Deck 16: Building a Team and Management Succession

Question 1

Posting job openings on the Internet has proven to be:

A) a relatively ineffective method of recruiting.
B) a cost-effective method to attract candidates from other areas.
C) an effective method to attract candidates and is relatively expensive.
D) problematic for entrepreneurial businesses.

Answer 1

B

Question 2

Which of the following techniques would you not recommend to a company desiring a stronger recruiting strategy?

A) Look inside the company first; a promotion-from-within policy serves as an incentive for existing workers to upgrade their skills.
B) Encourage employee referrals; reward employees for successful referrals.
C) Ensure that your recruitment efforts are known-whether in traditional media, the Internet, or on college campuses.
D) Avoid hiring retired workers; they too often fail to have anything to offer.

Answer 2

D

Question 3

The ________, published by the Department of Labor, lists more than 20,000 job titles and descriptions and serves as a useful tool for getting a small business owner started when writing job descriptions.

A) Title IX Handbook
B) Team Handbook
C) Job Listing Directory
D) Dictionary of Occupational Titles

Answer 3

D

Question 4

A leadership style in which a leader takes on the role of a servant first and the role of a leader second is referred to as a ________ leader.

A) servant
B) passive
C) managerial
D) subservient

Question 5

________ is the process of influencing and inspiring others to work to achieve a common goal and then giving them the power and the freedom to achieve it.

A) Management
B) Organizing
C) Leadership
D) Coordination

Question 6

Luisa, the director of human resources, is discussing the duties and responsibilities of a new position and its working conditions with Delmar, the manager over the position. Luisa and Delmar are discussing a:

A) job description.
B) management audit.
C) job specification.
D) job analysis.

Question 7

Which of the following pairs describing leadership (first column) and management (second column) is accurate? Leadership Management

A) Comes first Comes second
B) Deals with people Deals with things
C) Involves doing things right Involves doing the right things
D) Focuses on the present Focuses on the future

Question 8

Which of the following is not one of the vital tasks small business leaders must perform?

A) Hire the right employees to the team and constantly improve their skills.
B) Create a culture for retaining employees.
C) Plan for "passing the torch" to the next generation of leadership.
D) Keep flexible and do not be concerned about preparing for the next generation of management.

Question 9

Which of the following is not a behavior typically exhibited by effective leaders?

A) Define and constantly reinforce the vision they have for the company.
B) Respect and support their employees.
C) Require employees to gather necessary resources to complete their tasks; they will be more likely to "feel ownership" than if you did it for them.
D) Create an environment in which people have the motivation, the training, and the freedom to achieve the goals they have set.

Question 10

Leadership is:

A) essential to a company's success.
B) not an easy skill to learn.
C) influencing and inspiring others to work to achieve a common goal and then giving them the power and the freedom to achieve it.
D) All of the above

Question 11

Effective interviewers spend about ________ percent of the interview talking and ________ percent listening.

A) 25; 75
B) 50; 50
C) 75; 25
D) 90; 10

Question 12

Burt is applying for a position as a staff accountant. The job specification for the position might list all of the following items except:

A) BBA in Accounting.
B) 3 years of experience.
C) prepare daily sales reports.
D) knowledge of QuickBooks.

Question 13

Which of the following is true regarding hiring mistakes?

A) Hiring mistakes are expensive.
B) Companies' informal processes may lead to unpredictable outcomes.
C) Small businesses are most likely to make hiring mistakes because they lack the human resources experts and the disciplined hiring procedures large companies have.
D) All of the above

Question 14

A ________ interview is where the interviewer gives candidates a typical job-related situation to assess how they respond.

A) situational
B) puzzle
C) circumstantial
D) exploratory

Question 15

A ________ interview involves offbeat questions to determine how job candidates think and reason, allowing the interviewer to assess their capacity for creativity.

A) situational
B) puzzle
C) circumstantial
D) game-based

Question 16

Questions like "What are you deeply passionate about?", "What can you be the best in the world at?" and "What drives your economic engine?" are important to define your ________, according to the work of Jim Collins.

A) hedgehog concept
B) core competencies
C) critical strategies
D) keys to success

Question 17

A ________ identifies the duties and responsibilities of a position and its working conditions, while a ________ identifies the qualifications required of the job candidate in terms of skills, education, and experience needed.

A) job specification; job description
B) job description; job specification
C) job analysis; job specification
D) job analysis; job description

Question 18

One of the best sources for prospects for new positions may come from:

A) colleges and universities.
B) the Internet.
C) current employees.
D) employment advertisements.

Question 19

A ________ is the process by which a company determines the duties and the nature of the jobs to be filled and the skills and experience required of the people who are to fill them.

