Definitions

Question 1

Innovation

Answer 1

Specific type of change wherein new ideas may lead either to radical breakthroughs or incremental improvements in existing products, processes or growth.

Question 2

Entrepreneurship

Answer 2

Practice of organizing, managing, and assuming the risk of a business. An activity that seeks to create purposeful, focused change in an enterprise’s economic or social potential.

Question 3

Social entrepreneurship

Answer 3

An entrepreneur who focuses mainly on broader social missions designed to achieve large-scale results

Question 4

Locus of control

Answer 4

Extent to which individuals believe circumstances are either within their direct control (Internal locus of control) or beyond their control (External locus of control)

Question 5

Venture capital

Answer 5

Monetary resources provided by investor or private equity firms, specifically to early-stage projects or companies that often involves high risk or high earning potential.

Question 6

Cost minimization

Answer 6

Outcomes of various alternatives are assumed to be equal and only costs are compared

Question 7

Cost-effectiveness

Answer 7

Cost and outcomes between competing alternative treatments are assessed and compared with the outcomes being values in natural units.

Question 8

Cost utility

Answer 8

Compares cost and outcomes between alternative treatments, where the outcomes are measures in quality and quantity of life.

Question 9

Cost-benefit

Answer 9

Compares costs and monetary outcomes

Question 10

Sole proprietorship

Answer 10

A type of business in which, for tax and liability purposes, the owner and the company are considered a single entity.

Question 11

Partnership

Answer 11

A single business where two or more people share ownership. They share the profits, risks and losses equally. Each partner contributes in all aspects of the business

Question 12

Corporation

Answer 12

Legal entity that is separate and distinct from its owners. Has the right to enter into contracts, loan and borrow money, sue and be sued, hire employees, own assets and pay taxes

Question 13

Cooperative

Answer 13

An organization owned by and operated for the benefit of those using its services. Profits and earnings generated by the cooperative are distributed among the members, also known as user-owners

Question 14

Six sigma

Answer 14

Quality improvement technique that is derived from a field of statistics known as capability studies. Many industries use these to improve processes, eliminate defects and produce high output within specification.

Question 15

Intrapreneurship

Answer 15

Person who essentially operates an an entrepreneur but is an employee of the organization.

Question 16

Describe key characteristics of intrapreneurship and entrepreneurship

Answer 16

Both need autonomy and freedom but intrapreneurs must work within the corporate hierarchy, intrapreneurs have existing support network, entrepreneurs can rely on existing organizational funds and resources, entrepreneurs have to locate and obtain resources for the new venture. Entrepreneurs face career risk in the event of failure, whereas entrepreneurs face personal financial risk. An entrepreneur must create their image and reputation over time, intrapreneurs can be lended this reputation from the firm.

Question 17

Five stages of intrapreneurship

Answer 17

1. Define the opportunity or problem, including considerable data collection and analysis of the opportunity or problem
2. build support
3. Mobilize resources
4. Execute the project
5. Complete the venture

Question 18

Contrast micro and macro views of entrepreneurship

Answer 18

Micro view focuses on describing internal entrepreneurship characteristics associated with the success (especially those in internal locus of control).
Macro view focuses on identifying external components associated with entrepreneurial effectiveness (Those with external locus of control)

Question 19

Three schools of thought under the micro view of entrepreneurship

Answer 19

1. Entrepreneurial trait
2. Venture opportunity
3. Strategic formulation

Question 20

Understand how to leverage specific resources to be effective in the planning process

Answer 20

Amount of challenge towards employees for the purpose of mental stimulation.
Degrees of freedom granted to avoid or mitigate processes and procedures.
The way work groups are designed to obtain ideas from every person
Encouragement given as valuable rewards and recognition
Nature of organizational support

Question 21

Describe the 3 factors that are of concern in the macro view of entrepreneurship

Answer 21

Environmental: Involves aspects of institutions, including values and norms that create the infrastructure from which entrepreneurs operate.
Financial/capital: Stresses the importance of analyzing and acquiring external monetary resources to fund entrepreneurial activity.
Displacement: One’s choice to be an entrepreneur may be related to being prevented, redirected, or displaced from conducting other activities.

Question 22

List the 3 approaches to entrepreneurship

Answer 22

Entrepreneurial events approach, entrepreneurial assessment approach, multidimensional model of entrepreneurship

Question 23

Explain the entrepreneurial events approach

Answer 23

Emphasizes that entrepreneurial processes are not isolated activities that occur in succession. It articulates 4 specific events associated with effective activities (Innovation, triggering events, implementation, growth)

Question 24

Explain the entrepreneurial assessment approach

Answer 24

Emphasizes the importance of making several assessments according to the type of entrepreneur, environment and venture involved in an entrepreneurial endeavor. Refers to the mix of attributes and potential and is based on their prior experience, education and career stage.

Question 25

Explain the multidimensional model of entrepreneurship

Answer 25

Suggests the 4 broad categories (Individual, environmental, organization and process) must be considered in assessing the potential success of an adventure. Emphasizes entrepreneurship as a dynamic process rather than a segmented one. States that individual experience alone cannot explain entrepreneurship and that it must be an integration of several factors.

Question 26

List the elements involves in a business valuation

Answer 26

Understanding the pharmacy earnings, tax depreciation, and debt payments. goodwill: Any identifiable assets that may not be seen or physically measured but are identified as a separate asset. Overall consists of the goodwill + or - the net assets.

Question 27

Components needed to finance a pharmacy

Answer 27

Equity financing: Money raised in exchange for partial business ownership Debt financing: Borrowing money that will be repaid over a period of time.

Question 28

Differentiate strategy from operational effectiveness

Answer 28

Strategy is the pattern or plan that integrates an organizations major goals, policies, and action plans. Involves competitive advantage. Operational effectiveness includes performing activities that are similar to competitors but offering improvements explained by increased speed, higher quality, and reduced costs. (mitigating and eliminating dispensing errors)

Question 29

Identify methods to stimulate innovation within organizations

Answer 29

Cultural variables, human resource variables, structural variables

Question 30

Describe 4 categories of risk incurred by entrepreneurs

Answer 30

Financial risk: Capital and economic resources Career risk: Potential to find other work or return to previous work if venture fails Social risk: Increased commitments might take away from friends and family time Psychological risk: Potential psychological barrier of having to engage in risky endeavors or having to rebound from marked levels of failure.

Question 31

Describe the characteristics of a learning organization

Answer 31

Shared vision that has reached consensus. People discard their old ways of thinking. Members think of all organizational processes, activities, and functions as part of a system of interrelationships. People openly communicate across vertical and horizontal boundaries without fear of criticism or punishment. People work together to achieve the organizations shared vision.

Question 32

Why do people become innovators and/or entrepreneurs

Answer 32

Improved human condition, economic growth, organizational survival and competitive advantage, improved performance, and accumulation of wealth.

Question 33

What are the barriers of becoming an entrepreneur in both pharmacy and other health care industry sectors

Answer 33

Any barriers that prevent employees from conducting themselves in an effective manner

Question 34

Describe low-profit, limited liability corporations and identify the type of entrepreneurs they serve

Answer 34

L3C is a taxed organization that works first toward an established social mission, with profit or revenue generation as a secondary goal. Social entrepreneurs might choose to use an L3C business structure because it allows for diversification of investment funding pursuits while supporting the allocation of risks, which can produce a higher rate of return and therefore incentivizes private investment.

Question 35

List the components of the abbreviation (EBITDA)

Answer 35

Earnings, Before, Interest, Tax, Depreciation/debt, amortization (Paying off debt with fixed payments)