Chapter 2 - Study Guide/Review

Chapter 2: Inside the Entrepreneurial Mind: From Ideas to Reality
Learning Objectives
1.   Explain the differences among creativity, innovation, and entrepreneurship.
2.   Describe why creativity and innovation are such an integral part of entrepreneurship.
3.   Understand how the two hemispheres of the human brain function and what role they play in creativity.
4.   Explain the 10 “mental locks” that limit individual creativity.
5.   Understand how entrepreneurs can enhance the creativity of their employees as well as their own creativity.
6.   Describe the steps in the creative process.
7.      Discuss techniques for improving the creative process.
8.   Describe the protection of intellectual property involving patents, trademarks, and copyrights.

Class Instruction
Introduction  
One of the tenets of entrepreneurship is the ability to create new and useful ideas that solve the problems and challenges that people face every day. As Chapter 1 discussed, entrepreneurs can create value in a number of ways. For example, entrepreneurs invent new products and services, develop new technology, discover new knowledge, improve existing products or services, and find different way of providing more valuable goods and services with fewer resources.
Creativity, Innovation, and Entrepreneurship                                                          LO 1
Creativity is the ability to develop new ideas and discover new ways of looking at problems and opportunities.
Innovation is the ability to apply creative solutions to problems and opportunities that enhance or enrich people’s lives.
One entrepreneur explains, “Creativity is only useful if it is channeled and directed.” Leadership expert Warren Bennis says, “Today’s successful companies live and die according to the quality of their ideas.” A small percentage of product ideas prove to be successful products. It is this creativity that is an important source of building a competitive advantage.
                                                                             .
      Entrepreneurship is the result of a disciplined, systematic process of applying creativity and innovation to needs and opportunities in the marketplace. Innovation must be a constant process because most ideas do not work and most innovations fail.
Creativity – Essential to Survival                                                                                LO 2
      Creativity is an important source for building a competitive advantage and for survival.
      Making the inferential leap from what has worked in the past to what will work today (or in the future) requires entrepreneurs to cast off their limiting assumptions, beliefs, and behaviors and to develop new insights into the relationship among resources, needs, and values.
     
A paradigm is a preconceived idea of what the world is, what it should be like, and how it should operate. These ideas become so deeply rooted in our minds that they become blocks to creative thinking, even though they may be outdated, obsolete, and no longer relevant. A paradigm may also be defined in the following ways:
·         A shared set of assumptions—The way we perceive the world helping to explain and predict its behavior.
·         An overarching model—A concept that is either so widely accepted, or applicable to so many different areas, that it can be used as a type of template for understanding.
·         A set of rules and regulations, written or unwritten—It establishes or defines boundaries and tells you how to behave inside the boundaries.
      Paradigms stifle creativity when they limit or restrict the way people think about possible solutions. Paradigms set parameters and cause thinking to be based on past “rules and procedures” rather than open, creative thinking that can lead to innovative solutions. Creative and innovative thought must break through the barriers that paradigms can present.
     
Creative Thinking                                                                                                                                                                       LO 3
      Research into the operation of the human brain shows that each hemisphere of the brain processes information differently. One side of the brain tends to be dominant over the other. The human brain develops asymmetrically, and each hemisphere tends to specialize in certain functions. The left–brain handles language, logic, and symbols. The right brain takes care of the body’s emotional, intuitive, and spatial functions.
Right–brained lateral thinking is somewhat unconventional, unsystematic, and relies on kaleidoscope/lateral thinking. This describes the process of considering a problem from all sides and jumping into it at different points.
Left–brained vertical thinking is narrowly focused and systematic, proceeding in a highly logical fashion from one point to the next. Left–brain thinking is guided by a linear, vertical thought process progressing from one logical conclusion to the next.
      Those who have learned to develop their right–brained thinking skills tend to:
·         Challenge custom, routine, and tradition
·         Realize there is more than one “right answer”
·         Have “helicopter skills” to rise above daily routine
·         Ask the question: “Is there a better way?”
      Entrepreneurs can learn to tap their innate creativity by breaking down the barriers to creativity that most of us have.
      Entrepreneurship requires both left– and right–brained thinking.


Barriers to Creativity                                                                                                   LO 4
      There are many barriers to creativity—time pressures, unsupportive management, pessimistic coworkers, overly rigid company policies, and countless others.
      The most difficult hurdles to overcome are those that individuals impose upon themselves. In his book, A Whack on the Side of the Head, Roger von Oech identifies ten “mental blocks” that limit individual creativity. They are as follows:
1.      Searching for just one right answer
2.      Focusing on being logical
3.      Blindly following rules
4.      Constantly being practical
5.      Viewing play as frivolous
6.      Becoming overly specialized
7.      Avoiding ambiguity
8.      Fearing looking foolish
9.      Fearing mistakes and failure
10.  Believing that “I’m not creative”

     
Questions to spur the imagination include:
1.   Is there a new way to do it?
2.   Can you borrow or adapt it?
3.   Can you give it a new twist?
4.   Do you merely need more of the same?
5.   Do you need less of the same?
6.   Is there a substitute?
7.   Can you rearrange the parts?
8.   What if you do just the opposite?
9.   Can you combine ideas?
10.  Are customers using your product or service in ways you never expected or intended?
11.  Which customers are you not servicing? What changes to your product or service are necessary to reach them?
12.  Can you put it to other uses?
13.  What else could we make from this?
14.  Are there other markets for it?
15.  Can you reverse it?
16.  Can you rearrange it?
17.  Can you put it to another use?
18.  What idea seems impossible, but if executed, would revolutionize your business?


