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END-OF-CHAPTER GUIDE
*Review Questions and Answers
*Critical Discussion Questions and Answers
*Global Action
*Closing Case
REVIEW QUESTIONS AND ANSWERS
1. Based on your definition of entrepreneurship, can a firm be truly entrepreneurial if it does
not expand globally?
The definition of entrepreneurship does not specify that an entrepreneur must expand
2. How prevalent and important are small entrepreneurial firms in economies around the
globe?
Worldwide, they account for over 95% of the number of firms, create approximately 50%
3. ON CULTURE: Which societal norms tend to encourage entrepreneurship, and which
tend to discourage it?
Because entrepreneurs necessarily take more risk, individualistic and low
4. How important are an entrepreneur’s resources and capabilities in determining his or her
success? Why?
The resource-based view suggests that firm-specific (and in many cases
5. Name and describe three major characteristics associated with an entrepreneurial firm’s
growth.
6. What qualities typically compensate for an entrepreneurial firm’s lack of tangible
resources?
7. Briefly summarize three modes an SME can use to enter foreign markets.
© 2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 79
Chapter 9: Growing and Internationalizing the Entrepreneurial Firm
8. Name and describe at least three ways that SMEs can internationalize without leaving
their home countries.
There are at least five strategies for entrepreneurial SMEs to internationalize without
9. Compare Maps 3.1 and 3.4. Based on that information, which country would be most
attractive to you as a place to expand your business? The global economy is subject to
constant change. In your opinion, what potential changes in one of the countries shown
might make that country less attractive as a place to expand?
At the present time, when one considers both income levels and ease of doing business,
10. ON CULTURE: In the nature-versus-nurture debate, which do you think carries more
power: traits (nature) or institutions (nurture)? Does your response apply equally to all
countries around the world? Why or why not?
Some may mention those who have been successful with no obvious nurture but others
11. We know that it is possible for an SME to be born global by immediately engaging in
FDI, but do you think it is wise? Why?
The important thing is not so much the answer as the extent to which the student
demonstrates thought in providing the answer. Some may feel that the complexities
12. Describe two or three examples of institutions that could be made friendlier and more
supportive of entrepreneurs.
Institutionally, there is an urgent need to remove some of our antifailure biases. Specific
In comparing PengAtlas Maps 3.1 and 3.4, note that one of the countries that is at the bottom of
the list regarding ease of doing business is also among the poorest. Note that the two groups are
not identical. However, to what extent can ease of doing business affect the wealth of a country?
Ease of doing business may not assure the creation of wealth in a country because many
© 2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 80
Chapter 9: Growing and Internationalizing the Entrepreneurial Firm
14. ON CULTURE: Devise your own example of an entrepreneurial action that demonstrates
your understanding of the difference between being bold and being reckless. Why may
the view of what is bold or reckless vary among countries and cultures?
As was pointed out in Chapter Three, cultures differ in terms of the level of risk taking
CRITICAL DISCUSSION QUESTIONS AND ANSWERS
1. Given that most entrepreneurial start-ups fail, why do entrepreneurs start so many new
firms? Why are (most) governments interested in promoting more start-ups?
The answer to both parts of the question lie in the fact that while most start-ups fail,
2. Some suggest that foreign markets are graveyards where entrepreneurial firms overextend
themselves. Others argue that foreign markets represent the future for SMEs. If you were
the owner of a small, reasonably profitable domestic firm, would you consider expanding
overseas? Why or why not?
This is a question in which the answer is not as important as the thought process and the
3. ON ETHICS: Your former high school buddy invites you to join an entrepreneurial
start-up that specializes in making counterfeit (generic) drugs to combat HIV/AIDS,
which would potentially help millions of patients worldwide who cannot afford the
high-priced patented drugs. He has lined up financing and offers you the job of CEO and
10% of the equity of the firm. You are currently unemployed. How would you respond?
GLOBAL ACTION
1. You work for a small foreign language services company. You have been asked to present
a market assessment of the largest translation companies for competitor evaluation. Your
report must include the following attributes for the global industry: company, size,
locations, and ownership status. What do your findings suggest about possible worldwide
opportunities?
Exercise 1 Answers
One resource which can be used is “Common Sense Advisory”. This website can be
© 2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 81
Chapter 9: Growing and Internationalizing the Entrepreneurial Firm
2. An entrepreneurship research firm has asked you to identify the most entrepreneurial
countries in the world. Based on your knowledge of the entrepreneurship field, find a
database that may assist in your research. Once the information has been secured,
compare the top five countries across the multiple years included in the database. Are
there any countries that are included in the database in all years? What is the general
percentage of new startups in the overall economy for each of the top countries? Is the
size of each country similar? Explain these dynamics in your report.
Exercise 2 Answers
One resource which can be used is the “Entrepreneurship Database”. This website can be
found by entering the search term “IFC entrepreneurship” at the globalEDGE™ Resource
Desk search box located at http://globaledge.msu.edu/resourceDesk/. Once at the IFC
CLOSING CASE DISCUSSION GUIDE AND ANSWERS
EMERGING MARKETS: The Rise of Alibaba
1. What are the characteristics of Alibaba’s growth, innovation, and financing strategies that
are typical of successful entrepreneurial firms? What is unusual about Alibaba?
This is a question in which the answer is not as important as the thought process and the
2. Why has Alibaba become globally famous by focusing on its domestic market?
3. Sometimes the IPO of widely successful firms flops—Facebook’s disappointing IPO
comes to mind. Does Alibaba deserve to be one of the world’s most valuable companies?
This is a question in which the answer is not as important as the thought process and the
© 2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 82
Chapter 9: Growing and Internationalizing the Entrepreneurial Firm
© 2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 83
