Question 1

A way to deal with incompetent family members in a family-owned business is to:

Accepted Answer

A)  allow them to take special privileges. 
B)  tolerate them when they avoid unpleasant tasks. 
C)  place them in responsible positions to encourage them to work. 
D)  assign jobs to them that allow minimal contact with other employees. 
A)  allow them to take special privileges. 
B)  tolerate them when they avoid unpleasant tasks. 
C)  place them in responsible positions to encourage them to work. 
D)  assign jobs to them that allow minimal contact with other employees.

Question 2

In the context of family-owned businesses, which of the following can be used to minimize estate taxes?

Accepted Answer

A)  Buy-sell agreement 
B)  Family limited partnership 
C)  Formal succession planning 
D)  Selling stock to outsiders 
A)  Buy-sell agreement 
B)  Family limited partnership 
C)  Formal succession planning 
D)  Selling stock to outsiders

Question 3

According to the Family Firm Institute of Boston:

Accepted Answer

A)  family-owned businesses in the U.S. are predominantly small. 
B)  a majority of family-owned businesses in the U.S. flourish. 
C)  family-owned businesses in the U.S. must hire college graduates. 
D)  emotions and business do not mix in a family-owned business. 
A)  family-owned businesses in the U.S. are predominantly small. 
B)  a majority of family-owned businesses in the U.S. flourish. 
C)  family-owned businesses in the U.S. must hire college graduates. 
D)  emotions and business do not mix in a family-owned business.

Question 4

Pre-nuptial agreements pose a problem when a couple running a family-owned business gets divorced.

Accepted Answer

A) True 
 B)False

Question 5

A person's age must determine the lines of authority in a family-owned business.

Accepted Answer

A) True 
 B)False

Question 6

The involvement of relatives in a family-owned business should always be based on the family status of the person.

Accepted Answer

A) True 
 B)False

Question 7

A characteristic of family-owned businesses in the U.S. is that they:

Accepted Answer

A)  have less potential financial risks. 
B)  can be a source of unresolved family conflicts. 
C)  have little disagreement among members on how to meet business goals. 
D)  rarely have family members with differing value systems. 
A)  have less potential financial risks. 
B)  can be a source of unresolved family conflicts. 
C)  have little disagreement among members on how to meet business goals. 
D)  rarely have family members with differing value systems.

Question 8

Why is management succession a problem for family-owned businesses?

Accepted Answer

A)  Employees may dislike the chosen successor. 
B)  Children may choose their own successor. 
C)  Potential candidates may be groomed too early. 
D)  There is a defined hierarchy for decision-making. 
A)  Employees may dislike the chosen successor. 
B)  Children may choose their own successor. 
C)  Potential candidates may be groomed too early. 
D)  There is a defined hierarchy for decision-making.

Question 9

The transition of a family-owned business to a successor can be made easier for the former owner by:

Accepted Answer

A)  devoting lesser time to hobbies and other outside activities. 
B)  keeping the owner engaged in a top management position. 
C)  narrowing his/her skills to focus on a single task. 
D)  handing over to the successor in phases. 
A)  devoting lesser time to hobbies and other outside activities. 
B)  keeping the owner engaged in a top management position. 
C)  narrowing his/her skills to focus on a single task. 
D)  handing over to the successor in phases.

Question 10

A disadvantage of organizing a family business into a corporation and hiring professional managers is the:

Accepted Answer

A)  concentration of power in small cliques. 
B)  unfair treatment of employees. 
C)  loss of family time for other purposes. 
D)  increasing friction between family members. 
A)  concentration of power in small cliques. 
B)  unfair treatment of employees. 
C)  loss of family time for other purposes. 
D)  increasing friction between family members.

Question 11

The borrowing power of a family-owned business is limited by the amount of family assets.

Accepted Answer

A) True 
 B)False

Question 12

In family-owned businesses run by copreneurs, both partners have equal roles in all management areas.

Accepted Answer

A) True 
 B)False

Question 13

What are the limitations faced by a family-owned business?

Accepted Answer

Entrepreneurs tend to be specialists in

Question 14

If a family-owned business is a corporation, replacement of ownership is decided by:

Accepted Answer

A)  the spouse of the former owner. 
B)  a court-appointed attorney. 
C)  the board of directors. 
D)  family law. 
A)  the spouse of the former owner. 
B)  a court-appointed attorney. 
C)  the board of directors. 
D)  family law.

Question 15

What is estate planning?

Accepted Answer

A)  Planning for a new buyer of a family-owned business that is up for sale 
B)  Compensating the owner of a family-owned business when the family wants to sell it 
C)  Preparing for the orderly transfer of the owner's equity when death occurs 
D)  Assessing the real-estate value of a family-owned business before it is sold 
A)  Planning for a new buyer of a family-owned business that is up for sale 
B)  Compensating the owner of a family-owned business when the family wants to sell it 
C)  Preparing for the orderly transfer of the owner's equity when death occurs 
D)  Assessing the real-estate value of a family-owned business before it is sold

Question 16

Most people-related challenges faced by family-owned businesses result from interactions of business necessity with family values and relationships.