How to Enhance Creativity                                                                                         LO 5
      New ideas are fragile creations, but the right organizational environment can encourage people to develop and cultivate them.
      Ensuring that workers have the freedom and the incentives to be creative is one of the best ways to achieve creativity.
      Entrepreneurs can stimulate their own creativity and encourage it among workers by:
1.      Including creativity as a core company value
2.      Hire for creativity
3.      Establish an organizational structure that nourishes creativity
4.      Embracing diversity
5.      Expecting creativity
6.      Expecting and tolerating failure
7.      Incorporate fun into the work environment
8.      Encouraging curiosity
9.      Design a work space that encourages creativity
10.  View problems as challenges
11.  Provide creativity training
12.  Provide support
13.  Develop a procedure for capturing ideas
14.  Talk and interact with customers
15.  Monitor emerging trends and identify ways your company can capitalize on them
16.  Look for uses for your company’s products or services in other markets
17.  Rewarding creativity
18.  Modeling creative behavior
      You can enhance individual creativity by using the following techniques:
1.      Allow yourself to be creative
2.      Forget the “rules”
3.      Give your mind fresh input every day
4.      Travel and observe
5.      Observe the products and services of other companies, especially those in complete different markets
6.      Recognize the creative power of mistakes
7.      Notice what is missing
8.      Keep a journal handy to record your thoughts and ideas
9.      Listen to other people
10.  Listen to customers
11.  Watch a movie
12.  Talk to a child
13.  So something ordinary in an unusual way
14.  Keep a toy box in your office
15.  Take note of your “pain points”
16.  Do not throw away seemingly “bad” ideas
17.  Read books on stimulating creativity or take a class on creativity
18.  Take some time off
19.  Be persistent

The Creative Process                                                                                                   LO 6
      Although new ideas may appear to strike like a bolt of lightning, they are actually the result of the creative process. The creative process involves seven steps:
1.      Preparation
2.      Investigation
3.      Transformation
4.      Incubation
5.      Illumination
6.      Verification
7.      Implementation

Techniques for Improving the Creative Process                                                       LO 7
      Brainstorming is a process in which a small group interacts with very little structure to produce a large quantity of novel and imaginative ideas. For a brainstorming session to be successful, an entrepreneur should follow these guidelines:
1.      Keep the group small—five to eight members
2.      Make the group as diverse as possible
3.      Encourage participants to engage in some type of aerobic exercise before the session
4.      Company rank and department affiliation are irrelevant
5.      Give the group a well–defined problem to address
6.      Provide the group relevant background information about the problem in advance
7.      Limit the session to 40 to 60 minutes
8.      Take a field trip to visit the scene of the problem
9.      Appoint someone the job of recorder
10.  Use a seating pattern that encourages communication
11.  Throw logic out the window
12.  Encourage all ideas from the team, even wild and extreme ones
13.  Establish a goal of quantity of ideas rather than quality
14.  Forbid evaluation or criticism
15.  Encourage “idea hitch–hiking”
16.  Dare to imagine the unreasonable
   
 Mind–mapping is an extension of brainstorming. Mind–mapping is a graphical technique that encourages thinking on both sides of the brain, visually displays the various relationships between ideas, and improves the ability to view the problem from many sides. It relates to the way the brain actually works. Rather than throwing out ideas in a linear fashion, the brain jumps from one idea to another. In many creative sessions, ideas are rushing out so fast that many are lost if a person attempts to shove them into a linear outline. 
      The mind–mapping process works this way:
1.      Sketch a picture symbolizing the problem
2.      Write down every idea that comes to your mind – use key words and symbols
3.      When idea flow starts to trickle, stop
4.      Allow your mind to rest a few minutes
       
Force Field Analysis addresses the problem to solved, the driving forces, and the restraining forces. Refer to Figure 2.3 – Sample Force Field Analysis.
      TRIZ is a systematic approach to solve any technical problem and relies on 40 principles and left–brain thinking to solve problems. Refer to Figure 2.4 – TRIZ Contradiction Matrix.                                        
      Rapid prototyping transforms ideas into actual models that point out flaws and lead to improvements. The three principles of rapid prototyping are “The Three R’s”: rough, rapid, and right.

Protecting Your Ideas                                                                                                  LO 8
      Entrepreneurs must understand how to put patents, copyrights and trademarks to work for them.      
·         Patents – a grant from the federal government’s Patent and Trademark Office (PTO), to the inventor, giving the exclusive right to use or sell the invention in the US for 20 years from the date of the patent application.
·         Inventors who develop a new plant can obtain a plant patent (by grafting or cross–breeding, not planting seeds).
·         Most patents are granted for new product inventions, but design patents, which extend beyond the date the patent is issued, are given to inventors who make new original and ornamental changes in the designs of existing products that enhance their sales.
·         A device cannot be patented if it has been in print anywhere in the world.
·         Before beginning the lengthy process of applying for a patent, it is best to seek the advice of a patent agent or attorney.

