Deck 19: Professional Management and the Small Business

Question 1

Stage 4 of small business growth involves the use of budgets, personnel policies, organisational charts and computerisation.

Answer 1

True

Question 2

A small business that has expanded beyond the comfort zone of its entrepreneur will end in bankruptcy.

Answer 2

False

Question 3

Company planning helps clarify issues and how these issues can be faced provides focus and increases credibility with outsiders.

Answer 3

True

Question 4

A consultant beginning to ask employees for their marketing ideas illustrates empowerment.

Question 5

The formal organisation stage of business growth is a turning point because the entrepreneur must learn to rise above direct management and work through an intermediate level of managers.

Question 6

A manager who grants subordinates the right to act or make decisions is delegating authority.

Question 7

A small company's culture unfolds over the lifetime of the business.

Question 8

Budgets are usually prepared for five years in advance using quarterly figures.

Question 9

Someone with a charismatic personality will make a more effective leader.

Question 10

Professional managers often have more sophisticated methods of management than entrepreneurs.

Question 11

Individuals who are launching promising start-ups need to have a "tolerance for ambiguity".

Question 12

Top-level executives in a large company have a distinct advantage over the leader of a small business in exerting their influence.

Question 13

Most very small businesses use a single chain of command.

Question 14

Owner-managers of small businesses typically overdo the amount of planning.

Question 15

As a business moves from Stage 1 to Stage 4, the entrepreneur becomes less of a manager and more of a doer.

Question 16

Small businesses that hesitate to acquire professional management often limit growth.

Question 17

A small business always has greater constraints in cash flow and employee expertise than found in larger companies.

Question 18

Compared to empowerment, work teams require a lower level of employee participation.

Question 19

The maximum number of employees who can be supervised effectively by a capable manager is four.

Question 20

When a business reaches Stage 2, the entrepreneur engages extensively in both the coordination of the efforts of others as well as performing basic work activities.

Question 21

If a company successfully creates properly functioning self-managed teams among employees, the supervisors will:

A)feel threatened by her leadership approach to teams.
B)likely become fewer in number.
C)may attempt to delegate mundane tasks to the teams.
D)need to maintain closer supervision.

Question 22

A positive solution should be pursued in negotiations whenever it is feasible to do so.

Question 23

Periodic performance review sessions for a company following two-way communication would discuss employee ideas, questions, complaints and job expectations.

Question 24

Founders are least likely to be described as a(n):

A)creative.
B)good organisational member.
C)innovative.
D)risk-taking.

Question 25

Preparing a daily written plan of activities is useful in deciding which tasks deserve highest priority.

Question 26

To improve employee morale, an industrial distribution business might consider __________.

A)employee empowerment.
B)formulating policies after gaining employee thoughts.
C)soliciting employee input on the adoption of budgets.
D)the establishment of control standards.

Question 27

Entrepreneurs who follow a win-win negotiating strategy seek a solution that will satisfy at least the basic interests of both parties.

Question 28

Workers who act on their own and make decisions about the processes they're involved with are considered to be:

A)'beginning' or nascent managers.
B)empowered employees.
C)policy-capable subordinates.
D)work-team ready.

Question 29

Leadership roles differ greatly, depending on the size of the business and its:

A)stage of development.
B)product and service offerings.
C)marketing efforts.
D)industry in which the company operates.

Question 30

Leadership in small businesses is more ____ in comparison to the leadership in large companies.

A)haphazard
B)impersonal
C)personalised
D)skilful

Question 31

Marcia, owner of Drapes by Design, has groups of employees in production and installation.If she decides to use work teams as part of her leadership approach, she may be able to:

A)earn more in quarterly profits.
B)decrease the number of supervisors.
C)improve product quality.
D)reduce total compensation.

Question 32

If Elizabeth, who just hired her first employee, desires to create an innovative cultural environment within the business, what should she do?

A)Support experimentation while eliminating unnecessary penalties for failure.
B)Maintain tight control of all aspects of the business.
C)Reject employee ideas.
D)Treat all employees the same.

Question 33

A corporate marketing executive is moving to a managerial position in a small business, where she may logically expect to find:

A)adequate financial resources and adequate staff.
B)inadequate financial resources and inadequate staff.
C)adequate financial resources and inadequate staff.
D)inadequate financial resources and adequate staff.

Question 34

Linda's high standards and expectations of employee excellence are typical of ____ leaders.

A)team builder
B)general
C)populist
D)paragon

Question 35

It is critical for entrepreneurs to set aside time to work undisturbed.

