Question

Which of the following statements regarding risk-taking are true? (Check all that apply.)

a. Entrepreneurial managers will forgo methods or products that have worked in the past.
b. Corporate entrepreneurs often choose riskier alternatives in order to be successful.
c. Corporate entrepreneurs usually know whether a venture will be successful through a careful vetting process.
d. Entrepreneurial firms often will assume higher levels of debt in order to introduce new products into new markets.

Answer 1

Entrepreneurial and corporate entrepreneurs take calculated risks, which may involve discarding past methods, choosing riskier alternatives, and assuming higher levels of debt to introduce new products and capture market opportunities.

Step-by-step explanation:

When considering the statements regarding risk-taking in relation to entrepreneurial and corporate behavior, we should analyze each statement:

• Entrepreneurial managers may sometimes forgo methods or products that have worked in the past if they believe that there are better opportunities ahead that align with changing market demands or innovative trends. This statement is true and reflects the dynamic nature of entrepreneurship, where adaptability and flexibility are key traits.
• Corporate entrepreneurs are often tasked with fostering innovation within an established company, and to do this, they may choose riskier alternatives compared to traditional corporate strategies. This statement is generally true since taking calculated risks is a part of driving innovation and pursuing new market opportunities.
• While corporate entrepreneurs conduct a careful vetting process to evaluate the potential success of a venture, it is never possible to know with certainty whether it will succeed. Therefore, this statement is partially true as the vetting process can reduce but not eliminate the uncertainty associated with new ventures.
• An entrepreneurial firm may take on higher levels of debt to fund the development and introduction of new products into new markets, a statement which is often true. This approach can be part of a strategic financing decision aimed at seizing market opportunities, but it also increases financial risk.

Based on these explanations, the correct options for the question asked about risk-taking are:

1. Entrepreneurial managers will forgo methods or products that have worked in the past.
2. Corporate entrepreneurs often choose riskier alternatives in order to be successful.
3. Entrepreneurial firms often assume higher levels of debt in order to introduce new products into new markets.