A list of registered patent, copyright and trademark professionals are available at: http://www.uspto.gov/web/offices/dcom/olia/oed/roster/
      The patent process involves these six steps:
1.      Establish the invention’s novelty
2.      Document the device
3.      Search existing patents
4.      Study search results
5.      Submit the patent application
6.      Prosecute the patent application

      A trademark is any distinctive word, phrase, symbol, design, name, logo, slogan, or trade dress that a company uses to identify the origin of a product or to distinguish it from other goods in the market. A service mark is the same as a trademark, except that it identifies and distinguishes the source of a service rather than a product. Refer to Figure 2.7 – Trademark Applications and Trademarks and Renewals Issued.
      A copyright is an exclusive right that protects the creators of original works of authorship such as literary, dramatic, musical, and artistic works. This includes motion pictures, software, choreography, books, and recordings.
      Protecting intellectual property is imperative. Unfortunately, not every businessperson respects the rights of ownership to products, processes, names, and works. The dynamics of the global market makes protecting intellectual property even more challenging. The primary weapon is efficient use of the legal system. Before bringing a lawsuit, an entrepreneur must consider the following issues:
1.      Can the opponent afford to pay if you win?
2.      Will you get enough from the suit to cover the costs of hiring an attorney?
3        Can you afford the loss of time and privacy from the ensuing lawsuit?
Conclusion                      
The creative process is a tenant of the entrepreneurial experience. Success, and even survival itself, requires entrepreneurs to tap their creativity. The seven steps of the creative process allow the entrepreneur to transform an idea into a business reality.
1.      Preparation
2.      Investigation
3.      Transformation
4.      Incubation
5.      Illumination
6.      Verification
7.      Implementation
Creativity results in value and value provides a competitive advantage. Entrepreneurs should protect their creative ideas through patents, trademarks, servicemarks, and copyrights to sustain a competitive edge.

Chapter Discussion Questions
1.      Explain the differences among creativity, innovation, and entrepreneurship.  (LO 1)
Creativity is the ability to develop new ideas and to discover new ways of looking at problems and opportunities.
Innovation is the ability to apply creative solutions to those problems and opportunities to enhance or enrich people’s lives.
Entrepreneurship is the ability of the entrepreneur to apply creative ideas into a business model and succeed by doing things in an innovative way.
2.      How are creativity, innovation, and entrepreneurship related?  (LO 2)
Creativity is a core business skill that develops new ideas and discovers new ways of looking at problems and opportunities, and entrepreneurs lead the way in developing and applying that skill. Innovation is the ability to apply creative solutions to problems and opportunities to enhance or enrich people’s lives. Successful entrepreneurs come up with creative ideas and then find ways to make them work to solve a problem or fill a need. In an ever–changing world, creativity and innovation are vital to a company’s success and survival.
3.      Why are creativity and innovation so important to the survival and success of a business?  (LO 2)
Creativity offers the potential to generate something from nothing. When small business owners cannot outspend their larger rivals, they can create powerful competitive advantages by “outcreating” and “outinnovating” their larger competitors. Today’s successful businesses live and die according to the quality of their ideas and the ability to protect them.
4.      One entrepreneur claims, “Creativity unrelated to a business plan has no value.” What does he mean?  Do you agree?  (LO 2)
Yes, creativity is only useful if it is channeled and directed in a viable business concept. The definition of innovation addresses the importance of applying this creativity to bring value to others. Expect students to leverage information from the chapter to support their decision.
5.      Can creativity be taught or is it an inherent trait?  Explain.  (LO 3)
Creativity can be taught. Research indicates that anyone can be creative. Each person can be taught techniques and behaviors that can help them generate new and creative ideas to solve problems and pursue opportunities.
6.      How does the human brain function? What operation does each hemisphere specialize in? What hemisphere is the “seat” of creativity? (LO 3)
Each hemisphere of the human brain processes information differently and one side of the brain tends to be dominant over the other. The left brain is guided by linear, vertical thinking and handles language, logic, and symbols. The right brain takes care of the body’s emotional, intuitive, and spatial functions, relying heavily on images. The “seat” of creativity comes from the right brain that more efficiently leverages these attributes.
7.      Briefly outline the “ten mental locks” that can limit individual creativity. Give an example of a situation in which you subjected yourself to one of these mental locks.  (LO 4)
      The ten mental blocks are:
1.      Searching for the one right answer
2.      Focusing on being logical
3.      Blindly following the rules
4.      Constantly being practical
5.      Viewing play as frivolous
6.      Becoming overly specialized
7.      Avoiding ambiguity
8.      Fearing looking foolish
9.      Fearing mistakes and failure
10.  Believing that “I’m not creative”
      Each student will have a different “mental lock” experience. Encourage them to express and describe that mental lock.
8.   What can entrepreneurs do to stimulate their own creativity and to encourage it among workers?  (LO 5)
      Enhancing individual creativity:
·         Allow yourself to be creative
·         Give your mind daily input
·         Keep a journal
·         Read books that stimulate creativity
·         Take a class on creativity
·         Take some time off
      Ways to enhance creativity:
·         Expect it
·         Tolerate and expect failure
·         Encourage curiosity
·         View problems as challenges
·         Provide creativity training
·         Provide support
·         Reward creativity
·         Model creative behavior
9.   Explain the steps of the creative process. What can an entrepreneur do to enhance each step?  (LO 7)
The steps of the creative process include:
1.      Preparation
2.      Investigation
3.      Transformation
4.      Incubation
5.      Illumination
6.      Verification
7.      Implementation
      Techniques to assist entrepreneurs improve the creative process include brainstorming, mind–mapping, and rapid prototyping.
10. Explain the differences among a patent, a trademark, and a copyright. What form of intellectual property does each protect?  (LO 8)
·         A patent is a grant from the federal government’s Patent and Trademark Office (PTO) to the inventor of a product, giving the exclusive right to make, use, or sell the invention in the U.S. for 20 years from the date of filing the patent application.
·         A trademark is any distinctive word, phrase, symbol, design, name, logo, slogan, or trade dress that a company uses to identify the origin of a product or to distinguish it from other goods in the marketplace.
·         A copyright is an exclusive right that protects the creators of original works of authorship such as literary, dramatic, musical, and artistic works. Examples of these works include video games, software, sculptures, motion pictures, choreography and others.


