Question 1

Which statement is true concerning using available family talent in the succession plan?

Accepted Answer

A) Younger family members working in the business should realize that mistakes early on in their careers should be considered in their future advancement. 
B) If the available talent is not sufficient inside the company,the owner must bring in outside leadership even if it is not perceived as a favorable decision by the family at large. 
C) If a younger family member would like to advance their career by working on a new direction for the company,a negative decision by their parent means they should not discuss their ideas with the board of directors. 
D) It is rare a younger member will have the skill set to rescue a struggling company;therefore they should not be considered for a succession plan. 
A) Younger family members working in the business should realize that mistakes early on in their careers should be considered in their future advancement. 
B) If the available talent is not sufficient inside the company,the owner must bring in outside leadership even if it is not perceived as a favorable decision by the family at large. 
C) If a younger family member would like to advance their career by working on a new direction for the company,a negative decision by their parent means they should not discuss their ideas with the board of directors. 
D) It is rare a younger member will have the skill set to rescue a struggling company;therefore they should not be considered for a succession plan.

Question 2

A benefit of strong family relationships is the greater willingness of family members to:

Accepted Answer

A) adopt new operating methods when needed. 
B) act generously in compensating nonfamily employees. 
C) sacrifice salaries and dividends when necessary. 
D) emphasize short-run profits. 
A) adopt new operating methods when needed. 
B) act generously in compensating nonfamily employees. 
C) sacrifice salaries and dividends when necessary. 
D) emphasize short-run profits.

Question 3

As the only son,Eduardo's father expected to one day turn over management of the business to him despite Eduardo's protests that he wanted no part of it.Following graduation from college,Eduardo realized he did not want his father to let some outsider take over the business.Eduardo's commitment is based on:

Accepted Answer

A) family control. 
B) identification with the firm. 
C) binding social ties. 
D) emotional attachment. 
E) renewal of family bonds. 
A) family control. 
B) identification with the firm. 
C) binding social ties. 
D) emotional attachment. 
E) renewal of family bonds.

Question 4

Kinder's Deli has been in business for three generations.A place was found for every Kinder child to work in the shop.The name Kinder meant fine deli meats.This family's commitment is based on:

Accepted Answer

A) family control. 
B) identification with the firm. 
C) binding social ties. 
D) emotional attachment. 
E) renewal of family bonds. 
A) family control. 
B) identification with the firm. 
C) binding social ties. 
D) emotional attachment. 
E) renewal of family bonds.

Question 5

To avoid a stifling atmosphere for nonfamily employees in a family business,the owner should:

Accepted Answer

A) promote only nonfamily members. 
B) avoid all special consideration for family members. 
C) make clear the extent of opportunity for nonfamily members. 
D) minimize discussion about future management changes. 
A) promote only nonfamily members. 
B) avoid all special consideration for family members. 
C) make clear the extent of opportunity for nonfamily members. 
D) minimize discussion about future management changes.

Question 6

A family firm's special patterns and beliefs comprise the firm's organizational culture.

Accepted Answer

A) True 
 B)False

Question 7

Bret first opened his hardware store in 1946.His sons took over when Bret retired,and now Bret's grandchildren run the store.This type of family business is known as:

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.

Question 8

One of the most frequent and stressful roles performed by the spouse who is not active in the business is to:

Accepted Answer

A) serve as the mediator between the entrepreneur and the children. 
B) be a good listener. 
C) mandate they are given a copy of the books each month. 
D) All of the above are activities of the non-active spouse. 
A) serve as the mediator between the entrepreneur and the children. 
B) be a good listener. 
C) mandate they are given a copy of the books each month. 
D) All of the above are activities of the non-active spouse.

Question 9

Family retreats are best handled by an outside facilitator,who can help develop an agenda and establish ground rules for discussion.

Accepted Answer

A) True 
 B)False

Question 10

An inherent problem for couples involved in a family business is that

Accepted Answer

A) conflicts in the business tend to carry over into family life. 
B) hours of work may become longer for one person. 
C) uneven division of labor,i.e. ,one person is only responsible for the menial tasks. 
D) some husbands find their masculinity threatened when their wives are better managers. 
A) conflicts in the business tend to carry over into family life. 
B) hours of work may become longer for one person. 
C) uneven division of labor,i.e. ,one person is only responsible for the menial tasks. 
D) some husbands find their masculinity threatened when their wives are better managers.

Question 11

A family retreat is designed to:

Accepted Answer

A) bring family members together to openly discuss business matters. 
B) focus on business matters while avoiding extensive communication. 
C) control the lines of communication. 
D) announce the latest policy decisions and other changes in the business. 
A) bring family members together to openly discuss business matters. 
B) focus on business matters while avoiding extensive communication. 
C) control the lines of communication. 
D) announce the latest policy decisions and other changes in the business.

Question 12

Fran and Bob (who are married)own and manage a cleaning service.A potential advantage of this arrangement is that:

Accepted Answer

A) differences of opinion about the business won't carry over into family lives since they will see each other more hours daily. 
B) it affords the opportunity to share more of their lives and build something together. 
C) the business isn't likely to dissipate their energies as they can each work on separate sections. 
D) they can count on working fewer hours in the business. 
A) differences of opinion about the business won't carry over into family lives since they will see each other more hours daily. 
B) it affords the opportunity to share more of their lives and build something together. 
C) the business isn't likely to dissipate their energies as they can each work on separate sections. 
D) they can count on working fewer hours in the business.

