MAN3025 MIDTERM
Identify a true statement about the Delphi technique.
It begins by assembling a panel of experts.
Which statement s true about the startup rate for new businesses owned by women?
It has grown at a rate about 1.5 the national average
Hersey and Blanchard's life cycle (situational) theory of leadership Contingency
Levels of maturity come from which theory?
unlimited liability
Liability on the part of an owner that extends beyond the owner's investment in the business
unlimited liability
Liability on the part of an owner that extends beyond the owner's investment in the business.
Due Diligence for Purchasing a Business:
Licenses and Permits Zoning Requirements Environmental Concerns Letter of Intent Confidentiality Agreement Contracts and Leases Financial Statements/Tax Returns Important Documents Professional Help
A microbusiness that permits the owner to follow a desired pattern of living refers to which of these
Lifestyle business
A ________ involves at least one general partner and one or more limited partners.
Limited Partnership
A involves at least one general partner and one or more limited partners.
Limited Partnership
LLc stands for
Limited liability company
zoning ordinances
Local laws regulating land use.
Superiority in competitive advantage refers to all of the following EXCEPT:
Low cost
Hersey and Blanchard's Life Cycle Theory of Leadership describes four levels of maturity. Which level is described by someone who is lacking specific required skills but motivated to take responsibility for the job/task?
M2
Hersey and Blanchard's Life Cycle Theory of Leadership describes four levels of maturity. Which level is described by someone who is ready to be delegated to?
M4
Special-purpose equipment
Machines designed to serve specialized functions in the production process.
special-purpose equipment
Machines designed to serve specialized functions in the production process.
General-purpose equipment
Machines that serve many functions in the production process.
general-purpose equipment
Machines that serve many functions in the production process.
Encouraging other members to participate, praising and rewarding others for their contributions, reconciling arguments and disagreements, and maintaining a friendly group atmosphere are what type of role?
Maintenance roles
Which theory labels "concern for production" on the X axis and "concern for people" on the Y axis?
Managerial Grid Model
management team
Managers and other key persons who give a company its general direction Consists of individuals with supervisory responsibilities, as well as nonsupervisory personnel who play key roles in the business.
management team
Managers and other key persons who give a company its general direction.
Which of the following is a reason small firms assume a consumer orientation?
Managers are concerned about long term survival
involves taking the steps necessary to locate and describe potential customers.
Market Analysis
Which of these may be defined as the gathering, processing, interpreting, and reporting of market info?
Market research
What two things does the BCG matrix evaluate?
Market share, Business growth rates
What does the "M" in M1, M2, M3, and M4 stand for?
Maturity
According to the Managerial Grid Model, there are five styles of management/leadership behaviors. Which style claims that adequate organization performance is possible through balancing the necessity to get out the work with maintaining the morale of people at a satisfactory level?
Middle-of-the-Road Management
Match the following with the corresponding style: "Adequate organization performance is possible through balancing the necessity to get out the work with maintaining the morale of people at a satisfactory level"
Middle-of-the-Road Management
According to the Contingency Theory, a relationship-oriented leader would be most effective when organizational factors are?
Moderate
Which of these situations provides an external opportunity that the company may exploit to gain competitive advantage?
Monica's rare book company has weak competition
The three situation factors for group structure is group size, social density, and __________
Nature of the task
________ refers to startup ideas centered around providing customers with an existing product or service not available in their market.
New Market Ideas
Mores
Norms that are considered to be central to the functioning of society and social life.
Related Diversification
Operating separate businesses that are related to one another
What is the first stage of group development?
Orientation
Who presented a theory of leadership that was distinctly "situational?"
Paul Hersey
________ refers to fundamentally refocusing the startup as it unfolds or completely recreating it if the initial concept turns out to be seriously flawed. but already exists elsewhere. a. Core competencies b. Serendipity c. SWOT d. Pivot
Pivot
Which of the following is an aspect of the compression approach to innovation?
Planning
Identify a true statement about plans.
Plans are meant to be guidelines for action.
Additive tasks is sometimes referred to as?
Pooled interdependence
For a differentiation strategy to be effective, the product should NOT be based on:
Price
____________ are the inefficiencies that arise from having to organize and coordinate larger groups
Process losses
When an informal group exceeds eight to twelve individuals, a significant part of the time, called __________, can be wasted simply trying to decide who should participate next
Process time
A corporation is set up in order to accommodate individuals whose profession requires licensure.
Professional
What is the purpose of the Foreign Corrupt Practices Act?
Prohibit US firms from paying bribes in foreign countries, including countries where such bribes may be legal.
Mergers and acquisitions
Pros: quickly enter a new market, management control Cons: premium price, integrating management and culture
AB Cutters has five strategic business units (SBUs)—marine terminals, trucking, third-party logistics, energy, and oil exploration. Because of a small market share, the company is not making much profit in the trucking sector, which otherwise is a fast-growing market. In the context of the BCG matrix, which of the following categories of SBUs best describes the trucking sector?
Question marks
What does the following describe? "Recognize the emotion exists, Evaluate what the emotion really is, Analyze why you feel the emotion, and Decide how to respond to the emotion based on your intellectual understanding of what is best for the situation"
READ
an ei person processes emotions by
READ -Recognize the emotion exists -Evaluate what the emotion really is -Analyze why you feel the emotion -Decide how to respond to the emotion based on your intellectual understanding of what is best for the situation
_____ are companies that do not follow a consistent adaptive strategy but instead respond to changes in the external environment after they occur.
Reactors
_____ are usually the poorest performers among all the four kinds of industry-level adaptive strategies.
Reactors
Advantages of Related Diversification
Reduced risk since other products may make up for a weak product Management efficiencies due to administration and related costs being spread over several businesses Synergy
Managers that rated their LPC high were presumed to be __________ oriented
Relationship
____ is a process of weighing decision criteria in which each criterion is compared with every other criterion.
Relative comparisons
Finding out Why the Business Is for Sale The seller's real reasons for selling may or may not be the stated ones. Here are some of the most common reasons why owners offer their businesses for sale:
Retirement Illness Partnership or family disputes Unprofitability or failure of the business Burnout Lack of capital for growth potential
A/n *** model identifies the nature and types of income expected to come into the firm from the sale of products and services.
Revenue model
Groups use two major social influence processes to obtain conformity: __________ and information dependence
Reward dependence
This describes what type of conformity? "Groups have the capacity to reward or punish their members"
Reward dependence
Role Overload
Role Conflict caused by too many demands on a person.
A new employee who has had a broad background of relevant experience and is prepared to immediately perform a new job would have a high degree of?
Role readiness
The focal person's ability and willingness to accept the responsibility associated with a new role is called?
Role readiness
In formal groups, the __________ may be anyone attempting to change the behavior of another individual, called the focal person
Role sender
The leadership literature seems to have settled on five main traits that are relevant across situational factors: intelligence, _____________, determination, integrity, and sociability
Self-confidence
Which of the following factors causes resistance to change?
Self-interest
Organizational Strengths
Skills and capabilities that give the organization special competencies and competitive advantage in executing strategies in pursuit of its vision
The leadership literature seems to have settled on five main traits that are relevant across situational factors: intelligence, self-confidence, determination, integrity, and ___________
Sociability
Some organizational studies have found that greater _____________ improves performance because of greater accessibility
Social density
The concentration of people within an area is called __________
Social density
Although the presence of others may improve performance, it can also inhibit performance on some tasks. What is this effect called?
Social inhibition
Performing a task worse in the presence of others is associated with?
Social inhibition
Components of BCG Matrix
Stars (HGR, HMS) Cash Cows (LGR, HMS) Question Marks (HGR, LMS) Dogs (LGR, LMS)
Michael Porter defined _______ as an attempt to achieve sustainable competitive advantage by preserving what is distinct about a company.
Strategic Positioning
Three types of goals
Strategic goals, tactical goals. and operational goals
Michael Porter lists five factors that determine the nature and degree of competition in an industry. Which of his factors describes, "Can customers turn to other products or services to replace those that the industry offers?"
Substitute products and services
Which of the following is not a characteristic of a business plan?
Summarization of the operations of a mature business
Match with the corresponding role: Pulling together related ideas; restating suggestions; offering a decision or conclusion for the group to consider
Summarizer
Characteristics of MBO includes which of the following?
Systematic and organized approach
Which factor of the work environment does the following describe? "The degree to which jobs are clearly defined and 'who does what' is clearly defined"
Task structure
Match the following with the corresponding style: "Work accomplishment is from committed people: interdependence through a "common stake" in organization purpose leads to relations of trust and respect"
Team Management
Supernova Inc. attempts to resolve a major technical issue in its database. To identify the best way to resolve the issue, the company assembles technical experts with different skill sets. The problem was explained to each of the experts and their individual opinions were collected, and a questionnaire based on the problem was given to each of them. The answers of all the experts were analyzed and then sent back to the experts for their final opinions. Identify the strategy that is being used by Supernova to generate solutions.
The Delphi technique
Market
The ability of the market to support all competing business units, including the one to be purchased, should be determined. This requires doing marketing research, studying census data, and personally observing each competitor's place of business.
Maintenance Roles
The activities performed by one or more group members that are designed to maintain the member's willingness to participate in the group.
Work Roles
The activities performed by one or more group members that help the group accomplish its task and pursue its goals; for example, structuring the tasks, delegating assignments, and initiating action.
social capital
The advantage created by an individual's connections in a social network
social capital
The advantage created by an individual's connections in a social network.
disintermediation
The bypassing of a middleman by a producer or wholesaler in order to sell its product or service directly to the final consumer.
Technology
The combination of skills and equipment that managers use in designing, producing, and distributing goods and services.
Which of the following is NOT an eligibility requirement for an S corporation?
The corporation must be international.
Crossmart Inc. has been trying to protect itself from the negative effects of industry-wide competition by producing products at consistently lower prices than its competitors. However, it has not compromised on the quality of its products and the products are good enough to be sustained in the market. In the context of Porter's positioning strategies, which of the following strategies has been adopted by Crossmart?
The cost leadership strategy
Synergy
The economic value of separate, related businesses under one ownership and management is greater together than the businesses are worth apart
due diligence
The exercise of reasonable care in the evaluation of a business opportunity.
Which of the following is an important condition that a firm must meet in order to gain a sustainable competitive advantage?
The firm's resources must be imperfectly imitable.
Compliance
The first level of conformity, in which the individual's motive is to obtain rewards or avoid punishment.
Collaboration
The fourth stage of group development when group members form a cohesive relationship and are committed to the group's success.
encroachment
The franchisor's selling of another franchise location within the market area of an existing franchisee.
An outside-in analysis involves assessing the firm's--
The general environment and industry environment
board of directors
The governing body of a corporation, elected by the stockholders.
board of directors
The government body of a corporation, elected by the stockholders
Internalization
The highest level of conformity, in which the motive to conform is based on the group member's acceptance of the prescribed behavior as basic principle of right and wrong.
Free-Trade Doctrine
The idea that if each country specializes in the production of the goods and services that it can produce most efficiently, this will make the best use of global resources.
franchise contract
The legal agreement between franchisor and franchisee.
Letter of Intent:
The letter of intent should spell out the proposed price, the terms of the purchase and the conditions for the sale of the business.
corporation
The liability of each partner resulting from any one partner's ability to legally bind the other partners.
oint and several liability
The liability of each partner resulting from any one partner's ability to legally bind the other partners.
joint and several liability
The liability of each partner resulting from any one partner's ability to legally bind the other partners. A business decision by one partner binds all other partners, even if they were not consulted in advance, didn't approve the agreement or contract in question, or didn't even know about it. In general partnership, each party bears _______.
Social Density
The number of people physically located within a confined area.
Product prices
The prospective owner should compare the prices of the seller's products with those listed in manufacturers' or wholesalers' catalogs and also with the prices of competing products in the locality. This is necessary to ensure full and fair pricing of goods whose sales are reported on the seller's financial statements.
Folkways
The routine social conventions of everyday life.
Confrontation
The second stage of group development when members divide the work to be done and perform their assigned tasks.
Task Environment
The set of forces and conditions that originates with suppliers, distributors, customers, and competitors, and affects an organization's ability to obtain inputs and dispose outputs. Influence managers daily.
Global Environment
The set of global forces and conditions that operates beyond an organization's boundaries but affects a manager's ability to acquire and utilize resources.
Social Inhibition Effect
The tendency for the presence of other people to disrupt performance and cause them to perform poorly.
Social Facilitation Effect
The tendency for the presence of other people to increase motivation and arousal, which tends to help the individual perform better.
Social Loafing
The tendency to exert less effort when working as a member or a group than when working alone.
brick-and-mortar facility
The traditional physical facility from which businesses have historically operated.
Social Strucutre
The traditional system of relationships established between people and groups in a society.
Which of the following is NOT a potential problem in the succession of a family business?
The type of business conducted by the firm
General Environment
The wide-ranging global, economic, technological, sociocultural, demographic, political, and legal forces that affect an organization and its task environment.
Emotional Support
To handle the pressures of daily living, and especially when situations are threatening or uncertain, people rely on others for emotional support. A person facing a stressful situation is comforted by the physical presence of another person facing the same stress.
What theory assumes that leaders are born, not made?
Trait Theory
A __________ is someone who interacts with followers in a series of "transactions" aimed at personal and organizational gain
Transactional leader
This type of leader exhibits a set of distinct behaviors know as the four I's.
Transformational Leader
A ____________ exhibits a set of behaviors that are quite distinct. These behaviors are known as the four I's
Transformational leader
A Franchise Disclosure Document (FDD) is a detailed statement of such information as the franchisor's finances, experience, size, and involvement in litigation.
True
A cost-focus strategy is a low-cost, narrowly focused market strategy
True
A firm that possesses a valuable and rare resource will not gain a competitive advantage unless it can actually put that resource to effective use
True
A franchise Disclosure Document (FDD) is a detailed statement of such information as the franchisor's finances, experience, size, and involvement in litigation.
True
An economically attractive and timely opportunity that creates value for interested buyers and end users refers to entrepreneurial opportunity.
True
Functional areas, like accounting and marketing, will need to have goals and objectives that help show how those functions are contributing to the organization's goals and objectives
True
Goals and objectives provide a form of control since they create a feedback opportunity regarding how well of how poorly the organization is executing its strategy
True
In a family business, the founder's core values may become part of both the business culture and the family code.
True
New technology involves using high-tech technology to simulate real life experiences.
True
a potential advantage of the husband-wife team (co-preneurs) is the opportunity to share more of their lives.
True
Types of Diversification
Unrelated Diversification Related Diversification
Norms
Unwritten, informal codes of conduct that prescribe how people should act. Considered important by most members of a group.
organizational test
Verification of whether a nonprofit organization is staying true to its stated purpose.
A ____________ is a group that relies on technology to interact and accomplish its tasks.
Virtual team
auction sites
Web-based businesses offering participants the ability to list products for consumer bidding.
Zoning Requirements:
Zoning requirements may affect the type of business that you are intending to operate in a particular area. Visit the SBA's online Basic Zoning Laws section for more information about zoning and to ensure your business is abiding by all laws in your area.
An enduring opinion that is based on knowledge, feeling, and behavioral tendency is called a(n) _____. a. attitude b. perception c. need d. motivation
a
Tangible assets serve as great collateral when a business is requesting a bank loan. a. True b. False
a
According to the U.S. Small Business Administration, a franchise is
a business model involving a business owner (the franchisor) who licenses trademarks and methods to an independent entrepreneur (the franchisee). The franchise governs the method of conducting business between the two parties.
Technology cycle
a cycle that begins with the birth of a new technology and ends when that technology reaches its limits and is replaced by a newer, substantially better technology
justice rule
a decision is ethical when benefits and harms are distributed fairly, equitably and impartially
mood
a feeling, or a state of mind
vision
a long term goal describing what an organization wants to become. it is a clear sense for the future and the actions needed to get there
Vision
a long term goal describing what an organization wants to become; it is a clear sense of the future and the actions needed to get there
BCG matrix
a means of evaluating strategic business units on the basis of growth and market share
entropy
a natural tendency of a closed system to lose control of itself and therefore disintegrate.
Flow
a psychological state of effortlessness, in which you become completely absorbed in what you're doing, and time seems to pass quickly
BallGame manufactures premium golf balls and prices these balls at twice the price of ordinary golf balls. The premium balls sell exceptionally well because customers believe that its patented three-layer construction is capable of increasing the ball's drive. None of the other golf ball manufacturers can produce the same quality. The patent on these golf balls gives BallGame _____.
a sustainable competitive advantage
forecast
a vision or projection of the future; managers use this to determine their strategies moving forward
________ equipment requires a minimal investment and is easily adapted to varied types of operations.
a. General-purpose
A Franchise Disclosure Document (FDD) is a detailed statement of such information as the franchisor's finances, experience, size, and involvement in litigation.
a. True
A Franchise Disclosure Document (FDD) is a detailed statement of such information as the franchisor's finances, experience, size, and involvement in litigation. a. True b. False
a. True
A profitable company does not necessarily have positive cash flows. a. True b. False
a. True
One of the considerations in selecting a location for a business is the availability of resources.
a. True
Total assets less outstanding debt must always equal ownership equity. a. True b. False
a. True
Which of these is a key challenge of running a home-based business? a. professional image b. loss of tax advantage c. warehousing limitation d. shipping difficulties
a. professional image
The greatest advantage of buying a franchise is
a. the probability of success
Levels of maturity: M3
able/uncertain willingness
_____ is a process of weighing decision criteria in which each criterion is compared with a standard or ranked on its own merits.
absolute comparison
_______ is a process of weighing decision criteria in which each criterion is compared with a standard or ranked on its own merits.
absolute comparison
Sivinch is a manufacturer and marketer of cosmetics. To ensure that its products stand out from other similar brands, Sivinch focuses on educating its customers on general skin and hair care. Its salespeople are trained to answer questions and help customers find solutions to their skin and hair problems. This has helped Sivinch _____.
achieve a competitive advantage
Experiential approach to innovation
an approach to innovation that assumes a highly uncertain environment and uses intuition, flexible options, and hands-on experience to reduce uncertainty and accelerate learning and understanding
Compression approach to innovation
an approach to innovation that assumes that incremental innovation can be planned using a series of steps and that compressing those steps can speed innovation
If a technological innovation follows the S-curve pattern of innovation, a flat slope at the beginning of the curve indicates that:
an increased effort can bring only small improvements in its performance.
A master licensee is
an independent firm or individual acting as a middleman or sales agent with the responsibility of finding new franchisees within a specified territory.
GlycoAll, a company that produces energy drinks, has started manufacturing and selling energy bars for the American market. The products turn out to be a huge success. Inspired by GlycoAll's success, Keith & Sons, a producer of energy drinks in the U.K., starts to sell energy bars for the European market. In the context of adaptive strategies, Keith & Sons would most likely be categorized as a(n) _____.
analyzer
Deadlines
are essential to planning because they become great motivators both for the manager and for subordinates
ceremonies and rites
are events that recognize important incidents
norms
are informal, unwritten codes of conduct.
technical skills
are job-specific skills that are required for a particular organizational role.
Operational Goals
are set by and for first-line managers and are concerned with short term matters associated with realizing tactical goals
operational goals
are set by and for first-line mangers and are concerned with short-term matters associated with realizing tactical goals
Before introducing the new software, Star Software Inc., conducted benchmark activities to assess how popular the product would be in the marketplace. Which stage of the strategic management process is being used in this situation?
asses the current reality
The second step of the strategic management process involves
assessing the current reality
There are eight general steps for organizational development interventions. The third step is _____.
assessment and feedback
Trait Theories of Leadership
assume that leaders are born, not made
A facility that rents space specifically to new businesses or to people wishing to start a business is called a: a. Startup generator. b. Business incubator. c. Launch pad. d. Slingshot.
b. Business incubator.
The _____ approach recognizes that with every interaction, customers learn something about a business that will either strengthen or weaken their satisfaction and desire to return. a. CRM b. CEM c. perception d. segmentation
b. CEM
Which of the following is NOT an advantage of opening a home-based business? a. It is often quicker and cheaper to get up and running. b. Customers feel more comfortable in your home. c. You will save time and money on daily commutes. d. You will be your own boss.
b. Customers feel more comfortable in your home.
Fortunately, an entrepreneur can cash out immediately after the completion of the IPO. a. True b. False
b. False
Generally, investors are more product-oriented than market-oriented. a. True b. False
b. False
One of the disadvantages of franchising is the inability on part of franchisees to use franchisor's trade name and trademark.
b. False
When harvesting a firm, getting professional advice is helpful but not vital to the process. a. True b. False
b. False
Which of the following is generally NOT an outcome when a business practices social responsibility? a. Increased financial performance b. Increased scrutiny from regulatory agencies c. Greater access to capital d. Reduced employee turnover
b. Increased scrutiny from regulatory agencies turnover
Fixed assets include all of the following EXCEPT: a. land. b. inventory. c. trucks. d. machinery
b. inventory.
Protecting a neighborhood's residential quality is the primary purpose of _____ laws. a. local b. zoning c. home-based d. homeowners association
b. zoning
organizational citizenship behaviors
behaviors that are not required of organizational members but that are nevertheless critical for effectiveness, efficiency, and competitive advantage.
Behavioral Leadership Theories
belief that humans can moderate their behaviors based on circumstance
Companies pursuing a cost-leadership strategy keep costs/prices _____ those of competitors and target a _____ market.
below; wide
Juanita feels it is important for her taxi company to continually measure itself against its best competition. She keeps track of the number of rides per hour and turnaround times for all her drivers and compares it to that of other high-performing taxi companies in the area. Juanita is using the process of _____ to compare her company with another.
benchmarking
Doing more with less in terms of resources invested in business, and, where possible, controlling the resources without owning them refers to
bootstrapping
Small business can gain a competitive advantage through all of the following except
bootstrapping
_____ is a type of quantitative planning through which managers decide how to allocate available money to best accomplish company goals.
budgeting
A down payment of _____ percent is usually required for equipment purchases on an installment basis through an equipment loan. a. 90 b. 50 c. 25 d. 10
c
All of the following are e-commerce business models EXCEPT? a. B2B b. B2C c. B2A d. Auction site
c. B2A
According to the Business Tax Index report, which state in 2017 had the most favorable tax systems? a. Maryland b. Florida c. Nevada d. Illinois
c. Nevada
Michael opened a franchise restaurant within an existing business. He did what is known as: a. Nested business launching b. Down drilling c. Piggyback franchising d. Hot site locating
c. Piggyback franchising
Which of the following statements best describes the proper way to purchase equipment and furnishings for a new business? a. Spend only what you absolutely have to even if the furnishings look ratty and unkempt. Customers won't mind. b. Always get the most expensive. Nothing turns customers away like knowing the computers were bought used. c. Save money when possible, but make sure the company looks stable and professional. d. Always rent equipment. Renting is always cheaper.
c. Save money when possible, but make sure the company looks stable and professional.