Self-Study Quiz
1.  What is the basic difference between creativity and innovation?
A) Creativity means coming up with a new product; innovation means coming up with a new process.
B) Creativity is a more mentally straining exercise; innovation just comes naturally.
C) Creativity is having a new idea on how to look at a problem or opportunity, while innovation is the ability to apply the creative idea.
D) Creativity is where the real money is made; innovations just usually stay in the lab.
D) Creativity is the same thing as innovation, except creativity refers to ideas outside the business realm.
                (See "Creativity, Innovation, and Entrepreneurship," page 40.)                 


 2. Why are creativity and innovation so critical to an entrepreneurs' survival?
A) Creativity and innovation allow small companies with limited resources to compete with larger competitors.
B) Creativity and innovation keeps entrepreneurs focused on the initial business development period.
C) Creativity and innovation help entrepreneurs to replicate current products on the market.
D) Creativity and innovation can substitute for a shaky business model.
E) Creativity and innovation help the entrepreneur to secure financing for start-up capital.
                (See "Creativity - Essential to Survival," pages 42–44.)


3. Entrepreneurs require what side of the brain to help them meet the requirements for success?
A) Left side
B) Right side
C) Both right and left sides
D) Neither right or left sides
E) The brain is not an important ingredient
                (See "Creative Thinking," pages 44–47.)               


 4. Potential barriers to creativity are limitless. Which one of those listed below is NOT a barrier?
                A) Logical thinking
                B) Fearing failure
                C) Ambiguity
                D) Following the rules
                E) Being practical with a solution
                (See "Barriers to Creativity," pages 48–53.) 


 5. Which of the following is a method for enhancing organizational creativity?
                A) Initiate a controlling structure within the organization
                B) Maintain the same location or scenery
                C) Encourage curiosity among your employees
                D) View issues as potential problems
                E) Provide no support for creativity
                (See "Enhancing Organizational Creativity," pages 53–57.) 

                               
 6. Enhancing creativity includes the following EXCEPT:
                A) Do something different everyday
                B) Lay off those who aren't creative
                C) Borrow ideas from others not involved with your industry
                D) Develop an understanding of mistakes made
                E) Listen to others outside the organization
                (See "Enhancing Individual Creativity," pages 57–61.) 


 7. What is one of the best ways to generate creative thinking while you are on the job?
                A) Don't gain a formal education
                B) Don't gain a total understanding of the problem
                C) Don't think convergently and divergently
                D) Don't schedule every minute of the day
                E) Don't use simulations
(See "The Creative Process," pages 62–67.) 


8. Which of the following shows the proper order of select steps in the creative process?
                A) Preparation, implementation, verification, illumination
                B) Preparation, verification, implementation, illumination
                C) Verification, preparation, implementation, illumination
                D) Preparation, illumination, verification, implementation
                E) Preparation, implementation, illumination, verification
                (See "The Creative Process," pages 62–67.) 

                               
 9. What is a good recommendation for forming and conducting a brainstorming session?
                A) Throw logic out the window
                B) Distinguish good ideas from bad ideas during the session
                C) Create an all-day retreat for the session
                D) Restrict the guest list to only top management
                E) Allow employees to prepare for the session ahead of time
                (See "Techniques for Improving the Creative Process - Brainstorming," pages 67–68.) 


10. Music writers would need to protect their songs by filing for which type of intellectual property protection?
                A) A patent
                B) A trademark
                C) A copyright
                D) A trade secret
                E) A service mark
                (See "Intellectual Property: Protecting Your Ideas," pages 72–79.) 



Chapter Review
Multiple Choice Questions:

1.      What is the entrepreneurial “secret” for creating value in the marketplace?
    a.   Applying Creativity and Innovation to Solve Problems
    b.   Creating New Products and Services
    c.   Learning by Doing
    d.   Applying Lessons Learned from History


2.             The ability to develop new ideas and to discover new ways of looking at problems and opportunities is called:
    a.   entrepreneurship
    b.   innovation
    c.   creativity
    d.   creative thinking

   
3.       The ability to apply creative solutions to problems and opportunities to enhance or to enrich people’s lives is called:
    a.   entrepreneurship
    b.   innovation
    c.   creativity
    d.   creative thinking


4.       Harvard’s Theodore Levitt says that creativity is ____________ new things, and innovation is ______________ new things.
    a.   thinking; doing
    b.   doing; thinking
    c.   seeing; doing
    d.   thinking; applying


5.       Creativity often involves creating something from nothing. However, it is more likely to result in:
    a.   elaborating on the present.
    b.   putting old things together in new ways.
    c.   taking something away to create something simpler or better.
    d.   All of the above.


