Question 1

What are the four critical steps to consider in developing a succession strategy in a family business?

Accepted Answer

The four critical steps to consider are

Question 2

The first source of succession often is

Accepted Answer

A)  nonfamily outsiders. 
B)  professional managers. 
C)  family and in-house personnel. 
D)  friends of the family. 
A)  nonfamily outsiders. 
B)  professional managers. 
C)  family and in-house personnel. 
D)  friends of the family.

Question 3

Which of the following is not a suggestion a tax accountant or lawyer might make concerning tax reduction?

Accepted Answer

A)  Place real estate in a separate corporation. 
B)  Increase management's salaries and fringe benefits. 
C)  Establish a leasing subsidiary. 
D)  Give some or all of the owner's shares to heirs. 
A)  Place real estate in a separate corporation. 
B)  Increase management's salaries and fringe benefits. 
C)  Establish a leasing subsidiary. 
D)  Give some or all of the owner's shares to heirs.

Question 4

Bill and James Raymond have worked for their father's company for 15 years. Their father, who is president and now wants to retire, wants his sons jointly to take over the company. Bill and James have never agreed on anything. Should their father try another succession plan?

Accepted Answer

For the sake of the company, another suc

Question 5

Nepotism policies are lawful unless they have an "adverse impact" on women or minority groups (as in the Oakland Scavenger Company case).

Accepted Answer

A) True 
 B)False

Question 6

The Oakland Scavenger Company case resulted in

Accepted Answer

A)  a favorable ruling by the court for the plaintiffs. 
B)  a favorable ruling by the court for the defendants. 
C)  an out-of-court settlement. 
D)  an appeal to the U.S. Supreme Court. 
A)  a favorable ruling by the court for the plaintiffs. 
B)  a favorable ruling by the court for the defendants. 
C)  an out-of-court settlement. 
D)  an appeal to the U.S. Supreme Court.

Question 7

The idea of selling out should be viewed in

Accepted Answer

A)  a destructive sense. 
B)  a negative sense. 
C)  a positive sense. 
D)  a last resort sense. 
A)  a destructive sense. 
B)  a negative sense. 
C)  a positive sense. 
D)  a last resort sense.

Question 8

Which of the following is not considered a step in the harvest strategy?

Accepted Answer

A)  Looking for new venture to start up. 
B)  Publicizing the offer to sell. 
C)  Valuing the business. 
D)  Segregating assets. 
A)  Looking for new venture to start up. 
B)  Publicizing the offer to sell. 
C)  Valuing the business. 
D)  Segregating assets.

Question 9

External environmental factors do not have any effect on the succession issue.

Accepted Answer

A) True 
 B)False

Question 10

When considering financial difficulties, which of the following statements constitutes a forcing event?

Accepted Answer

A)  The business has a loss for one quarter. 
B)  A lender demands the removal of an owner-manager before lending the necessary funds. 
C)  The business does not make a substantial profit for the first year of business. 
D)  The business has record losses over a holiday season. 
A)  The business has a loss for one quarter. 
B)  A lender demands the removal of an owner-manager before lending the necessary funds. 
C)  The business does not make a substantial profit for the first year of business. 
D)  The business has record losses over a holiday season.

Question 11

The liquidity event can be achieved through an IPO or selling out.

Accepted Answer

A) True 
 B)False

Question 12

Only three in ten privately held enterprises make it to a second generation.

Accepted Answer

A) True 
 B)False

Question 13

A written succession strategy

Accepted Answer

A)  is part of an entrepreneur's will. 
B)  prepares the entrepreneur for developing a management continuity strategy and policy. 
C)  must be reviewed by the government. 
D)  must be reviewed by the family. 
A)  is part of an entrepreneur's will. 
B)  prepares the entrepreneur for developing a management continuity strategy and policy. 
C)  must be reviewed by the government. 
D)  must be reviewed by the family.

Question 14

Outside help in succession planning should be considered when

Accepted Answer

A)  the entrepreneur's ego gets in the way of a succession plan 
B)  the family doesn't want the business 
C)  the government requires it 
D)  market competition is heating up 
A)  the entrepreneur's ego gets in the way of a succession plan 
B)  the family doesn't want the business 
C)  the government requires it 
D)  market competition is heating up

Question 15

The textbook identifies four strategies that can be used in preparing a management succession policy. Which of the following is not one of these strategies?

Accepted Answer

A)  The owner's family controls the management continuity strategy entirely. 
B)  The owner controls the management continuity strategy entirely. 
C)  The owner works with a professional advisor on the management continuity strategy. 
D)  The owner works with family on the management continuity strategy. 
A)  The owner's family controls the management continuity strategy entirely. 
B)  The owner controls the management continuity strategy entirely. 
C)  The owner works with a professional advisor on the management continuity strategy. 
D)  The owner works with family on the management continuity strategy.

Question 16

An entrepreneurial successor is someone who

Accepted Answer

A)  is ingenious, creative, and driven 
B)  is loyal 
C)  has a profit orientation 
D)  has an administrative orientation 
A)  is ingenious, creative, and driven 
B)  is loyal 
C)  has a profit orientation 
D)  has an administrative orientation

Question 17

A harvest plan

Accepted Answer

A)  is similar to a will. 
B)  defines when and how business owners will realize a cash return on investment. 
C)  leaves the business to the next generation. 
D)  is simple to implement. 
A)  is similar to a will. 
B)  defines when and how business owners will realize a cash return on investment. 
C)  leaves the business to the next generation. 
D)  is simple to implement.