A) job analysis
B) job description
C) job specification
D) management audit

Question 20

Which of the following types of questions should a business owner ask a candidate in a job interview?

A) Questions calling for "yes or no" answers
B) Questions about the candidate's religious beliefs
C) Questions based on on-the-job scenarios that require open-ended answers
D) Questions about the candidate's physical traits, characteristics, and family life

Question 21

The type of job design that adds more tasks to a job to broaden its scope is known as:

A) job rotation.
B) job enlargement.
C) horizontal job loading.
D) Both B and C

Question 22

A company's culture manifests itself in:

A) how workers dress.
B) the language workers use.
C) the way workers behave.
D) All of the above

Question 23

Which government agency is responsible for enforcing employment laws?

A) The Fair Labor Standards Commission
B) The National Labor Relations Board
C) The Equal Employment Opportunity Commission
D) The Justice Department

Question 24

If a job candidate files charges of employment discrimination against a company, the burden of proof in the case falls on:

A) the employer to prove that all pre-employment questions are job-related and nondiscriminatory.
B) the candidate to prove that some pre-employment questions and actions were discriminatory.
C) the Equal Employment Opportunity Commission representing the job candidate in the lawsuit.
D) None of the above

Question 25

The advantages of job rotation include:

A) the ability to move from one job to others.
B) a greater number and variety of tasks.
C) additional flexibility for the company.
D) All of the above

Question 26

Which of the following statements about a company's culture is false?

A) Company culture manifests itself in a variety of ways, from how workers dress and act to the language they use.
B) As a company grows larger, its culture tends to remain constant.
C) Culture arises from an entrepreneur's consistent and relentless pursuit of a set of core values that everyone in the company can believe in.
D) All of the above

Question 27

Although many business owners see checking references as a formality and pay little attention to it, the process is:

A) expensive and often meaningless.
B) necessary and often invaluable.
C) optional, based on the position's salary and relative importance.
D) a questionable practice that may bias the hiring process.

Question 28

The ________ design strategy involves cross-training workers so they can move from one job in the company to others, giving them a greater number and variety of tasks to perform.

A) job simplification
B) job enlargement
C) job enrichment
D) job rotation

Question 29

According to a survey by CareerBuilders, almost ________ of candidates either exaggerated or falsified information about their previous employment on their resumes.

A) one-third
B) three-fourths
C) half
D) two-thirds

Question 30

Successful interviewers always listen for these in an interview to see whether it matches the candidate's words. This interviewer is referring to the candidate's:

A) work experience.
B) job-related skills.
C) nonverbal clues or body language.
D) nervousness.

Question 31

The classic auto assembly line is based on which job design principle?

A) Job enlargement
B) Job enrichment
C) Job simplification
D) Job rotation

Question 32

The ________ design strategy adds more tasks to a job to broaden its scope.

A) job simplification
B) job enlargement
C) job enrichment
D) job rotation

Question 33

The ________ design strategy involves building motivators into a job by increasing the planning, decision-making, organizing, and controlling functions workers perform.

A) job simplification
B) job enlargement
C) job enrichment
D) job rotation

Question 34

The type of job design that breaks work down into its simplest form and standardizes tasks is known as:

A) job simplification.
B) job enlargement.
C) job rotation.
D) horizontal job loading.

Question 35

Which of the following is not a recommended guideline for developing questions to ask candidates in job interviews?

A) Develop a series of core questions and ask them of every candidate.
B) Ask only questions calling for "yes or no" answers to avoid any controversy regarding the direction the job interview took; this way, you have better control of the situation.
C) Create hypothetical situations candidates would likely encounter on the job and ask how they would handle them.
D) Ask candidates to describe a recent success and a recent failure and how they dealt with them.

Question 36

In job enrichment, ________ is the degree to which a job requires a variety of different skills, talents, and activities from the worker.

A) skill variety
B) task identity
C) task significance
D) autonomy

Question 37

________ is the distinctive, unwritten code of conduct that governs the behavior, attitudes, relationships, and style of an organization.

A) Organizational structure
B) Company culture
C) Hierarchy of command
D) Formal organization

Question 38

Company culture has a powerful impact on:

A) the way people work together in a business.
B) how people in a company do their jobs.
C) how people in a company treat their customers.
D) All of the above

Question 39

Successful organizational culture supports exceptional performance and is compatible with the firm's stated values and beliefs. Which of the following best illustrates this concept?