6.       Entrepreneurship is a constant process that relies on:
    a.   creativity, innovation, and profit.
    b.   the ability to win over the consumer.
    c.   creativity, innovation, and application in the marketplace.
    d.   intellectual property rights.


7.       When developing creative solutions to modern problems, entrepreneurs must:
    a.   go beyond merely using whatever has worked in the past.
    b.   limit the creative process to only profitable ventures.
    c.   remember what has worked in the past.
    d.   pay attention to limiting factors.

8.       A ________________  is a preconceived idea of what the world is, what it should be like, and how it should operate.
    a.   innovation
    b.   entrepreneur
    c.   paradigm
    d.   profitable vision      


9.       Research shows that anyone can learn to be creative. The problem is:
    a.   many organizations fail to foster an environment that encourages creativity.
    b.   most people never tap into their pools of innate creativity.
    c.   most people have never been taught to be creative.
    d.   All of the above.


10.           Research into the operation of the human brain shows that each hemisphere of the brain:
    a.   develops symmetrically.
    b.   controls similar functions.
    c.   does not dominate the other hemisphere.
    d.   processes information differently.


11.     The left-brain is guided by:
    a.   kaleidoscopic, lateral thinking.
    b.   linear, vertical thinking.
    c.   asymmetrical thinking.
    d.   intuitive thinking.


12.           The right brain is guided by:
    a.   kaleidoscopic, lateral thinking.
    b.   linear, vertical thinking.
    c.   asymmetrical thinking.
    d.   logical thinking.


13.           Which hemisphere of the brain is responsible for language, logic, and symbols?
    a.   Right Hemisphere
    b.   Left Hemisphere
    c.   Lateral Hemisphere
    d.   Intuitive Hemisphere 


14.           Which hemisphere of the brain is responsible for the body’s emotional, intuitive, and spatial functions?
    a.   Right Hemisphere
    b.   Left Hemisphere
    c.   Vertical Hemisphere
    d.   Logical Hemisphere 


15.     Which hemisphere of the brain processes information in a step-by-step fashion?
    a.   Right Hemisphere
    b.   Left Hemisphere
    c.   Lateral Hemisphere
    d.   Intuitive Hemisphere 

16.     Which hemisphere of the brain processes information all at once and by relying heavily on images?
    a.   Right Hemisphere
    b.   Left Hemisphere
    c.   Vertical Hemisphere
    d.   Logical Hemisphere 

   
17.     _______________ vertical thinking is narrowly focused and systematic, proceeding in a highly logical fashion from one point to the next.
    a.   Left-brained
    b.   Right-brained
    c.   Unconventional
    d.   Intuitive

18.     _______________ lateral thinking is somewhat unconventional and unstructured.
    a.   Left-brained
    b.   Right-brained
    c.   Systematic
    d.   Logical


19.    In his book A Whack on the Side of the Head, Roger von Oech views a “playful attitude” as:
    a.   frivolous.
    b.   fundamental to creative thinking.
    c.   a mental block.
    d.   limiting individual creativity.


20.           All of the following represent barriers to creativity that entrepreneurs impose upon themselves except:
    a.   focusing on being too logical.
    b.   being too practical.
    c.   blindly following rules.
    d.   searching for more than one answer.


21.     Roger von Oech believes that blindly following rules leads to:
    a.   order, which stimulates creativity.
    b.   a clearer vision and business venture.
    c.   new ways of doing things.
    d.   a mental block towards creativity.


22.     Joseph Schumpeter wrote that entrepreneurs perform the vital function of:
    a.   challenging accepted ways of doing things.
    b.   creative destruction.
    c.   revolutionizing current patterns of production.
    d.   All of the above.


 23.     Entrepreneurs can stimulate their own creativity and encourage it among workers by:
    a.   expecting and tolerating failure.
    b.   avoiding problems.
    c.   limiting rewards.
    d.   not taking chances.


24.     Which of the following is NOT one of the ways entrepreneurs can stimulate their own creativity and encourage it among their workers?
    a.   Provide creativity training
    b.   Encourage curiosity
    c.   View challenges as problems
    d.   Develop a corporate culture that both fosters and rewards creativity

   
25.           Employees must be given the tools and resources they need to be creative. One of the most valuable resources is:
    a.   providing challenges.
    b.   rules and guidelines.
    c.   time.
    d.   money.


26.    Hiring a diverse workforce:
          a.   helps in enhancing organizational creativity.
          b.   allows for different ideas and varying methods of problem solving.
          c.   brings in people from different backgrounds, with different cultural experiences, hobbies, and interests.
          d.   All of the above.


27.     All of the following are enhancements to individual creativity except:
    a.   keeping a journal to record thoughts and ideas.
    b.   limiting your reading sources.
    c.   taking time off.
    d.   allowing yourself to be creative.