Which of the following is NOT a potential problem in the succession of a family business? a. Reluctant parents b. Ambitious children c. The type of business conducted by the firm d. Lack of understanding between parent and child
c. The type of business conducted by the firm
Which of the following is a business model that provides a mechanism for buying or selling products or services and is considered the center of the e-commerce universe?
c. Transaction-based
A ______ is a facility that rents space to new businesses or to people wishing to start businesses.
c. business incubator
A(n) ________ should be written as the last step in writing the business plan. a. financial plan b. operations and development plan c. executive summary d. exit strategy
c. executive summary
A statement of principles intended to guide a family firm through times of crisis and change refers to a(n)-- a. organizational culture. b. cousin consortium. c. family business constitution. d. transfer of ownership.
c. family business constitution.
A surrogate variable is used in_________ forecasting. a. break even b. direct c. indirect d. competition
c. indirect
ABC Financing provides a combination of debt and equity to the business that allows the entrepreneur to cash out part of his or her investment in the company. This refers to a-- a. bust-up LBO. b. built-up LBO. c. private equity recapitalization. d. ESOP.
c. private equity recapitalization.
Ethical companies feel that they have an obligation to their _______, the people who could be affected by the company's actions. a. competitors b. governments c. stakeholders d. agents
c. stakeholders
A company's routines and processes that can coordinate the combined use of its productive assets in order to achieve desired outcomes
capabilities
personality traits
certain enduring tendencies to think, feel, and act in particular ways.
An individual who is formally in charge of guiding a change effort in an organization is referred to as a _____.
change agent
Generational change
change based on incremental improvements to a dominant technological design such that the improved technology is fully backward compatible with the older technology
Results-driven change
change created quickly by focusing on the measurement and improvement of results
managers
charged with using the company's resources effectively
Design competition
competition between old and new technologies to establish a new technological standard or dominant design
A benefit that exists when a firm has a product or service that is seen by its target market as better than those of competitors
competitive advantage
The environment that focuses on the strength, position, and likely moves and countermoves of competitors in an industry
competitive environment
The _____ assumes that innovation is a predictable process that can be planned using a series of steps and reducing the time it takes to complete those steps can speed up the innovation process.
compression approach to managing innovation
Which of the following is not a distinct type of marketing philosophy
computer orientation
Levio is a company that develops mobile applications. It aims to become the market leader in its field. Levio focuses on developing a culture where workers are made to feel that new ideas are welcome. It plans to do this by offering challenging work and supervisory encouragement to its workers. In this scenario, the company is attempting to develop a(n) _____.
creative work environment
Which of these involves bringing two franchise brands together under one owner? a. Piggyback franchising b. Master licensee c. Elite entrepreneur d. Co-branding
d. Co-branding
Which of the following is NOT one of the "Big Three" stakeholders? a. Owners b. Customers c. Employees d. Government regulators
d. Government regulators
If you are asked to describe how will you entice customers to make the change to your product or service and to continue using it, which section of a business plan would you address it in? a. Financial b. Operations and development c. Management d. Marketing
d. Marketing
Which of the following is NOT an area of strategy the marketing plan should address? a. Promotion b. Distribution c. Pricing d. Production
d. Production
Entrepreneur's Top 10 Franchises for 2012 include all of these EXCEPT: a. Hampton Hotels b. Servpro c. Denny's, Inc. d. Starbucks
d. Starbucks
Which of the following is NOT one of the three main financial statements? a. Income Statement b. Cash Flow Statement c. Balance Sheet d. Statement of Changes in Owners' Equity
d. Statement of Changes in Owners' Equity
The fundamental benefit a customer gains from a product or service is called: a. The actual product/service. b. The virtual product/service. c. The augmented product/service. d. The core product/service.
d. The core product/service.
A process wherein a wholesaler decides to bypass middlemen and sell direct to end users is called_____________. a. predatory pricing b. price lining c. W2C d. disintermediation
d. disintermediation
Of all the relationships in a family business, the ______ relationship is the most sensitive and troublesome. a. husband-wife b. in-law c. son-daughter d. parent-child
d. parent-child
According to government surveys, business owners choose to run their businesses out of their homes for all of the following reasons EXCEPT: a. quick and cheap to get up and running. b. save time and money on daily commuting. c. spend more time with family and friends. d. they do not have to maintain a professional office area.
d. they do not have to maintain a professional office area.
Tactical Planning
determining what contributions departments or similar work units can make with their given resources during the next 6 months to 2 years; done by middle management
single-use plans
developed for activities that are not likely to be repeated in the future
a company markets an individual yogurt serving with a collapsible spoon attached to the cup. This firm is pursuing a _____________ strategy.
differentiation
A process wherein a wholesaler decides to bypass middlemen and sell direct to end users is called ________ . a. W2C b. price lining c. disintermediation d. predatory pricing
disintermediation
The strategy of moving into new lines of business is called _____.
diversification
three factors of fiedlers contingency theory of leadership
eader:member relations, task structure, and leader position power.
contingency theory
effective managers exhibit high task or relationship focus as the situation is dictated. a leaders style depends on the circumstances of the environment
Managerial Grid Model: Authority-compliance management
efficiency in operations results from arranging conditions of work in such a way that human elements interfere to a minimum degree
Management
efficient allocation of resources and the organization of work
Task-focus leader behaviors
emphasize the production process
relationship-focused behavior
emphasized employee satisfaction and well-being
When the franchisor sells another franchise location within the market area of an existing franchisee it is called
encroachment
A summary (short plan) is often enough to satisfy most bankers
false
Research finds that the general environment affects large businesses and not the small ones, regardless of the industry. a. True b. False
false
Unfortunately, a cost-based strategy usually doesn't work for small companies because they don't have the capacity to produce high volumes. a. True b. False
false
Unlimited liability means that the owner's personal assets outside the business cannot be taken by creditors if the business fails
false
A circumstance or development that alone could render a new business unsuccessful
fatal flaw
Change forces
forces that produce differences in the form, quality, or condition of an organization over time.
Leonore's Luxury Leather Footwear Corp. conducted a SWOT analysis and determined that at least 57% of consumers would demand high-end footwear and their sales should increase by 18% in the next year. This vision of what could happen is known as a _____.
forecast
rules
formal instructions specifying which actions should be taken under different circumstances.
Milestones
formal project review points used to assess progress and performance
blueprint
formulating the firm's strategic plan is a critical step in the planning process because it provides the organization with the overall _______ for how the org will achieve its goals
Costs associated with franchises include
franchise fees investment costs royalty payments advertising costs.
the party in a franchise contract that specifies the methods to be followed and the terms to be met by the other party is called a(n) a. local community. b. franchisee. c. franchisor. d. broker.
franchisor
Henry Fayol
french theorist that identified 14 principles of management.
15. The broad environment, encompassing factors that influence most businesses in a society
general environment
Unfreezing
getting the people affected by change to believe that change is needed
A(n) _____ is a broad corporate-level strategic plan used to achieve strategic goals and guide the strategic alternatives that managers of individual businesses or subunits may use.
grand strategy
Leader Member Exchange Theory (LMX)
group status tends to become a self-fulfilling prophecy
A business that wants to reach more customers and hires more employees to get this done is focusing on a _____ strategy.
growth
value proposition
having a strategic plan helps firms do this -- how the organization will exploit its core competencies, deliver value to customers, and build synergy in its operations
competitive rivalry
high exit barriers and slow industry growth tend to increase this
star
high growth, high market share; managers should invest in them (iPad)
question mark
high growth, low market share; managers should analyze them to determine if they will turn into stars or dogs
Inspirational motivation
how leaders motivate followers to commit to the vision of the company
inspirational motivation
how leaders motivate followers to commit to the vision of the organization -they encourage team spirt to reach important goals that benefit the organization and the employee. -they are the lead cheerleaders for the organization and their energy, commitment, and passion are critical to the influence they have over others. -their passion for excellence is contagious and they use this to its fullest potential
Intellectual stimulation
how transformational leaders encourage innovation and creativity through challenging the normal beliefs or views of a group
trend analysis
hypothetical extension of a past series of events into the future
trend analysis
hypothetical extensions of a past series of events into the future
Multiple-unit ownership,
in which a single franchisee owns more than one unit of a franchised business, is becoming widely used.
Porter's five competitive forces form a model for _____ analysis.
industry
Strategy
involves a group of decisions about what goals to pursue and how to use resources to achieve those goals.
Controlling
involves accurately measuring and monitoring the organization's achievement of its goals. it involves monitoring the performance of people, groups, departments and the entire organization as a whole.
mechanistic structure
involves centralization of authority, close supervision of employees and clearly specified tasks and rules.
strategic management
is a process that involves mangers from all parts of the organization in the formulation and implementation of stratefies and strategic goasl
Using the textbook's criteria for defining a small business, a new venture isn't a small business if it:
is engaged in geographically dispersed operations
closed system
is self-contained and unaffected by the environment.
Operating Plan
is typically designed for a 1-year period, defines how a manager will conduct business based on the action plan; it identifies clear targets such as revenues, cash flow, and market share
In the context of conflicts, c-type conflict is a disagreement that focuses on _____.
issue-related differences of opinion
A particular technology becomes the dominant design because of critical mass, which means that:
it is used by most people.
A technology is most likely to become a dominant design if:
it solves a practical problem.
The primary advantage of franchising is
its high probability of success.
Analyzers
let the other organizations take the risks of product development and marketing and then imitate (or slightly improve on) what seems to work; "Let others take the risks of innovating and we'll imitate what works best"
To be successful, strategic planning requires a company to have a _____ orientation.
long-term
functional level strategy
lowest level of strategic management -- functional managers (HR, marketing, etc) use this strategy to direct how their department will support the business level strategies
top managers
make high-level decisions about organizational goals and how departments should interact, and they monitor organizational performance
Which of the following is a commonly used technique for increasing goal commitment?
making the goals public
disturbance handlers
manage conflict, including clashes between groups or individuals in the organization.
attitudes
manager's feelings and beliefs about jobs, people, and organizations
responsiveness to customers
managers and front-line employees must be responsive to customers needs. this is particularly important for service organizations.
effectiveness
managers choose appropriate goals and achieve them
Market segmentation, marketing research, and sales forecasting are integral parts of what is commonly called--
market analysis
Most investors are more___________ because they realize what it takes to make money.
market oriented
If you are asked to describe how will you entice customers to make the change to your product or service and to continue using it, which section of a business plan would you address it in?
marketing
A knowledgeable person who can offer guidance based in a given field is called a(n)--
mentor
A _______ assessment is focused less on whether industry conditions overall are suitable to launching a new business and more on the probability of a startup's success over the long run.
micro-level industry
strategic control
monitoring the execution of strategy and making adjustments if needed -- use a feedback loop
MBO's purpose
motivate rather than to control subordinates
The practice of employing relatives is referred to as--
nepotism
transformational leader
one that is wholeheartedly vested in the organization and every individual who participates in it
Multibrand franchising involves
operating several franchise organizations within a single corporate structure.
A pattern of behaviors and beliefs that characterize a particular firm refers to its--
organizational culture
efficiency
organizations can improve efficiency by either increasing their outputs or reducing their inputs.
business model
outlines the need the from will fill, the operations of the business, its components and functions, as well as the expected revenues and expenses
procedure
outlines the response to particular problems or circumstances
Within a SWOT analysis, an organizational threat will come from _____ the company.
outside
the managerial and professional talent of a new venture management team can be supplemented by using ________ assistance. a. outside b. corporate c. in-house d. employee
outside
the managerial and professional talent of a new venture venture management team can be supplemented by using ______ assistance.
outside
Of the three core processes of business identified by Bossidy and Charan, which do they believe is the most important?
people
First core process
people: effective leaders evaluate talent using specific milestones, develop future leaders, and deal with non-performers
hawthorne effect
performance improves when workers perceive that they are being watches and that their performance is important
operational efficiency
performing tasks well, even better than competitors
_____ are the standing plans that indicate the general course of action that should be taken in response to a particular event or situation.
policies
Which of the following is NOT an area of strategy the marketing plan should address?
production
the executive summary should include all of these subsections EXCEPT:
products and/or service concept
Internal development
pros: capture all the value, management control cons: time-consuming, limited knowledge
suppliers
provide the company with raw inputs
General Electric fastworks
quickly experimenting with new ideas to solve customer problems and learn from repeated tests and improvements
MilchMaan, a German dairy cooperative, covers an area of 500 acres. The organization is one of the best dairy cooperatives in the country. It recruits its employees from various top universities in the country and uses good quality equipment. In this scenario, the organization's processes, its employees, and its equipment are examples of its:
recources
one key way to think about transformation leaders is that they focus on ways to _________ _____ _______ __ _____ for others.
redefine the reality of work
The basic inputs that a firm uses to conduct its business
resources
In terms of change tools and techniques, the General Electric workout is a special kind of _____.
results-driven change
A family _______ is a gathering of family members, usually at a remote location, to discuss family business matters.
retreat
The "feedback loop" in the strategic-management process involves
revising actions if necessary
According to strategic reference point theory, the _____ aims to protect an existing competitive advantage.
risk-avoiding strategy
_____ refers to choosing a "good-enough" alternative when making a decision.
satisficing
utilitarian rule
says that a decision is ethical when it does the greatest good for the greatest number of people
The first step in designing a plan that works is to:
set goals.
Planning
setting goals and deciding how to achieve them -coping with uncertainty by formulating future courses of action achieve specified results
Planning
setting goals and deciding how to achieve them. Also, coping with uncertainty by formulating future courses of action to achieve specified results
A form of the business plan that presents the most important issues and projections of the business is called the--
short plan
action plan
should follow the goal -which defines the course of action needed to achieve the stated goal
project
single-use plan or a less scope and complexity
The least expensive and easiest formation of the forms of organization is--
sole proprietorship
transactional leader
someone who interacts with followers in a series of "transactions" aimed at personal and organizational gain
Vision Statement
statement that expresses what the organization should become and where it wants to go strategically
contingency theory
states that managerial control systems and organizational structures should be contingent on characteristics of the external environment.
SWOT analysis
strategic planning tool that involves the search for Strengths, Weaknesses, Threats, and Opportunities. Part of "examine the current reality" step of strategic management process.
When a company is readily able to switch to another company in order to get the raw materials it needs to make products, Porter would say that the bargaining power of ______ goes down.
suppliers
Refreezing
supporting and reinforcing new changes so that they stick
effective strategy
the creation of a unique and valuable position against competitors
need for power (nPow)
the degree to which a person tries to influence or control others
what does it mean for a manager to rate their lpc high?
the more relationship oriented they were. people who are relationship motivated tend to describe their least preferred coworkers in a more positive manner. -relationship oriented leader would be most effective when the organizational factors were moderate
job specialization
the process in which labor is divided among workers specializing in different tasks.
organizational socialization
the process in which new employees learn the organization's values and norms and learn the work behaviors that they need to effectively perform their jobs.
benchmarking
the process of a company evaluating its own performance based on how it compares with the performance of high performing organizations
Change intervention
the process used to get workers and managers to change their behaviors and work practices
Technological substitution
the purchase of new technologies to replace older ones
goal
the purpose of planning and known as an objective, a specific commitment to achieve a measurable result within a stated period of time
Individual consideration
the quality of a leader as a coach and adviser
organizational commitment
the set of feelings and beliefs that managers have about the organization as a whole
human relations movement
the system of norms and behavioral rules that emerged within a group.
Testing
the systematic comparison of different product designs or design iterations
conscientiousness
the tendency to be careful, scrupulous, and persevering.
Idealized influence
the way a leader sets and exemplary role model for others
According to government surveys business owners chose to run their businesses out of their homes for all of the following reasons EXCEPT: a. they do not have to maintain a professional office area. b. spend more time with family and friends. c. save time and money on daily commuting. d. quick and cheap to get up and running.
they do not have to maintain a professional office area
Managerial Grid Model: country club management
thoughtful attention to the needs of people to satisfy relationships leads to a comfortable, friendly organization atmosphere and work tempo
Levels of maturity: M1
unable/unwilling
operation plan
which is typically desired for a one-year period, which defines, how you will conduct your business based on the action plan -it identifies clear targets such as revenues, cash flow, and market share
restructuring
(also called simplifying, shrinking or downsizing) involves the elimination of managerial and non-managerial jobs to reduce operating costs.
rites of enhancement
(awards ceremony) involve public recognition of an employee's contributions
rites of pasage
(basic training) dictate how individuals enter, advance within and leave the organization
distributors
(including wholesalers and retailers) provide the products to final customers
rites of integration
(xmas party) build common bonds among organizational members
Describe the characteristics and value of a strong management team.
- A strong management team nurtures a good business idea and helps provide the necessary resources to make it succeed. - The skills of management team members should complement each other, forming an optimal combination of education and experience. - A small firm can enhance its management by drawing on the expertise of competent insiders and outside specialists. - Social media tools can be very helpful in attracting customers, connecting with peers, and sharing advice about common problems. - Building social capital through networking and goodwill is extremely helpful in developing a small business.
Elton Mayo
- Harvard psychologist -conducted relay assembly test experiments in which he changed various dimensions of the work environment and recorded the impact on job performance
Recognize both the attraction and the challenges of creating a home-based startup.
- Home-based businesses are started both for financial reasons and to accommodate family lifestyle considerations. - Operating a business at home can pose challenges beyond family and business conflict, particularly in the areas of professional image and legal considerations. - Technology, especially the Web, has made it possible to operate many types of businesses from almost any location.
Mary Parker Follet
-"mother of management thought" -recognized that workers could make more significant contributions to the organizations when managers gave them the ability to take initiative.
several branches of management science theory are as follows:
--quantitative management -operations management -total quality management (TQM) -management information systems (MISs)
means to achieve diversification
-mergers and acquisitions -strategic alliances and joint ventures -internal development
the strategic management process
1. Establish the mission, vision, and values statement 2. assess the current reality 3. formulate the grand strategy 4. implement the strategy 5.maintain strategic control
Why should an organization adopt planning and strategic management?
1.they can provide direction and momentum 2. encourages new ideas 3. develops a sustainable competitive advantage
impoverished management
1st styles of management exertion of minimum effort to get require work done is appropriate to sustain organization membership
authority-compliance management
2nd styles of management efficiency in operations result from arranging conditions of work in such a way that human elements interfere to a minimum degree
A _____ price strategy sets prices for products or services at high levels for a limited period of time. a. skimming b. penetration c. follow-the-leader d. variable
A
For every dollar of assets needed, there must be a corresponding dollar of financing. a. True b. False
A
Successful CRM programs include good transactional relationships with customers and knowledge of customer behavior. a. True b. False
A
business-to-business (B2B) model
A business model based on selling to business customers electronically.
product and trade name franchising
A franchise agreement granting the right to use a widely recognized product or trademark.
BCG Matrix
A means of evaluating strategic business units on the basis of their business growth rates and their share of the market
limited partners
A partner in a limited partnership who is not active in its management and has limited personal liability.
limited partnership
A partnership with at least one general partner and one or more limited partners
limited partnership
A partnership with at least one general partner and one or more limited partners.
Franchise Rule
A rule that requires the franchisor to disclose certain information to prospective franchisees.
SWOT Analysis
A search for the Strengths, Weaknesses, Opportunities, and Threats affecting an organization
_____ is a process of weighing decision criteria in which each criterion is compared with a standard or ranked on its own merits.
Absolute comparisons
churning
Actions by franchisors to void the contracts of franchisees in order to sell the franchise to someone else and collect an additional fee.
Interviewing customers leaving a store as part of a consumer survey is an __________ because three interviewers working together will survey more customers than one working alone
Additive tasks
What is a final group product that is the sum of the individual contributions?
Additive tasks
Which task assumes that "as the size of the group increases, the average productivity of each member tends to decline due to social loafing?"
Additive tasks
Match with the corresponding role: Deflating another's status; attacking the group or its values; joking in a barbed or semi-concealed way
Aggressor
Floortree, a company that manufactures floor tiles, offers customized lightweight and high-strength tiles in different colors and shapes to compete with its rival company's high-strength tiles. In this scenario, which of the following strategies is FloorTree using to reduce its rival's market share?
An attack strategy
master licensee
An independent firm or individual acting as a middleman or sales agent with the responsibility of finding new franchisees within a specified territory.
Additive Tasks
An independent group task in which the contributions are simply summed or pooled to form the group product.
Role Readiness
An individual's preparation to perform a group role by possessing the appropriate motivation and/or ability.
social network
An interconnected system of relationships with other people The web of relationships that a person has with other people, including roommates or other acquaintances from college, former employees and business associates, and contacts through community organizations.
social network
An interconnected system of relationships with other people.
C corporation
An ordinary corporation, taxed by the federal government as a separate legal entity.
strategic alliance
An organizational relationship that links two or more independent business entities in a common endeavor
strategic alliance
An organizational relationship that links two or more independent business entities in a common endeavor.
Match the following with the corresponding style: "Efficiency in operations results from arranging conditions of work in such a way that human elements interfere to a minimum degree"
Authority-Compliance Management
An __________ style is where the leader tells subordinates what they need to do (the when, where, and how)
Autocratic
A profit and loss statement is a financial report that shows the sources of a firm's cash and its uses of the cash. a. True b. False
B
A(n) _____ categorizes accounts receivable based on the length of time they have been outstanding. a. trade credit b. aging schedule c. revolving charge account d. bad-debt ratio
B
A(n) _____ is a group of brands that a customer is both aware of and willing to consider as a solution to a purchase need. a. reference group b. evoked set c. perceptual categorization d. social classes
B
About _____ percent of customers say they have walked out of a store in the previous year because of poor customer service. a. 24 b. 64 c. 15 d. 75
B
After the completion of the sale, the relationship with the client does not matter to the entrepreneur. a. True b. False
B
All of the following are categories of product strategy alternatives of a small business EXCEPT: a. one product/ one market. b. one product/ modified market. c. multiple products/ multiple markets. d. modified products/ one market.