A) A "do what is needed regardless" attitude, diversity, respect for work and life balance, a sense of purpose and a sense of fun, and participative management in a learning environment
B) Honesty and integrity, diversity, respect for work and life balance, a sense of purpose and a sense of fun, and dictatorial management in a learning environment
C) Honesty and integrity, diversity, respect for work and life balance, an appreciation for career limitations, and participative management in a learning environment
D) Honesty and integrity, diversity, respect for work and life balance, a sense of purpose and a sense of fun, and participative management in a learning environment

Question 40

Which of the following best represents the three phases of an effective job interview?

A) Breaking the ice, asking informative questions, and providing as much information about the company-good and bad- as possible
B) Breaking the ice, asking informative questions, and selling the candidate on the company
C) Breaking the ice, asking informative questions, and selling the candidate on the company regardless of their potential fit
D) Breaking the ice, asking questions in an interrogative manner, and selling the candidate on the company

Question 41

Studies regarding succession of family businesses reveal that:

A) 70 percent of first-generation businesses fail to survive into the second generation.
B) only 12 percent make it to the third generation.
C) only 3 percent make it to the fourth generation and beyond.
D) All of the above

Question 42

An arrangement under which employees work a normal number of hours with options regarding when they start and stop work is:

A) hoteling.
B) flextime.
C) job sharing.
D) flexspace.

Question 43

Cora arrived at work at 7 a.m. today, and she will get off at 4 p.m. so that she can watch her son's soccer game. Her office mate, Emma, is not a "morning person" and usually arrives at the office at 10 a.m. and gets off at 7 p.m. Their company uses:

A) job sharing.
B) flextime.
C) flexplace.
D) job enrichment.

Question 44

A compensation system in which employees' pay depends on how well they perform their jobs is known as:

A) a profit-sharing plan.
B) open book management.
C) a pay-for-performance compensation system.
D) a commission compensation plan.

Question 45

Chris openly shares the company's financial results with employees. This represents:

A) a profit-sharing plan.
B) a pay-for-performance approach.
C) the cafeteria benefit plan.
D) open book management.

Question 46

Almost ________ percent of business founders intend to pass theirs on to their children; however, only ________ percent have created a formal management succession plan.

A) 81; 47
B) 90; 65
C) 75; 50
D) 60; 10

Question 47

When building your management succession "survival kit,"

A) never assume your children want to take control of the business.
B) keep your succession choice a secret to avoid conflict among other family members.
C) remember that entrepreneurial skills and desire are largely hereditary.
D) you may assume your children want to take control of the business.

Question 48

Arturo, a sales representative for a small manufacturer, works out of an office in his home, using his laptop computer, a fax machine, and a beeper to communicate with the home office, which is located in a city 58 miles away. Arturo actually goes to the main office, on average, once every 10 to 14 days. His company is using which work arrangement?

A) Job sharing
B) Flextime
C) Flexplace
D) Job enrichment

Question 49

More than ________ percent of all companies in the world are family owned.

A) 40
B) 60
C) 80
D) 90

Question 50

In job enrichment, ________ is the degree to which a job allows a worker to complete a whole or identifiable piece of work.

A) skill variety
B) task identity
C) task significance
D) autonomy

Question 51

In job enrichment, ________ is the degree to which a job substantially influences the lives or work of others-employees or final customers.

A) skill variety
B) task identity
C) task significance
D) autonomy

Question 52

In job enrichment, ________ is the degree to which a job gives the worker direct, timely information about the quality of his performance.

A) task identity
B) task significance
C) autonomy
D) feedback

Question 53

Maria is excited about the new opportunity her company has offered her-she will be able to work from her home office with a company computer and a high speed internet connection while she spends time with her newborn son. This is possible because of the implementation of:

A) telecommuting.
B) hoteling.
C) job sharing.
D) job rotation.

Question 54

Type of job design that involves building motivators into a job by increasing the planning, decision-making, organizing, and controlling functions workers perform is:

A) job enrichment or vertical job loading.
B) job enlargement or vertical job loading.
C) job enrichment or horizontal job loading.
D) job simplification or lateral job loading.

Question 55

In job enrichment, ________ is the degree to which a job gives a worker the freedom, independence, and discretion in planning and performing tasks.

A) task identity
B) task significance
C) autonomy
D) feedback

Question 56

When transferring power in a management succession, the small business owner should do all but which of the following?

A) Tell the successor where all the critical documents are-wills, trusts, insurance policies, etc.
B) Provide the successor with a list of advisers, people who have given you good advice in the past.
C) Be open to learn from, as well as to teach, the successor.
D) Transfer power quickly and step back, letting the successor run the business completely without any advice or interference by the owner.

Question 57

A business founder relying on a lifetime gifting strategy to minimize the taxes on the estate she is passing on to her son can give him a maximum gift of ________ in company stock each year, tax exempt.