Accepted Answer

A) True 
 B)False

Question 17

A developing trend in family businesses is that young people:

Accepted Answer

A)  offer an executive position to their parents in their company in return for funding. 
B)  show disinterest in continuing the work of their parents. 
C)  prefer to look for jobs in major corporations rather than focus on the business. 
D)  are not interested in gaining experience by working part-time. 
A)  offer an executive position to their parents in their company in return for funding. 
B)  show disinterest in continuing the work of their parents. 
C)  prefer to look for jobs in major corporations rather than focus on the business. 
D)  are not interested in gaining experience by working part-time.

Question 18

Family-owned businesses run by husband-and-wife teams are referred to as copreneurs.

Accepted Answer

A) True 
 B)False

Question 19

Estate planning involves preparing for the orderly transfer of the owner's equity in the business when death occurs.

Accepted Answer

A) True 
 B)False

Question 20

In order to cope with the daily challenges of a family-owned business, the family should:

Accepted Answer

A)  hire more relatives to work in the business. 
B)  keep children out of the decision-making process. 
C)  reduce time spent on home activities. 
D)  develop an appropriate family mission statement. 
A)  hire more relatives to work in the business. 
B)  keep children out of the decision-making process. 
C)  reduce time spent on home activities. 
D)  develop an appropriate family mission statement.

A way to deal with incompetent family members in a family-owned business is to:

In the context of family-owned businesses, which of the following can be used to minimize estate taxes?

According to the Family Firm Institute of Boston:

Pre-nuptial agreements pose a problem when a couple running a family-owned business gets divorced.

A person's age must determine the lines of authority in a family-owned business.

The involvement of relatives in a family-owned business should always be based on the family status of the person.

A characteristic of family-owned businesses in the U.S. is that they:

Why is management succession a problem for family-owned businesses?

The transition of a family-owned business to a successor can be made easier for the former owner by:

A disadvantage of organizing a family business into a corporation and hiring professional managers is the:

The borrowing power of a family-owned business is limited by the amount of family assets.

In family-owned businesses run by copreneurs, both partners have equal roles in all management areas.

What are the limitations faced by a family-owned business?

If a family-owned business is a corporation, replacement of ownership is decided by:

What is estate planning?

Most people-related challenges faced by family-owned businesses result from interactions of business necessity with family values and relationships.

A developing trend in family businesses is that young people:

Family-owned businesses run by husband-and-wife teams are referred to as copreneurs.

Estate planning involves preparing for the orderly transfer of the owner's equity in the business when death occurs.

In order to cope with the daily challenges of a family-owned business, the family should:

Starting Your Small Business

Forms of Ownership of Small Businesses

Maintaining Good Government Relations and Business Ethics

Becoming the Owner of a Small Business

Planning, Organizing, and Managing a Small Business

How to Obtain the Right Financing for Your Business

Developing Marketing Strategies

Promoting and Distributing

How to Obtain and Manage Human Resources and Diversity in Small Companies

How to Maintain Relationships With Your Employees and Their Representatives

Obtaining and Laying Out Operating Facilities

Purchasing, Inventory, and Quality Control

Basic Financial Planning

Budgeting and Controlling Operations and Taxes

Using Computer Technology in Small Businesses

Risk Management, Insurance, and Crime Prevention

Filters

Exam 2: Family-Owned Businesses

A way to deal with incompetent family members in a family-owned business is to:

In the context of family-owned businesses, which of the following can be used to minimize estate taxes?

According to the Family Firm Institute of Boston:

Pre-nuptial agreements pose a problem when a couple running a family-owned business gets divorced.

A person's age must determine the lines of authority in a family-owned business.

The involvement of relatives in a family-owned business should always be based on the family status of the person.

A characteristic of family-owned businesses in the U.S. is that they:

Why is management succession a problem for family-owned businesses?

The transition of a family-owned business to a successor can be made easier for the former owner by:

A disadvantage of organizing a family business into a corporation and hiring professional managers is the:

The borrowing power of a family-owned business is limited by the amount of family assets.

In family-owned businesses run by copreneurs, both partners have equal roles in all management areas.

What are the limitations faced by a family-owned business?

If a family-owned business is a corporation, replacement of ownership is decided by:

What is estate planning?

Most people-related challenges faced by family-owned businesses result from interactions of business necessity with family values and relationships.

A developing trend in family businesses is that young people:

Family-owned businesses run by husband-and-wife teams are referred to as copreneurs.

Estate planning involves preparing for the orderly transfer of the owner's equity in the business when death occurs.

In order to cope with the daily challenges of a family-owned business, the family should:

Starting Your Small Business

Forms of Ownership of Small Businesses

Maintaining Good Government Relations and Business Ethics

Becoming the Owner of a Small Business

Planning, Organizing, and Managing a Small Business

How to Obtain the Right Financing for Your Business

Developing Marketing Strategies

Promoting and Distributing

How to Obtain and Manage Human Resources and Diversity in Small Companies

How to Maintain Relationships With Your Employees and Their Representatives

Obtaining and Laying Out Operating Facilities

Purchasing, Inventory, and Quality Control

Basic Financial Planning

Budgeting and Controlling Operations and Taxes

Using Computer Technology in Small Businesses

Risk Management, Insurance, and Crime Prevention

Filters