Question 1

Sometimes firms are compelled to grow to accommodate the growth of a key customer.

Accepted Answer

A) True 
 B)False

Question 2

________ means that as the number of employees a firm needs increases, it becomes increasingly difficult for it to find the right employees, place them in appropriate positions, and provide adequate supervision.

Accepted Answer

A)  Difficult hazard 
B)  Adverse hazard 
C)  Adverse selection 
D)  Moral selection 
E)  Moral hazard 
A)  Difficult hazard 
B)  Adverse hazard 
C)  Adverse selection 
D)  Moral selection 
E)  Moral hazard

Question 3

Zack Shields leases a manufacturing facility that produces computer monitors. Zack tries to keep production high, because his lease payments are $10,500 a month, regardless of whether he produces one computer monitor a month or 10,000. Zach's lease payment is a ________ cost.

Accepted Answer

A)  variable 
B)  secondary 
C)  fixed 
D)  marginal 
E)  tangible 
A)  variable 
B)  secondary 
C)  fixed 
D)  marginal 
E)  tangible

Question 4

The main challenges for a business in the introduction stage of the organizational life cycle is ________.

Accepted Answer

A)  beginning the process of transitioning the owner from a hands-on supervisor to a more managerial role and developing business partnerships 
B)  developing business partnerships and making sure the initial product or service is right 
C)  determining whether the owner of the business and the current management team is capable of taking the business further and developing systems and procedures 
D)  developing systems and procedures and beginning the process of transitioning the owner from a hands-on supervisor to a more managerial role 
E)  making sure the initial product or service is right and starting to lay the groundwork for building a larger organization 
A)  beginning the process of transitioning the owner from a hands-on supervisor to a more managerial role and developing business partnerships 
B)  developing business partnerships and making sure the initial product or service is right 
C)  determining whether the owner of the business and the current management team is capable of taking the business further and developing systems and procedures 
D)  developing systems and procedures and beginning the process of transitioning the owner from a hands-on supervisor to a more managerial role 
E)  making sure the initial product or service is right and starting to lay the groundwork for building a larger organization

Question 5

Which of the following statements is not true regarding the day-to-day challenges of growing a firm?

Accepted Answer

A)  As a firm grows, it requires a decreasing amount of cash to service its customers. 
B)  If firm growth comes at the expense of a competitor's market share, price competition can set in. 
C)  Most businesses, regardless of their industry, need capital from time to time to invest in growth-enabling projects. 
D)  Although most businesses are started fairly inexpensively, the need for capital is typically the most prevalent in the early growth and continuous stages of the organizational life cycle. 
E)  One of the most difficult challenges that businesses encounter as they grow is maintaining high levels of quality and customer service. 
A)  As a firm grows, it requires a decreasing amount of cash to service its customers. 
B)  If firm growth comes at the expense of a competitor's market share, price competition can set in. 
C)  Most businesses, regardless of their industry, need capital from time to time to invest in growth-enabling projects. 
D)  Although most businesses are started fairly inexpensively, the need for capital is typically the most prevalent in the early growth and continuous stages of the organizational life cycle. 
E)  One of the most difficult challenges that businesses encounter as they grow is maintaining high levels of quality and customer service.

Question 6

According to the textbook, the businesses that have the potential to grow the fastest over a sustained period of time are ones that ________.

Accepted Answer

A)  solve a significant problem or have a major impact on their customers' productivity or lives 
B)  are cost leaders and promote themselves aggressively 
C)  have a major impact on their customers' lives and sell high quality products 
D)  take advantage of environmental trends and are cost leaders 
E)  solve a significant problem or sell high quality products 
A)  solve a significant problem or have a major impact on their customers' productivity or lives 
B)  are cost leaders and promote themselves aggressively 
C)  have a major impact on their customers' lives and sell high quality products 
D)  take advantage of environmental trends and are cost leaders 
E)  solve a significant problem or sell high quality products

Question 7

Megan Johnson owns a kitchen and bathroom cabinet company. Her market research is telling her that she is taking business away from the large home improvement stores in her trade area. One thing that Megan is worried about is that the large stores might fight back by lowering their prices, which hurts everyone except the consumer. The day-to-day challenge of firm growth that this example is referring to is ________.

