Exam 13: Preparing for and Evaluating the Challenges of Growth

The author of the book titled The Theory of the Growth of the Firm, which is referred to in Chapter 13, is ________.

________ means that as a firm grows and adds personnel, the new hires typically do not have the same ownership incentives as the original founders, so the new hires may not be as motivated as the founders to put in long hours or may even try to avoid hard work.

All businesses have the potential to be aggressive growth firms.

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 ________.

According to the basic model of firm growth articulated in Chapter 13, the ability to increase managerial services to facilitate growth is not friction free but is constrained and limited. Which of the following selections is not one of the factors that constrains or limits a firm's ability to increase its managerial services?

As a business moves beyond its early growth stage and its pace of growth accelerates, the need for structure and formalization decreases.

According to the textbook, most entrepreneurial firms ________.

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

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

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

Business success doesn't always scale.

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

According to Penrose, managerial services generate new market, product, and service ideas, while entrepreneurial services administer the routine functions of the firm and facilitate the proper execution of new opportunities.

The Savvy Entrepreneurial Firm feature in Chapter 13 focuses on Salesforce.com, a company that pioneered the idea of software as a service (SaaS). The main point of the case is that rather than remaining a niche product, Salesforce.com's product, which is an online software platform for salespeople, has ________ and appeals to mainstream customers.

________ costs are costs that a company incurs whether it sells something or not. ________ costs are the costs a company incurs as it generates sales.

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

A firm's core strategy is largely determined by its core competencies, or what it does particularly well.

Which of the following was NOT identified in the textbook as one of the day-to-day challenges involved with growing a firm?

Moral hazard 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.

The What Went Wrong feature in Chapter 13 focuses on Dishero, that operates in the restaurant space. Its primary service was ________ food.