Question 1

As the spouse of the founder of Stonyfield Farm,Meg Cadoux Hirshberg serves the family business in a typical but critical role of

Accepted Answer

A) making impartial decisions on controversial business matters when her husband,Greg,asks. 
B) filling the role of a company director so as to provide balance in family matters. 
C) mediating family disputes. 
D) supporting Greg through the many hours the business requires. 
A) making impartial decisions on controversial business matters when her husband,Greg,asks. 
B) filling the role of a company director so as to provide balance in family matters. 
C) mediating family disputes. 
D) supporting Greg through the many hours the business requires. D

Question 2

What step is best for parents to decrease succession conflict among children active in the firm and those who are not?

Accepted Answer

A) Letting those not involved in the company have a larger portion of an inheritance outside of the company and allow those involved in daily operations have more ownership of the business. 
B) Letting the next generation reach a consensus about management of the company. 
C) Changing the ownership of the company so common (voting)stock is only given to those active in the company and others receive preferred (nonvoting)stock. 
D) Making decisions based on tax considerations,not what is best for the next generation or the business. 
A) Letting those not involved in the company have a larger portion of an inheritance outside of the company and allow those involved in daily operations have more ownership of the business. 
B) Letting the next generation reach a consensus about management of the company. 
C) Changing the ownership of the company so common (voting)stock is only given to those active in the company and others receive preferred (nonvoting)stock. 
D) Making decisions based on tax considerations,not what is best for the next generation or the business. C

Question 3

A founder's core values may become part of the family business culture because:

Accepted Answer

A) the founder typically knows what is best for the company's culture. 
B) others in the firm absorb traditions and values established by the founder. 
C) the values coincide with modern management theory. 
D) family members follow family traditions without excessive analysis. 
A) the founder typically knows what is best for the company's culture. 
B) others in the firm absorb traditions and values established by the founder. 
C) the values coincide with modern management theory. 
D) family members follow family traditions without excessive analysis. B

Question 4

To protect the interests of both the family and the business in a family business,the owner should:

Accepted Answer

A) recognize a basic obligation to supply the family with employment of some type. 
B) refuse to hire family members but,instead,reward them with generous dividends. 
C) personally make all personnel decisions affecting family members. 
D) identify the positions,if any,that are reserved for members of the family. 
A) recognize a basic obligation to supply the family with employment of some type. 
B) refuse to hire family members but,instead,reward them with generous dividends. 
C) personally make all personnel decisions affecting family members. 
D) identify the positions,if any,that are reserved for members of the family.

Question 5

When a senior generation member is planning for succession,planning should encompass family members,employees and the owners.

Accepted Answer

A) True 
 B)False

Question 6

Bequeathing equal shares of ownership to children in a family business will probably create havoc in the future functioning of the business.

Accepted Answer

A) True 
 B)False

Question 7

A best practice for the family firm is to promote family members above other,more skilled employees,so that the workers will understand who is in charge.

Accepted Answer

A) True 
 B)False

Question 8

Patricia,a nonfamily employee of a family business,is concerned about competing with family members for future career opportunities.To protect her personal interests,she should:

Accepted Answer

A) align herself with the CEO to hopefully know when new positions will become open. 
B) ask that the owner/manager clarify the extent of opportunities considering her skill set. 
C) seek assurances that she will receive first consideration for promotion,ahead of family members who are not as qualified. 
D) be realistic enough to leave the firm and seek employment in a nonfamily business. 
A) align herself with the CEO to hopefully know when new positions will become open. 
B) ask that the owner/manager clarify the extent of opportunities considering her skill set. 
C) seek assurances that she will receive first consideration for promotion,ahead of family members who are not as qualified. 
D) be realistic enough to leave the firm and seek employment in a nonfamily business.

Question 9

Two major factors involved in grooming a son or daughter to enter the family business are the child's aptitude and the right to choose a career.

Accepted Answer

A) True 
 B)False

Question 10

In-laws not working in the family business may have a bad attitude about the company because of only hearing one side of an argument.

Accepted Answer

A) True 
 B)False

Question 11

In a family business,the interests of the family and the interests of the business are best described as:

Accepted Answer

A) overlapping. 
B) conflicting. 
C) coinciding. 
D) having no relationship with each other. 
A) overlapping. 
B) conflicting. 
C) coinciding. 
D) having no relationship with each other.

Question 12

In a family business,the family's primary function is to ensure the profitability and survival of the business.

Accepted Answer

A) True 
 B)False

Question 13

A family business constitution is sometimes labeled a _____.

