Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

A parent might attempt to resolve a transfer of ownership by giving children active in the firm's management _____ stock and giving nonactive children _____ stock.

Accepted Answer

A)  preferred, common 
B)  growth, speculative 
C)  common, preferred 
D)  more, less 
A)  preferred, common 
B)  growth, speculative 
C)  common, preferred 
D)  more, less

Question 3

Match the term to its definition.
-An organization in which either the individuals who established or acquired the firm or their descendants significantly influence the strategic decisions and life course of the firm

Accepted Answer

A) co-preneurs 
B) cousin consortium 
C) family 
D) family business 
E) family business constitution
F)family council
G)family retreat
H)nepotism
I)organizational culture
J)owner-managed business
K)sibling partnership
L)socioeconomic wealth
M)transfer of ownership 
A) co-preneurs 
B) cousin consortium 
C) family 
D) family business 
E) family business constitution
F)family council
G)family retreat
H)nepotism
I)organizational culture
J)owner-managed business
K)sibling partnership
L)socioeconomic wealth
M)transfer of ownership

Question 4

Match the term to its definition.
-An organized group of family members who gather periodically to discuss family-related business issues

Accepted Answer

A) co-preneurs 
B) cousin consortium 
C) family 
D) family business 
E) family business constitution
F)family council
G)family retreat
H)nepotism
I)organizational culture
J)owner-managed business
K)sibling partnership
L)socioeconomic wealth
M)transfer of ownership 
A) co-preneurs 
B) cousin consortium 
C) family 
D) family business 
E) family business constitution
F)family council
G)family retreat
H)nepotism
I)organizational culture
J)owner-managed business
K)sibling partnership
L)socioeconomic wealth
M)transfer of ownership

Question 5

The close relationship of business factors and family concerns in a family business are best described as

Accepted Answer

A)  separation of domains. 
B)  a generational gap. 
C)  an example of blood being thicker than water. 
D)  overlapping. 
A)  separation of domains. 
B)  a generational gap. 
C)  an example of blood being thicker than water. 
D)  overlapping.

Question 6

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 7

Tim is married to Susan. Tim's parents are his _____, and Susan's parents are Tim's _____.

Accepted Answer

A)  family of attachment; family of origin 
B)  natural family; inherited family 
C)  natural family; extended family 
D)  family of origin; family of attachment 
A)  family of attachment; family of origin 
B)  natural family; inherited family 
C)  natural family; extended family 
D)  family of origin; family of attachment

Question 8

On average, family businesses survive longer than nonfamily firms.

Accepted Answer

A) True 
 B)False

Question 9

Allan opened a hot dog stand in Central Park, New York City. He owns it and operates it six days a week, year round. Which of the following types 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

Question 10

Recent research findings suggest that companies that are successful in transferring ownership and management from one generation to the next are characterized by

Accepted Answer

A)  centralized management. 
B)  diversification. 
C)  transfer of equal ownership shares among all heirs. 
D)  entrepreneurial behavior. 
A)  centralized management. 
B)  diversification. 
C)  transfer of equal ownership shares among all heirs. 
D)  entrepreneurial behavior.

Question 11

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(n)

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 12

Which of the following statements about using available family talent in the succession plan is true?

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 or supplement family talent to avoid a decline in the business under the leadership of second- or third-generation family members. 
C)  If a younger family member would like to advance his or her career by working on a new direction for the company, a negative decision by his or her parent means he or she should not discuss his or her ideas with the board of directors. 
D)  It is rare a younger member will have the skill set to rescue a struggling company; therefore, younger members 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 or supplement family talent to avoid a decline in the business under the leadership of second- or third-generation family members. 
C)  If a younger family member would like to advance his or her career by working on a new direction for the company, a negative decision by his or her parent means he or she should not discuss his or her ideas with the board of directors. 
D)  It is rare a younger member will have the skill set to rescue a struggling company; therefore, younger members should not be considered for a succession plan.

Question 13

The role of the entrepreneur's spouse in family conflicts can sometimes be described as that of a mediator in business relationships between the entrepreneur and the children.