Accepted Answer

A)  quality control 
B)  price stability 
C)  capital constraints 
D)  cash flow management 
E)  benchmarking 
A)  quality control 
B)  price stability 
C)  capital constraints 
D)  cash flow management 
E)  benchmarking

Question 8

Few businesses need access to capital to fuel their growth.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is not one of the five stages in the organizational life cycle?

Accepted Answer

A)  Introduction 
B)  Early growth 
C)  Scale 
D)  Maturity 
E)  Decline 
A)  Introduction 
B)  Early growth 
C)  Scale 
D)  Maturity 
E)  Decline

Question 10

According to the textbook, the toughest decisions regarding business growth are made in the ________ stage of the organizational life cycle.

Accepted Answer

A)  introduction 
B)  early growth 
C)  continuous growth 
D)  maturity 
E)  decline 
A)  introduction 
B)  early growth 
C)  continuous growth 
D)  maturity 
E)  decline

Question 11

Jeremy Westbrook owns an organic food company which has increased both its profits and revenues over an extended period of time. Jeremy's firm is experiencing ________ growth.

Accepted Answer

A)  persistent 
B)  unremitting 
C)  sustained 
D)  unbroken 
E)  moderate 
A)  persistent 
B)  unremitting 
C)  sustained 
D)  unbroken 
E)  moderate

Question 12

For a business to be successful in the early growth stage of the organizational life cycle, the two important things that must happen are ________.

Accepted Answer

A)  the founder or owner of the business must start transitioning from his or her role as the hands-on supervisor to a more managerial role, and increased formalization must take place 
B)  a decision must be made whether the owner-manager and the current management team is capable of taking the business further, and the organization must start laying the groundwork for future growth 
C)  increased formalization must take place, and the business must achieve price stability 
D)  a decision must be made whether the owner-manager or the current management team is capable of taking the business further, and business partnerships must be established 
E)  the founder or owner of the business must start transitioning from his or her role as the hands-on supervisor to a more managerial role, and the business must be cash flow positive 
A)  the founder or owner of the business must start transitioning from his or her role as the hands-on supervisor to a more managerial role, and increased formalization must take place 
B)  a decision must be made whether the owner-manager and the current management team is capable of taking the business further, and the organization must start laying the groundwork for future growth 
C)  increased formalization must take place, and the business must achieve price stability 
D)  a decision must be made whether the owner-manager or the current management team is capable of taking the business further, and business partnerships must be established 
E)  the founder or owner of the business must start transitioning from his or her role as the hands-on supervisor to a more managerial role, and the business must be cash flow positive

Question 13

________ are(is) generated when increasing production lowers the average cost of each unit produced.

Accepted Answer

A)  Business scalability 
B)  Economies of scale 
C)  Reaching for scale 
D)  Market leadership 
E)  Economies of scope 
A)  Business scalability 
B)  Economies of scale 
C)  Reaching for scale 
D)  Market leadership 
E)  Economies of scope

Question 14

The Partnering for Success feature in Chapter 13 focuses on Threadless, the popular community-centered T-shirt design site. According to the feature, at one point during its early growth, Threadless almost collapsed under the weight of operational problems. Threadless solved the problem by ________.

Accepted Answer

A)  hiring professional managers 
B)  replacing the founder CEO with a seasoned CEO from an established company 
C)  hiring a consulting firm 
D)  selling a minority interest to a venture capital firm, which provided Threadless operational assistance 
E)  merging with Zappos and folding its operations into Zappos' operations 
A)  hiring professional managers 
B)  replacing the founder CEO with a seasoned CEO from an established company 
C)  hiring a consulting firm 
D)  selling a minority interest to a venture capital firm, which provided Threadless operational assistance 
E)  merging with Zappos and folding its operations into Zappos' operations

Question 15

According to the textbook, most entrepreneurial firms ________.