B
All of the following are economic benefits of maintaining relationships with current customers EXCEPT: a. happy customers refer friends and colleagues. b. new customers increase profits more than current customers. c. order-processing cost are less for returning customers. d. long-time customers spend more money than new customers.
B
All of the following are stages in the product life cycle EXCEPT: a. growth. b. deployment. c. maturity. d. decline.
B
An initial public offering (IPO) occurs when a company sells stock to selected insiders. a. True b. False
B
At the _____ stage of the product life cycle, profits reach their peak. a. introduction b. growth c. maturity d. decline
B
Fixed assets include all of the following EXCEPT: a. land. b. inventory. c. trucks. d. machinery.
B
Fixed costs are also known as a. variable costs. b. operating expenses. c. average prices. d. elastic demands.
B
For all practical purposes, cash flows and profits are the same thing and can be used interchangeably. a. True b. False
B
For entrepreneurs, an indirect channel of distribution is sometimes preferable because it provides more control. a. True b. False
B
Given the advances in technology, the cost of accepting major credit cards for payment over the internet has decreased. a. True b. False
B
Given the dynamic nature of online business, internet companies are discovering that frequent price changes do not work to their benefit. a. True b. False
B
Harvesting is simply selling and leaving a business. a. True b. False
B
In a harvest strategy, financial questions associated with the sale of a firm include how to value the firm and how will this affect the firm's stock. a. True b. False
B
Owners' equity in a business comes from investments the owners make in the business and a. inventory. b. retained earnings. c. spontaneous debt financing. d. cash resources.
B
Packaging, branding, labeling, and warranties are part of a firm's total product offering. a. True b. False
B
Penetration pricing and skimming are long-term strategies used when new products are first introduced into the market. a. True b. False
B
Perception is the starting point for all behavior. a. True b. False
B
Studies have shown that small entrepreneurial firms produce _____ the innovations per employee as large firms. a. triple b. double c. quadruple d. half
B
The _____ requires every food product covered by the law to have a standard nutrition label. a. Consumer Product Safety Commission b. Nutrition Labeling and Education Act c. Consumer Product Improvement Act d. Food and Drug Administration
B
The best financial ratio to determine a company's ability to pay debt as it come due is the _____ ratio. a. debt b. current c. liquidity d. activity
B
The income statement and the cash flow statement complement each other to give an overall picture of the firm's financial situation. a. True b. False
B
To convert the company's income statement from accrual basis to cash basis, we take two steps: 1) add back _____ to net profits and 2) subtract any uncollected sales and payments for inventory. a. total assets b. depreciation c. cash flows d. retained earnings
B
Total asset turnover equal sales divided by a. operating profits. b. total assets. c. total debt. d. debt ratio.
B
Unfortunately for a business, preparing historical financial statements such as income statements, balance sheets, and cash flow statements is a very difficult task. a. True b. False
B
Unfortunately, research findings suggest that managing customer relationships pays minimal dividends. a. True b. False
B
Unfortunately, strategic decisions about growth, innovation, and product development are seldom made within the guidelines and constraints of the legal environment of the marketplace. a. True b. False
B
Which of the following is NOT true of loyal customers? a. They buy more expensive products. b. reacting more to price increases. c. encouraging their friends to buy the same products. d. engaging in other behaviors that tend to enhance a firm's profits.
B
Which of these are groups of individuals who form limited partnerships for the purpose of raising capital from large institutional investors? a. bankers b. formal venture capitalists c. small business entrepreneurs d. business angels
B
Which of these is the rate of return that could be earned on an investment of similar risk? a. seller financing b. opportunity cost of funds c. ESOP d. private equity recapitalization
B
Which stage of new product development entails sketching out the plan for branding, packaging, and other supporting efforts, such as pricing and promotion? a. idea accumulation b. development of the physical product c. business analysis d. product testing
B
Working with a limited amount of capital makes forecasting important because you have more room for error. a. True b. False
B
All of the following are e-commerce business models EXCEPT? a. B2C b. Auction site c. B2B d. B2A
B2A
The ________ is the governing body for corporate activity. a. board of consultants b. advisory council c. lead consultant d. board of directors
BOD Board of directors
Touchstone Hardware was a popular company that specialized in making floppy disks. At the start of the 21st century, when people began switching to CDs and DVDs to store their information, it was brought to the notice of senior managers that the company needed to switch its focus to the production of new storage devices. However, the managers did not feel it was important to make this switch. They dismissed CDs and DVDs as just a passing phase. Which of the following stages of organizational decline best illustrates the current situation of the company?
Blinded stage
co-branding
Bringing two or more franchise brands together under one roof.
A brand _____ is a tangible component of brand identity that cannot be verbalized. a. image b. name c. mark d. letters
C
A group leader who plays a key communications role among peers is called a(n) _____. a. reference group member b. peer perceiver c. opinion leader d. cultural leader
C
A more recent development in acquisitions is the _____ which involves pulling together a group of smaller firms to create a larger enterprise that might eventually be sold or taken public via an initial public offering. a. bust-up LBO b. IPO c. build-up LBO d. CMO
C
ABC Financing provides a combination of debt and equity to the business that allows the entrepreneur to cash out part of his or her investment in the company. This refers to a a. bust-up LBO. b. build-up LBO. c. private equity recapitalization. d. ESOP.
C
All of the following are reasons a small business may or may not decide to sell on credit EXCEPT: a. type of business. b. credit policies of competitors. c. political conditions. d. ages of customers.
C
All the following are good suggestions for financial forecasting EXCEPT: a. using clear assumptions about marketing and pricing plans when creating the financial forecast for the current year. b. avoiding the use of unrealistic profit margins. c. focusing on the development of the income statement and avoid the balance sheet and cash flow statement until the second year. d. avoiding providing too much financial data.
C
The conventional method of measuring the firm's liquidity is the a. debt ratio. b. cash flow statement. c. current ratio. d. asset turnover ratio.
C
The last stage of a product life cycle is a. growth. b. maturity. c. decline. d. introduction.
C
The primary source of financing for most small business startups is a. institutional loans. b. angel investors. c. personal savings. d. stock offering.
C
The value of a depreciable asset a. is constant over time. b. increases with each use of the asset. c. decreases over time. d. increases over time
C
A firm's strategy includes which of the following:
Captures how vision and mission will be achieved
What word has the meaning "the gift of grace"
Charisma
Which of the following methods for managing resistance to change should only be used as a last resort or under crisis conditions?
Coercion
The highest level of group maturity is the stage of ____________. This stage is when members form a cohesive relationship and are committed to the group's success.
Collaboration
The stage associated with "Storming?"
Confrontation
A _____ relationship is an association between a business and a customer that relates to a purchase or a business deal. a. transitional b. customer service c. customer management d. transactional
D
A collection of information about a customer including demographic data, attitudes, preferences, and other behavioral characteristics, as defined by CRM goals, is called a a. customer description. b. target market. c. target audience. d. customer database.
D
A firm using a _____ pricing strategy prices products or services lower than a normal, long-range market price in order to gain more rapid market acceptance or to increase existing market share. a. skimming b. variable c. flexible d. penetration
D
A legal term that identifies a firm's exclusive right to use a brand is called a a. warranty. b. brand name. c. brand mark. d. trademark.
D
All of the following are basic types of sales transactions when an entrepreneur is harvesting an investment EXCEPT: a. strategic acquisition. b. financial acquisition. c. employee acquisition. d. environmental acquisition.
D
All of the following are major kinds of consumer credit EXCEPT: a. open charge accounts. b. installment accounts. c. revolving charge accounts. d. savings accounts.
D
Operating expenses consist of all of the following EXCEPT: a. marketing and selling expenses. b. general and administrative expenses. c. depreciation. d. cost per number of item sold.
D
The Stanford Prison study, conducted by Phillip Zimbardo, is an example of what concept?
Deindividuation
This is one explanation for the concept of? People are anonymous because they lose their sense of individual identification
Deindividuation
A __________ style includes workers in the decision-making process of the organization
Democratic
Organizational Opportunities
Environmental factors that an organization may exploit for competitive advantage
Organizational Threats
Environmental factors that hinder an organization's ability to achieve a competitive advantage
The group norm of ___________ suggests that rewards should be allocated on the basis of merit according to each person's contribution of the group.
Equity
Not all organizations need strategies to survive and thrive
False
One of the disadvantages of franchising is the inability on part of franchisees to use franchisor's trade name and trademark.
False
The basic features of the relationship between the franchisor and the franchisee are embodied in the broker contract
False
The basic features of the relationship between the franchisor and the franchisee are embodied in the broker contract. a. True b. False
False
The general environment is defined more narrowly as the context for factors that directly impact a given firm and all of its competitors.
False
The internet has made it easier for people to steal the creations and ideas of others, including literary works, artistic products, and music. These creations are collectively known as trademarks.
False
The overlap of family concerns and business interest in the family firm simplifies management of the business.
False
True or false: It is common practice today for most small business owners to engage in strategic planning.
False
Unlimited liability means that the owner's personal assets outside
False
Unlimited liability means that the owner's personal assets outside the business cannot be taken by creditors if the business fails. a. True b. False
False
a refugee is a person who tried entrepreneurship, failed and sought refuge in corporate employment
False
"Three big" stakeholders for organizations are employees, customers, and competitors.
False.
Microbusinesses are firms that provide substantial profits to their owners
False.
Jonathan is a manager at a departmental store. In recent weeks, the sale of goods in his store has decreased considerably. He does not know the reason behind this decline. As per the decision-making process, the next step that Jonathan must take is to (27)
Generate course of action
Match with the reason people join groups: People work together in groups because they need the help of others to achieve important goals
Goal accomplishment
According to the Contingency Theory, a task-oriented leader would be most effective when organizational factors are?
Good or poor
One of the reasons to create ________ are to help the group avoid embarrassing situations
Group norms
_________ are general expectations about how members ought to behave
Group norms
_________ represent general expectations or codes of conduct that imply a duty or obligation
Group norms
Virtual Team
Groups that rely on electronic communication rather than face-to-face interaction.
Contracts and Leases:
If the business has a current lease for the location, be aware that you may have to work with the landlord to assume any existing lease on the business premises or to negotiate a new lease. Contracts with suppliers and clients may need to be renegotiated as well.
This is known as one of the four I's of leadership, and describes how transformational leaders encourage innovation and creativity through challenging the normal beliefs or views of a group.
Intellectual stimulation
At the ________ level of conformity norms are followed because the person accepts the beliefs, attitudes, and values supporting the norms
Internalization
What is the highest level of conformity?
Internalization
What must happen in order for MBO to be successful?
1. the commitment of top management is essential 2. the program must be applied organization wide 3. objectives must cascade-becoming more specific at lower levels of the organization
home-based business
A business that maintains its primary facility in the residence of its owner.
Which of the following is a characteristic of a family business?
A business that passes from one generation to the next
nonprofit corporation
A form of corporation for enterprises established to serve civic, educational, charitable, or religious purposes; not for generation of profits
nonprofit corporation
A form of corporation for enterprises established to serve civic, educational, charitable, or religious purposes; not for generation of profits.
professional corporation
A form of corporation that shields owners from liability and is set up for individuals in certain professional practices.
limited liability company
A form of organization in which owners have limited liability but pay personal income taxes on business profits
Limited Liability Company (LLC)
A form of organization in which owners have limited liability but pay personal income taxes on business profits.
limited liability company
A form of organization in which owners have limited liability but pay personal income taxes on business profits.
Stability Strategy
A grand strategy that involves little or no significant change
Confidentiality Agreement:
A confidentiality agreement indicates that you will not use the information about the seller's business for any purpose other than making the decision to buy it.
general partner
A partner in a limited partnership who has unlimited personal liability
general partner
A partner in a limited partnership who has unlimited personal liability.
limited partner
A partner in a limited partnership who is not active in its management and has limited personal liability
Step 3: Formulate the Grand Strategy
-comes after assessing the current reality -explains how the organization's mission is to be accomplished (growth strategy, stability, defense)
levels of strategy
-corporate level strategy -business level strategy -functional level strategy
the four building blocks of a sustainable competitive advantage are as follows:
-efficiency -quality -innovation -responsiveness to customers
4 key activities of maintaining strategic control
-engage people -keep it simple -stay focused -keep moving
the big 5 personality traits
-extraversion -negative affectivity -agreeableness -conscientiousness -openness to experience
Hawthorne studies
-from 1924 to 1932, researchers conducted experiments at the Hathorne works of the western electric company. -impact of different levels of illumination on workers productivity.
Directive- environment
-high ambiguity or complexity to tasks -formal authority is high -group is working together well
Participative- environment
-high ambiguity or complexity to tasks -formal authority is questionable -group functioning is questionable
Step 2: Assessing the current reality
-look at where the organization stands internally and externally, to determine what's working and what's not -see what can be changed so as to increase efficiency and effectiveness in achieving the organization's vision -tools include competitive intelligence, SWOT analysis, forecasting, benchmarking, Porter's model for industry analysis
strategic management process
1. determine the mission, vision, and values statements 2. examine the current reality 3. devise strategies 4. execute strategy 5. monitor the process and maintain control
The planning process
1. develop vision, mission, and goals 2. diagnose the opportunities and weaknesses 3. diagnose strengths and weakness 4. develop strategies 5. prepare strategic plan 6. prepare tactical/operational plans 7. control and diagnose results 8. continue planning
Select the appropriate leadership style: Subordinate Variables: -Authoritative leadership is desired -Locus of control is external -Perceived high ability on task Environmental Variables: -Simple or highly structured task -Formal authority is high -Group functioning is questionable
Achievement-oriented
nondisclosure agreement
An agreement in which the buyer promises the seller that he or she will not reveal confidential information or violate the seller's trust.
Current Reality Assessment
An assessment that looks at where an organization stands and determines what is working and what could be different so as to maximize efficiency and effectiveness in achieving the organization's mission
__________ are prescribed by the organization as a means of dividing the labor and assigning responsibility
Assigned roles
Match with the corresponding role: Pursuing special interests not related to task; staying off the subject to avoid commitment; preventing group from facing controversy
Avoidance behavior
The _____ is the most important planning document in the life of a small company. a. pro forma financial statement b. cash budget c. balance sheet d. income statement
B
Barriers to Entry
Factors that make it difficult and costly for an organization to enter a particular task environment or industry.
A firm subscribing to a consumer-oriented philosophy of marketing believes the product is the most important part of the business.
False
According to Entrepreneur magazine's "Top Franchises for 2012," McDonald's is ranked number 1
False
According to Entrepreneur magazine's "Top Franchises for 2012," McDonald's is ranked number 1.
False
Research finds that due to lack of control, franchising is more risky than starting a business from scratch. a. True b. False
False
Research finds that, generally, the process of succession is usually very fast in a family business.
False
Research finds the due to lack of control, franchising is more risky than starting a business from scratch.
False
Strategic management process is the coordinated means by which an organization chooses its mission and vision
False
Success and progress in achieving goals and objectives will be indicated by how well the vision and mission are achieved
False
1. Idealized influence 2. Inspirational motivation 3. Intellectual stimulation 4. Individual consideration
Four I's of transformational leadership
A/n ________ is a business model that involves a business owner who license trademarks and methods to an independent entrepreneur.
Franchise
Which of the following is NOT information contained in a disclosure document?
Franchisor's selling price
Which study is the following referring to? A study aimed at finding more optimal working conditions for employee production
Hawthorne
Manager's goal
High performance
According to Porter's industry forces, which of the following is likely to occur when new companies can enter an industry easily?
Industry attractiveness is likely to decrease
Process Losses
Inefficiencies that arise from having to coordinate the contributions and activities of group members.
Injunctive Norms
Influence attempts of group members since they result from the influence attempts of group members and are enforced through peer pressure
______________ is when group members feel induced to conform to group pressure because they depend on the group to provide important substance to help them know what to do.
Information Dependence
Groups use two major social influence processes to obtain conformity: reward dependence and _____________
Information dependence
This describes what type of conformity? "Individuals also conform to group pressure because they depend on others for information about the appropriateness of their thoughts, feelings, and behavior"
Information dependence
Match with the corresponding role: Offering facts; giving expression of feeling; giving an opinion
Informer
Match with the corresponding role: Proposing tasks or actions; defining group problems; suggesting a procedure
Initiator
Norms that are viewed as the product of the shared attitudes and beliefs that group members bring to the group are called?
Injunctive norms
What type of norms emerge from the group consensus after the group discusses the issue or from a dominant group member who simply voices an opinion?
Injunctive norms
The four I's of transformational leadership are idealized influence, _____________, intellectual stimulation, and individual consideration
Inspirational motivation
What occurs when two or more role senders communicate incompatible expectations to the focal person?
Intersender role conflict
Name a theory that focuses on in-group members?
Leader Member Exchange Theory
What theory talks about cliques?
Leader Member Exchange Theory
Which theory is the following associated with? "Wise leaders capitalize on all of their human talent, and it is incumbent upon them to create an environment and personal relationship with every subordinate that allows them to grow to their maximum capacity in the organization."
Leader Member Exchange Theory
What does LPC stand for?
Least preferred coworker
Which of the following is a commonly used technique for increasing goal commitment?
Making the goals public
Prospectors
Managers who develop new products or services and seek out new markets, rather than waiting for things to happen.
_____ consist of payments due from a firm's customers. a. Accounts payable b. Accounts receivable c. Accrued expenses d. Inventory
B
_____ equals the price of the product or service times the number of units sold or the amount of service rendered. a. Cost of goods sold b. Amount of sales c. Operating expenses d. Interest expenses
B
____ is a type of quantitative planning through which managers decide how to allocate available money to best accomplish company goals.
Budgeting
Entrepreneurs who receive an entire marketing and management system are participating in:
Business format franchising
Political / Legal Forces
Outcomes of changes in laws and regulations, such as deregulation or industries, privatization of organisations, and increased emphasis on environmental protection.
Technological Forces
Outcomes of changes in the technology managers use to design, produce, or distribute goods and services.
Demographic Forces
Outcomes of changes in, or changing attitudes towards the characteristics of a population, such as age, gender, ethnic origin, race, etc.
an ____ business is a venture that is operated by a founding entrepreneur.
Owner-managed
Crowds have the capacity to create a mental homogeneity, called a __________, that is frequently irrational and often functions at lower moral and intellectual levels than isolated individuals
Collective mind
Match with the corresponding role: Making a comical display of others or one's lack of involvement; using sarcasm and humor to disrupt the group; seeking recognition in ways not relevant to the group task
Comedian
Methods to Assess The Current Reality
Competitive Intelligence SWOT Analysis Forecasting Benchmarking Porter's Model for Industrial Analysis
_____ refers to a reluctance to change strategies or competitive practices that have been successful in the past.
Competitive inertia
When resistance to change is based on insufficient, incorrect, or misleading information, which of the following is the best approach that a manager can use to manage resistance to change?
Education and communication
E-commerce
Electronic commerce, or the buying and selling of products or services over the Internet.
e-commerce
Electronic commerce, or the buying and selling of products or services over the Internet.
Who led the "Hawthorne Studies?"
Elton Mayo
Hawthorne Studies
Elton Mayo performance improves when workers perceive that they are being watched and that their performance is important
__________ develop naturally to meet the needs of group members or assist in achieving formal goals
Emergent roles
Match with the reason people join groups: To handle the pressures of daily living, and especially when situations are threatening or uncertain, people rely on others for emotional support
Emotional Support
Style #1: Production Style #2: Employee Which of the following was found to be the best style?
Employee
Match with the corresponding role: Being friendly, warm and responsive to others; indicating by facial expression or remark the acceptance of others' contributions
Encourager
Activities to Keep A Strategic Plan on Track
Engage people about the group's hopes and how to accomplish them Keep your planning simple Stay focused Keep moving toward your vision and adjusting your plan as necessary
What norm suggests that everyone should be treated the same?
Equality
What norm suggests that the rewards should be allocated on the basis of merit according to each person's contribution to the group?
Equity
One explanation for the social facilitation effect is called?
Evaluation apprehension
What does the following describe? "the presence of others creates a higher level of arousal and motivation because we expect others to evaluate our performance, and their opinions matter to us"
Evaluation apprehension
Types of Forecasting
Trend Analysis Contingency Planning
The Internet has made it easier for users to copy intellectual property.
True
management science theory
a contemporary extension of scientific management that uses techniques ti help managers make the best use of organizational resources.
A pattern of behaviors and beliefs that characterize a particular firm refers to its-- a. organizational culture. b. family council. c. family-based commitment. d. nepotism.
a. organizational culture.
maturity
ability and willingness of employee
differentiation strategy
an attempt to compete based on a differentiated product, not low cost.
________ refers to fundamentally refocusing the startup as it unfolds or completely recreating it if the initial concept turns out to be seriously flawed, but already exists elsewhere.
Pivot
Spending time deciding who should participate next is an example of?
Process time
Expected behavior attached to a position or a job refers to a?
Role
The following steps are associated with? 1) breaking down the various motions involved in a job, 2) improving the motions to optimize performance, and 3) eliminating unnecessary motions
Scientific Management
The idea that there is one best way to do a job and it is the manager's job to figure this out and implement it at the work site is associated with?
Scientific Management
The stage associated with "Adjourning?"
Separation
Which additional stage is characterized by feelings of closure and compromise as members prepare to leave, often with sentimental feelings?
Separation
SCORE stands for--
Service Corps of Retired Executives
which of the following is not a characteristic of a family council?
Small, selected group of employee's
According to the Business Tax Index report, which state in 2012 had the most favorable tax systems? a. South Dakota b. Florida c. Illinois d. Maryland
South Dakota
_________ equipment has a limited use and is only justified at high volumes of output.
Special Purpose
business brokers
Specialized brokers that bring together buyers and sellers of businesses.
Entrepreneur's Top 10 Franchises for 2012 include all of these EXCEPT:
Starbucks
department
consists of people with similar skills and who use similar knowledge or tools to perform their jobs.