28.    Which of the following is NOT an enhancement to individual creativity?
          a.   Listening to other people.
b.      Recognizing the creative power of mistakes.
c.       Keeping a toy box in your office.
d.      Working without breaks until the project is complete or the problem is solved.


29.     Which stage of the Creative Process includes on-the-job training?
    a.   Implementation
    b.   Preparation
    c.   Illumination
    d.   Verification


30.     Which stage of the Creative Process requires one to develop a solid understanding of the problem or decision?
    a.   Investigation
    b.   Preparation
    c.   Illumination
    d.   Verification


31.           Which stage of the Creative Process involves viewing the similarities and differences in the
          information collected?
    a.   Transformation
    b.   Incubation
    c.   Illumination
    d.   Verification


32.     The ability to see the similarities and the connections among various data and events is called:
    a.   Convergent thinking
    b.   Divergent thinking
    c.   Transformational thinking
    d.   Illumination


33.     The ability to see the differences among various data and events is called:
    a.   Convergent thinking
    b.   Divergent thinking
    c.   Transformational thinking
    d.   Illumination

34.           ________________ thinking is the ability to see similarities and ___________________ thinking is the ability to see differences among various data and events.
    a.   Divergent; Convergent
    b.   Convergent; Divergent
    c.   Convergent; Transformational
    d.   None of the above.


35.           During the Incubation Phase of the Creative Process, the entrepreneur might do all of the following EXCEPT which one to let ideas “marinate” in his mind?
          a.   Do something totally unrelated for awhile.
          b.   Relax and play regularly.
          c.   Work on the problem or opportunity in a different environment.
          d.   Don’t allow himself to daydream.


36.     At which stage of the Creative Process does a spontaneous breakthrough occur, allowing all of the previous stages to come together to produce the “Eureka Factor” or the “light bulb goes on”?
    a.   Implementation
    b.   Preparation
    c.   Illumination
    d.   Verification

  
37.           “Verification” refers to:
          a.   validating the idea as accurate and useful.
          b.   possibly conducting experiments, running simulations, test marketing a product or service.
          c.   possibly asking questions such as “will it work?” and “is it really a better solution?”
          d.   All of the above.


38.     The focus of this step in the Creative Process is to transform the idea into reality.
    a.   Implementation
    b.   Preparation
    c.   Illumination
    d.   Verification


39.    ______________ is a process in which a small group of people interacts to produce a large quantity of imaginative ideas.
    a.   Groupthink
    b.   Mind-mapping
    c.   Brainstorming
    d.   Prototyping


40.     Effective Brainstorming involves all of the following except:
    a.   a small group of people
    b.   an open uninhibited environment
    c.   an effective method to evaluate ideas
    d.   very little structure


41.     ________________  is a graphical technique that encourages thinking on both sides of the brain, visually displays the various relationships among the ideas, and improves the ability to view a problem from many sides.
    a.   Brainstorming
    b.   Mind-mapping
    c.   Prototyping
    d.   Groupthink


42.    Mind-mapping is a useful tool for jump-starting creativity. It includes all of the following except:
    a.   sketching a picture to symbolize the problem or area of focus in the center of a sheet of paper.
    b.   writing down every idea that comes into your mind, connecting each idea to the central picture. 
    c.   allowing your mind to rest for a few minutes before integrating the ideas.
    d.   forcing creativity when ideas start to trickle.


43.     The premise behind _____________ is that transforming an idea into an actual model will lead to improvements in its design.
    a.   Rapid Prototyping
    b.   Mind-mapping
    c.   Brainstorming
    d.   Inventions


44.           The three principles (3 R’s) of Rapid Prototyping are:
    a.   develop a rough model, rapidly and for the right price.
    b.   develop a complete model, rapidly and for the right problem.
    c.   develop a rough model, rapidly and for the right problem.
    d.   develop a right model, roughly, for the right price.


45.           Steps in the Patent Process include:
    a.   establishing whether or not it is a novelty.
    b.   documenting and verifying the date the idea was first conceived.
    c.   searching existing patents.
    d.   All of the above.


46.           To which governmental office must applications for patents be submitted?
    a.   The U.S. Patent and Trademark Office
    b.   The individual State Offices of Patent Development
    c.   Both A and B are correct.
    d.   None of the above.


47.           Any distinctive word, phrase, symbol, name or logo a firm uses to distinguish itself or its products is called a:
    a.   trademark.
    b.   patent.
    c.   copyright.
    d.   service mark.


48.           A _____________ is an exclusive right that protects the creators of original works such as literary,
          dramatic, musical, and artistic works.
    a.   Trademark
    b.   Patent
    c.   Copyright
    d.   Service Mark


49.           Copyrights protect the creator of original works such as:
    a.   software, choreography, and motion pictures.
    b.   symbols, names and designs.
    c.   Both A and B are correct.
    d.   None of the above.


50.           Which of the following questions should you consider before entering a lawsuit to protect intellectual property?
    a.   Can you afford the loss of time, money and privacy the lawsuit will bring?
    b.   Can the opponent afford to pay if you win?
    c.   Do you expect to get enough from the suit to pay for the costs of hiring an attorney?
    d.   All of the above.



True/False Questions:

51.           Creativity is the ability to apply creative solutions to problems and opportunities to enhance or enrich people’s lives.

          False

52.           Innovation is the ability to develop new ideas and to discover new ways of looking at problems and opportunities.