Accepted Answer

A)  are ambivalent about growth 
B)  want to grow 
C)  do not want to grow 
D)  want to grow if the economy is strong but do not want to grow if the economy is weak 
E)  want to grow if they are a service firm but do not want to grow if they are a manufacturing firm 
A)  are ambivalent about growth 
B)  want to grow 
C)  do not want to grow 
D)  want to grow if the economy is strong but do not want to grow if the economy is weak 
E)  want to grow if they are a service firm but do not want to grow if they are a manufacturing firm

Question 16

London Simpson owns a company that makes smartphone accessories. She is trying to increase her sales, primarily because she knows that increasing production lowers the average cost of each unit produced. The reason for growth illustrated in this example is ________.

Accepted Answer

A)  economies of scope 
B)  market leadership 
C)  influence, power, and survivability 
D)  need to accommodate the growth of key customers 
E)  economies of scale 
A)  economies of scope 
B)  market leadership 
C)  influence, power, and survivability 
D)  need to accommodate the growth of key customers 
E)  economies of scale

Question 17

According to the textbook, it is ________.

Accepted Answer

A)  not inevitable that a business enter the decline stage of the organizational life cycle 
B)  inevitable that a business enter the decline stage of the organizational life cycle 
C)  not inevitable that service firms enter the decline stage of the organizational life cycle but is inevitable for manufacturing firms 
D)  not inevitable that manufacturing firms enter the decline stage of the organizational life cycle but is inevitable for service firms 
E)  not inevitable that international firms enter the decline stage of the organizational life cycle but is inevitable for strictly domestic firms 
A)  not inevitable that a business enter the decline stage of the organizational life cycle 
B)  inevitable that a business enter the decline stage of the organizational life cycle 
C)  not inevitable that service firms enter the decline stage of the organizational life cycle but is inevitable for manufacturing firms 
D)  not inevitable that manufacturing firms enter the decline stage of the organizational life cycle but is inevitable for service firms 
E)  not inevitable that international firms enter the decline stage of the organizational life cycle but is inevitable for strictly domestic firms

Question 18

________ means that as the number of employees a firm needs increases, it becomes increasingly difficult for it to find the right employees, place them in appropriate positions, and provide adequate supervision.

Accepted Answer

A)  Moral hazard 
B)  Adverse selection 
C)  Adverse hazard 
D)  Complex hazard 
E)  Complex selection 
A)  Moral hazard 
B)  Adverse selection 
C)  Adverse hazard 
D)  Complex hazard 
E)  Complex selection

Question 19

A firm's pace of growth is the rate it is growing ________.

Accepted Answer

A)  compared to industry norms 
B)  compared to a national index of all firms 
C)  on an annual basis 
D)  compared to the national economy 
E)  compared to its closest competitor 
A)  compared to industry norms 
B)  compared to a national index of all firms 
C)  on an annual basis 
D)  compared to the national economy 
E)  compared to its closest competitor

Question 20

Growth usually increases rather than decreases the challenges involved with cash flow management.

Accepted Answer

A) True 
 B)False

Sometimes firms are compelled to grow to accommodate the growth of a key customer.

________ means that as the number of employees a firm needs increases, it becomes increasingly difficult for it to find the right employees, place them in appropriate positions, and provide adequate supervision.

Zack Shields leases a manufacturing facility that produces computer monitors. Zack tries to keep production high, because his lease payments are $10,500 a month, regardless of whether he produces one computer monitor a month or 10,000. Zach's lease payment is a ________ cost.

The main challenges for a business in the introduction stage of the organizational life cycle is ________.

Which of the following statements is not true regarding the day-to-day challenges of growing a firm?

According to the textbook, the businesses that have the potential to grow the fastest over a sustained period of time are ones that ________.

Few businesses need access to capital to fuel their growth.

Which of the following is not one of the five stages in the organizational life cycle?