Question 13

Liam's mentor had worked with him for several months to prepare him for the promotion.Now that the offer has been made,Liam is hesitant.His hesitation is likely based on:

Accepted Answer

A) fear of failure. 
B) fear of success. 
C) fear of commitment. 
D) fear of disappointing his mentor. 
A) fear of failure. 
B) fear of success. 
C) fear of commitment. 
D) fear of disappointing his mentor.

Question 14

Chip and Dale are brothers who have taken over their father's business.This type of family business is known as:

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.

Question 15

When a parent retires completely and turns the firm over to a son or daughter,the firm ceases to be a family business.

Accepted Answer

A) True 
 B)False

Question 16

Senior management will be more receptive to the junior generation advancing if the junior generation

Accepted Answer

A) decides what time is best for their personal lives. 
B) prepares for ownership by concentrating on learning "big" picture skills as opposed to basic management skills. 
C) designs life plans for themselves and the business that involves what happens if the business fails. 
D) proactively shares their preparation for advancement and asks for advice for implementation. 
A) decides what time is best for their personal lives. 
B) prepares for ownership by concentrating on learning "big" picture skills as opposed to basic management skills. 
C) designs life plans for themselves and the business that involves what happens if the business fails. 
D) proactively shares their preparation for advancement and asks for advice for implementation.

Question 17

John and his brother Jack started a produce farm 20 years ago and are thinking about retirement.Over time,their children have worked at the farm and so the cousins have started talking about taking over management.At present,this produce farm is an example of ____.

Accepted Answer

A) co-preneur managed business 
B) cousin consortium 
C) owner-managed business 
D) sibling partnership 
A) co-preneur managed business 
B) cousin consortium 
C) owner-managed business 
D) sibling partnership

Question 18

A nonfamily employee of a family business complains that the recent promotion of a family member was unfair.The owner should:

Accepted Answer

A) enter into a discussion of the roles and opportunities for both family members and outsiders. 
B) clarify that family members always have the inside track,even though this fact is disappointing to the bypassed employee. 
C) get the employee to think more positively by describing other attractive features of the employee's job. 
D) acknowledge that a tension always exists and that it can never be dealt with satisfactorily. 
A) enter into a discussion of the roles and opportunities for both family members and outsiders. 
B) clarify that family members always have the inside track,even though this fact is disappointing to the bypassed employee. 
C) get the employee to think more positively by describing other attractive features of the employee's job. 
D) acknowledge that a tension always exists and that it can never be dealt with satisfactorily.

Question 19

Jan and Jill started a business 20 years.Jill recently stepped down;her daughter Jenny has agreed to start managing the company with Jan's help;and the eventual goal is for Jenny to run the entire company.This process between Jan and Jenny is called ____.

Accepted Answer

A) sibling partnership 
B) family consortium 
C) mentoring 
D) Two of the above are true. 
A) sibling partnership 
B) family consortium 
C) mentoring 
D) Two of the above are true.

Exam 5: The Family Business

Which statement is true concerning using available family talent in the succession plan?

A benefit of strong family relationships is the greater willingness of family members to:

Kinder's Deli has been in business for three generations.A place was found for every Kinder child to work in the shop.The name Kinder meant fine deli meats.This family's commitment is based on:

To avoid a stifling atmosphere for nonfamily employees in a family business,the owner should:

A family firm's special patterns and beliefs comprise the firm's organizational culture.

Bret first opened his hardware store in 1946.His sons took over when Bret retired,and now Bret's grandchildren run the store.This type of family business is known as:

One of the most frequent and stressful roles performed by the spouse who is not active in the business is to:

Family retreats are best handled by an outside facilitator,who can help develop an agenda and establish ground rules for discussion.

An inherent problem for couples involved in a family business is that

A family retreat is designed to:

Fran and Bob (who are married)own and manage a cleaning service.A potential advantage of this arrangement is that:

Liam's mentor had worked with him for several months to prepare him for the promotion.Now that the offer has been made,Liam is hesitant.His hesitation is likely based on:

Chip and Dale are brothers who have taken over their father's business.This type of family business is known as:

When a parent retires completely and turns the firm over to a son or daughter,the firm ceases to be a family business.

Senior management will be more receptive to the junior generation advancing if the junior generation

John and his brother Jack started a produce farm 20 years ago and are thinking about retirement.Over time,their children have worked at the farm and so the cousins have started talking about taking over management.At present,this produce farm is an example of ____.

A nonfamily employee of a family business complains that the recent promotion of a family member was unfair.The owner should:

Jan and Jill started a business 20 years.Jill recently stepped down;her daughter Jenny has agreed to start managing the company with Jan's help;and the eventual goal is for Jenny to run the entire company.This process between Jan and Jenny is called ____.

The Entrepreneurial Lifethe Entrepreneurial Life

Integrity, ethics, and Social Entrepreneurship

Starting a Small Business

Franchises and Buyouts

The Business Plan: Visualizing the Dream

The Marketing Plan

The Organizational Plan: Teams, legal Structures, alliances, and Directors

The Location Plan

Understanding a Firms Financial Statements

Forecasting Financial Requirements

A Firms Sources of Financing

Planning for the Harvest

Building Customer Relationships

Product Development and Supply Chain Management

Pricing and Credit Decisions

Promotional Planning

Global Opportunities for Small Business

Professional Management and the Small Business

Managing Human Resources

Managing Small Business Operations

Managing the Firms Assets

Managing Risk

Filters