          False

53.           Creativity is the ability to develop new ideas and to discover new ways of looking at problems and opportunities.

          True

54.           Innovation is the ability to apply creative solutions to problems and opportunities to enhance or enrich people’s lives.

          True

55.     Successful entrepreneurs come up with ideas and then find ways to make them work to solve a problem or fill a need.

          True

56.           Creativity and innovation are the signature of large, entrepreneurial businesses.

          False

57.           Creativity and innovation are the signature of small, entrepreneurial businesses.

          True

58.           Although creativity sometimes involves generating something from nothing, it more likely results in elaborating on the present, putting old things together in new ways, or taking something away to create something simpler or better.

          True

59.     Innovation must be a constant process because most ideas don’t work and most innovations fail.

          True

60.           For every 3,000 new product ideas, four make it to the development stage, two are actually launched, and only one becomes successful in the market.

          True

61.           On average, new products account for 2/3 – 3/4 of companies’ sales.

          False

62.     Creativity is not only an important source for building a competitive advantage, but it also is necessary for survival.

          True

63.           History is always a reliable predictor of the future of business.

          False

64.     Entrepreneurs must embrace traditional assumptions and perspectives about how things ought to be because they support creativity.
     
          False

65.           A paradigm is a preconceived idea of what the world should be like.

          True

66.     Paradigms may become so deeply rooted in our minds that they become immovable blocks to creative thinking.

          True

67.           While most people see what they’ve always seen, entrepreneurs are able to see beyond
          preconceptions.

          True

68.           Successful entrepreneurs push technological and economic boundaries forward and sometimes make unconventional decisions.
     
          True

69.     The rapidly accelerating rate of change has created an environment in which staying in a leadership position requires constant creativity, innovation, and entrepreneurship.
         
          True

70.           Research shows that not everyone can be creative.

          False

71.           Businesses typically foster an environment that encourages creativity.

          False

72.     Research shows that each hemisphere of the human brain processes information differently and that one side of the brain tends to be dominant over the other.
     
          True

73.           The left brain is guided by linear, vertical thinking.

          True

74.     The right brain is guided by linear, vertical thinking.

          False
75.           The left-brain relies on kaleidoscopic, lateral thinking.

          False

76.           The right brain relies on kaleidoscopic, lateral thinking.

          True

77.           The left brain handles language, logic, and symbols.

          True

78.           The right brain takes care of the body’s emotional, intuitive, and spatial functions.

          True

79.           The right brain processes information intuitively—all at once, relying heavily on images.

          True

80.           The left brain processes information in a step-by-step fashion.

          True

81.           The left brain processes information intuitively—all at once, relying heavily on images.

          False

82.           The right brain processes information in a step-by-step fashion.

          False

83.           Right-brained individuals tend to challenge tradition, custom, and routine.

          True

84.           Left-brained individuals realize that there may be more than one right answer.

          False

85.           Entrepreneurship requires both left and right-brained thinking.

          True

86.     Right-brain thinking draws on the power of divergent reasoning, which is the ability to create a multitude of original, diverse ideas, while left-brain thinking counts on convergent reasoning, the ability to evaluate multiple ideas and choose the best solution to a given problem.

          True

87.           Entrepreneurs need to rely on left-brain thinking to generate innovative product, service, or business ideas and use right-brain thinking to judge the market potential of the ideas they generate.

          False

88.    Intuition is based on the accumulated knowledge and experiences a person encounters over the course of a lifetime and resides in the subconscious.

          True

89.           “Constantly Being Practical” is a mental block that can stifle creativity.

          True

90.           Viewing play as frivolous is a mental block, which stifles creativity.

          True

91.           Ambiguity tends to destroy creativity.

          False

92.     Failure is an important part of the creative process, as it provides a chance to learn how to succeed.

          True

93.           Employees tend to rise—or fall—to the level of expectations entrepreneurs have of them.

          True

94.     Hiring a diverse work force makes it more difficult to achieve creativity in the workplace.

          False

95.     Entrepreneurs can encourage creative thinking in their employees by setting examples of creative behavior and rewarding creative behavior when exhibited by their employees.

          True

96.           “Divergent Thinking” is the ability to see similarities and connections among various data and events.

          False

97.           “Convergent Thinking” is the ability to see the differences among data and events.

          False

98.           It may appear in the Incubation Stage of the Creative Process that the entrepreneur is loafing, as he is taking time to reflect on the information collected.

          True

99.           The Illumination Stage of the Creative Process is often called the “Eureka Factor” and is characterized by a spontaneous breakthrough.

          True

100.   The typical entrepreneurial philosophy is “Ready, aim, aim, aim…”

          False
101.  When “Brainstorming,” individuals should be encouraged to use “idea hitchhiking,” or building new ideas on those already suggested.

          True

102.   During a brainstorming session, company rank and department affiliates are irrelevant.

          True

103.  Mind mapping is a graphical technique that encourages thinking on both sides of the brain, visually displays the various relationships among ideas, and improves the ability to view a problem from many sides.

          True

104.   Rapid prototyping, transforming an idea into an actual model, typically does not lead to
          improvements in design.

          False

105.  A patent gives the inventor the exclusive right to make, use, or sell an invention for 50 years.

          False

106.  One study reports that for the typical small business, obtaining a patent and maintaining it for 20 years costs about $10,000.