A) $6,000
B) $13,000
C) $18,000
D) $24,000

Question 58

As a motivator, money:

A) is the best motivator a business owner can use.
B) is the most effective motivator for younger, "Generation X" workers.
C) is only a short-term motivator, losing its impact over time.
D) All of the above

Question 59

The first step in creating a management succession plan is to:

A) create a survival kit for the successor.
B) groom the successor.
C) promote an environment of trust and respect.
D) select the successor.

Question 60

During the transfer of power, how should the owner deal with company problems and mistakes the successor makes?

A) Use them as a means for teaching.
B) Step in and fix them herself, to prevent damage to the company.
C) Explain how the owner would have handled it and insist it be done that way in the future.
D) Use them as an opportunity to maintain control for as long as possible.

Question 61

An arrangement in which employees and/or managers contribute a portion of their salaries and wages, over time, toward purchasing shares of a company's stock from the founder until they own the company outright, is referred to as:

A) an IPO.
B) a leveraged buyout.
C) a hostile takeover.
D) an ESOP.

Question 62

Questions like "What are you deeply passionate about?", "What can you be the best in the world at?" and "What drives your economic engine?" are important to define your hedgehog concept, according to the work of Jim Collins.

Question 63

Entrepreneurs who are planning to retire often use two strategies:

A) sell to outsiders or arrange for an IPO.
B) assume the role of a silent partner or sell to nonfamily insiders.
C) sell to outsiders or sell to nonfamily insiders.
D) sell to outsiders or sell to relatives.

Question 64

In a grantor-retained annuity trust (GRAT):

A) the grantor could put company stock in an irrevocable trust lasting for up to 10 years.
B) the grantor retains the voting power and interest income from the stock in the trust.
C) the company stock transfers to the beneficiaries at the end of the trust and is taxed at its discounted present value.
D) All of the above

Question 65

Effective leaders know they must punish workers who take risks and fail so that other workers do not make the same mistakes.

Question 66

Effective leaders recognize that money is not the only reward that motivates workers.

Question 67

Effective leaders know that what they do is more important than what they say because they set the example for their employees.

Question 68

A leveraged buyout is an arrangement in which managers and/or employees borrow money from a financial institution and pay the owners:

A) a discounted price, over time, that leverages their good credit.
B) the total agreed-on price at closing using the cash generated from the company's operations to pay off the debt.
C) the total agreed-on price at closing using alternative financing sources to pay off the debt.
D) the total agreed-on price at closing using the cash generated from additional stock issued by the company.

Question 69

Although a small business manager must assume a wide range of ideas, tasks, and responsibilities, none is more important than the role of leader.

Question 70

A strong leader does not share aspects of his or her company's financial health, its future plans, or her vision for it with employees.

Question 71

Both leadership and management are essential to a small company's success, but leadership comes first.

Question 72

Effective leaders make sure that workers have both the tangible and the intangible resources they need to do their jobs well.

Question 73

Leadership gets a small business going; management keeps it going.

Question 74

A(n) ________ is the most basic type of trust, which allows a business owner to put up to $1.3 million into trust, naming his spouse as the beneficiary upon his death. The spouse receives the income from the trust throughout her life, but the principal in the trust goes to the couple's heirs, free of estate taxes, upon the spouse's death.

A) grantor-retained annuity trust
B) family limited partnership
C) bypass trust
D) estate freeze

Question 75

A family limited partnership (FLP) is a strategy that allows business owning parents to transfer their company to their children and ________ their estate taxes while retaining control over the business.

A) lower
B) modify
C) avoid
D) defer

Question 76

Management and leadership are essentially the same.

Question 77

Today's workforce responds best to a leadership style based on instilling fear and intimidation.

Question 78

A(n) ________ attempts to minimize taxes on a family business passed from one generation to the next by creating two classes of stock-one for the parents (preferred voting stock), whose value is locked in, and another for the children (nonvoting common stock), whose value reflects the market value of the business.

A) grantor-retained annuity trust
B) estate freeze
C) bypass trust
D) buy/sell agreement

Question 79

Leadership deals with doing things right; management deals with doing the right things.

Question 80

In a grantor-retained annuity trust (GRAT),

A) there is an attempt to minimize taxes on a family by creating two classes of stock-preferred stock, whose value is locked in, and common stock, whose value reflects the market value of the business.
B) a business owner can pass on up to $10,000 annually which is exempt from federal gift taxes.
C) the grantor retains the voting power and interest income from the stock in the trust for up to ten years before the business goes to the beneficiaries.
D) the surviving owner or heir of a family business has the right to purchase the stock of the deceased owner at a price established by a predetermined formula.