Contingency Theories of Motivation
context of environment determined when a particular leadership would be most effective "it all depends"
Strategic _____ involves monitoring the execution of strategy and taking corrective action when necessary.
control
disseminators
convey info to others
liaisons
coordinate activities and serve as a "go-between" within groups
In any organization, _____ are the less visible, internal decision-making routines, problem-solving processes, and organizational cultures that determine how efficiently inputs can be turned into outputs.
core capabilities
The president, chief financial officer, and chief operating officer of Jensen Mfg. meet annually to discuss the direction of the company including what products they will continue to offer and what new products they will introduce. Which level of strategic management does this represent?
corporate-level
Which level of strategic management focuses on the organization as a whole?
corporate-level
If an entrepreneur wanted to limit the liability of ownership, he/she should choose which of the following forms of organization?
corporation
A small firm that provides low prices due to cost efficiencies is using a--
cost based strategy
A small firm that provides low prices due to cost efficiencies is using a a. cost-based strategy. b. revenue-based strategy. c. focus strategy. d. differentiation-based strategy.
cost- based strategy
A plan of action that requires a firm to hold down its costs so that it can compete by charging lower prices and still make a profit
cost-based strategy
Which two of Porter's competitive strategies are appropriate when addressing a narrow market? Choose all that apply.
cost-focused, focused-differentiation
contingency planning
creation of alternative hypothetical but equally likely future conditions
contingency planning
creation of alternative hypothetical but equally likely future conditions; helps firms react quickly and decisively when things don't go as planned
operations strategy
ensure all tasks that are performed are the right tasks
Business growth rate, as used in the BCG matrix, is concerned with how fast the _____ is(are) growing.
entire industry
Readiness to act on existing but unnoticed business opportunities
entrepreneurial alertness
In business format franchising,
entrepreneurs receive an entire marketing and management system.
You, as a resident and citizen of USA, are conducting busienss abroad and make decisions based on local interpretations depending on the country you are in. You are using the philosophy of
ethical relativism
organizational behavior
examines the factors that impact how individuals and groups act in various situations.
_____ is the process that helps align the last two phases of the strategic-management process: strategic implementation and strategic control.
execution
A_______should be written as the last step in writing the business plan.
executive summary
The _________ is usually at the beginning of the business plan and summarizes the total plan.
executive summary
Managerial Grid Model: Impoverished management
exertion of minimum effort to get required work done is appropriate to sustain organization membership
transformational leader
exhibits a set of behaviors that are quite distinct. these behaviors are known as the four I's of transformational leadership: -idealized influence -inspirational motivation -intellectual stimulation -individual consideration
ethical dilemmas
exists when a person has to decide to act in a way that may help others even though doing so may be against his, or her own self interest
The _____ assumes that innovation is occurring within a highly uncertain environment.
experiential approach to innovation
Defenders
expert at producing and selling narrowly defined products or services
grand strategy
explains how the organization will accomplish its mission
The price at which the property would change hands between a willing buyer and willing seller when the former is not under any compulsion to buy and the latter is not under any compulsion to sell, both parties having reasonable knowledge of relevant facts refers to a. Encroachment value. b. Churning price. c. fair market value. d. nondisclosure agreement.
fair market value
he price at which the property would change hands between a willing buyer and willing seller when the former is not under any compulsion to buy and the latter is not under any compulsion to sell, both parties having reasonable knowledge of relevant facts refers to a. Encroachment value. b. Churning price. c. fair market value. d. nondisclosure agreement.
fair market value
employee-oriented managers
focus on actively seeking ways to nurture a strong relationship with their employees Rensis Likert
A grand strategy that involves expansion of things like sales revenues, market share, or number of employees is known as a(n) _____ strategy.
growth
A surrogate variable is used in _________ forecasting.
indirect
Managers that rated their LPC low were presumed to be _________ oriented
Task
Tariff
Tax that a government imposes on imported or exported goods.
Evaluation Apprehension
The concern that people experience when they know they are being observed and evaluated by others.
Power Distance
The degree to which societies accept the idea that inequalities in the power and well-being of their citizens are due to differences in physical or intellectual capabilities, or heritage. High power distance: Societies in which inequalities are allowed to persist or grow. Low power distance: Societies in which large inequalities between citizens are not allowed to develop.
Uncertainty Avoidance
The degree to which societies are willing to tolerate uncertainty and risk. Low uncertainty avoidance: Easygoing, diverse, and tolerate differences. High uncertainty avoidance: Rigid and skeptical about people whose beliefs differ from the norm.
Organizational Weaknesses
The drawbacks that hinder an organization in executing stategies in pursuit of its vision
Identify a true statement about the planning process.
The final step in developing an effective plan is to maintain flexibility.
Orientation
The first stage of group development when members are getting to know each other
According to John Mullins, the author of The New Business Road Test, all of these key elements should be in every business plan EXCEPT:
personal life descriptors of the entrepreneurs
leaders
provide focus and motivate others
_____ is a process of weighing decision criteria in which each criterion is compared with every other criterion.
relative comparison
decisional roles
roles in which managers use info to make decisions to solve problems or take advantage of opportunities. these include the roles of entrepreneur, disturbance handler, resource allocator and negotiator.
A facility for making desirable discoveries by accident
serendipity
Accidental discovery involves ________ , the facility for making desirable discoveries by accident. a. luck b. search c. investigation d. serendipity
serendipity
Accidental discovery involves _________, the facility for making desirable discoveries by accident.
serendipity
Tactical Goals
set by and for middle managers and focus on the actions needed to achieve strategic goals
Achievement behaviors
set challenging goals for followers, expect them to perform at their highest level, and show confidence in their ability to meet expectation
One unethical practice involves the concealing of business income. This practice is called is called:
skimming
A profitable company that responds to customers' needs while showing reasonable concern for the environment is called a(n)
sustainable small business
Those organizational resources that are visible and easy to measure
tangible resources
In Fiedler's Contingency Theory of Leadership, he focused on three different factors of the work environment: leader-member relations, _______, and leader position power.
task structure
The greatest advantage of buying a franchise is a. the probability of success. b. piggyback cost sharing. c. multiple-unit option. d. Little or no work on part of the franchisee.
the probability of success
the greatest advantage of buying a franchise is--
the probability of success
Operational planning
they determine how to accomplish specific task within the next 1-52 weeks
One of the considerations in selecting a location for a business is proximity to the business owner's home? a. True b. False
true
Ownership is transferred most easily in a corporation
true
Ownership is transferred most easily in a corporation. a. True b. False
true
Pre-emptive rights allow stockholders to buy new shares of stock before they are offered to the public.
true
When ABC International engages in the unethical practice of concealing business income, it is called skimming
true
outside analysis should consider the general environment, or big picture, and the industry setting in which the venture might do business.
true
The main purpose of a retrenchment strategy is to:
turn around very poor company performance by shrinking the size or scope of the business.
Those organizational resources that are invisible and difficult to assess
intangible resources
five main traits
intelligence self confidence determination integrity sociability a leader must know what he is doing, believe is what he is saying, be committed to seeing things through, speak and act honestly, and communicate with others.
m2 unable/willing
lacking specific require skills but motivated to take responsibility for the job/task
m1 unable/unwilling
lacking specific required skulls and unmotivated to take responsibility for the job/task
strategy
large-scale action plan that sets the direction for an organization
LLC stands for
a. Limited Liability Company.
Economies of Scale
Cost advantages associated with large operations.
What is the second level of conformity?
Identification
Strategy formulation answers the question:
What should be our strategy?
The __ is the governing body for corporate activity.
board of directors
open system
one that interacts with the external environment
Values
what managers are trying to achieve and how they believe they should behave.
The effect that a change in price has on the quantity demanded is called the a. elasticity of demand. b. break-even point. c. cost differential. d. adaptive pricing.
A
The five Cs of credit consist of all of the following EXCEPT: a. credit card. b. character. c. capacity. d. capital.
A
The four basic ways to harvest an investment in a privately owned company are all of these EXCEPT: a. buying another firm. b. distributing the cash flows generated by the business to its owners instead of reinvesting the cash. c. offering stock to the public through an initial public offering. d. undertaking a private equity recapitalization.
A
The most effective approach to collecting past-due accounts is to a. remind the debtor that his or her credit rating may be impaired. b. contract with a collection agency immediately. c. endorse a consolidation loan for the debtor. d. negotiate extended payments from the debtor.
A
The type of assets that can quickly be converted into cash are called a. current assets. b. fixed assets. c. property, plant, and equipment. d. other assets.
A
Top Hats Limited routinely sets high prices for their hats to convey an image of high quality. This refers to a. prestige pricing. b. variable pricing. c. fixed pricing. d. average pricing.
A
Total assets less outstanding debt must always equal ownership equity. a. True b. False
A
Transactional relationships occur between the customer and a small business. a. True b. False
A
Unfortunately, there is no formula for determining the price of a private company. a. True b. False
A
Value is created when a firm's return on invested capital is _____ the investors' opportunity cost of funds. a. greater than b. less than c. equal to d. similar to
A
When consumers develop an emotional connection to firms, they respond more positively. a. True b. False
A
Which of the following shows the profits and losses of a firm's operations over a period of time? a. income statement b. balance sheet c. statement of cash flow d. statement of financial position
A
Which of the following would most CEOs state as being the primary motivation for going public with stock? a. Raise capital for growth b. Facilitate selling the company c. Establish a market value for the firm d. Enhance the firm's ability to raise capital
A
Which of these is an informal agreement or understanding between the borrower and the bank as to the maximum amount of credit the bank will provide the borrower at any one time? a. Line of credit b. Term loan c. Chattel mortgage d. Mortgage
A
Which technique is a method to forecast asset investments and financing requirements? a. percentage-of-sales b. net working capital c. spontaneous debt financing d. cash budget
A
____ is a loan for which certain items of inventory or other movable property serve as collateral. a. Chattel mortgage b. Line of credit c. Estate mortgage d. Term loan
A
_____ are expressed either as a percentage of the selling price or the cost. a. Markups b. Break-even points c. Prestige pricing d. Elastic demand
A
reciprocation
A powerful sense of obligation to repay in kind what another has done for or provided to us.
Professional Help:
A qualified attorney should be enlisted to help review the legal and organizational documents of the business you are planning to purchase. Also, an accountant can help with a thorough evaluation of the financial condition of the business.
Funk Booster, a company that manufactures vehicle boosters, launched a new product, NOS3. This launch was aimed at occupying the shares held by Funk Booster's competitor, Fly-Wagon's, product, NOS-A. To prevent Funk Booster from occupying their shares, Fly-Wagon launched a new product, NOS-X, which was an advanced version of NOS-A. Which of the following strategies was used by Fly-Wagon to defend its market share?
A response strategy
piercing the corporate veil
A situation in which the courts conclude that incorporation has been used to perpetuate a fraud, skirt a law, or commit some wrongful act and remove liability protection from the corporate entity.
piercing the corporate veil
A situation in which the courts conclude that incorporation has been used to perpetuate a fraud, skirt a law, or commit some wrongful act and thus remove liability protection from the corporate entity
If a technological innovation follows the typical S-curve pattern of innovation, which of the following will indicate that small amounts of effort, in terms of money or research and development, will lead to significant increase in technological performance?
A steeper slope at the midpoint of the curve
Single-Product Strategy (Definition and Pro/Con)
A strategy in which a company makes and sells only one product within its market Benefit: Focus Risk: Vulnerability
Role Episode
An encounter between a role sender and the focal person in which role expectations are sent, received, and evaluated.
franchisee
An entrepreneur whose power is limited by a contractual relationship with a franchising organization.
Grand Strategy
An explanation of how the organization's mission will be accomplished
Fortunately, an entrepreneur can cash out immediately after the completion of the IPO. a. True b. False
B
In practice, credit cards are insignificant source of financing for all entrepreneurs, particularly early in the game. a. True b. False
B
What is it called when a private firm sells its stock for the first time to the general public? a. LBO b. IPO c. SEC d. ESOP
B
What is the customary time period for trade credit? a. 7 days b. 30 days c. 60 days d. 90 days
B
When harvesting a firm, getting professional advice is helpful but not vital to the process. a. True b. False
B
You do not need to know a firm's financial position at the beginning of the year to fully understand how that firm performed during that year. a. True b. False
B
____ is the extent to which a good or service is perceived by its customer to meet his or her needs or wants and is measured by a customer's willingness to pay for it.
B
____ measures the degree to which a firm has sufficient working capital available to meet maturing debt obligations. a. Percentage-of-sales b. Liquidity c. Debt ratio d. Spontaneous financing
B
_____ are divisions in a society having different levels of social prestige. a. Reference groups b. Social classes c. Opinion leaders d. Perception classes
B
All of the following tactics represent bootstrapping EXCEPT: a. leasing instead of buying. b. utilizing "just-in-time" inventory strategy. c. "floating" checks. d. collecting the money owed the firm prior to having to pay its bills.
C
Which of these basic firm characteristics significantly affect how a business is financed? a. the firm's past performance b. the size of the competitors c. the nature of its assets d. the preferences of the bankers with respect equity desire
C
_____ are the starting point for all behavior. a. Perceptions b. Motivations c. Needs d. Evaluations
C
_____ equals current assets divided by current liabilities. a. Liquidity b. Cash flow c. Current ratio d. Return on assets
C
the 4 key principles that would improve productivity (scientific management)
-Study how workers perform tasks and try to improve how tasks are performed -use written rules and standard operating procedures to codify new, more efficient methods of performing tasks. -select workers with the appropriate skills and abilities, and train them to accomplish the task using the codified rules and procedures -establish an acceptable level of performance, and incentivize workers by rewarding them for performing above this level.
Fayol's 14 principles of management
1) Division of labor 2) Authority and responsibility 3) Unity of command 4) Line of authority 5) Centralization of authority 6) Unity of direction 7) Equity 8) Order 9) Initiative 10) Discipline 11) Remuneration of personnel 12) Stability of tenure of personnel 13) Subordination of individual interests to the common interest 14) Esprit de corps
Management by objective (MBO)
1. managers and employees joiuntly set objectives for the employee 2. managers develop action plans 3. manager and employees periodically review the employee;s performance 4. the manager makes a performance appraisal and rewards the employee according to results
five forces of competition
1. threat of new entry 2. suppliers' bargaining power 3. buyers' bargaining power 4. threats of substitutes 5. competitive rivalry
S corporation (Subchapter S corporation)
A type of corporation that offers limited liability to its owners and passes taxable income or losses on to stockholders
S corporation (Subchapter S corporation)
A type of corporation that offers limited liability to its owners and passes taxable income or losses on to stockholders.
S corporation, or Subchapter S corporation
A type of corporation that offers limited liability to its owners and passes taxable income or losses on to stockholders.
Forecasting
A vision or projection of the future
Norm of Reciprocity
A widely accepted social norm that insists that if person A helps person B, then person B has an obligation to help others, especially person A.
Achievement Orientation
A worldview that values assertiveness, performance, success, and competition.
Individualism
A worldview that values individual freedom and self expression and adherence to the principle that people should be judged by their individual achievements rather than their social background.
Short-Term Orientation
A worldview that values personal stability, or happiness and living for the present.
Collectivism
A worldview that values subordination of the individual to the goals of the group and adherence to the principle that people should be judged by their contribution to the group.
Nurturing Orientation
A worldview that values the quality of life, warm personal friendships, and services and care for the weak.
Long-Term Orientation
A worldview that values thrift and persistence in achieving goals.
team management
5th styles of management work accomplishment is from committed people: interdependence through a common stake in organization purpose leads to relations of trust and respect
Small firms represent about___________ percent of all US exporters
97
A _____ is simply a short-term loan to help with temporary needs, such as seasonal increases in inventory. a. line of credit b. cash budget c. current asset d. long-term debt
A
A leveraged buyout depends on adequate future _____ and entails a high level of _____. a. cash flow; debt b. trust; product innovation c. legal risk; political favors d. equity; shareholder goodwill
A
A leveraged buyout involving the purchase of a company with the intent of selling off its assets is called a. bust-up LBO. b. ESOP. c. build-up LBO. d. MBO.
A
A major component of the consumer behavior model is psychological influence. a. True b. False
A
A product _____ is the lowest common denominator in a company's product mix. a. item b. mix c. strategy d. line
A
A profitable company does not necessarily have positive cash flows. a. True b. False
A
According to recent research, 91 percent of businesses with 11 or more employees and 50 percent of those with 10 or fewer employees said they had a CRM system already in place, which represents impressive growth in usage over previous years. a. True b. False
A
All of the following are primary SBA program's EXCEPT: a. the Venture Capital program. b. the 7(a) Loan Guaranty program. c. the Certified Development Company program. d. the Small Business Innovation Research program.
A
All of the following are true about cost of goods sold EXCEPT: a. it is an operating expense. b. it can be variable. c. it is the cost of producing a firm's products and services. d. it can be fixed.
A
As long as the owner's rate of return is greater than the cost of debt, return on equity will increase as the company uses more debt. a. True b. False
A
Conflicts are more likely to occur if an entrepreneur remains with the company after the sale. a. True b. False
A
Costs that remain constant at different levels of quantity sold are called a. fixed costs. b. variable costs. c. average costs. d. markup costs
A
General-purpose equipment permits cost reduction in industries in which the technology is fully established and in which a capacity is assured by high sales volume. a. True b. False
A
Having positive net profits in an income statement does not necessarily mean that a firm has generated positive cash flows. a. True b. False
A
Interest expense is deducted from the _____ to arrive at the company's profits before taxes. a. operating profits b. gross profits c. net profits d. cost of goods sold
A
Monthly forecasts should be avoided for any time frames beyond one year. a. True b. False
A
Need recognition occurs when a consumer realizes that his or her current state of affairs differs significantly from some ideal state. a. True b. False
A
Net working capital is a measure of a company's a. liquidity. b. long-term asset structure. c. profitability. d. asset turnover capacity.
A
Packaging, branding, labeling, and warranties are part of a firm's total product offering. a. True b. False
A
Raising new capital through equity financing would mean giving up a part of the firm's ownership, and most owners of small firms resist giving up control to outsiders. a. True b. False
A
The amount of the business owner's initial investment, owner's later investment in the business, and retained earnings comprise a. debt capital. b. accrued expenses. c. owner's long-term debt. d. owner's equity capital.
D
The last stage of the new product development process is a. idea accumulation. b. development of the physical product. c. business analysis. d. product testing.
D
Which of these involves bringing two franchise brands together under one owner? a. Elite entrepreneur b. Co-branding c. Piggyback franchising d. Master licensee
Co- branding
Which of these involves bringing two franchise brands together under one owner?
Co-branding
The stage associated with "Performing?"
Collaboration
What is the fourth stage of group development?
Collaboration
What is the highest level of group maturity?
Collaboration
Which stage in developing a group is associated with a feeling of cohesiveness and commitment to the group
Collaboration
Match with the corresponding role: Asking if a group is nearing a decision; assessing whether there is agreement on a possible conclusion
Consensus tester
Which of the following is a consideration in the transfer of ownership in the family firm?
Consideration of tax laws
A measure called LPC is used in what theory?
Contingency theory
Theories with the perspective "it all depends" is called what?
Contingency theory
What theory of leadership did Fiedler propose?
Contingency theory
Common credit card types include all of the following EXCEPT: a. bank cards. b. financial institution cards. c. retailer cards. d. installment cards.
D
Harvesting encompasses all of the following EXCEPT: a. creating future options. b. capturing value. c. reducing risk. d. expanding.
D
Straddling strategies as an approach to strategic management is not recommended for which reason:
It is an indication that the firm's managers have not made necessary choices about the business and its strategy
The purpose of pro forma financial statements is to answer all of these questions EXCEPT: a. How profitable can you expect the firm to be, given the projected sales levels and the expected sales-expense relationships? b. How much and what type of financing (debt or equity) will be needed to finance a firm's assets? c. Will the firm have adequate cash flows? If so, how will they be used? If not, where will the additional cash come from? d. What are the firm's core competencies in the marketplace compared to the competitors?
D
The three stages of the competitive advantage life cycle are a. introduction, growth, and decline. b. introduction, deploy, and decline. c. develop, deploy, and maturity. d. develop, deploy, and decline.
D
Two important building blocks to developing a CRM program are a. outstanding transactional relationships and a relevant, working database. b. a database and knowledge of consumer behavior. c. a database and stockholders. d. outstanding transactional relationships and knowledge of consumer behavior.
D
____ are generally used to finance equipment with a useful life corresponding to the loan's term. a. Chattel mortgages b. Line of credit c. Estate mortgages d. Term loans
D
____ is the process of raising very small investments from a large number of investors online. a. Basis point b. Loan covenants c. Factoring d. Crowdfunding
D
_____ is measured by dividing current assets by current liabilities. a. Total debt ratio b. Line of credit c. Total equity to liability d. Current ratio
D
This is one explanation for the concept of? People become more suggestible in groups where they feel greater pressures to conform
Deindividuation
This is one explanation for the concept of? The contagion of the group causes people to act differently by reducing their inhibitions and allowing them to behave like other group members
Deindividuation
Which of the following is not a consideration in the transfer of ownership in the family firm?
Delay of transfer of ownership until death of the founder
Full __________ is when a person is given a task to complete, but not given direction on how to complete it
Delegation
Style #1: Autocratic Democratic Style #2: Democratic Style #3: Laissez-Faire Which of the following was found to be the best style?
Democratic
Norms that are created as post-hoc (after the fact) justifications are called?
Descriptive norms
What does this describe? "After the group has been functioning for a while, we observe certain patterns of behavior and explain them as being a group norm."
Descriptive norms
Which of the following is an aspect of the experiential approach to innovation?
Design iteration
The leadership literature seems to have settled on five main traits that are relevant across situational factors: intelligence, self-confidence, ____________, integrity, and sociability
Determination
____ is a decision-making method that creates c-type conflict by forcing decision makers state the assumptions of a proposed solution and generate a solution that is the opposite of that solution.
Dialectical inquiry
The stage associated with "Norming?"
Differentiation
What is the third stage of group development?
Differentiation
Which stage in developing a group is associated with how the tasks and responsibilities will be divided among members and how members will evaluate each other's performance?
Differentiation
Using Porter's analysis, firms are likely to generate higher profits if the industry includes which of the following:
Difficult to enter
____ is the rivalry between two companies that offer similar products and services, acknowledge each other as rivals, and act and react to each other's strategic actions.
Direct competition
According to Robert House, there are four key leader behaviors. Which leadership style is most successful in an environment that highly values formal authority has high complexity to tasks, and has a group that is working together well?