Accepted Answer

A) True 
 B)False

Question 14

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

Accepted Answer

Although the family and the business are

Question 15

Match the term to its definition.
-A business in which children of the founder become owners and managers

Accepted Answer

A) co-preneurs 
B) cousin consortium 
C) family 
D) family business 
E) family business constitution
F)family council
G)family retreat
H)nepotism
I)organizational culture
J)owner-managed business
K)sibling partnership
L)socioeconomic wealth
M)transfer of ownership 
A) co-preneurs 
B) cousin consortium 
C) family 
D) family business 
E) family business constitution
F)family council
G)family retreat
H)nepotism
I)organizational culture
J)owner-managed business
K)sibling partnership
L)socioeconomic wealth
M)transfer of ownership

Question 16

For families that are not able to develop an atmosphere of neutrality, family retreats are best handled by an outside facilitator, who can help develop an agenda and set ground rules for discussion.

Accepted Answer

A) True 
 B)False

Question 17

Researchers have found that one of the most frequent and stressful roles performed by a spouse not employed by the family business is

Accepted Answer

A)  making impartial decisions on controversial business. 
B)  providing balance in family matters. 
C)  entertaining potential clients. 
D)  serving as a mediator in business relationships between the entrepreneur and the children. 
A)  making impartial decisions on controversial business. 
B)  providing balance in family matters. 
C)  entertaining potential clients. 
D)  serving as a mediator in business relationships between the entrepreneur and the children.

Question 18

A major factor involved in grooming a son or daughter to enter the family business is the child's right to choose a career.

Accepted Answer

A) True 
 B)False

Question 19

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 20

Match the term to its definition.
-The practice of employing relatives

Accepted Answer

A) co-preneurs 
B) cousin consortium 
C) family 
D) family business 
E) family business constitution
F)family council
G)family retreat
H)nepotism
I)organizational culture
J)owner-managed business
K)sibling partnership
L)socioeconomic wealth
M)transfer of ownership 
A) co-preneurs 
B) cousin consortium 
C) family 
D) family business 
E) family business constitution
F)family council
G)family retreat
H)nepotism
I)organizational culture
J)owner-managed business
K)sibling partnership
L)socioeconomic wealth
M)transfer of ownership

Exam 5: The Family Business

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

A parent might attempt to resolve a transfer of ownership by giving children active in the firm's management _____ stock and giving nonactive children _____ stock.

Match the term to its definition. -An organization in which either the individuals who established or acquired the firm or their descendants significantly influence the strategic decisions and life course of the firm

Match the term to its definition. -An organized group of family members who gather periodically to discuss family-related business issues

The close relationship of business factors and family concerns in a family business are best described as

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

Tim is married to Susan. Tim's parents are his _____, and Susan's parents are Tim's _____.

On average, family businesses survive longer than nonfamily firms.

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

Recent research findings suggest that companies that are successful in transferring ownership and management from one generation to the next are characterized by

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(n)

Which of the following statements about using available family talent in the succession plan is true?

The role of the entrepreneur's spouse in family conflicts can sometimes be described as that of a mediator in business relationships between the entrepreneur and the children.

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

Match the term to its definition. -A business in which children of the founder become owners and managers

For families that are not able to develop an atmosphere of neutrality, family retreats are best handled by an outside facilitator, who can help develop an agenda and set ground rules for discussion.

Researchers have found that one of the most frequent and stressful roles performed by a spouse not employed by the family business is

A major factor involved in grooming a son or daughter to enter the family business is the child's right to choose a career.

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

Match the term to its definition. -The practice of employing relatives

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 Businesses

Professional Management and the Small Business

Managing Human Resources

Managing Small Business Operations

Managing the Firms Assets

Managing Risk

Filters

A parent might attempt to resolve a transfer of ownership by giving children active in the firm's management _ stock and giving nonactive children _ stock.

Tim is married to Susan. Tim's parents are his _, and Susan's parents are Tim's _.