Question 18

Most privately held firms

Accepted Answer

A)  lack a succession plan. 
B)  pass the firm to a child. 
C)  don't view succession as a major issue. 
D)  leave the succession decision to the executor of the owner's will. 
A)  lack a succession plan. 
B)  pass the firm to a child. 
C)  don't view succession as a major issue. 
D)  leave the succession decision to the executor of the owner's will.

Question 19

The employees at Donnely and Associates have noticed a case of favoritism toward the president's son Jim. Jim constantly breaks company policy. The president is planning to retire in a few years. What should be done about the growing unrest in the company?

Accepted Answer

Before the president retires he must dis

Question 20

Meeting with potential buyers

Accepted Answer

A)  leads to a lower selling price. 
B)  helps in the negotiation of major requirements. 
C)  reduces buyer confidence. 
D)  reduces seller confidence. 
A)  leads to a lower selling price. 
B)  helps in the negotiation of major requirements. 
C)  reduces buyer confidence. 
D)  reduces seller confidence.

What are the four critical steps to consider in developing a succession strategy in a family business?

The first source of succession often is

Which of the following is not a suggestion a tax accountant or lawyer might make concerning tax reduction?

Bill and James Raymond have worked for their father's company for 15 years. Their father, who is president and now wants to retire, wants his sons jointly to take over the company. Bill and James have never agreed on anything. Should their father try another succession plan?

Nepotism policies are lawful unless they have an "adverse impact" on women or minority groups (as in the Oakland Scavenger Company case).

The Oakland Scavenger Company case resulted in

The idea of selling out should be viewed in

Which of the following is not considered a step in the harvest strategy?

External environmental factors do not have any effect on the succession issue.

When considering financial difficulties, which of the following statements constitutes a forcing event?

The liquidity event can be achieved through an IPO or selling out.

Only three in ten privately held enterprises make it to a second generation.

A written succession strategy

Outside help in succession planning should be considered when

The textbook identifies four strategies that can be used in preparing a management succession policy. Which of the following is not one of these strategies?

An entrepreneurial successor is someone who

A harvest plan

Most privately held firms

The employees at Donnely and Associates have noticed a case of favoritism toward the president's son Jim. Jim constantly breaks company policy. The president is planning to retire in a few years. What should be done about the growing unrest in the company?

Meeting with potential buyers

Entrepreneurship: Evolutionary Development-Revolutionary Impact

The Entrepreneurial Mind-Set in Individuals: Cognition and Ethics

The Entrepreneurial Mind-Set in Organizations: Corporate Entrepreneurship

Social Entrepreneurship and the Global Environment for Entrepreneurship

Innovation: The Creative Pursuit of Ideas

Assessment of Entrepreneurial Opportunities

Pathways to Entrepreneurial Ventures

Sources of Capital for Entrepreneurs

Legal Challenges of Entrepreneurial Ventures

Marketing Challenges for Entrepreneurial Ventures

Financial Preparation for Entrepreneurial Ventures

Developing an Effective Business Plan

Strategic Entrepreneurial Growth

Valuation of Entrepreneurial Ventures

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Exam 15: Harvesting the Entrepreneurial Venture

What are the four critical steps to consider in developing a succession strategy in a family business?

The first source of succession often is

Which of the following is not a suggestion a tax accountant or lawyer might make concerning tax reduction?

Bill and James Raymond have worked for their father's company for 15 years. Their father, who is president and now wants to retire, wants his sons jointly to take over the company. Bill and James have never agreed on anything. Should their father try another succession plan?

Nepotism policies are lawful unless they have an "adverse impact" on women or minority groups (as in the Oakland Scavenger Company case).

The Oakland Scavenger Company case resulted in

The idea of selling out should be viewed in

Which of the following is not considered a step in the harvest strategy?

External environmental factors do not have any effect on the succession issue.

When considering financial difficulties, which of the following statements constitutes a forcing event?

The liquidity event can be achieved through an IPO or selling out.

Only three in ten privately held enterprises make it to a second generation.

A written succession strategy

Outside help in succession planning should be considered when

The textbook identifies four strategies that can be used in preparing a management succession policy. Which of the following is not one of these strategies?

An entrepreneurial successor is someone who

A harvest plan

Most privately held firms

The employees at Donnely and Associates have noticed a case of favoritism toward the president's son Jim. Jim constantly breaks company policy. The president is planning to retire in a few years. What should be done about the growing unrest in the company?

Meeting with potential buyers

Entrepreneurship: Evolutionary Development-Revolutionary Impact

The Entrepreneurial Mind-Set in Individuals: Cognition and Ethics

The Entrepreneurial Mind-Set in Organizations: Corporate Entrepreneurship

Social Entrepreneurship and the Global Environment for Entrepreneurship

Innovation: The Creative Pursuit of Ideas

Assessment of Entrepreneurial Opportunities

Pathways to Entrepreneurial Ventures

Sources of Capital for Entrepreneurs

Legal Challenges of Entrepreneurial Ventures

Marketing Challenges for Entrepreneurial Ventures

Financial Preparation for Entrepreneurial Ventures

Developing an Effective Business Plan

Strategic Entrepreneurial Growth

Valuation of Entrepreneurial Ventures

Filters