Directive
Select the appropriate leadership style: Subordinate Variables: -Authoritative leadership is desired -Locus of control is external -Perceived low ability on task Environmental Variables: -High ambiguity or complexity to tasks -Formal authority is high -Group is working together well
Directive
"Be a good corporate citizen, and give back" represents which type of responsibility?
Discretionary
Steps of the Strategic-Management Process
Establish the mission and vision Assess the current reality Formulate the grand strategy Implement the strategy Maintain strategic control (feedback loop)
Jordan plans to open a computer repair business this summer. As he plans, he writes down the long-term goals of the business so he can decide where he wants to go strategically. Which stage of the strategic management process is Jordan in?
Establish the mission, vision, and values statements
Financial Statements/Tax Returns:
Examine the financial statements from the business for at least the past three to five years. Also make sure that an audit letter from a reputable CPA firm accompanies the statements. You should not accept a simple financial review by the business itself. Also examine the business's tax returns from the past three to five years. This will help you determine the profitability of the business as well as any outstanding tax liability.
Mission Statement
Expresses the purpose of the organization
Existing competitive firms should be ignored in building a formal marketing plan.
False
General-purpose equipment permits cost reduction in industries in which the technology is fully established and in which a capacity is assured by high sales volume. a. True b. False
False
Given the size, the ethical influence of a leader is more pronounced in a large corporation than it is in a small firm
False
In industries in which the technology is fully established and a capacity operation is assured by high sales volume, retail store equipment can reduce costs. a. True b. False
False
Match the following with the corresponding style: "Exertion of minimum effort to get required work done is appropriate to sustain organization membership"
Impoverished Management
A(n) _______ is the most common form of organization for a new small business.
LLC
All of the following are advantages that a limited liability company (LLC) has over an S corporation EXCEPT: a. LLCs can offer stock options to employees b. LLCs are more flexible c. LLCs are easier to set up d. LLCs have significant tax advantages
LLC's can offer stock options to employees
All of the following are advantages that a limited liability company (LLC) has over an S corporation EXCEPT:
LLCs can offer stock options to employees
Fiedler's theory focused on three different factors of the work environment: leader-member relations, task structure, and _____________
Leader position power
Which factor of the work environment does the following describe? "The ability of the leader to allocate rewards or punishments to group members"
Leader position power
Fiedler's theory focused on three different factors of the work environment: ___________, task structure, and leader position power
Leader-member relations
Which factor of the work environment does the following describe? "The ability of the leader to influence followers"
Leader-member relations
____________ is a set of actions and attitudes that move people to pursue a vision that is in the mind of the leader for the attainment of organizational and/or societal goals
Leadership
What is the process called of a leader/subordinate relationship that grows through several phases?
Leadership making
Legal commitments
Legal commitments may include contingent liabilities, unsettled lawsuits, delinquent tax payments, missed payrolls, overdue rent or installment payments, and mortgages of record on any of the real property acquired.
Nonquantitative Factors in Valuing a Business You should also consider a number of nonquantitative factors in evaluating an existing business. In particular, is it likely that the firm you are considering buying might be subject to change regarding any of the following?
Market Competition Future community development Legal commitments Union contracts Buildings Product prices
Licenses and Permits:
Most businesses need licenses and permits to operate. The type of license or permit you need depends on your industry and the state in which the business is located. Use the SBA's online Find Business Licenses and Permits tool to get a listing of federal, state and local permits and licenses you will need to run your business.
Under the restrictions of _______, the buyer promises the seller that he or she will not reveal confidential information or violate the trust that the seller has offered in providing the information.
b. nondisclosure agreement
The executive summary should include all of these subsections EXCEPT: a. an explanation of the business concept. b. products and/or service plan. c. an industry overview. d. a description of the opportunity.
b. products and/or service plan.
In direct forecasting, _______ is the forecasting variable. a. the surrogate variable b. sales c. the independent variable d. marketing
b. sales
A _____ is the web of relationships that a person has with other people, including roommates or other acquaintances from college, former employees and business associates, and contacts through community organizations. a. sole proprietorship b. social network c. social capital d. c-partnership
b. social network
Protecting a neighborhood's residential quality is the primary purpose of ________ laws.
b. zoning
According to Porter's industry forces, _____ is a measure of the influence that suppliers of parts, materials, and services to firms in an industry have on the prices of these inputs.
bargaining power of suppliers
Pacific Specialty Bikes store gets customized parts for its high-end models from a local manufacturer, Premium Supply. When the manufacturer announced a price increase, the bike store tried to switch to other local manufacturers but learned they that they wouldn't be able to meet delivery schedules. As a result, Pacific Bike chose to pay the higher prices from Premium Supply. Which of Porter's competitive forces does this demonstrate?
bargaining power of suppliers
According to Spinelli and Adams, desirable entrepreneurial characteristics are all of these EXCEPT
be a domineering manager.
The process by which a company compares its performance with that of other high-performing organizations is known as _______.
benchmarking
When Subway operates a restaurant within a truck stop, it is an example of ____ franchising. a. business format b. multiple-unit ownership c. piggyback d. product and trade name
c. piggyback
Costs and break-even analyses are included in the ___________ section of the marketing plan. a. promotion b. distribution c. pricing d. product
c. pricing
Ethical _______ holds the philosophy "When in Rome, do as the Romans do". a. religion b. imperialism c. relativism d. codes of ethics
c. relativism
The type of equipment that reduces cost in industries in which the technology is fully established and in which a capacity operation is assured by high sales volume is called _____ purpose equipment. a. general b. retail c. special d. total
c. special
Which of the following is a business model that provides a mechanism for buying or selling products or services and is considered the center of the e-commerce universe? a. content-based b. information-based c. transaction-based d. cyber-based
c. transaction-based
values of the founder
can have long lasting impact on organizational culture
Goal Accomplishment
People work together in groups because they need the help of others to achieve important goals. Many goals require the cooperative efforts of other people, such as building a high-rise tower, extinguishing a forest fire, and playing a basketball game. Some goals could be accomplished by individuals, but groups do them better, such as developing a new consumer product, restructuring the production process, and evaluating applications for college scholarships.
______________ is a type of role conflict that occurs when people are asked to behave in ways that are inconsistent with their personal values.
Person-Role Conflict
What is this an example of? An administrative aide may be told that a report must be completed before going home, even if it means several hours of overtime. But working overtime would mean missing the school play, and the aide's daughter is the star of the play.
Person-role conflict
What occurs when people are asked to behave in ways that are inconsistent with their personal values?
Person-role conflict
Match with the reason people join groups: Membership in a group helps us know more about ourselves
Personal identity
planning/control cycle
Planning steps: 1. make the plan 2. carry out the plan Controlling steps: 3. Control the direction by comparing results with the plan 4. Control the direction by taking corrective action in two ways a. by correcting derivation in the plan being carried out b. improving future plans
Standing plan
Plans developed for activities that occur repeatedly over a period of time; such plans consist of policies, procedures, or rules.
_____ are the standing plans that indicate the general course of action that should be taken in response to a particular event or situation.
Policies
Descriptive Norms
Post-hoc (after the fact) justifications. They emerge from watching how others behave and then adopting the same patterns.
Strategic Positioning
Preserving what is distinctive about a company to achieve sustainable competitive advantage
Sociocultural Forces
Pressure emanating from the social structure or a country or society or from the national culture.
____________ projecting the company's sales, costs, and profits are usually contained in the financial plan.
Pro forma statements
____________ is the term used to describe the inefficiencies that arise with disjunctive tasks from having to organize and coordinate larger groups.
Process Loss
What theory is the following associated with? M1 (unable/unwilling): Lacking specific required skills and unmotivated to take responsibility for the job/task
Situational Leadership
Which theory is the following associated with? They considered two dimensions of the follower as critical determinants of how they should be led: ability and willingness. Together, these two dimensions were the elements of what they called follower "maturity."
Situational Leadership
The three situation factors for group structure is group size, _________, and nature of the task
Social density
Which concept is this example associated with? In a technical organization, engineers reported less stress and tension when colleagues and other authority figures were located in close proximity
Social density
Performing a task better in the presence of others is associated with?
Social facilitation
Which effect does the following describe? "Early studies in social psychology noted that people performed better as members of a group than they did when performing alone."
Social facilitation
What is it called when the members of a group exert less effort while working as a group than when working as individuals?
Social loafing
Which concept is the following describing? "A study examined how much effort individuals exerted in pulling on a rope, either individually or in a group. The average pressure exerted by each individual was 63 kilograms, which was more than double the average pressure exerted by a group of eight people pulling together (248 kilograms per group, or 31 kilograms per person)."
Social loafing
________ occurs primarily because the presence of other group members reduces each individual's identifiability
Social loafing
A ___ is the web of relationships that person has with other people including roommates or other acquaintances from college, former employees and business associates, and contacts through community organizations.
Social network
The norm of _________ suggests that the rewards should be allocated on the basis of need
Social responsibility
Which of these refers to a company's ethical obligations to the community?
Social responsibility
In which step of the strategic-management process does the organization conduct a current reality assessment?
Step One
Gemini Inc. has decided to decrease its product prices to respond to its competitor's strategy. To achieve this, the company needed to lower its manufacturing costs. However, the managers at Gemini have been buying expensive raw materials and hiring many employees. Which of the following best illustrates the situation at Gemini?
Strategic dissonance
Principles of Strategic Positioning
Strategy is the creation of a unique and valuable position Strategy requires trade-offs in competing (choose which strategies to and not to follow) Strategy involves creating a "fit" among activities
According to Robert House, there are four key leader behaviors. Which leadership style is most successful in an environment where formal authority is low, the tasks are simple or highly structured, and the group is not working together well?
Supportive
Select the appropriate leadership style: Subordinate Variables: -Authoritative leadership not desired -Locus of control is internal -Perceived high ability on task Environmental Variables: -Simple or highly structured task -Formal authority is low -Group is not working together well
Supportive
Fiedler's theory focused on three different factors of the work environment: leader-member relations, _____________, and leader position power
Task structure
According to Michael Porter, which of the following industry forces determines industries' overall attractiveness and potential for long-term profitability?
The bargaining power of suppliers
piggyback franchising
The operation of a retail franchise within the physical facilities of a host store. (ex. walmart with a subway inside or kfc and taco bell in the same building)
multibrand franchising
The operation of several franchise organizations within a single corporate structure.
franchisor
The party in a franchise contract that specifies the methods to be followed and the terms to be met by the other party.
Focal Person
The person in a role episode to whom the role expectations are communicated.
Benchmarking
The process by which a company compares its performance with that of high-performing organizations
Strategy Formulation
The process of choosing among different strategies and altering them to best fit the organization's needs
Union contracts
The prospective buyer should determine what type of labor agreement, if any, is in force, as well as the quality of the firm's relationship with its employees. Private conversations with key employees and rank-and-file workers can be helpful in determining their job satisfaction and the company's likelihood of success.
Competition
The prospective buyer should look into the extent, intensity, and location of competing businesses. In particular, the buyer should check to see whether the business in question is gaining or losing in its race with rivals. Additionally, new competitors in the local marketplace (Walmart or Target, for example) may dramatically change an existing small firm's likelihood of success. Past performance is no guarantee of future performance.
Global Outsourcing
The purchase or production of inputs or final products from overseas suppliers to lower costs and improve product quality or design.
Buildings
The quality of the buildings housing the business should be checked, with particular attention paid to any fire hazards. In addition, the buyer should determine whether there are any restrictions on access to the buildings.
preemptive right
The right of stockholders to buy new shares of stock before they are offered to the public
preemptive right
The right of stockholders to buy new shares of stock before they are offered to the public.
Identification
The second level of conformity, in which the motive to conform is to please or be like others.
Globalization
The set of specific and general forces that work together to integrate and connect economic, political, and social systems across countries, cultures, or regions so that nations become increasingly interdependent and similar.
National Culture
The set of values a society considers important and the norms of behavior that are approved or sanctioned in that society.
Competitive Forces of Porter's Model for Industry Analysis
Threats of entrants Bargaining power of suppliers Bargaining power of buyers Threats of substitute products or services Rivalry among competitors
Which of the following represent competitive forces used in Porter's model for industry analysis?
Threats of new entrants, bargaining power of suppliers, threat of substitute products or services, bargaining power of suppliers, rivalry among competitors
which of the following is a reason for buying an existing business?
To acquire an ongoing business at a bargain price
Execution
Using questioning, analysis, and follow-through to mesh strategy with reality, align people with goals, and achieve results promised
What four characteristics are being addressed in a VRIO analysis?
Value, Rarity, Imitability, Organization
Positioning Strategies
Variety-Based Positioning (Few needs, many customers) Needs-Based Positioning (Broad needs, few customers; Same customer, differing needs) Access-Based Positioning (Broad needs, many customers)
The death of an owner terminates the legal existence of a business that is organized as a sole proprietorship. a. True b. False
True
The death of an owner terminates the legal existence of a business that is organized as sole proprietorship.
True
The notion of intergrity and ethics are closely tied
True
Organizational decline
a large decrease in organizational performance that occurs when companies don't anticipate, recognize, neutralize, or adapt to the internal or external pressures that threaten their survival
strategy
a large-scale action *plan* that sets the direction for an organization
strategy
a large-scale action plan that sets the direction for an organization
The franchise contract is
a legal agreement between a franchisor and franchisee.
The price at which the property would change hands between a willing buyer and willing seller when the former is not under any compulsion to buy and the latter is not under any compulsion to sell, both parties having reasonable knowledge of relevant facts refers to
a. fair market value
The price at which the property would change hands between a willing buyer and willing seller when the former is not under any compulsion to buy and the latter is not under any compulsion to sell, both parties having reasonable knowledge of relevant facts refers to a. fair market value. b. nondisclosure agreement. c. Churning price. d. Encroachment value.
a. fair market value.
The party in a franchise contract that specifies the methods to be followed and the terms to be met by the other party is called a(n)-- a. franchisor. b. franchisee. c. local community. d. broker.
a. franchisor.
Most investors are more __________ because they realize what it takes to make money. a. market-oriented b. people-oriented c. product-oriented d. quality-oriented
a. market-oriented
The managerial and professional talent of a new venture management team can be supplemented by using ________ assistance. a. outside b. in-house c. employee d. corporate
a. outside
A(n) _____ business is a venture that is operated by a founding entrepreneur. a. owner-managed b. sibling partnership c. cousin consortium d. family council
a. owner-managed
A profitable company that responds to customers' needs while showing reasonable concern for the environment is called a(n) a. sustainable small business. b. underlying valued business. c. better business bureau poster child. d. a socially coded business.
a. sustainable small business.
A segmenting strategy that targets the mass market is called a(n)-- a. un-segmented strategy. b. multi-segmented strategy. c. single-segmented strategy. d. demographic strategy.
a. un-segmented strategy.
Levels of maturity: M4
able/willing
In the planning process, a(n) _____ lists the specific steps, people, resources, and time period for accomplishing a goal.
action plan
Managerial Grid Model: middle-of-the-road management
adequate organization performance is possible through balancing the necessity to get out the work with maintaining the morale of people at a satisfactory level
All of these elements must be evident from the feasibility analysis before you move on to the business plan EXCEPT:
agreeable banker
Objective
aka goal, a specific commitment to achieve a measurable result within a stated period of time
Goal
aka objective, a specific commitment to achieve a measurable result within a stated period of time
Procedure
aka standard operating procedure; a standing plan that outlines the response to particular problems or circumstances
emotion
an intense, relatively brief feeling
Mission
an organization's purpose or reason for being
tactical goals
are set by and for middle managers and focus on the actions needed to achieve strategic goals
Strategic Goals
are set by and for top management and focus on objectives for the organization as a whole
strategic goals
are set by and for top management and focus on objectives for the organization as a whole
spokespeople
are the official voices of the organization.
Some single franchisees are
area developers—individuals or firms that obtain the legal right to open several outlets in a given area.
The buyer will want to review supporting materials that validate the accuracy of the financial statements by scrutinizing such documents as federal tax returns, state sales tax statements, supplier invoices, and customer receipts, as well as the company's bank statements. There are numerous techniques used for valuing a company, but they can be grouped into three basic methods:
asset-based valuation, market-based valuation, and cash flow-based valuation.
A limited partnership consists of--
at least one general partners and one or more limited partners
m3 able/uncertain willingness
at this stage, an employee is able to complete tasks autonomously but uncertain about their willingness to be completely delegated to. this employee simply lacks motivation or confidence that m4 employees have
strategic positioning
attempts to achieve sustainable competitive advantage by preserving what is distinctive about a company -- performing different activities from rivals, or performing similar activities in different ways
Which of the following is NOT a cost normally associated with franchise ownership? a. Initial franchise fee b. A personal vehicle c. Investment costs d. None of the above are costs normally associated with franchise ownership
b. A personal vehicle
_____ consist of payments due from a firm's customers. a. Accounts payable b. Accounts receivable c. Accrued expenses d. Inventory
b. Accounts receivable
Social entrepreneurship is best defined as: a. A more profitable and more ethical approach to founding a company. b. Applying already established principles of good business to social problems. c. Leveraging social media to build a customer base. d. A more enlightened way to do business.
b. Applying already established principles of good business to social problems
Harvesting is best described as: a. Picking the best parts of the business (those with the highest cash flow) and gutting the rest. b. Capturing value in the form of cash flows, reducing risks, and creating future options. c. Selling the business for cash. d. Buying all other owners out and gaining 100% control over the company.
b. Capturing value in the form of cash flows, reducing risks, and creating future options.
_____ refers to actions by franchisors to void the contracts of franchisees in order to sell the franchise to someone else and collect an additional fee.
b. Churning
Which of the following marketing philosophies is likely to lead to success in many areas, not just marketing? a. Profit-oriented b. Consumer-oriented c. Sales-oriented d. Production-oriented
b. Consumer-oriented
If an entrepreneur wanted to limit the liability of ownership, he/she should choose which of the following forms of organization? a. Partnership b. Corporation c. Limited partnership d. Sole proprietorship
b. Corporation
"Three big" stakeholders for organizations are employees, customers, and competitors. a. True b. False
b. False
A business incubator produces ideas for new ventures.
b. False
A business incubator produces ideas for new ventures. a. True b. False
b. False
General-purpose equipment permits cost reduction in industries in which the technology is fully established and in which a capacity is assured by high sales volume. a. True b. False
b. False
In a harvest strategy, financial questions associated with the sale of a firm include how to value the firm and how will this affect the firm's stock. a. True b. False
b. False
In industries in which the technology is fully established and a capacity operation is assured by high sales volume, retail store equipment can reduce costs.
b. False
In industries in which the technology is fully established and a capacity operation is assured by high sales volume, retail store equipment can reduce costs. a. True b. False
b. False
Piercing the corporate veil" means a corporation has formed strategic alliances with other corporations.
b. False
Research finds that due to lack of control, franchising is more risky than starting a business from scratch.
b. False
Research finds that due to lack of control, franchising is more risky than starting a business from scratch. a. True b. False
b. False
The basic features of the relationship between the franchisor and the franchisee are embodied in the broker contract.
b. False
The income statement and the cash flow statement complement each other to give an overall picture of the firm's financial situation. a. True b. False
b. False
Unlimited liability means that the owner's personal assets outside the business cannot be taken by creditors if the business fails. a. True b. False
b. False
Writing a business plan should be thought of as the means to an end. a. True b. False
b. False
Which of the following is NOT information contained in a disclosure document?
b. Franchisor's selling price
Which of the following is NOT information contained in a disclosure document? a. Franchisor's financial statements b. Franchisor's selling price c. Franchisee's initial costs/fees d. Franchisor's involvement in litigation
b. Franchisor's selling price
Profits are not the same as cash flows because: a. They do not include the sale of stock. b. They are calculated on an accrual rather than a cash basis. c. They are reconciled with the bank statement. d. They are calculated yearly rather than monthly.
b. They are calculated on an accrual rather than a cash basis.
Which of the following is a reason for buying an existing business?
b. To acquire an ongoing business at a bargain price
____ is the extent to which a good or service is perceived by its customer to meet his or her needs or wants and is measured by a customer's willingness to pay for it. a. Price b. Value c. Cost d. Credit
b. Value
Market segmentation, marketing research, and sales forecasting are integral parts of what is commonly called-- a. marketing mixes. b. a marketing analysis. c. secondary data. d. a buildup process.
b. a marketing analysis.
A site such as e-Bay, that allows participants to list products for sale through bidding by potential buyers, is called a(n) a. bidding site. b. auction site. c. buying site. d. shopping site.
b. auction site.
A site such as e-Bay, that allows participants to list products for sale through bidding by potential buyers, is called a(n)-- a. bidding site. b. auction site. c. buying site. d. shopping site.
b. auction site.
Which of the following key factors in determining a good business location includes decisions about weather conditions, competition, legal requirements, and tax structure? a. personal preference b. environmental conditions c. population sparseness d. customer accessibility
b. environmental conditions
The practice of employing relatives is referred to as-- a. a family council. b. nepotism. c. co-preneurs. d. a transfer of ownership.
b. nepotism.
SpokedWheels Inc. has introduced a specialized mountain bike in the market. Two-thirds of its profits come from the sale of mountain bikes. The company is recognized worldwide for its ability to design and produce superior mountain bikes that are tougher, more durable, and more reliable than its competitors'. This ability of producing superior mountain bikes is the company's _____.
distinctive competence
What strategy is American Tile Corp. using when it acquires a company that makes industrial cleaning products which American Tile doesn't currently offer?
diversification
Amanda Industries has five strategic business units (SBUs)—online retail, shipping, third-party logistics, structural materials, and oil exploration. The oil exploration unit is costing the company a huge amount of money. It is neither making any profit at present nor will it make any profit in the future as the oil fields are diminishing and the company has a small share in this market. In the context of the BCG matrix, which of the following categories of SBUs best describes the oil exploration unit?
dogs
All of the following are entrepreneurial qualities EXCEPT:
domineering
Mark was the person who was in charge of the plan to reinvent Supernova Automobiles. He played a major role in the company making a shift to building solar-powered automobiles from making regular fuel-powered cars. After the change intervention gave satisfactory results, Mark left the project and started working on another project. In the context of organizational development, Mark is a(n) _____.
change agent
_____refers to actions by franchisors to void the contracts of franchisees in order to sell the franchise to someone else and collect an additional fee.
churning
Which of these involves bringing two franchise brands together under one owner?
co-branding
Key factors in determining a good business location include all of these EXCEPT: a. Community approval. b. Customer accessibility. c. Resource availability. d. Site availability and costs
community approval
innovation
companies must be speedy and flexible; they have to be able to bring new products to the market quickly, but they also have to be able to respond to competitors and change their activities if needed.