          True

107.   Trademarks are distinctive words, symbols, designs, names, or logos used for company identification.

          True

108.   A patent protects the creator of original works of authorship such as for software.

          False

109.   The U.S. Copyright Office does not require registering the creative work because registering it does not give creators greater protection over their work.
     
          False

110.   The major problem with relying on the legal system to enforce ownership rights is the cost of infringement lawsuits, which can quickly exceed the budget of most small businesses.

          True


Essay Questions:

111.   What is the entrepreneurial “secret” for creating value in the marketplace?

Creativity and Innovation should be used in combination to allow the entrepreneur to solve real world problems and to exploit opportunities and the profits that come with them. Creativity should always be directed and complement the business plan.
Creativity is the ability to develop new ideas and to discover new ways of looking at problems and to exploit opportunities that people face everyday. Innovation is the ability to apply creative solutions to those problems and opportunities to enhance and enrich people's lives.


112.   Explain the differences between the left and right sides of the brain.

      The left brain is guided by linear, vertical thinking, whereas the right brain relies on kaleidoscopic, lateral thinking.  The left brain handles language, logic, and symbols, whereas the right brain takes care of the body’s emotional, intuitive, and spatial functions.  The left brain processes information in a step-by-step fashion, whereas the right brain processes it intuitively—all at once, relying heavily on images.  Left-brained vertical thinking is narrowly focused and systematic, whereas right-brained lateral thinking is somewhat unconventional, unsystematic, and unstructured. 
       

113.   List five of the “mental locks” that limit individual creativity.
         
          The five should come from the following list:
·         Search for the one “right” answer.
·         Focus on “being logical.”
·         Blindly follow the rules.
·         Constantly be practical.
·         View play as frivolous.
·         Become overly specialized.
·         Avoid ambiguity.
·         Fear looking foolish.
·         Fear mistakes and failure.
·         Believe that “I’m not creative.”
         

114.   List five ways entrepreneurs can stimulate their own creativity and encourage it among
          workers.
                The five should come from the following list:
·         Expect creativity.
·         Embrace diversity.
·         Expect and tolerate failure.
·         Encourage curiosity.
·         View problems as challenges.
·         Provide creativity training.
·         Provide support.
·         Reward creativity.
·         Model creative behavior.
     

115.   List five ways individuals can enhance their own creativity.
         
          The five should come from the following list:
·         Allow yourself to be creative.
·         Give your mind fresh input every day.
·         Recognize the creative power of mistakes.
·         Keep a journal handy to record your thoughts and ideas.
·         Listen to other people.
·         Read books on stimulating creativity or take a class on creativity.
·         Talk to a child.
·         Keep a toy box in your office.
·         Take some time off.
         

116.   List and briefly explain the seven steps in the Creative Process.
1.      Preparation – Get your mind ready for creative thinking through formal education, OJT, work experience, etc.  This helps to build creativity and innovation.
2.      Investigation – Develop a solid understanding of the problem or decision.
3.      Transformation – View the similarities and differences in the information collected.
4.      Incubation – Take time to reflect on the information collected.
5.      Illumination – A spontaneous breakthrough occurs, causing the “light bulb to go on.”  All of the previous stages come together to produce the “Eureka factor.”
6.      Verification – Validate the idea as accurate and useful.  May include conducting experiments, running simulations, test marketing a product or service, etc., to verify that the new idea will work and is practical.
7.      Implementation – Transform the idea into reality.
     

117.  Explain “brainstorming” and list at least five of the guidelines for a successful brainstorming session.
         
          Brainstorming is a process in which a small group of people interact with very little structure with the goal of producing a large quantity of novel and imaginative ideas.  The goal is to create an open, uninhibited atmosphere that allows member of the group to “freewheel” ideas.  Five guidelines should come from the following list:
·         Keep the group small—five to eight members.
·         Have a well-defined problem for the group to address, but don’t reveal it ahead of time.
·         Limit the session to 40-60 minutes.
·         Appoint someone to be the recorder and write every idea on a flip chart.
·         Use a seating pattern that encourages communication and interaction.
·         Encourage all ideas from the team, even wild and extreme ones.
·         Establish a goal of quantity of ideas rather than quality.
·         Forbid evaluation or criticism of any idea during the session.
·         Encourage participants to use “idea hitchhiking” or to “piggyback”/build new ideas on those already suggested.
         

118.   Why is it important for an entrepreneur to use techniques like Mind-mapping, which use both sides of the brain?

      Mind-mapping, a graphical technique that encourages thinking on both sides of the brain, visually displays the various relationships among ideas, and improves the ability to view a problem from many sides. Since entrepreneurs themselves tend to be left or right-brained thinkers, techniques like Mind-mapping encourage them to look at problems and opportunities in a different way. Mind-mapping is also a useful tool that includes: sketching a picture symbolizing the problem, connecting each idea to the central picture or words with a line, and allowing your mind to rest for a few minutes before beginning to integrate the ideas.
     

119.   List the steps an entrepreneur should follow in order to enhance his/her chances of receiving a patent.
         
1.Establish the invention’s novelty.
2.Document the device.
3.Search existing patents.
4.Study search results.
5.Submit the patent application.
6.Prosecute the patent application.

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