According to the textbook, the toughest decisions regarding business growth are made in the ________ stage of the organizational life cycle.

Jeremy Westbrook owns an organic food company which has increased both its profits and revenues over an extended period of time. Jeremy's firm is experiencing ________ growth.

For a business to be successful in the early growth stage of the organizational life cycle, the two important things that must happen are ________.

________ are(is) generated when increasing production lowers the average cost of each unit produced.

The Partnering for Success feature in Chapter 13 focuses on Threadless, the popular community-centered T-shirt design site. According to the feature, at one point during its early growth, Threadless almost collapsed under the weight of operational problems. Threadless solved the problem by ________.

According to the textbook, most entrepreneurial firms ________.

London Simpson owns a company that makes smartphone accessories. She is trying to increase her sales, primarily because she knows that increasing production lowers the average cost of each unit produced. The reason for growth illustrated in this example is ________.

According to the textbook, it is ________.

________ means that as the number of employees a firm needs increases, it becomes increasingly difficult for it to find the right employees, place them in appropriate positions, and provide adequate supervision.

A firm's pace of growth is the rate it is growing ________.

Growth usually increases rather than decreases the challenges involved with cash flow management.

Introduction to Entrepreneurship

Recognizing Opportunities and Generating Ideas

Feasibility Analysis

Developing an Effective Business Model

Industry and Competitor Analysis

Writing a Business Plan

Preparing the Proper Ethical and Legal Foundation

Assessing a New Venture's Financial Strength and Viability

Building a New-Venture Team

Getting Financing or Funding

Unique Marketing Issues

The Importance of Intellectual Property

Strategies for Firm Growth

Franchising

Filters

Exam 13: Preparing for and Evaluating the Challenges of Growth

Sometimes firms are compelled to grow to accommodate the growth of a key customer.

________ means that as the number of employees a firm needs increases, it becomes increasingly difficult for it to find the right employees, place them in appropriate positions, and provide adequate supervision.

Zack Shields leases a manufacturing facility that produces computer monitors. Zack tries to keep production high, because his lease payments are $10,500 a month, regardless of whether he produces one computer monitor a month or 10,000. Zach's lease payment is a ________ cost.

The main challenges for a business in the introduction stage of the organizational life cycle is ________.

Which of the following statements is not true regarding the day-to-day challenges of growing a firm?

According to the textbook, the businesses that have the potential to grow the fastest over a sustained period of time are ones that ________.

Few businesses need access to capital to fuel their growth.

Which of the following is not one of the five stages in the organizational life cycle?

According to the textbook, the toughest decisions regarding business growth are made in the ________ stage of the organizational life cycle.

Jeremy Westbrook owns an organic food company which has increased both its profits and revenues over an extended period of time. Jeremy's firm is experiencing ________ growth.

For a business to be successful in the early growth stage of the organizational life cycle, the two important things that must happen are ________.

________ are(is) generated when increasing production lowers the average cost of each unit produced.

According to the textbook, most entrepreneurial firms ________.

London Simpson owns a company that makes smartphone accessories. She is trying to increase her sales, primarily because she knows that increasing production lowers the average cost of each unit produced. The reason for growth illustrated in this example is ________.

According to the textbook, it is ________.

________ means that as the number of employees a firm needs increases, it becomes increasingly difficult for it to find the right employees, place them in appropriate positions, and provide adequate supervision.

A firm's pace of growth is the rate it is growing ________.

Growth usually increases rather than decreases the challenges involved with cash flow management.

Introduction to Entrepreneurship

Recognizing Opportunities and Generating Ideas

Feasibility Analysis

Developing an Effective Business Model

Industry and Competitor Analysis

Writing a Business Plan

Preparing the Proper Ethical and Legal Foundation

Assessing a New Venture's Financial Strength and Viability

Building a New-Venture Team

Getting Financing or Funding

Unique Marketing Issues

The Importance of Intellectual Property

Strategies for Firm Growth

Franchising

Filters