Question 1

Which of the following is the most appropriate and useful role for the entrepreneur's spouse in maintaining good family relationships in a business?

Accepted Answer

A)  Worrier 
B)  Listener 
C)  Evaluator 
D)  Appeals judge 
A)  Worrier 
B)  Listener 
C)  Evaluator 
D)  Appeals judge

Question 2

In a 2007 study conducted by MassMutual Financial Group ___ percent of respondents said family members share the same values.

Accepted Answer

A)  87% 
B)  73% 
C)  48% 
D)  65% 
A)  87% 
B)  73% 
C)  48% 
D)  65%

Question 3

The close relationship of business factors and family concerns in a family business has been 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 4

The text presents _____ stages in the process of succession.

Accepted Answer

A)  4 
B)  5 
C)  6 
D)  7 
A)  4 
B)  5 
C)  6 
D)  7

Question 5

A family member who feels he/she ought to pursue a career in the family business is expressing a _____ - based commitment.

Accepted Answer

A)  desire-based 
B)  obligation-based 
C)  cost-based 
D)  need-based 
A)  desire-based 
B)  obligation-based 
C)  cost-based 
D)  need-based

Question 6

Steve, Harry, and Chris, who own and operate a family auto parts store, are experiencing tough times during a downturn in the local economy. To help the store weather these adverse conditions, the brothers agree to each take a 25 percent reduction in salary for a one-year period. This decision

Accepted Answer

A)  demonstrates a weakness of financial management. 
B)  illustrates an important advantage of a family business. 
C)  reveals a lack of customer orientation in a family business. 
D)  reflects a lessening of entrepreneurial ambition in second-generation businesses. 
A)  demonstrates a weakness of financial management. 
B)  illustrates an important advantage of a family business. 
C)  reveals a lack of customer orientation in a family business. 
D)  reflects a lessening of entrepreneurial ambition in second-generation businesses.

Question 7

When hiring non-family employees it is only fair to identify the positions, if any, that are reserved for family members.

Accepted Answer

A) True 
 B)False

Question 8

When fathers train their children in the family business, the typical problem is

Accepted Answer

A)  ambitious fathers. 
B)  disloyal children. 
C)  reluctant fathers. 
D)  capable children. 
A)  ambitious fathers. 
B)  disloyal children. 
C)  reluctant fathers. 
D)  capable children.

Question 9

The process of preparing a family successor for leadership in the family business often takes

Accepted Answer

A)  weeks. 
B)  months. 
C)  about one year. 
D)  a decade or longer. 
A)  weeks. 
B)  months. 
C)  about one year. 
D)  a decade or longer.

Question 10

Grateter's Ice Cream is managed by what is labeled a cousin consortium.

Accepted Answer

A) True 
 B)False

Question 11

Research shows that next-generation family members motivated by a need-based commitment instead of a desire-based commitment are the most likely to pursue long-term careers with the family business.

Accepted Answer

A) True 
 B)False

Question 12

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 13

A founder's values become part of the family business culture because

Accepted Answer

A)  the founder insists that the values are sound. 
B)  others in the firm learn what's important and absorb traditions established by the founder. 
C)  the values coincide with modern management theory. 
D)  family members follow family traditions without excessive analysis. 
A)  the founder insists that the values are sound. 
B)  others in the firm learn what's important and absorb traditions established by the founder. 
C)  the values coincide with modern management theory. 
D)  family members follow family traditions without excessive analysis.

Question 14

Many publicly traded companies have policies against nepotism - the hiring of family members. Wise family business owners would be wise to adopt the same policy.

Accepted Answer

A) True 
 B)False

Question 15

Some family businesses benefit from effective collaboration among brothers and sisters.

Accepted Answer

A) True 
 B)False

Question 16

In the U.S., family businesses are estimated to represent what percentage of all enterprises?

Accepted Answer

A)  50-60% 
B)  60-70% 
C)  70-80% 
D)  80-90% 
A)  50-60% 
B)  60-70% 
C)  70-80% 
D)  80-90%

Question 17

In a family business, the interests of the family and the interests of the business are best described as

Accepted Answer

A)  overlapping. 
B)  conflicting. 
C)  coinciding. 
D)  having no relationship with each other. 
A)  overlapping. 
B)  conflicting. 
C)  coinciding. 
D)  having no relationship with each other.

Question 18

Though the distinctive values that motivate and guide an entrepreneur in the founding of a firm are important, these cannot serve as a foundation for competitive advantage in the firm.

Accepted Answer

A) True 
 B)False

Question 19

Concerning the need for good management in the family business, which of the following is one of the "best practices" identified in the textbook?

Accepted Answer

A)  Resist preparing successors for leadership to avoid demoralizing those who are not selected. 
B)  Maintain rigid guidelines based on family traditions to guide the company into the future. 
C)  Emphasize the attraction and retention of family members. 
D)  Stimulate new thinking and fresh strategic insights. 
A)  Resist preparing successors for leadership to avoid demoralizing those who are not selected. 
B)  Maintain rigid guidelines based on family traditions to guide the company into the future. 
C)  Emphasize the attraction and retention of family members. 
D)  Stimulate new thinking and fresh strategic insights.

Question 20

In the family business, family considerations affect only members of the family.

Accepted Answer

A) True 
 B)False

Exam 5: The Family Business

Which of the following is the most appropriate and useful role for the entrepreneur's spouse in maintaining good family relationships in a business?

In a 2007 study conducted by MassMutual Financial Group ___ percent of respondents said family members share the same values.

The close relationship of business factors and family concerns in a family business has been described as

The text presents _____ stages in the process of succession.

A family member who feels he/she ought to pursue a career in the family business is expressing a _____ - based commitment.

Steve, Harry, and Chris, who own and operate a family auto parts store, are experiencing tough times during a downturn in the local economy. To help the store weather these adverse conditions, the brothers agree to each take a 25 percent reduction in salary for a one-year period. This decision

When hiring non-family employees it is only fair to identify the positions, if any, that are reserved for family members.

When fathers train their children in the family business, the typical problem is

The process of preparing a family successor for leadership in the family business often takes

Grateter's Ice Cream is managed by what is labeled a cousin consortium.

Research shows that next-generation family members motivated by a need-based commitment instead of a desire-based commitment are the most likely to pursue long-term careers with the family business.

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.

A founder's values become part of the family business culture because

Many publicly traded companies have policies against nepotism - the hiring of family members. Wise family business owners would be wise to adopt the same policy.

Some family businesses benefit from effective collaboration among brothers and sisters.

In the U.S., family businesses are estimated to represent what percentage of all enterprises?

In a family business, the interests of the family and the interests of the business are best described as

Though the distinctive values that motivate and guide an entrepreneur in the founding of a firm are important, these cannot serve as a foundation for competitive advantage in the firm.

Concerning the need for good management in the family business, which of the following is one of the "best practices" identified in the textbook?

In the family business, family considerations affect only members of the family.

The Entrepreneurial Life

Entrepreneurial Integrity and Ethics

Getting Started

Franchises and Buyouts

The Business Plan: Visualizing the Dream

The Marketing Plan

The Human Resources Plan: Managers, Owners, Allies, 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 and Supply Chain Management

Pricing and Credit Decisions

Promotional Planning

Global Opportunities for Small Business

Professional Management in the Entrepreneurial Firm

Managing Human Resources

Managing Operations

Managing the Firms Assets

Managing Risk in the Small Business

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