Computer maker Dell tries to have the lowest prices for its computers in order to attract a large consumer group. In Porter's four competitive strategies, this would be an example of the _____ strategy.
cost-leadership
What are Porter's four competitive strategies?
cost-leadership, differentiation, cost-focus, focused-differentiation
A formal organization in which family members discuss strategic planning and other issues pertaining to the family business called a family _____.
council
All of the following are channels of distribution EXCEPT: a. direct. b. indirect. c. dual. d. common.
d
To make an informed decision, a small business owner needs to recognize and understand trade-offs between debt and equity with regards to all of the following EXCEPT: a. financial risk. b. voting control. c. potential profitability. d. intangible assets.
d
Which of the following e-commerce business models do not actually sell anything online? a. Information-based. b. Content-based. c. Transaction-based. d. A and B.
d. A and B.
Yongmei's company is the target of an acquisition by a larger company that will finance the deal primarily through taking on a large debt. This type of deal is called: a. A management buyout. b. A seller-financed buyout. c. An employee buyout. d. A leveraged buyout.
d. A leveraged buyout.
Which of these may be defined as the gathering, processing, interpreting, and reporting of market information? a. Customer profile b. Biography of customers c. Buildup process d. Marketing research
d. Marketing research
Discontinuous change is characterized by _____, in which an old technology and several different new technologies compete to establish a new technological standard or dominant design.
design competition
Before TREX Mobiles launched its latest smartphone, it built a prototype of the phone and tested its performance repeatedly, improving the model each time. In the context of the experiential approach to innovation, this process is called _____.
design iteration
rule
designates specific required action
resource allocators
determine how to divide organizational resources among business units, projects, or teams.
Operational Planning
determining how to accomplish specific tasks, done by first-line managers for the next 1-52 weeks
Strategic Planning
determining what an organizations long-term goals should be for the next 1 - 10 years with the resources it expects to have available; done by top management
In the planning process, after developing goal commitment, a manager must:
develop an effective action plan.
Martha is a manager at Healier Life Inc. She drafts a list of specific goals that she wants her company to achieve by the end of the year. In the context of planning, the next step that Martha should take is to:
develop commitment to those goals
Martha is a manager at Healier Life Inc. She drafts a list of specific goals that she wants her company to achieve by the end of the year. In the context of planning, the next step that Martha should take is to:
develop commitment to those goals.
standing plans
developed for activities that occur repeatedly over a period of time
A plan of action designed to provide a product or service with unique attributes that are valued by consumers
differentiation strategy
Garden Hoses, Inc. (GHI) focuses on offering a products that are unique and different from competitors' products. GHI is engaging in the ________ strategy.
differentiation-based
In the context of the planning process, _____ are primary goals.
distal goals
Pro forma statements projecting the company's sales, costs, and profits are usually contained in the __________ plan.
financial
Disadvantages of franchising include
financial issues franchisor competition management issues
SMART
five charactersitics of a good goal 1. Specific 2. Measurable 3. Attainable, 4. Results oriented 5. Target dates
Expenses and costs that are useful in making projections are frequently classified as all of these EXCEPT:
floating costs
Production-oriented managers
focus on getting the job done with efficiency and effectiveness Rensis Likert
A plan of action that isolates an enterprise from competitors and other market forces by targeting a restricted market segment
focus strategy
MCRS Toys manufactures learning toys and games exclusively for children in the age group of one to six years. In this scenario, the company is most likely using a(n) _____.
focus strategy
fiedlers contingency theory of leadership
focused on three different factors of the work environment: leader:member relations, task structure, and leader position power. Fiedler argued that managers had a distinct managerial disposition that was relatively stable over time. his notion was that someone who might be an ineffective leader in one situation might be an effective leader in another. this would depend on the conditions of the environment and how well they matched the leader disposition.
Fiedler's Contingency Theory of Leadership
focuses on 3 different factors of the work environment: 1. Leader-member relations 2. task structure 3. leader position power
Resistance forces
forces that support the existing conditions in organizations.
A _____ is a vision or projection of the future that is made following a SWOT analysis.
forecast
intellectual stimulation
how transformational leaders encourage innovation and creativity through challenging the normal beliefs of a group. -these leaders stimulate open intellectual thought that promotes critical thinking and problem solving. -are open to new ideas and always searching for the next great ideas from anyone in the organization -stimulating the intellectual contributions of all members of the organization makes the organization better
individual consideration
the quality of a leader as a coach and advisor to the others. -these leaders encourage and facilitate subordinate goal attainment on an individual basis. -they realize that every person has a need to be identified as an individual and as a member or a larger group. -a key component to treating someone as an individual is knowing defining information about them, like their first name, how long theyve been with the company.
value system
the set of values that act as guiding principles in his or her life.
organizational culture
the shared set of values, norms,work routines, beliefs, and expectations that influences how organizational members interact with one another to achieve the goals of the organization
administrative management theory
the study of how organizational structure and control system can be used to achieve efficiency ad effectiveness.
Organizational innovation
the successful implementation of creative ideas in organizations
agreeableness
the tendency to get along well with others
negative affectivity
the tendency to have negative emotions and moods, to feel distressed, and to be critical of oneself and others
outsourcing
the use of another company to perform a task that the organization once performed.
Coercion
the use of formal power and authority to force others to change
Other advantages of franchising include
the value of trade names and trademarks the franchisor's operations manual, training support, immediate access to supply lines and purchasing power, financial support. It also is a way for existing businesses to diversify.
idealized influence
the way a leader sets an exemplary role model for others -they act with great integrity (can be trusted), are respected by others, and are expected to make good decisions for the organization. -are generally among the first to arrive at work and last to leave -perceived as leaders who will do anything they ask others to do -the respect they command (not demand) is a key factor in their transformational influence
why use swot
this analysis helps managers set realistic goals, improve their capabilities in "problem areas", establish plans to overcome weakness, exploit strengths, and turn threats into opportunity
m4 able/willing
this person is ready to be delegated to. simply give them the task and trust them implicitly to complete it without assistance and without follow up.
Newly-implemented government regulations have reduced the availability of raw materials for Blair Woodworking Corp. This would be considered an external organizational ______ in a SWOT analysis.
threat
You own a small deli near campus and learn that the university is exploring whether it should open a Subway sandwich franchise in the Student Union. Which of Porter's competitive forces does this represent for you?
threat of new entrants
Within a SWOT analysis, the letter "T" represents a company's _____.
threats
Sasha has run a small diner near the train station for the past ten years. Six months ago, a chain restaurant serving gourmet burgers and sandwiches opened up near him and he has had to re-think his menu. He added some specialty sandwiches and free fries with every burger in order to retain his customers. Which of Porter's five competitive forces has affected Sasha's business?
threats of new entrants
Which of the following is a reason for buying an existing business? a. To acquire an ongoing business at a bargain price b. To start from scratch c. To develop a new product d. To eliminate risk
to acquire on ongoing business at a bargain price
turnaround management
to create new vision and adopt a new approach that will better use of a company's resources so that it can survive and prosper.
Purpose of Strategy
to determine where to invest time and effort in order to effectively utilize resources
An individual's beliefs affect what that person does on the job and how she acts towards customers.
true
By enhancing a firm's credibility, a business plan serves as an effective selling tool with investors.
true
One of the benefits of e-commerce is that it allows small businesses to compete on a more level playing field with large businesses. a. True b. False
true
Outside-in analysis should consider the general environment, or big picture, and the industry setting in which the venture might do business. a. True b. False
true
An assessment that catalogs the startup's sources of potential strengths
inside-out analysis
dog
low growth, low market share (Apple TV)
Which section of the marketing plan should describe the entrepreneur's approach to creating customer awareness of the product or service and explain why customers will be motivated to buy?
promotion
Douglas Mcgregor
proposed that managers may adopt one of two sets of assumptions about workers' attitudes and behavior. -Theory X and Theory Y
Strategic alliances and joint ventures
pros: quickly enter new markets, technology; lower investment Cons: choosing a partner, dividing the "pie", trust
Ace Glue is a global innovation company. It manufactures a number of imaginative products which ranges from health care to office products. Its products are being sold in more than 100 countries and it continuously keeps searching for new market opportunities. It has also doubled its investment to market its products. In the context of adaptive strategies, Ace Glue is most likely to be categorized as a(n) _____.
prospector
employees
provide valuable services to organizations and they must be compensated and treated fairly
Strategic planning begins with the creation of a _____.
purpose statement
figureheads
put new policies in place and serve as examples for subordinates
strategy implementation
putting strategic plans into effect
Relative to Coca- Cola, Pepsi Cola would be considered a ______________ to /for Coca Cola under Porter's Five Forces model.
rivalry
informational roles
roles which managers analyze and communicate info. these roles include the ones of monitor, disseminator, and spokesperson.
interpersonal roles
roles which managers interact with people inside and outside their work units. these include the roles of figurehead, leader, liaison.
In direct forecasting, _______________ is the forecasting variable.
sales
The type of equipment that reduces cost in industries in which the technology is fully established and in which a capacity operation is assured by high sales volume is called ________ purpose equipment. a. total b. retail c. general d. special
special
What are the three core processes of business identified by Bossidy and Charan?
strategy, people, operations
second core process
strategy: a good strategic plan considers the "how" of execution
Companies following a _____ would most likely try to improve the way in which they sell the same goods or services to the same customers.
stability strategy
Ethical companies feel that they have an obligation to their _________, the people who could be affected by the company's actions
stakeholders
Taufuer Motors, a car manufacturer, has a detailed seven-step plan in place for dealing with defects in its cars. It believes that the plan can be used as long as the defects are completely rectified. This is an example of a _____.
standing plan
Policy
standing plan that outlines the general response to a designated problem or situation
Entrepreneur's Top 10 Franchises for 2012 include all of these EXCEPT: a. Servpro b. Starbucks c. Denny's Inc. d. Hampton Hotels
starbucks
According to Bryan Barry, which of these are things a manager can do to keep a strategic plan on track?
stay focused, keep moving, engage people, keep it simple
stories and language
stories about organizational heroes and villains provide info about what the organization does not value
A(n) ______ links two or more independent business entities in a common endeavor.
strategic alliance
The skills and capabilities that give an organization special competencies and competitive advantages in executing strategies in pursuit of its mission are called organizational ______.
strengths
Within a SWOT analysis, the letter "S" represents a company's _____.
strengths
SWOT stands for:
strengths, weaknesses, options, and trade.
assumption of behavioral theories
strong circumstance moderate the behavior of leaders and leaders can change their behavior to fit the needs of a given managerial/leadership circumstance
behavioral management theory
studies how managers should motivate employees and ensure that they are committed to the organization.
House's Path-Goal Theory of Leadership
subordinates perceive quality in leadership insofar as they perceive that the leader is clearing a path for the to attain the goals
entreprenuers
suggest new courses of action to take advantage of opportunities
middle managers
supervise first-line managers. They may develop ways to reduce costs, improve customer service, or improve the quality of the goods or services being produced.
First-line managers
supervise non-managerial employees on a daily basis. (These individuals are often called supervisors)
Feldman Films is a company associated with photography, and has been in business for the last 30 years. The invention and development of the digital camera forced Feldman Films to start thinking fresh. Feldman Films applied design thinking to strategy and innovation in response to the competitive threat from the digital camera. In this scenario, the development of the digital camera was a _____.
technological discontinuity
During the last decade, as people sought to replace their obsolete floppy discs, there was an increase in sales in CDs, DVDs, pen drives, and portable hard discs. The replacement of floppy discs by other advanced storage devices is an example of _____.
technological substitution
In market analysis, ________ could be useful for analyzing the competition.
telephone surveys
highself esteem
the extent to which people feel good about themselves and their capabilities.
job satisfacion
the feeling and beliefs that managers have about their current jobs
hawthorne effect
the finding that managerial behaviors and leadership approaches can impact workers' performance.
Encroachment is
the franchisor's selling of another franchise location within the market area of an existing franchisee.
a(n) ________ links two or more independent business entities in a common endeavor. a. oligopoly b. strategic alliance c. pact d. consortium
strategic alliance
third core process
operations: strategy defines where the organization wants to go, the people process assigns responsibility for getting there, and the operating plan shows how to get there
Environmental factors that an organization may exploit for competitive advantage are called organizational ______.
opportunities
Identification of potential new products or services that may lead to promising businesses
opportunity recognition
Resistance to change
opposition to change resulting from self-interest, misunderstanding and distrust, and a general intolerance for change
Plushvier Inc. plans to launch its product in five regional markets. In order to maximize profit and reduce loss, initially, the company makes small investments in all five markets. The investments made are small so that if a particular market fails to perform, then the company can discontinue its investment in that market and invest in markets that produce good returns. In this case, Plushvier Inc. is using _____.
options-based planning
Garrison Motors Inc. developed a creative manufacturing technique that helps improve the efficiency of their production. It allows the company to produce more than one type of car from the same assembly line. In this scenario, the development of a new technique by Garrison Motors to improve its workflow efficiency is an example of _____.
organizational innovation
quality
organizations can improve the quality of their outputs through formal techniques such as total quality management (TQM)
In the decision-making process, one of the rules of brainstorming is that:
other group members' ideas should be used to come up with even more ideas.
The study of the general and industry environments of a business context to identify potential startup opportunities
outside-in analysis
Which of the following is NOT true of a C corporation? a. Owners, including stockholders, can be personally liable for the company's debts b. A corporate charter must be approved c. Ownership is easily transferable d. It is a legal entity separate from its owners
owners, including stockholders can be personally liable for the companys debts
Which of the following is NOT true of a C corporation?
owners, including stockholders, can be personally liable for the company's debts.
Of all the relationships in a family business, the _________ relationship is the most sensitive and troublesome.
parent-child
According to Blanchard and Peale, an organization's ethical policy should be based on all of these EXCEPT:
pattern
Innovation streams
patterns of innovation over time that can create sustainable competitive advantage
Karen, the sales manager of an appliance store, informs Jonah, one of her salespeople, that she expects him to sell $50,000 worth of merchandise by the end of the quarter. Every week, Jonah provides Karen with a report on his progress. In this scenario, Karen is using _____ to track Jonah's progress.
performance feedback method
A plan of action that coordinates the resources and commitments of an organization to achieve superior
performance strategy
operational efficiency
performing tasks better than your competitors -- important, but not sufficient to be the sole driver of company decision making
instrumental values
personal convictions about how one should behave.
terminal values
personal convictions about lifelong objectives
The primary source of new ideas is a--
personal experience
The primary source of new ideas is: a. deliberate search. b. chance happening. c. personal experience. d. personal interest.
personal experience
When Subway operates a restaurant within a truck stop, it is an example of ____ franchising
piggyback
When Subway operates a restaurant within a truck stop, it is an example of ________ franchising. a. piggyback b. product and trade name c. multiple-unit ownership d. business format
piggyback
To refocus or recreate a startup if the initial concept turns out to be flawed
pivot
Laws and regulations regarding exports fall under which section of the marketing plan?
place
After earning a profit of $10 billion, Tekmake decides to double its profits within the next five years. It lays out broad goals and develops a market penetration strategy to accomplish its goals. In this case, the process by which Tekmake is going to achieve this goal is called _____.
planning
Alpha Inc. wants to expand its customer base. The chief executive officer (CEO) sets a target for all its sales units to increase sales by 50 percent by the next fiscal year. The CEO also lays out a scheme for the company to produce a new product within the next two years. In this case, which of the following functions of business management is the CEO most likely doing?
planning
Management
planning, organizing, leading, and controlling of human and other resources to achieve organizational goals efficiently and effectively
Single-use plan
plans developed for activities that are not likely to be repeated in the future (plans that can be used for programs or projects)
Top management is responsible for developing _____ that make clear how a company will serve customers and position itself against competitors in the next two to five years.
strategic plans
Libra Travels regularly checks the prices at which other travel agencies sell their services to evaluate its position and make changes, if needed. Libra Travels uses the prices of other travel agencies as a:
strategic reference point to measure its competencies.
3 types of standing plans
policy, procedure, rule
New market info that is gathered by the firm conducting the research refers to--
primary data
Margo works at Parker's Coffees. She is always the last person to leave the shop. Before closing the shop each evening, she follows these instructions: pour out all the leftover coffee, turn off and unplug all the coffeemakers, wash and dry all the coffee pots, wipe the counters, turn the store lights off, and lock the door. The instructions constitute a(n) _____.
procedure
Benchmarking
process by which a company compares its performance with that of high-performing organizations
strategic management
process that involves managers from all parts of the organization in the formulation and the implementation of strategies and strategic goals
Warranties and customer service are included in the ____________ section of the marketing plan.
product
In ______ franchising, a franchisor owns the right to a name or trademark and sells that right to a franchisee.
product and trade name
In ________ franchising, a franchisor owns the right to a name or trademark and sells that right to a franchisee. a. piggyback b. multiple-unit ownership c. business format d. product and trade name
product and trade name
Dynamics Inc. is a company that specializes in household appliances. It is currently working on creating a new geyser that can heat water in less than five minutes. The company has developed a working model that is being tested for design, function, and reliability. In terms of the experiential approach to innovation, this working model is called a _____.
product prototype
2 types of single-use plans
program, project
In product and trade name franchising, the main benefit for the franchisee is
the privilege of using a widely recognized product or trademark.
The death of an owner terminates the legal existence of a business that is organized as a sole proprietorship. a. True b. False
true
The new venture's facilities and location are often discussed in the operations and development plan
true
True or false: According to Bossidy and Charan, execution is the central part of any company's strategy.
true
Co-branding brings
two or more franchise brands together within a single enterprise.
A segmenting strategy that targets the mass market is called a(n)--
un-segmented strategy
Levels of maturity: M2
unable/willing
The three steps in the basic process of managing organizational change outlined by Kurt Lewin are:
unfreezing, change intervention, and refreezing
least preferred coworker (LPC)
was a survey instrument that asked the leader to rate the person they least preferred working with in terms of how friendly/unfriendly, cooperative/uncooperative, supportive/hostile, and open/guarded that person was. the more positively(higher) leaders rated their lpc, the more relationship oriented they were. people who are relationship motivated tend to describe their least preferred coworkers in a more positive manner.
Managerial Grid Model: team management
work accomplishment is from committed people: interdependence through a "common stake" in organization purpose leads to relations of trust and respect
Creative work environments
workplace cultures in which workers perceive that new ideas are welcomed, valued, and encouraged
michael porter
world's leading expert on competitive strategy -- he stated that the best way of thinking about competition is by focusing strategy on creating a unique organization that offers something different; he proposed 3 underlying principles of strategic planning
Standard operating procedures (SOPs)
written instructions about how to perform a particular aspect of a task.
If the children of teh founder become the owners and managers of the business, that second generation is referred to as a(n)--
Sibling partnership
Which task is associated with the phrase "a chain is only as strong as its weakest link?"
Conjunctive tasks
competitive intelligence
-systematic and ethical program for gathering, analyzing, and managing external information that can affect your company's plans, decisions, and operations
Participative- subordinate
-wants to be involved -locus of control is internal -high ability on task
The desire to be accepted by others who are perceived as important is associated with what level of conformity?
Identification
Which of the following statements is true about planning?
. It encourages the development of task strategies.
Who created the Situational Leadership theory?
Paul Hersey
Describe the five key factors in locating a brick-and-mortar startup.
- Customer accessibility is a key location factor in industries with high transportation costs, as well as those that must provide handy access for targeted customers to avoid losing those customers to more conveniently located competitors. - Business environment factors affecting the location decision are climate, competition, legal requirements, and the tax structure. - Availability of resources such as raw materials, suitable labor, crucial suppliers, and transportation can be important to location decisions. - Though it can interfere with sound decision making, the entrepreneur's personal preference is a practical consideration in selecting a location. - An appropriate site must be available and priced within the entrepreneur's budget.
Understand the potential benefits of locating a startup on the Internet.
- E-commerce offers small firms the opportunity to compete with bigger companies on a more level playing field. - Internet operations can help small firms with early cash flow problems by compressing the sales cycle. - Business-to-business (B2B) companies generate far more sales than ventures following alternative models. - The three main advantages of online business-to-consumer (B2C) firms are convenient to use, immediate transactions, and continuous access to products and services. - Internet auction sites, like eBay, are based on the consumer-to-consumer (C2C) model and can help even the smallest of businesses access a worldwide market with great convenience. - The role of a website can range from merely offering information and content to permitting the buying and selling of products and services online. - Emerging platforms for online ventures include blogging, podcasting, and creating a following on YouTube or Pinterest to generate revenue from ads and sponsorships, donations, subscription charges, or fees for access to live events. - Internet-based businesses can be started on a part-time basis, which reduces the personal risk of the entrepreneur if the venture should fail.
Discuss the unique features and restrictions of five specialized organizational forms.
- In a limited partnership, general partners have unlimited liability, while limited partners have only limited liability as long as they are not active in the firm's management. - S corporations, also called Subchapter S corporations, enjoy a special tax status that permits them to avoid the corporate tax but requires individual stockholders to pay personal taxes on their proportionate shares of the business profits. - In limited liability companies, individual owners have the advantage of limited liability but pay only personal income taxes on the firm's earnings. - Professional corporations are set up for those who offer professional services (usually those that require a license), to protect them from the liability of other owners in the practice. - Some enterprises (especially those with a social focus) benefit from greater credibility and authenticity when they organize as nonprofit corporations, such as 501(c)(3) organizations. - The B corporation may be the best form of organization for entrepreneurs who are intending to use the power of business to solve a social or environmental problem.
two kinds of strategies
- Low cost strategy -differentiation strategy
Understand the nature of strategic alliances and their uses in small businesses.
- Strategic alliances allow business firms to combine their resources without compromising their independent legal status. - Strategic alliances may be formed by two or more independent businesses to achieve some common purpose. For example, a large corporation and a small business or two or more small businesses may collaborate on a joint project. - Entrepreneurs can improve their chances of creating and maintaining a successful alliance by establishing productive connections, identifying the best person to contact, being prepared to confirm the long-term benefits of the alliance, learning to speak the partner's "language," ensuring a win-win arrangement, and monitoring the progress of the alliance and making any necessary changes.
