings

accounts, certificates of deposit, IRA’s, 401K’s, stocks, bonds, and the available equity

in your home.

Your debt is considered all of your obligations and monthly bills. In the existing financial

obligation section, list your monthly expenses, rent or mortgage, your monthly utility

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Ch. 2: Individual Leadership and Entrepreneurial Start-Ups

bills, installment loans, revolving debt (monthly credit card payments), child support,

alimony, and all other outstanding debt.

In the New Business need section, list all of the items that you believe you need for your

new business and estimate the accumulated cost.

In the Resource section, list all of the potential resources that you can think of that might

help you fund your new business.

Discussion Questions:

1. Add the assets column and list the results.

2. Add the total amount of debt that you pay each month and

list the results.

3. List all the material items you believe are required to initiate

your new business.

4. Next, list all the support resource that you can utilize for your

new business need.

5. Summarize the results of your analysis. Do your assets

exceed your debts? Discuss whether or not you have the funds required to initiate

your new business? If not, list your support resources and discuss how they will

assist you with your new business goals.

Bonus Case 2.2: Lifesaver Realtor and Entrepreneurial Leadership

(LO 2-3)

Laurie Wagner

Entrepreneurs assess and evaluate the characteristics of their personality to gain

specific information related to their likes and dislikes about potential business

opportunities. Frequently, the results of certain analysis indicate the industry or the type

of business that an individual can excel in as an entrepreneur.

Another significant characteristic for a potential entrepreneur to evaluate is their

leadership skills. You want to open a new business. However, have you ever been a

leader? What are the characteristics of a leader? Effective leadership skills enhance the

new business owner’s values; and they enhance an entrepreneur’s ability to be a

leader. Entrepreneurs develop leadership skills to assure they are positive role models

in the communities they serve.

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Ch. 2: Individual Leadership and Entrepreneurial Start-Ups

One example of an entrepreneur who has effective leadership skills is Laurie Wagner.

Ms. Wagner was a real estate agent in Virginia Beach, Virginia, licensed with Rose and

Womble Realty. In addition, she was considered a leader in her community. In an

interview, Ms. Wagner was asked what the most important leadership characteristics an

entrepreneur needs to develop. She replied “honesty first…even when nobody is

looking”, “perseverance”, “listening to others”, and “leading by example”.i

1. Describe the leadership traits that an entrepreneur needs in order to

achieve success in a new business ventures. List at least five personality

characteristics and explain why each is important to a new business owner.

2. Explain why entrepreneurs need to develop leadership skills. List at least

three reasons and explain why they are important to a new business owner.

3. Do you believe that all entrepreneurs are leaders? Do you believe that

entrepreneurs are born as leaders or do they acquire those skills

4. Discuss how potential entrepreneurs who lack leadership skills can gain

those skills to assure they become effective leaders. Explain your answer.

5. Compare your skills to the characteristics of a leader in your community.

What changes, if any, do you need to implement to assure you are an

effective and efficient leader?

Bonus Case 2-2: Lifesaver Realtor and Entrepreneurial Leadership

(LO 2-3) – Notes

1. Describe the leadership traits that an entrepreneur needs in order to

achieve success in a new business venture. List at least five

characteristics and explain why each is important to a new business

2. Explain why entrepreneurs need to develop leadership skills. List at least

five reasons and explain why they are important to a new business owner.

3. Do you believe that all entrepreneurs are leaders? Do you believe that

entrepreneurs are born as leaders or do they acquire those skills? Student’s

4. Discuss how potential entrepreneurs who lack leadership skills can gain

those skills so that they become effective leaders. Explain your answer.

5. Compare your skills to the characteristics and skills of a leader in your

community. What changes, if any, do you need to implement to assure you

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Ch. 2: Individual Leadership and Entrepreneurial Start-Ups

are an effective and efficient leader? Student responses will vary depending

6. Bonus Case 2.3: Paint a Pretty Picture: One Individual’s Approach to

Entrepreneurship

(LO 2-4)

The quest to entrepreneurship can be a long process for some individuals. Other

individuals seem to achieve success overnight. One important concept that

entrepreneurs need to consider is that they must enjoy their work.

For example, Barbara Lively Mastaglio is a business woman, an artist, a mother, and a

wife. (Personal Interview by Lisa Johnson, 2009). She owns a summer home on

Valentia Island in Ireland; and when she is not working abroad at her cottage on the

island she resides in Norfolk, Virginia. When asked what she attributes to her success

as an entrepreneur she asserted “I paint pretty pictures.” In addition, she credits her

success on “hard work”, “dedication”, and “my number one goal is to have a lot of fun.”

1. Explain why it is important for entrepreneurs to enjoy their work. Be specific.

2. How will you assure that you paint pretty pictures with your new business

venture?

3. Discuss your new business venture and why you anticipate that you will

thoroughly enjoy it.

Bonus Case 2.3: Paint a Pretty Picture: One Individual’s Approach to Entrepreneurship

(LO 2-4) – Notes

1. Explain why it is important for entrepreneurs to enjoy their work. Be

2. How will you assure that you paint pretty pictures with your new business

3. Discuss your new business venture and why you anticipate that you will

thoroughly enjoy it. Student responses will vary.

Endnotes

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i Wagner, Laurie. (2009). Laurie Wagner, Realtor. Rose and Womble Realty 2009. http://www.roseandwomble.com/Agent/Laurie%20Wagner/

Retrieved on October 14, 2009.