Deck 16: Leading Rapid Growth, Crises, and Recovery

Question 1

Which of the following tasks involves the technique called subaccount analysis?

A) Reconstructing a business
B) Determining the available cash
C) Analyzing the differences in financial statements
D) Determining where the money is going

Answer 1

D

Question 2

Most causes of failure are external and not in control of the company management.

Answer 2

False

Question 3

One challenge fast-growth firms face is that of an abundance of viable opportunities.

Answer 3

True

Question 4

The prospect of bankruptcy can provide a foundation for bargaining with creditors in a turnaround situation.

Question 5

Bankruptcy law defines the priority of creditors' claims when a firm is liquidated.

Question 6

What was the core theme of Jack Stack's management approach at Springfield Remanufacturing Corporation?

A) Education
B) Profit sharing
C) Long-term goals
D) Communication

Question 7

Which bankruptcy law gives a firm immediate protection from creditors?

A) Chapter 7
B) Chapter 11
C) Chapter 13
D) Chapter 6

Question 8

What is the major protection for organizations against trouble caused by external forces?

A) Long-term strategies
B) Cash budgets and projections
C) Experienced advisors and directors
D) Mergers and acquisitions

Question 9

Founders of high-potential ventures are frequently experienced in launching companies.

Question 10

In the context of selling inventory to raise quick cash,the sale of raw materials inventory to competitors is generally considered the best route.

Question 11

Except for the owners,which group has the lowest claim in a bankruptcy situation?

A) Commercial banks
B) Investors
C) Trade debt
D) Leasing companies

Question 12

Which approach to management requires managing and working with peers and subordinates outside the formal chains of command?

A) Systems approach
B) Consensus approach
C) Commune approach
D) Operational approach

Question 13

_____ refers to the problem of starting a firm around an idea without strategically analyzing the firm's opportunities.

Question 14

Bankruptcy can provide only for the liquidation of the business;reorganization is not an option.

Question 15

What is the primary source of decreasing expenses in a troubled company?

A) Advertising
B) Workforce reduction
C) Underutilized assets
D) Working capital

Question 16

Organizational climate is created both by the expectations people bring to the organization and by the practices and attitudes of the key managers.

Question 17

The faster the rate of growth,the greater the potential for difficulty.

Question 18

Identify the basic dimension of organizational climate that describes the extent to which an employee feels a sense of cohesion and team spirit.

A) Clarity
B) Standard
C) Esprit de corps
D) Commitment

Question 19

Which of the following can be the most disrupting event during a period of explosive growth?

A) Bringing in new senior management
B) Closing a round of expansion funding
C) Expanding of space or facilities
D) Overcoming a challenge from a competitor

Question 20

Which of the following is a primary cause of failure of a company?

A) Culture
B) Management
C) Regulatory changes
D) Competitive pressure

Question 21

In the chain of greatness model,an entrepreneurial mind-set leads to _____.

Question 22

Identify four nonquantitative signals that would indicate the possibility of trouble.

Question 23

What are the external forces that can cause trouble for a company?

Question 24

In the _____ approach,a manager is seen as willing to relinquish his or her priorities and power in the interests of an overall goal,and the appropriate people are included in setting cross-functional or cross-departmental goals and in making decisions.

Question 25

_____ is not as liquid as receivables but still can be liquidated to generate quick cash.

Question 26

A company focuses on growth without considering profitability.Instead of developing a strategy,the firm takes on low-margin business and adds capacity in an effort to grow.What is the likely result?

Question 27

In highly successful ventures,leadership is based on _____ rather than on authority.

Question 28

What three areas does a turnaround specialist diagnose?

Question 29

List the six basic dimensions of organizational climate.

Question 30

What are the three most commonly found areas for potential cuts and improvements in a troubled company?

Question 31

What is the formula for calculating a company's Net Liquid Balance (NLB)?

Question 32

In _____ bankruptcy,creditors force a troubled company into bankruptcy.

Question 33

Net liquid balance can be thought of as the "uncommitted cash" a firm has available to meet _____.

Question 34

Describe how effective group communication is facilitated in successful entrepreneurial firms.

Question 35

The best route to quick cash is _____.

Question 36

Describe how there is a decline in the organizational morale at a troubled company.

Question 37

Explain how a "big project" can get a company into trouble.

Question 38

In rapid growth situations where cash burn rates are racing ahead of collections,what measures need to be in place to avoid chaos and possible collapse?

Question 39

What are the elements of effective entrepreneurial leadership?

Question 40

_____ is the most liquid noncash asset.

Question 41

Explain how a turnaround plan with its long-term remedial actions can help a troubled company.