Discuss the challenges of designing and equipping a physical facility.
- The general suitability of a building depends on the functional requirements of the business; it should be neither too large and extravagant nor too small and restrictive. - The comfort, convenience, and safety of the business's employees and customers must not be overlooked. - Deciding whether to purchase or lease equipment is an important choice many entrepreneurs face. - Most small manufacturing firms must use general-purpose equipment, but some can use special-purpose equipment for specialized operations. - Small retailers must have merchandise display racks and counters, storage racks, shelving, mirrors, shopping carts, cash registers, and other equipment that facilitates selling. - Fixtures and other retailing equipment should create an atmosphere appropriate for customers in the retailer's target market. - Entrepreneurs should select office equipment that reflects the latest advances in technology applicable to a particular business. - All new ventures, regardless of their function, should project an image that is appropriate to and supportive of the business and its intentions.
Identify factors to consider in choosing among the primary legal forms of organization.
- The key factors in choosing an organizational form are initial organizational requirements and costs, liability of the owners, continuity of the business, transferability of ownership, management control, attractiveness for raising capital, and income tax considerations. - Self-employed individuals who operate businesses as sole proprietorships report income from the businesses on their individual tax returns. - A partnership reports the income it earns to the Internal Revenue Service, but the partnership itself does not pay income taxes. The income is allocated to the owners according to their partnership agreement. - A C corporation reports its income and pays any taxes due to this corporate income. Individual stockholders must also pay personal income taxes on dividends paid to them by a corporation.-
Explain the common legal forms of organization used by small businesses.
- The most basic legal forms of organization used by small businesses are the sole proprietorship, partnership, and C corporation. - In a sole proprietorship, the owner receives all profits and bears all losses. The principal disadvantage of this form is the owner's unlimited liability. - In a partnership, which should be established on the basis of a written partnership agreement, success depends on the partners' ability to build and maintain an effective working relationship. The partners share unlimited liability. - C corporations are particularly attractive because of their limited liability feature. The fact that ownership is easily transferable makes them well suited for combining the capital of numerous owners. - Currently, 63.9 percent of all new businesses are organized as sole proprietorships, 8.9 percent are set up as partnerships, and 7 percent are established as C corporations.
Describe the effective use of boards of directors and advisory boards.
- To be most effective, a board of directors should include properly qualified, independent outsiders, who provide a good fit with the nature and needs of the business. - Boards of directors can assist small businesses by offering objective counsel and assistance to their chief executives. - Directors can fill gaps in the expertise of a management team and monitor its activities. - One alternative to an active board of directors is an advisory board, whose members are not personally liable for the company's actions.
Frank and Lillian Gilbreth
- a husband and wife team that refined Taylor's work through time-and-motion studies. -they filmed people performing tasks and then divided each task into component movements.
managerial skills
-Conceptual skills -human skills -technical skills
Mintzberg 3 categories of managerial roles
-Interpersonal roles -Informational roles -decisional roles
2 influential theorists of administrative management theory are?
-Max Weber -Henri Fayol
READ
-Recognize the emotion exists -Evaluate what the emotion really is -Analyze why you feel the emotion -Decide how to respond to the emotion based on your intellectual understanding of what is best for the situation
SWOT Analysis
-a strategic planning tool that separates influences on a business's future success into internal and external factors
Achievement Oriented- subordinate
-authoritative leadership is desired -locus of control is external -perceived high ability on task
Directive- subordinate
-authoritative leadership is desired -locus of control is external -perceived low ability on task
Supportive- subordinate
-authoritative leadership is not desired -locus of control is internal -perceived high ability on task
Theory X managers
-believe that workers are lazy, unmotivated, disinterested, and attempt to avoid work whenever possible. -managers must closely supervise workers - they believe that $ is the primary motivator
Theory Y managers
-believe that workers do not naturally dislike work and are not inherently lazy. -rather they will do good for the organization if given the opportunity -managers strive to create an environment that allows workers to take initiative
Step 1: Establishing mission, vision, and values statement
-mission statement must define: customers, products or services, where and HOW we compete, how the company will treat stakeholders -vision statement must provide: clarity and direction, unique competences; what the organization stands for and what it will become -value statement must address: organizations viewpoint on the world (culture, norms, the basic beliefs of the organization)
managerial tasks
-planning -organizing -leading -controlling
Achievement Oriented- environment
-simple or highly structured task -formal authority is high -group functioning is questionable
Supportive- environment
-simple or highly structured task -formal authority is low -group is not working well together
porters principles
-strategy involves creating a unique and valuable position -strategy involves competitive trade-offs -strategy requires the creation of a "fit" among companies
The steps in the strategic-management process in the correct order, with the first step listed at the top.
1. Establish the mission, vision, and values statements 2. Assess the current reality 3. Formulate corporate, business, and functional strategies 4. Execute the strategies 5. Maintain strategic control
middle of the road management
3rd styles of management adequate organization performance is possible through balancing the necessity to get out the work with maintaining the morale of people at a satisfactory level
houses path goal theory of leadership
4 key leader behaviors- directive supportive participative achievement-oriented path goal theory assumes that leaders are flexible and that they are able to change their style of leadership as the situation requires
country club management
4th styles of management thoughtful attention to the needs of people to satisfy relationships leads to a comfortable, friendly organization atmosphere and work tempo
business-to-consumer (B2C) model
A business model based on selling to final consumers electronically.
transaction-based model
A business model in which a website provides a mechanism for buying or selling products or services.
content-based model
A business model in which a website provides information (content) that attracts visitors, usually with the hope of generating revenue through advertising or by directing those visitors to other websites.
information-based model
A business model in which a website simply provides information about a business, its products, and other related matters.
franchise
A business model involving a business owner who licenses trademarks and methods to an independent entrepreneur.
consumer-to-consumer (C2C) model
A business model usually set up around Internet auction sites that allow individuals and companies to list items available for sale to potential bidders.
coporation
A business organization that exists as a legal entity and provides limited liability to its owners
B corporation
A business organization that exists as a legal entity and provides limited liability to its owners.
corporation
A business organization that exists as a legal entity and provides limited liability to its owners.
legal entity
A business organization that is recognized by the law as having a separate legal existence.
legal entity
A business organization that is recognized by the law as having a separate legal exsitence
sole proprietorship
A business owned by one person, who bears unlimited liability for the enterprise
sole proprietorship
A business owned by one person, who bears unlimited liability for the enterprise.
Planning/Control Cycle
A continuous feedback cycle that has two planning steps (1 and 2) and two control (3 and 4) (1) Make the plan (2) Carry out the plan (3) Control the direction by comparing results with the plan (4) Control the direction by taking corrective action in 2 ways: (a)Correcting deviations in the plan being carried out (b) Improving future plans
Which of these represent the second step in the ethical decision making process?
Identify alternative solutions
Franchise Disclosure Document (FDD)
A detailed statement providing information about the franchisor that satisfies the franchise disclosure requirements of the FTC.
stock certificate
A document specifying the number of shares owned by a stockholder
stock certificate
A document specifying the number of shares owned by a stockholder.
stock certificates
A document specifying the number of shares owned by a stockholder.
corporate charter
A document that establishes a corporation's existence
corporate charter
A document that establishes a corporation's existence.
partnership agreement
A document that states explicitly the rights and duties of partners
partnership agreement
A document that states explicitly the rights and duties of partners.
business incubator
A facility that provides shared space, services, and management assistance to new businesses.
business format franchising
A franchise arrangement whereby the franchisee obtains an entire marketing and management system geared to entrepreneurs.
Growth Strategy
A grand strategy that involves expansion
Defensive Strategy
A grand strategy that involves reduction in the organization's effort
Disjunctive Task
A group task involving some of the decision making or problem analysis that requires a yes or no decision.
Conjunctive Task
A group task that is divided into interdependent sub-parts and the successful completion of each sub-part is necessary for overall task accomplishment.
advisory board
A group that serves as an alternative to a board of directors, acting only in an advisory capacity
advisory board
A group that serves as an alternative to a board of directors, acting only in an advisory capacity.
Means-end chain
A hierarchy of goals; in the chain of management (operational, tactical, strategic), the accomplishment of low-level goals are the means leading to the accomplishment of high-level goals or ends.
Trend Analysis
A hypothetical extension of past series of events into the future (assumes the past will be like the future)
partnership
A legal entity formed by two or more co-owners to operate a business for profit.
partnership
A legal entity formed by two or more co-owners to operate business for profit
Porter's Model for Industry Analysis
A model that suggests that business-level strategies originate in 5 primary competitive forces in a firm's environment
X = (Potential performance - Process losses)
Actual Performance
____________ is an independent group task in which the contributions of all members are simply summed or pooled to form the group project.
Additive Task
Which task assumes that "larger groups should produce more than smaller groups?"
Additive tasks
Some groups go through an "____________" stage by consciously deciding to disband, usually because the group has completed its tasks or because members choose to go their separate ways.
Adjourning
According to Gerber, all of the following are personalities that come into play when you are starting a business EXCEPT:
Administrative Personality
Match with the reason people join groups: People like to associate with other people, particularly if they have something in common
Affiliation
Match with the corresponding role: Interpreting ideas or suggestions; defining terms; clarifying issues for the group
Clarifier
Match with the corresponding role: Disagreeing and opposing beyond reason; resisting stubbornly the group's wish for personal reasons; using a hidden agenda to thwart the movement of a group
Blocker
What type of role is associated with activities that disrupt or destroy the group, such as dominating the discussion, attacking other group members, disagreeing unreasonably with other group members, and distracting the group with irrelevant issues or unnecessary humor?
Blocking roles
A product or service is said to have a(n) _____ if an increase in its price lowers demand for the product or service or a decrease in its price raises demand. a. inelastic demand b. break-even supply c. elastic demand d. bad debt ratio
C
A risky way to finance is through a. being an angel. b. equity. c. debt. d. returning money borrowed.
C
All of the following are purposes of pro forma financial statements EXCEPT: a. to project sales-expenses relationship for a venture. b. to project how profitable a firm can expect to be. c. to project the economic stability of industry. d. to project a firm's cash flow and where it will come from.
C
All of the following are types of bank loans EXCEPT: a. lines of credit. b. term loan. c. equity. d. mortgage.
C
Environmental Scanning
Careful monitoring of an organization's internal and external environments to detect early signs of opportunities and threats that may influence a firm's plans
Widget Corp. has five strategic business units (SBUs)—informatics, shipping, third-party logistics, structural materials, and oil exploration. The third-party logistics unit is quite profitable in spite of operating in a slow-growing market. It provides funds for the operation of the other business units as well. In the context of the BCG matrix, which of the following categories of SBUs best describes the third-party logistics unit?
Cash cows
In accounting, transactions are reported when they actually occur.
Cash- basis
Which of the following is not an advantage of family involvement in the business?
Children easily see the advantages derived from family participation in the business
_______ refers to actions by franchisors to void the contracts of franchisees in order to sell the franchise to someone else and collect an additional fee. a. Piggybacking b. Encroachment c. Churning d. Multiple-unit ownership
Churning
Aries Inc. is a computer manufacturer that has been in the market for several years. Many other companies have started manufacturing compact, and portable gadgets that are easier to use than desktop computers. Aries, however, has been reluctant to adopt new strategies because it thinks that its desktops were selling well when it first started and will continue to sell the same way even if new competitors and better products enter the market. Which of the following concepts is illustrated in this scenario?
Competitive inertia
Cost-Focus Strategy
Competitive strategy to keep the costs, and hence prices, of a product/service below those of competitors while targeting a narrow market
Cost-Leadership Strategy
Competitive strategy to keep the costs, and therefore prices, of a product/service below those of competitors while targeting a wide market
Focused-Differentiation Strategy
Competitive strategy to offer products/services that are of unique and superior value compared to those of competitors while targeting a narrow market
Differentiation Strategy
Competitive strategy to offer products/services that are of unique and superior value compared with those of competitors while targeting a wide market
Conforming to social pressure either to obtain rewards or to avoid punishment describes what level of conformity?
Compliance
What is the lowest level of conformity?
Compliance
A more in-depth business plan that provides an analysis of the critical factors that will determine the success or failure of the business is called a
Comprehensive plan
Match with the corresponding role: Offering a compromise that yields status; admitting error; modifying the group's policies or objectives
Compromiser
CLM is a leading cable operator. The company has recently declared bankruptcy and its needs to restructure its processes to attain more flexibility and allow it to raise capital. Since CLM has identified its need for strategic change, what would be CLM's next step in the strategy-making process?
Conducting a situational analysis
__________ means yielding to group influence by doing or saying something you might otherwise choose not to do
Conformity
What is the second stage of group development?
Confrontation
Which stage in developing a group is associated with conflict, confrontation, concern, and criticism?
Confrontation
The filming of an event by a television news team is a ___________ and each member's contribution is essential to the final product. (because a mistake by any member means failure for the whole group, whether it is a bad interview, a bad picture, or bad sound)
Conjunctive tasks
What describes those tasks that can be divided into interdependent subtasks and then assigned to various group members through a "division of labor?"
Conjunctive tasks
____ are the central companies in a strategic group
Core firms
If an entrepreneur wanted to limit the liability of ownership, he/she should choose which of the following forms of organization? a. Corporation b. Sole proprietorship c. Partnership d. Limited partnership
Corporation
What is the first step in the marketing research procedure ?
Correctly identifying and defining the informational need
Porter's Competitive Strategies (List)
Cost-Leadership Strategy Differentiation Strategy Cost-Focus Strategy Focused-Differentiation Strategy
Match the following with the corresponding style: "Thoughtful attention to the needs of people to satisfy relationships leads to a comfortable, friendly organization atmosphere and work tempo"
Country Club Management
Over the long run, which of the following is the best way for a company to sustain competitive advantage?
Creating innovation streams
A ________ identifies the key demographic and psychological characteristics of the individuals you consider most likely to be qualified purchasers of your products and services
Customer profile
Brand Loyalty
Customers' preference for the products of organizations currently existing in the task environment.
A(n) _____ is a financial acquisition involving a very high level of debt financing, where the future cash flows of the target company are expected to be sufficient to meet debt repayments. a. opportunity cost of funds b. bust-up LBO c. initial public offering d. leveraged buyout
D
All of the following are factors that drive profits EXCEPT: a. amount of sales. b. operating expenses. c. taxes. d. product design.
D
All of the following are intermediaries EXCEPT: a. merchant middlemen. b. agents. c. brokers. d. common carriers.
D
All of the following are legislation related to credit management EXCEPT the: a. Fair Credit Billing Act. b. Equal Credit Opportunity Act. c. Fair Debt Collection Practices Act. d. Sherman Antitrust Act.
D
Business brokers do all of the following EXCEPT: a. assist in buying and selling of a business. b. find possible buyers. c. help facilitate negotiations. d. decide whether to accept or deny offers.
D
Check My Work In a transfer of ownership there must be a trade-off among all of the following important goals EXCEPT: a. cash for the selling family members. b. continued financing for the company's future growth. c. the younger generation to maintain control of the firm. d. continued control over parts of the firm.
D
Environmental Concerns:
If you are acquiring real property along with the business, it is important to check the environmental regulations in the area. Visit the EPA's online Small Business Gateway for more information.
A strategy of ___________ involves bypassing retailers and going to the customer directly through online operations.
Disintermediation
Decision-making tasks that require the group to select the best solution is called?
Disjunctive tasks
___________ include making simple dichotomous decisions (yes or no) as well as selecting the best solution from a list of alternatives
Disjunctive tasks
In the context of the planning process, _____ are primary goals.
Distal Goals
Match with the corresponding role: Asserting authority or superiority to manipulate the group; interrupting contributions of others; controlling by means of flattery or patronizing behavior
Dominator
Who identifies eleven dimensions of group functioning?
Douglas McGregor
During What Step of the Strategic-Management Process Does One Deal with Roadblocks Within the Organization's Structure and Culture and Seeing If the Right People and Control Systems are Available to Execute the Plan?
Implementing Strategy
Unfortunately, a cost-based strategy usually doesn't work for small companies because they don't have the capacity to produce high volumes.
False.
a statement of principles intended to guide a family firm through times of crisis and change refers to a
Family business constitution
Members of the succeeding generation in family firms have emotional resistance to joining the firm which include all of the following EXCEPT:
Fear of Affluence
A popular tool for studying the industry environment is Porter's five factors. Which of the following is NOT considered part of the five factors?
Federal Government
Who created the Contingency Theory of Leadership?
Fiedler
Who created the principles of scientific management?
Frederick Taylor
Who is often referred to as the "father of scientific management?"
Frederick Taylor
Principles of Scientific Management
Frederick Taylor designed to optimize the efficiency and effectiveness of workers
scientific management
Frederick W. Taylor (a manufacturing manager with an engineering background )
Future community development
Future developments in the community that could have an indirect impact on a business include a change in zoning ordinances already enacted but not yet in effect, a change from a two-way traffic flow to a one-way traffic flow, and the widening of a road or construction of an overpass.
Match with the corresponding role: Helping to keep communication channels open; facilitating the participation of others; suggesting procedures that permit sharing remarks
Gatekeeper
Group Norms
General expectations demand nature regarding acceptable group behavior.
Portrance's iX processor is the latest installment in the Portrance microprocessor product line. It is fully backward compatible with the earlier versions of the microprocessor. Which of the following terms best describes this dominance of Portrance's new iX processor over its older versions?
Generational change
Max Weber
German theorist who developed the principles of bureaucracy.
__________ are the task activities and responsibilities the group members perform
Group roles
__________ are the task activities and responsibilities the group members perform.
Group roles
Assigned Roles
Group roles that are formally assigned to group members.
Emergent Roles
Group roles that are voluntarily performed by group members without being formally assigned.
Blocking Roles
Group roles that prevent the group from functioning effectively because they attack other group members or divert the group's attention.
The three situation factors for group structure is _______, social density, and nature of the task
Group size
___________ is the stable pattern of relationships among group members that maintain the group and help it achieve its goal
Group structure
Common Grand Strategies
Growth Strategy Stability Strategy Defensive Strategy
Match with the corresponding role: Attempting to reconcile disagreements; reducing tension; getting people to explore differences
Harmonizer
Values
Ideas about what a society believes to be good, right, desirable, or beautiful.
Elton Mayo led what study?
Hawthorne
The ___________ Effect is that performance improves when workers perceive that they are being watched and that their performance is important
Hawthorne
The four I's of transformational leadership are ______________, inspirational motivation, intellectual stimulation, and individual consideration
Idealized influence
This is known as one of the four I's of leadership, and describes the way a leader sets an exemplary role model for others.
Idealized influence
Which of the four I's describes the way a leader sets an exemplary role model for others
Idealized influence
Which of the following is generally NOT an outcome when a business practices social responsibility?
Increased scrutiny from regulatory agencies
process for evaluating a franchise opportunity
Independent third parties such as state and federal government agencies, the International Franchise Association, and business publications can be valuable sources of franchise information.
The four I's of transformational leadership are idealized influence, inspirational motivation, intellectual stimulation, and _______________
Individual consideration
Which of the four I's describes the quality of a leader as a coach and advisor to the others?
Individual consideration
Customers
Individuals and groups that buy the goods and services from organizations.
Suppliers
Individuals and organizations that provide and organization with the input resources it needs to produce goods and services.
area developers
Individuals or firms that obtain the legal right to open several franchised outlets in a given area.
This is known as one of the four I's of leadership, and describes how leaders motivate followers to commit to the vision of the organization.
Inspirational motivation
Which of the four I's describes how leaders motivate followers to commit to the vision of the organization?
Inspirational motivation
The leadership literature seems to have settled on five main traits that are relevant across situational factors: intelligence, self-confidence, determination, ______________ , and sociability
Integrity
________ refers to a general sense of honesty and reliability that is expressed in a strong commitment to doing the right thing, regardless of the circumstances.
Integrity
The four I's of transformational leadership are idealized influence, inspirational motivation, ______________, and individual consideration
Intellectual stimulation
Which of the four I's describes how transformational leaders encourage innovation and creativity through challenging the normal beliefs or views of a group?
Intellectual stimulation
The leadership literature seems to have settled on five main traits that are relevant across situational factors: ___________, self-confidence, determination, integrity, and sociability
Intelligence
Economic Forces
Interest rates, inflation, unemployment, economic growth, and other factors that affect the general health and well-being of a country or nation.
______________ is a type of role conflict that occurs when a single role sender communicates incompatible role expectations to the focal person.
Intrasender Role Conflict
What occurs when a single role sender communicates incompatible role expectations to the focal person?
Intrasender role conflict
As a franchisee, costs involved in renting or building an outlet and stocking it with inventory and equipment are called _______
Investment costs
Which of the following is a pitfall of planning
It can impede change and prevent or slow needed adaptation.
Which of the following is a pitfall of planning?
It can impede change and slow needed adaptation.
Which of the following statements is true about planning?
It encourages the development of task strategies.
Identify an accurate feature of the strategic objective of an organization.
It must stretch and challenge the organization.
Identify a true statement about electronic brainstorming.
It overcomes the problem of production blocking
Identify a true statement about electronic brainstorming.
It overcomes the problem of production blocking.
In the decision-making process, which of the following best defines the term maximizing?
It refers to choosing the best alternative course of action in decision making.
Identify a true statement about the nominal group technique.
It restricts c-type conflicts
Identify a true statement about the nominal group technique.
It restricts c-type conflicts.
Which of the following statements is true about an organization's purpose statement?
It states the company's reason for existing.
Which of the following statements is true about the strategic objective of an organization?
It unifies companywide efforts.
What type of role is associated with social-emotional activities of group members that maintain their involvement and personal commitment to the group?
Maintenance roles
Efficiency
Managers minimize the amount of input resources needed to produce goods/services
Reactors
Managers who make adjustments only when finally forced to by environmental pressures.
Which of the following is a characteristic of the inaction stage of organizational decline?
Managers wrongly assume that they can easily correct the problems, so they don't feel the situation is urgent.
Personal Identity
Membership in a group helps us know more about ourselves. Comments of peers generally have a great impact on our self-esteem because they come from people we respect; therefore, we have confidence in what they say. Their comments are also more credible because we assume they know us well and are concerned about our well-being.
