Question 1

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

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

Question 2

The Savvy Entrepreneurial Firm feature in Chapter 13 focuses on Timbuk2, a company that makes urban shoulder bags. The lesson provided by the feature is:

Accepted Answer

A)   its better to have mostly variable costs rather than fixed costs
B)   its more important to bag the right customer rather than the biggest one
C)   market leadership is the key to a successful growth strategy
D)   its important to have a scalable business model
E)   continually growing profits is very challenging B

Question 3

According to the textbook, there are three are three important things that a business can do to prepare for growth:

Accepted Answer

A)   plan for growth, adopt a growth-oriented business model, and stay committed to a core strategy
B)   appreciate the nature of business growth, stay committed to a core strategy, and plan for growth
C)   develop a viral marketing campaign, stay committed to a core strategy, and adopt a growth-oriented business model
D)   develop business partnerships, diversity beyond the company's core strategy, and appreciate the nature of business growth
E)   retain or hire one or more business growth consultants, diversify beyond the company's core strategy, and plan for growth B

Question 4

According to Penrose, the set of opportunities a firm feels it is capable of pursuing is referred to as the:

Accepted Answer

A)   creative field of potential
B)   productive opportunity set
C)   prolific potential
D)   passionate opportunity set
E)   dynamic opportunity options

Question 5

A business's early growth stage is generally characterized by increasing sales and heightened complexity.

Accepted Answer

A) True 
 B)False

Question 6

According to Penrose, entrepreneurial services generate new market, product, and service ideas.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is not one of the 10 warning signs that a business is growing too fast?

Accepted Answer

A)   the business's accountants are starting to worry
B)   productivity is falling
C)   e-mail starts going unanswered
D)   borrowing money to pay for routine expenses
E)   comfortable profit margins

Question 8

According to Chapter 13, business success doesn't always scale. What is meant by this statement?

Accepted Answer

The answer of According to Chapter 13, business success doesn't...

Question 9

Maureen Kimble owns a firm that sells products to the auto, aerospace, and defense industries. Maureen is currently evaluating a set of opportunities that he feels his firm is capable of pursuing. According to the textbook, Maureen is evaluating his firm's:

Accepted Answer

A)   prolific potential
B)   dynamic opportunity options
C)   productive opportunity set
D)   passionate opportunity set
E)   creative field of potential

Question 10

Market leadership occurs when:

Accepted Answer

A)   a firm is the number one or the number two firm in an industry or niche market in terms of net profits
B)   a firm is one of the top five firms in an industry or market niche in terms of sales volume
C)   a firm earns twice as much as its closest competitor
D)   a firm sells twice as much as its closest competitor
E)   a firm is the number one or the number two firm in an industry or niche market in terms of sales volume

Question 11

Define the term "market leadership." Why do firm work hard to obtain market leadership?

Accepted Answer

The answer of Define the term "market leadership." Why do...

Question 12

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

Accepted Answer

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

Question 13

A recent study sponsored by the SBA Office of Advocacy found that only ________ of all firms are "gazelles" or rapid growth firms at any given time.

Accepted Answer

A)   1 percent
B)   2 percent
C)   3 percent
D)   5 percent
E)   10 percent

Question 14

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

Question 15

Most businesses need capital from time to time to invest in growth-enabling projects.

Accepted Answer

A) True 
 B)False

Question 16

Some firms feel that they can better appeal to their customer if they can advertise that they are "the Number 1 firm" in their industry. This sentiment is motivated by the reason for growth labeled:

Accepted Answer

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

Question 17

Fixed costs are the costs a company incurs as it generates sales.

Accepted Answer

A) True 
 B)False

Question 18

Emily Wills owns a commercial printing company. Emily has more business than she wants, in fact, she is presently turning away exciting new business opportunities because it is expensive to hire new employees, and she knows that if she did hire new employees it would take time for the new employees to be trained and to be socialized into the culture of her firm. Emily's inability to take advantage of the new business opportunities that are coming her way is due largely to the:

Accepted Answer

A)   business aptitude problem
B)   entrepreneurial aptitude problem
C)   commercial opportunity problem
D)   business capacity problem
E)   managerial capacity problem

Question 19

One of the most difficult challenges that businesses encounter as they grow is maintaining high levels of quality and customer service.

Accepted Answer

A) True 
 B)False

Question 20

Most entrepreneurial firms try to grow and see it as an important part of their ability to remain successful.

Accepted Answer

A) True 
 B)False

Exam 13: Preparing for and Evaluating the Challenges of Growth

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

The Savvy Entrepreneurial Firm feature in Chapter 13 focuses on Timbuk2, a company that makes urban shoulder bags. The lesson provided by the feature is:

According to the textbook, there are three are three important things that a business can do to prepare for growth:

According to Penrose, the set of opportunities a firm feels it is capable of pursuing is referred to as the:

A business's early growth stage is generally characterized by increasing sales and heightened complexity.

According to Penrose, entrepreneurial services generate new market, product, and service ideas.

Which of the following is not one of the 10 warning signs that a business is growing too fast?

According to Chapter 13, business success doesn't always scale. What is meant by this statement?

Maureen Kimble owns a firm that sells products to the auto, aerospace, and defense industries. Maureen is currently evaluating a set of opportunities that he feels his firm is capable of pursuing. According to the textbook, Maureen is evaluating his firm's:

Market leadership occurs when:

Define the term "market leadership." Why do firm work hard to obtain market leadership?

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

A recent study sponsored by the SBA Office of Advocacy found that only ________ of all firms are "gazelles" or rapid growth firms at any given time.

According to the textbook, most entrepreneurial firms:

Most businesses need capital from time to time to invest in growth-enabling projects.

Some firms feel that they can better appeal to their customer if they can advertise that they are "the Number 1 firm" in their industry. This sentiment is motivated by the reason for growth labeled:

Fixed costs are the costs a company incurs as it generates sales.

One of the most difficult challenges that businesses encounter as they grow is maintaining high levels of quality and customer service.

Most entrepreneurial firms try to grow and see it as an important part of their ability to remain successful.