Question 36

Barry's expectation that employees will complete his requests immediately is typical of ______ leaders.

A)populist
B)general
C)paragon
D)team builder

Question 37

John, a small business operations manager, is confronted with a quality problem.A typical small business handicap that will hamper his efforts to solve the problem is a lack of:

A)time.
B)chain of command.
C)accounting data.
D)specialised staff assistance.

Question 38

What type of leadership style focuses on creating emotional bonds?

A)Team builder
B)Visionary
C)Coach
D)General

Question 39

Many owner-managers seldom work more than 40 hours a week.

Question 40

The greatest time saver is the effective use of time.

Question 41

Frequent and flagrant disregard of the chain of command undermines the position of the:

A)founder.
B)operative employee.
C)staff specialist.
D)bypassed manager.

Question 42

The fact that the daily "brush fires" of doing business tend to push aside planning until it is forgotten is the message of:

A)Parkinson's Law of Planning.
B)the Peter Principle.
C)the Tyranny of the Urgent.
D)Murphy's Law of Strategic Action.

Question 43

A hesitancy by an entrepreneur to move through the various organisational stages can:

A)limit the rate of business growth.
B)be interpreted as evidence of creativity.
C)normally provide a competitive edge to the business.
D)provide a spark to the business because of the spontaneity it introduces.

Question 44

Having more than one supervisor is a violation of the:

A)span of control.
B)Delegating.
C)Controlling.
D)chain of command.

Question 45

As a business grows, the small business owner needs to fill key positions with persons who:

A)could be future managers.
B)can complement weaker areas of the entrepreneur.
C)are able to survive in the culture.
D)All of the above are true.

Question 46

Stage 3 in the growth of a business is characterised by:

A)a one-person operation.
B)hands-off management practices.
C)multi-layered organisation.
D)the entrepreneur as a player-coach.

Question 47

A small business's basic path to the future is spelled out in a document called a:

A)feasibility study.
B)short-range plan.
C)budget.
D)strategic plan.

Question 48

Susan has seen her retail shop grow to the point that she has designated supervisors for the office and two selling areas.Her shop's stage of growth is:

A)formal organisation.
B)intermediate supervision.
C)one-person operation.
D)player-coach.

Question 49

In a line-and-staff organisation, which division is a line activity?

A)Production
B)Legal
C)Human Resources
D)Accounting

Question 50

Controlling is the managerial function that involves the managers:

A)thinking through issues confronting a business and developing a plan to increase productivity.
B)keeping track of performance and investigating when results deviate from the plan.
C)developing an atmosphere of cooperation and teamwork.
D)keeping an optimum number of people under supervision.

Question 51

The use of written policies, budgets and job descriptions is most closely associated with which stage of growth?

A)Formal organisation
B)Intermediate supervision
C)One-person operation
D)Player-coach

Question 52

Nancy just added her eighth employee, a human resource manager who will be responsible for all future hiring, training, retaining and firing decisions.The company is in a ________ organisational structure.

A)delegated
B)line-and-staff
C)line
D)span of control

Question 53

The organisational structure of small companies is often characterised by:

A)economy.
B)clarity.
C)practicality.
D)use of staff positions.

Question 54

Margaret has launched a new event planning company with four employees.With the growth in sales and personnel, the next step of growth will involve:

A)increased direct supervision.
B)improved quality management.
C)intermediate supervision.
D)more formal policies.

Question 55

James is talking to another supervisor about the number of employees who report directly to him.James is talking about his:

A)span of control.
B)informal organisation.
C)organisational structure.
D)chain of command.

Question 56

A budget is prepared as part of a:

A)strategic plan.
B)short-range plan.
C)organisational plan.
D)long-range plan.

Question 57

Mario has just begun to personally supervise employees.His business likely to be in the ____________ stage of growth.

A)formal organisation
B)intermediate supervision
C)one-person operation
D)player-coach

Question 58

The owner of a rapidly growing small business needs to talk to a lender for additional financing.Which document would increase the company's credibility?

A)Control standards
B)Human resource guidelines
C)Strategic plan
D)All of the above would be needed.

Question 59

For small businesses, the most likely form of organisational structure is:

A)functional.
B)line.
C)line-and-staff.
D)committee.

Question 60

A monthly production schedule is prepared as part of the:

A)operational plan.
B)short-range plan.
C)strategic plan.
D)tactical plan.

Question 61

Match the term with its definition.Some terms may not be used
a.Budget
b.Chain of command
c.Delegation of authority
d.Empowerment
e.Long-range plan
f.Professional manager
g.Self-managed work teams
h.Short-range plan
A business's overall plan for the future.