Accepted Answer

A) business plan 
B) by-law guide 
C) family creed 
D) succession plan 
A) business plan 
B) by-law guide 
C) family creed 
D) succession plan

Question 14

In considering the role of younger family members,the best philosophy is to recognize that

Accepted Answer

A) a child should have a right to a job in the business if he or she desires. 
B) no family member should be hired at any level. 
C) children should have a right to choose their own careers. 
D) sibling rivalry will always be an issue with second-generation managers. 
A) a child should have a right to a job in the business if he or she desires. 
B) no family member should be hired at any level. 
C) children should have a right to choose their own careers. 
D) sibling rivalry will always be an issue with second-generation managers.

Question 15

"The more you can do,the more is expected of you." Josh already had his hands full managing just one of his father's retail stores.He didn't doubt his ability to do well managing an entire region but still he was reluctant to accept the assignment.He is likely afraid of:

Accepted Answer

A) failure. 
B) success. 
C) commitment. 
D) disappointing his parents. 
A) failure. 
B) success. 
C) commitment. 
D) disappointing his parents.

Question 16

What could a founder do to make a succession plan successful? Using the Three-Circle Model of Family Firms,identify issues the founder should discuss with each group.

Accepted Answer

A founder should have a well developed p

Question 17

Explain the concept of family and business overlap in a family business.

Accepted Answer

Although the family and the business are

Question 18

A family retreat can bring family members closer together as well as strengthen the family business.

Accepted Answer

A) True 
 B)False

Question 19

Which statement is the most correct about in-laws and possible complications in a family business?

Accepted Answer

A) Rarely do in-laws impact the business since they are only indirectly involved and have limited decision making responsibilities if at all. 
B) In-laws may impact the business if they are employed in the firm and are responsible for decision making. 
C) There will be a complication only when in-laws are competing against another family member for a promotion. 
D) In-laws will impact the business as they increase the number of persons who are either directly or indirectly involved in the family business. 
A) Rarely do in-laws impact the business since they are only indirectly involved and have limited decision making responsibilities if at all. 
B) In-laws may impact the business if they are employed in the firm and are responsible for decision making. 
C) There will be a complication only when in-laws are competing against another family member for a promotion. 
D) In-laws will impact the business as they increase the number of persons who are either directly or indirectly involved in the family business.

Question 20

Allan opened a hot dog stand in Central Park,New York City.He owns it and operates it six days a week,year round.What kind of business is this?

Accepted Answer

A) A sibling partnership 
B) A franchise 
C) A cousin consortium 
D) An owner-managed business 
A) A sibling partnership 
B) A franchise 
C) A cousin consortium 
D) An owner-managed business

Exam 5: The Family Business

As the spouse of the founder of Stonyfield Farm,Meg Cadoux Hirshberg serves the family business in a typical but critical role of

What step is best for parents to decrease succession conflict among children active in the firm and those who are not?

A founder's core values may become part of the family business culture because:

To protect the interests of both the family and the business in a family business,the owner should:

When a senior generation member is planning for succession,planning should encompass family members,employees and the owners.

Bequeathing equal shares of ownership to children in a family business will probably create havoc in the future functioning of the business.

A best practice for the family firm is to promote family members above other,more skilled employees,so that the workers will understand who is in charge.

Patricia,a nonfamily employee of a family business,is concerned about competing with family members for future career opportunities.To protect her personal interests,she should:

Two major factors involved in grooming a son or daughter to enter the family business are the child's aptitude and the right to choose a career.

In-laws not working in the family business may have a bad attitude about the company because of only hearing one side of an argument.

In a family business,the interests of the family and the interests of the business are best described as:

In a family business,the family's primary function is to ensure the profitability and survival of the business.

A family business constitution is sometimes labeled a _____.

In considering the role of younger family members,the best philosophy is to recognize that

"The more you can do,the more is expected of you." Josh already had his hands full managing just one of his father's retail stores.He didn't doubt his ability to do well managing an entire region but still he was reluctant to accept the assignment.He is likely afraid of:

What could a founder do to make a succession plan successful? Using the Three-Circle Model of Family Firms,identify issues the founder should discuss with each group.

Explain the concept of family and business overlap in a family business.

A family retreat can bring family members closer together as well as strengthen the family business.

Which statement is the most correct about in-laws and possible complications in a family business?

Allan opened a hot dog stand in Central Park,New York City.He owns it and operates it six days a week,year round.What kind of business is this?

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