Question 1

Explain why managerial capacity might limit a company's growth.

Accepted Answer

Managerial capacity refers to the skills and experiences that are necessary in any organization in order to manage it well. While it requires reasonably good managerial capacity to start any organization,and to keep is successful,it probably becomes all the more challenging when an organization grows. To begin,a larger organization probably would require more of the top manager's time,leaving less to take care of some of the other important things that must be done in the organization. Also,a larger organization might require skills and experiences that go beyond what might be required to manage a smaller organization. It may be more complicated to deal with larger,and more,suppliers,customers,financial institutions,etc.that are related to managing a larger organization. Finally,it might be that there is more stress associated with managing a larger organization. The added stress can interfere with good management.

Question 2

Costs related to the building and equipment of a business are referred to as

Accepted Answer

A)   economies of scale.
B)   variable costs.
C)   fixed costs.
D)   joint costs.
E)   scalable costs. C

Question 3

Economies of scale means

Accepted Answer

A)   that average fixed costs are rising.
B)   the economy is favorable for a new business to sell scales that measure weight.
C)   as a firm produces and sells more products, the average cost of each product decreases.
D)   the company has better managerial capacity.
E)   the intellectual value of the business is increasing. C

Question 4

The term "gazelles" refers to companies that are not growing.

Accepted Answer

A) True 
 B)False

Question 5

Founders of high growth companies tend to have tenacity. That means

Accepted Answer

A)   they know where they want the company to go.
B)   they know how to find and attract new resources.
C)   they set specific goals.
D)   they have low self-efficacy.
E)   they tend not to give up and continue to try even after major setbacks.

Question 6

A merger is a form of an internal strategy.

Accepted Answer

A) True 
 B)False

Question 7

Increased new revenues cost less to deliver than current revenues applies to the idea of

Accepted Answer

A)   scalable business model.
B)   Food and Drug Administration.
C)   dynamic capabilities.
D)   internal strategies.
E)   a milestone.

Question 8

A larger company might have more financial resources than a smaller one.

Accepted Answer

A) True 
 B)False

Question 9

Given a certain level of fixed costs,if more sales are made,the average fixed cost per product will decrease.

Accepted Answer

A) True 
 B)False

Question 10

An entrepreneur wants his business to grow. He is trying to make that happen by focusing on developing new products that can use the same production and marketing facilities and skills that the company already has. This represents what type of strategy?.

Accepted Answer

A)   First mover.
B)   Quality.
C)   Self-efficacy.
D)   Internal.
E)   External.

Question 11

Two entrepreneurs saw that they both could gain by combining their separate companies into one. They would re-name the company and both would be managers in it. This represents

Accepted Answer

A)   a merger.
B)   an acquisition.
C)   a buy-out.
D)   a noncompete agreement.
E)   a low-growth strategy.

Question 12

Which of the following is a good internal strategies for growth?

Accepted Answer

A)   Go into markets that are different from the ones already served.
B)   Develop new products or services that are different from the ones now offered.
C)   Set a low price on products.
D)   Maintain quality.
E)   Reduce quality so more products can be produced with the same money.

Question 13

One reason for growing a business is that as it grows,average cost per product can go down.

Accepted Answer

A) True 
 B)False

Question 14

Because a new business has grown considerably,it can now purchase larger quantities of a certain raw material. Purchasing in larger quantities allows the company to get a lower price per pound of the raw material. Which of the following is related to this situation?

Accepted Answer

A)   Average fixed costs will decrease.
B)   Average variable costs will decrease.
C)   This is the idea of purchasing by licensing.
D)   Average managerial capacity will increase.
E)   Cash flow will decrease.

Question 15

Explain why high-growth companies tend to get into relationships with other companies more so than slow-growth companies.

Accepted Answer

The answer of Explain why high-growth companies tend to get...

Question 16

A strategic alliance between two companies that involves cooperating in research and development is known as

Accepted Answer

A)   a dynamic capability.
B)   a technological alliance.
C)   an acquisition.
D)   a spin-in.
E)   an internal strategy.

Question 17

Research shows that growth of a new business is always related to long-term financial success.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following tend to be associated with entrepreneurs of high-growth companies?

Accepted Answer

A)   Tenacity.
B)   Growth vision.
C)   High self-efficacy.
D)   All of the above are correct (a, b, and c) .
E)   Choices a and c are correct.

Question 19

Founders of new high growth companies tend to be low on self-efficacy.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following firms is most likely to have an edge over a local entrepreneur in terms of economies of scale?

Accepted Answer

A)   Porky's Pizza: open for 9 months.
B)   Kim's Hair and Salon: open for 3 years.
C)   Domino's Pizza: open for 15 years.
D)   Corn Krib: open for 10 months.
E)   Mike's Sports Bar and grill: open for 6 months.

Exam 11: Preparing For And Attaining Growth: Strategies For Building Lasting Success

Explain why managerial capacity might limit a company's growth.

Costs related to the building and equipment of a business are referred to as

Economies of scale means

The term "gazelles" refers to companies that are not growing.

Founders of high growth companies tend to have tenacity. That means

A merger is a form of an internal strategy.

Increased new revenues cost less to deliver than current revenues applies to the idea of

A larger company might have more financial resources than a smaller one.

Given a certain level of fixed costs,if more sales are made,the average fixed cost per product will decrease.

An entrepreneur wants his business to grow. He is trying to make that happen by focusing on developing new products that can use the same production and marketing facilities and skills that the company already has. This represents what type of strategy?.

Two entrepreneurs saw that they both could gain by combining their separate companies into one. They would re-name the company and both would be managers in it. This represents

Which of the following is a good internal strategies for growth?

One reason for growing a business is that as it grows,average cost per product can go down.

Because a new business has grown considerably,it can now purchase larger quantities of a certain raw material. Purchasing in larger quantities allows the company to get a lower price per pound of the raw material. Which of the following is related to this situation?

Explain why high-growth companies tend to get into relationships with other companies more so than slow-growth companies.

A strategic alliance between two companies that involves cooperating in research and development is known as

Research shows that growth of a new business is always related to long-term financial success.

Which of the following tend to be associated with entrepreneurs of high-growth companies?

Founders of new high growth companies tend to be low on self-efficacy.

Which of the following firms is most likely to have an edge over a local entrepreneur in terms of economies of scale?