Question 62

Match the term with its definition.Some terms may not be used
a.Budget
b.Chain of command
c.Delegation of authority
d.Empowerment
e.Long-range plan
f.Professional manager
g.Self-managed work teams
h.Short-range plan
Groups of employees with freedom to function without direct supervision but with responsibility for results.

Question 63

Andrea designed a new household cleaning product that can be used on any surface, is environmentally friendly and performs better than other current products.As the company grew, she added employees to produce the cleaner.Recently a grocery store chain asked to sell the cleaner in a regional area.Should she continue as the CEO? At what level is the company in its development? What factors should Andrea consider as the company continues to grow?

Question 64

The personal shopper business Jeff and Christy have developed has grown so they are busy 50 hours weekly.This schedule leaves little time for them as a couple.They have decided to hire outside employees to take over some of their business responsibilities.What suggestions should they follow to ease this transition?

Question 65

Scott, a printing shop owner, believes that his business is running rather haphazardly and wants to get it under control.The first step he should take is to:

A)take corrective action.
B)set standards.
C)increase inspection.
D)increase two-way communication.

Question 66

Paul has decided to start a musical venue that also includes a restaurant and an art gallery.His brother suggested he talk to a consultant to develop his business plan.What should Paul look for when searching? What issues should be determined before the consultant is hired?

Question 67

Marvin has just launched a consulting business.Business has been slower than expected.What advice would you give Marvin?

A)Post an ad in the local newspaper.
B)Tap into his personal and professional network.
C)Find a different line of work.
D)Take a full-time position with a company while he builds his business part-time.

Question 68

Match the term with its definition.Some terms may not be used
a.Budget
b.Chain of command
c.Delegation of authority
d.Empowerment
e.Long-range plan
f.Professional manager
g.Self-managed work teams
h.Short-range plan
A plan that governs a business's operations for one year or less.

Question 69

Jo Ann serves as the CEO of her company and currently works 60 hours a week at a minimum.What issues does she face?

Question 70

Match the term with its definition.Some terms may not be used
a.Budget
b.Chain of command
c.Delegation of authority
d.Empowerment
e.Long-range plan
f.Professional manager
g.Self-managed work teams
h.Short-range plan
The official, vertical channel of communication in an organisation.

Question 71

Match the term with its definition.Some terms may not be used
a.Budget
b.Chain of command
c.Delegation of authority
d.Empowerment
e.Long-range plan
f.Professional manager
g.Self-managed work teams
h.Short-range plan
A document that expresses future plans in monetary terms.

Question 72

Which time management suggestion would be the most critical for a small business owner?

A)Set aside time to work undisturbed.
B)Have a daily written plan and highlight priorities.
C)Email, cell phones and the Internet should be used to save time, not be a distraction.
D)Complete trivial tasks first to have something completed.

Question 73

Match the term with its definition.Some terms may not be used
a.Budget
b.Chain of command
c.Delegation of authority
d.Empowerment
e.Long-range plan
f.Professional manager
g.Self-managed work teams
h.Short-range plan
Authorisation of employees to make decisions or take actions on their own.

Question 74

Discuss the use of employee empowerment and self-managed work teams in relation to how leaders shape an innovative organisational culture.

Question 75

After identifying organisational structures of small businesses, explain how changing structures over time impact managerial responsibilities.

Question 76

Effective time management requires:

A)firmly established priorities.
B)self-discipline.
C)using a good time management system.
D)All of the above are required.

Question 77

Describe the four stages of small business growth and how the owner would function.

Question 78

Jenny is the owner-manager of a small accounting practice.She holds bi-weekly employee meetings to cover company goals, focus points for the future and keep the employees updated on current tax changes.She has developed significant bonds with the employees so they share work (and personal) problems with her more than in the past.Often Jenny can be found assisting new clients and aiding in paperwork completion especially around 15 April.What type of leadership style(s) does Jenny display and how?

Question 79

Kathleen believes she could be more efficient in the use of her time.To determine where improvements can be made, Kathleen should first:

A)list long-term objectives.
B)record time spent on various activities during the day.
C)list projects that need attention.
D)assign priorities to unfinished tasks.

Question 80

Vivian would like to improve two-way communication with her subordinates.Which of these ideas would be most helpful to her?

A)Post daily updates on the bulletin board.
B)Announce daily production requirements over the public address system.
C)Engage employees in conversations to discuss their ideas and problems.
D)Manage by walking around.