Strategic Control
Monitoring the execution of strategy and making adjustments, if necessary
Core Processes of Business
People (Most Important) Strategy Operations
Important Documents:
Numerous documents should be checked during your investigation. Examples include property documents, customer lists, sales records, advertising materials, and employee and manager information.
Affiliation
People like to associate with other people, particularly if they have something in common. The mere presence of others provides friendship, social stimulation, and person acceptance. College students and factory workers alike form informal peer groups simply to avoid the discomfort of being alone.
Existing and previous franchisees are also good sources of
information for evaluating a franchise.
Diversification Strategy
Operating several businesses in order to spread the risk
Unrelated Diversification
Operating several businesses under one ownership that are not related to one another
_____ are the day-to-day plans for producing or delivering an organization's products and services.
Operational plans
Distributors
Organizations that help other organizations sell their goods or services to customers.
Global Organizations
Organizations that operate and compete in more than one country.
Potential Competitors
Organizations that presently are not in a task environment but could enter if they so choose.
Competitors
Organizations that produce similar goods and services to another organization.
The first stage for almost every group is called ____________. This stage is marked by caution, confusion, courtesy, and commonality.
Orientation
The stage associated with "Forming?"
Orientation
Which stage in developing a group is marked by caution, confusion, courtesy, and commonality?
Orientation
Which of the following is NOT true of a C corporation?
Owners can be personally liable for the company's debts.
multiple-unit ownership
Ownership by a single franchisee of more than one franchise from the same company.
In the context of corporate-level strategies, which of the following exemplifies diversification?
Owning stocks in a variety of companies in different industries
Select the appropriate leadership style: Subordinate Variables: -Wants to be involved -Locus of control is internal -High ability Environmental Variables: -High ambiguity or complexity to tasks -Formal authority is questionable -Group functioning is questionable
Participative
Robert House presented what theory?
Path-Goal Theory of Leadership
The foundational premise of what model is that subordinates perceive quality in leadership insofar as they perceive that the leader is clearing a path for them to attain the goals?
Path-Goal Theory of Leadership
Strategy Implementation
Putting strategy plans into effect
Match with the corresponding role: Making a critical assessment of the situation and problem; testing an idea against data to see if it would work
Reality tester
The group norm of ___________ suggests that when people make an effort to help you, you should feel an obligation to help them at a later time.
Reciprocity
The norm of __________ suggests that when people make an effort to help you, you should feel an obligation to help them at a later time
Reciprocity
Managerial Grid Model
Robert Blake and Jane Mouton describes managerial/leader behaviors along the dimensions of concern for people and concern for production
Who presented the Path-Goal Theory of Leadership?
Robert House
Personal-role Conflict
Role conflict created by asking people to behave in ways that violate their personal values.
Intersender Role Conflict
Role conflict created by incompatible demands and expectations of two or more role senders.
A continuous process of evaluating each other's behavior and communicating expectations, both overtly and covertly, describes what?
Role episode
Role expectations are communicated to individuals during a _________, which is the interaction between role senders and the person receiving the role
Role episode
What is caused by the conflicting demands of too many roles?
Role overload
An assessment that provides a concise overview of a firm's strategic situation
SWOT analysis
____ refers to choosing a "good-enough" alternative when making a decision.
Satisficing
Contingency Planning
The creation of alternative hypothetical but equally likely future conditions to prepare an organization for emergencies and get managers thinking strategies
_____ is a group decision-making method that begins and ends by having group members quietly write down and evaluate ideas to be shared with the group.
The nominal group technique
joint and several liability
The liability of each partner resulting from any one partner's ability to legally bind the other partners.
Deindividualization
The loss of individuality that occurs by being a member of a large crowd.
Differentiation
The third stage of group development when members divide the work to be done and perform their assigned tasks.
One approach to focusing is to service either industrial buyers or consumers, but not both.
True
Pre-emptive rights allow stockholders to buy new shares of stock before they are offered to the public. a. True b. False
True
When Subway operates a restaurant within a truck stop, it is an example of ____ franchising.
c. piggyback
related diversification
When an organization operates several businesses that are linked to one another.
Reward Dependence
When group members feel induced to conform to group pressure because there are positive or negative consequences attached to doing so.
Information dependence
When group members feel induced to conform to group pressure because they depend on the group to provide important information to help them know what to do.
Porter's Four Competitive Strategies
Wide: cost-leadership and differentiation Narrow: cost-focus and focused-differentiation
Clarifying the purpose of the group, developing a strategy for accomplishing the work, delegating job assignments, and evaluating progress are what type of role?
Work roles
What type of role is associated with task-oriented activities involved in accomplishing the work and achieving the group objective?
Work roles
restrict and/or limit the operations of home-based businesses.
Zoning ordinances
If the seller's attorney is the closing agent, the buyer should exercise great caution—
a buyer should never go through a closing without the aid of an experienced attorney who represents only the buyer.
single product strategy
a company makes and sells only one product within its market -- allows the organization to focus its efforts on one product
diversification strategy
a company operates several businesses to spread out the risk among multiple markets or segments
A franchise contract is
a complex document and should be evaluated by a franchise attorney, especially the provision relating to termination and transfer of the franchise.
moral rights rule
a decision is ethical when it best protects people's fundamental or inalienable rights and privileges.
practical rule
a decision is ethical when the typical person in society would think that it is acceptable
business plan
a document that outlines a proposed fimr's goals, the strategy for achieving them, and the standards for measuring success
threats of substitutes
a firm faces more competition when there are more available substitutes for its products and services
A sustainable competitive advantage is achieved when:
a firm's competitors cannot duplicate the value offered by the firm to its customers.
bureaucracy
a formal system of organization and administration designed to ensure efficiency and effectiveness.
organization structure
a formal system of task and reporting relationships among organizational members.
Management by Objectives (MBO)
a four-step process in which manger and employees (1) discuss and select goals (2) develop tactical plans and (3) meet regularly to review progress toward goal accomplishment, and (4) the manager makes a performance appraisal and rewards the employee accordingly
The party in a franchise contract that specifies the methods to be followed and the terms to be met by the other party is called a
a franchisor
SMART goal
a goal that is Specific, Measurable, Attainable, Results oriented, and had Target dates
defensive strategy
a grand strategy that involves a reduction of the organizations' efforts
growth strategy
a grand strategy that involves expansion -- as in sales revenues, market share, number of employees, or number of customers
stability strategy
a grand strategy that involves little or no significant change
emotional intelligence
a persons ability to accurately monitor their environment (be socially aware of circumstances and what is expected of them) and act rationally in the face of emotional circumstances.
leadership making
a process where the leader/subordinate relationship grows from a stranger phase (rule bound, low quality exchanges) to an acquaintance phase (testing, sharing more resources and personal/work related information) and ultimately to a mature relationship phase (mutual trust, respect toward each other)
leadership
a set of actions and attitudes that move people to pursue a vision that is in the mind of the leader for the attainment of organizational and or societal goals
Leadership
a set of actions and attitudes that move people to pursue a vision that is in the mind of the leader for the attainment of organizational and/or societal goals
Program
a single use plan encompassing a range of projects or activities
Project
a single use plan of less scope and complexity than a program
Challenges in designing the physical facilities for a new business include finding all of the following EXCEPT: a. a space that is extravagant. b. a space that is too small. c. a space that is too large. d. a space that is practical.
a space that is extravagant
Rule
a standing plan that designated specific required action
policy
a standing plan that outlines the general response to a designated problem or situation
vision
a statement where the organization is going and what goals are to be achieved
scientific management
a systematic study of people and tasks in an attempt o improve productivity by redesigning the work process
empowerment
a technique that gives employees more responsibility and authority over the performance of their work activities by expanding their knowledge, tasks, and decision making abilities.
extraversion
a tendency to have positive feelings about oneself and the world
Action Plan
defines the course of action needed to achieve the stated goal
Entrepreneurs who receive an entire marketing and management system are participating in:
a. Business format franchising
Entrepreneurs who receive an entire marketing and management system are participating in: a. Business format franchising b. Multiple-unit ownership c. Piggyback franchising d. Product and trade name advertising
a. Business format franchising
Which of the following is a consideration in the transfer of ownership in the family firm? a. Consideration of tax laws b. Fair treatment of community members c. Delay of transfer of ownership until the death of the founder d. Planning and discussion of taking the firm public
a. Consideration of tax laws
The most accurate statement concerning socially responsible actions and firm profitability is: a. Evidence concerning the link between social responsibility and profit is mixed. b. Firms that act in socially responsible ways nearly always make less profit. c. Firms that act in socially responsible ways nearly always make more profit. d. Profit should be sacrificed for the sake of being socially responsible.
a. Evidence concerning the link between social responsibility and profit is mixed.
____ equipment requires a minimal investment and is easily adapted to varied types of operations. a. General-purpose b. Retail store c. Special-purpose d. Leasing
a. General-purpose
Which of the following is NOT true of a C corporation? a. Owners can be personally liable for the company's debts. b. It is a legal entity separate from its owners. c. A corporate charter must be approved. d. Ownership is easily transferable.
a. Owners can be personally liable for the company's debts.
________ projecting the company's sales, costs, and profits are usually contained in the financial plan. a. Pro forma statements b. Industry statistics c. Management capabilities d. Marketing potential of the competition
a. Pro forma statements
Which of these is a key challenge of running a home-based business?
a. Professional image
Which of these is a key challenge of running a home-based business? a. Professional image b. Loss of tax advantage c. Warehousing limitation d. Shipping difficulties
a. Professional image
Which of the following statements most accurately describes the relationship between planning and doing in a business? a. They are both important and must be balanced intelligently. b. It is better to act than think too much. c. The more detailed the plan, the better. d. Planners never get anything done.
a. They are both important and must be balanced intelligently.
A potential advantage of the husband-wife team (co-preneurs) is the opportunity to share more of their lives. a. True b. False
a. True
An example of a non-quantitative factor in buying a business is future community development.
a. True
An example of a non-quantitative factor in buying a business is future community development. a. True b. False
a. True
Having positive net profits in an income statement does not necessarily mean that a firm has generated positive cash flows. a. True b. False
a. True
Interestingly, many zoning laws, dating as far back as the 1930s, have never been updated.
a. True
One of the benefits of e-commerce is that it allows small businesses to compete on a more level playing field with large businesses.
a. True
One of the benefits of e-commerce is that it allows small businesses to compete on a more level playing field with large businesses. a. True b. False
a. True
The death of an owner terminates the legal existence of a business that is organized as a sole proprietorship. a. True b. False
a. True
Unfortunately, there is no formula for determining the price of a private company. a. True b. False
a. True
nterestingly, many zoning laws, dating as far back as the 1930s, have never been updated.
a. True
With _____ pricing, the total cost (cost of goods sold plus operating expenses) over a previous period is divided by the quantity sold in that period to arrive at an average cost, which is then used to set the current price. a. average b. variable c. skimming d. price-lining
a. average
The ________ is the governing body for corporate activity. a. board of directors b. advisory council c. board of consultants d. lead consultant
a. board of directors
The four basic ways to harvest an investment in a privately owned company are all of these EXCEPT: a. buying another firm. b. distributing the cash flows generated by the business to its owners instead of reinvesting the cash. c. offering stock to the public through an initial public offering. d. undertaking a private equity recapitalization.
a. buying another firm.
When the franchisor sells another franchise location within the market area of an existing franchisee, it is called
a. encroachment.
When the franchisor sells another franchise location within the market area of an existing franchisee, it is called a. encroachment. b. churning. c. pivot. d. co-branding.
a. encroachment.
The _______ is usually at the beginning of the business plan and summarizes the total plan. a. executive summary b. products and/or service plan c. marketing plan d. management plan
a. executive summary
Segmenting a market by age, gender, or income uses ____________ variables for market segmentation.
demographic
buyers bargaining power
buyers have more bargaining leverage when there are not many buyers in the market, when the buyer purchases a high volume, and when the buyer is informed and price sensitive
Private placement stock is usually sold to all of the following EXCEPT: a. employees. b. owner's acquaintances. c. the public. d. suppliers.
c
The return on owner's equity can be calculated as net profits divided by _____. a. financial leverage b. profit margins c. total owners' equity d. total asset turnover
c
_____ are the shares that represent investor ownership in a firm. a. Owner's equity b. Retained earning c. Common stock d. Total assets
c
All of the following are e-commerce business models EXCEPT: a. B2B. b. B2C. c. B2A. d. Auction site.
c. B2A.
Which of the following is NOT an advantage of opening a home-based business? a. It is often quicker and cheaper to get up and running. b. You will save time and money on daily commutes. c. Customers feel more comfortable in your home. d. You will be your own boss.
c. Customers feel more comfortable in your home.
"Be a good corporate citizen, and give back" represents which type of responsibility? a. Ethical b. Economic c. Discretionary d. Legal
c. Discretionary
A good retirement plan for an entrepreneur: a. Pulls as much cash as possible from the growing business to invest in off-the-shelf investment instruments. b. Is just a distraction. The entrepreneur must focus exclusively on creating value in the company. c. Is diversified such that it includes both the harvest and other types of investments not tied to the company's success. d. Relies solely on the harvest of the business.
c. Is diversified such that it includes both the harvest and other types of investments not tied to the company's success.
Which of the following statements most accurately describes the financial liability of a corporate stockholder? a. Stock ownership releases the individual from all financial obligations of the firm. b. The purchase of stock alone implies an obligation for the stockholder to repay debts incurred by the firm. c. It is limited to the amount of money invested in the business unless the owner has signed personally for a corporate loan. d. It applies only to money invested in stock and never to the stockholder's personal assets.
c. It is limited to the amount of money invested in the business unless the owner has signed personally for a corporate loan.
All of the following are advantages that a limited liability company (LLC) has over an S corporation EXCEPT: a. LLCs are easier to set up b. LLCs are more flexible c. LLCs can offer stock options to employees d. LLCs have significant tax advantages
c. LLCs can offer stock options to employees
All of the following are key factors in determining a good business location EXCEPT:
c. Population sparseness.
Family businesses are best described as: a. Businesses that cater to families. b. Companies that sell products and services appropriate for all ages. c. Those in which the strategic direction of the firm is influenced significantly by family members. d. Businesses that hire only family members.
c. Those in which the strategic direction of the firm is influenced significantly by family members.
Challenges in designing the physical facilities for a new business include finding all of the following EXCEPT: a. a space that is too small. b. a space that is too large. c. a space that is extravagant. d. a space that is practical.
c. a space that is extravagant.
Challenges in designing the physical facilities for a new business include finding all of the following EXCEPT: a. a space that is too small. b. a space that is too large. c. a space that is extravagant. d. a space that is practical.
c. a space that is extravagant.
A limited partnership consists of-- a. one general partner. b. all limited partners. c. at least one general partners and one or more limited partners. d. all general partners.
c. at least one general partners and one or more limited partners.
A limited partnership consists of-- a. one general partner. b. all limited partners. c. at least one general partners and one or more limited partners. d. all general partners.
c. at least one general partners and one or more limited partners.
A _____ is a facility that rents shared space, services and management assistance to new businesses or to people wishing to start businesses. a. zoning ordinances b. brick-and-mortar facility c. business incubator d. transaction-based model
c. business incubator
execution
consists of using questioning, analysis, and follow-through in order to mesh strategy with reality, align people with goals, and achieve results promised
Participative behaviors
consulting with followers and listening to their suggestions before making decisions
Those capabilities that provide a firm with a competitive edge and reflect its personality
core competencies
Sally has opened five successful candy shops and wishes to capitalize on the scalability of her business by franchising. Which of the following should she consider before going that route? a. She should determine whether her business systems are well-defined and replicable. b. She should see if she can get sufficient financing to deploy the franchise. c. She should research government regulations regarding her obligations to disclose certain information to potential franchisees. d. She should do all of the above.
d. She should do all of the above.
Recent research findings suggest that companies that are successful in making the transition from one generation to the next are: a. Those in which the culture keeps "creative" members in line. b. Those that instill a sense in succeeding generations that the founders' way of doing business is sacrosanct. c. Run by intricate operational guidelines that specify every detail of day-to-day work. d. Those whose new leaders act on their own, take risks, and support innovation.
d. Those whose new leaders act on their own, take risks, and support innovation.
Key factors in determining a good business location include all of these EXCEPT: a. customer accessibility. b. resource availability. c. site availability and costs. d. community approval
d. community approval
Operating expenses consist of all of the following EXCEPT: a. marketing and selling expenses. b. general and administrative expenses. c. depreciation. d. cost per number of item sold.
d. cost per number of item sold.
A process wherein a wholesaler decides to bypass middlemen and sell directly to end users is called _____. a. predatory pricing b. price lining c. W2C d. disintermediation
d. disintermediation
Harvesting encompasses all of the following EXCEPT: a. creating future options. b. capturing value. c. reducing risk. d. expanding.
d. expanding.
According to Blanchard and Peale, an organization's ethical policy should be based on all of these EXCEPT: a. pride. b. persistence. c. perspective. d. pattern.
d. pattern.
Outside directors of a firm offer all of the following to the firm EXCEPT: a. objectivity of people and issues. b. detachment from emotional differences. c. dispassionate view and resolution of issues. d. rationalization of unethical or illegal behaviors.
d. rationalization of unethical or illegal behaviors. Hide Feedback
The least expensive and easiest formation of the forms of organization is-- a. partnership. b. corporation. c. limited partnership. d. sole proprietorship.
d. sole proprietorship
According to government surveys, business owners choose to run their businesses out of their homes for all of the following reasons EXCEPT: a. quick and cheap to get up and running. b. save time and money on daily commuting. c. spend more time with family and friends. d. they do not have to maintain a professional office area.
d. they do not have to maintain a professional office area.
WindWings is a company that manufactures and markets flutes, a product with a steady demand rate. It is so successful at what it does that the company controls 85 percent of the world's flute industry. In terms of adaptive strategies, WindWings would most likely be categorized as a(n) _____.
defender
Jonathan is a manager at a departmental store. In recent weeks, the sale of goods in his store has decreased considerably. He does not know the reason behind this decline. As per the decision-making process, the next step that Jonathan must take is to:
define the problem
Jonathan is a manager at a departmental store. In recent weeks, the sale of goods in his store has decreased considerably. He does not know the reason behind this decline. As per the decision-making process, the next step that Jonathan must take is to:
define the problem.
program
encompasses a range of projects or activirties
According to Bryan Barry, which of these are things a manager can do to keep a strategic plan on track? (select all that apply)
engage people, keep moving, keep it simple, stay focused
The price at which the property would change hands between a willing buyer and willing seller when the former is not under any compulsion to buy and the latter is not under any compulsion to sell, both parties having reasonable knowledge of relevant facts refers to
fair market value.
"Piercing the corporate veil" means a corporation has formed strategic alliances with other corporations.
false
A family business's primary function relates to the care and nurture of family members
false
According to the US small Business Administration, small enterprises hire 83 percent of all high-tech employees.
false
Core competencies are the same thing as competitive advantage.
false
Core competencies are the same thing as competitive advantage. a. True b. False
false
General-purpose equipment permits cost reduction in industries in which the technology is fully established and in which a capacity is assured by high sales volume. a. True b. False
false
Generally, investors are more product oriented than market oriented.
false
Unlimited liability means that the owner's personal assets outside the business cannot be taken by creditors if the business fails. a. True b. False
false
Writing a business plan should be thought of as the means to an end.
false
_____ are the day-to-day plans for producing or delivering an organization's products and services.
operational plans
Research finds that the general environment affects large businesses and not the small ones, regardless of the industry.
false.
According to the BCG matrix, a company will do better in a _____ market in which it has a high market share.
fast-growing
A ________ analysis is a preliminary assessment of a business idea that gauges whether or not the venture envisioned is likely to succeed
feasibility
A preliminary assessment of a business idea that gauges whether the venture envisioned is likely to succeed
feasibility analysis
A popular tool for studying the industry environment is Porter's five factors. Which of the following is NOT considered part of the five factors? a. Suppliers b. New competitors c. Substitute products and services d. Federal government
federal government
The BCG matrix starts by recommending that while the substantial cash flows from cash cows last, they should be reinvested in stars to:
help them grow even faster and obtain even more market share.
Long-term benefits of adopting ethical and responsible business practices include all of the following EXCEPT:
higher employee turnover
means end chain
in the chain of management the accomplishment of low-level goals is the means leading to the accomplishment of high-level goals or ends
The environment that includes factors that directly impact a given firm and all of its competitors
industry environment
As a franchisee, costs involved in renting or building an outlet and stocking it with inventory and equipment are called ________.
investment costs.
Planning
involves choosing appropriate goals, developing strategies for achieving high performance, and allocating resources to achieve those goals.
leading
involves coordinating, motivating, and energizing people to work together to achieve organizational goals.
organic structures
involves decentralization of authority to middle- and first-line managers, and ambiguously defined tasks and roles. this allows employees to cooperate with one another and respond quickly when unexpected events occur in the environment.
organizing
involves establishing authority and task relationships that help people coordinate to achieve organizational goals
self management
involves the ability to control one's impulses and internal states
self awereness
involves the ability to manage one's own emotions, motives, weaknesses, and strengths
relationship management
involves the ability to manage the emotions of others
social awareness
involves the ability to understand and be sensitive to the thoughts, feelings and situations of others
Frederick W. Taylor
is sometimes known as the " Father of scientific management"
The primary source of information about a franchise
is the franchisor.
monitors
keep an eye out for new info
cash cow
low market growth, high market share; managers should milk them, not investing heavily in R&D. eventually this market will mature and the revenue stream will dry up (iPhone)
hersey and blanchards life cycle theory of leadership
m1 unable/unwilling m2 unable/willing m3 able/uncertain willingness m4 able/willing
scientific management viewed people as _____________ rather than human beings
machines
Tactical Planning
managers determine what contributions their work units can make during the next 6-24 months
Strategic planning
managers determining what the organization's long-term goals should be for the next 1-5 years
managerial grid model
model describes managerial leaders behaviors along the dimensions of concern for people and concern for the production the x axis: concern for production the y axis: concern for people 5 styles- 1. impoverished management 2. authority-compliance management 3. middle of the road management 4. country club management 5. team management
The___________ plan offers information on how the product will be produced or the service provided.
operations and development
The description of potential customers in a target market is commonly called a--
pricing
Startup ideas centered around providing customers with new or improved products or services
new benefit ideas
threat of new entry
new competitors take customers away from existing organizations; the higher the industry's barrier to entry, the costlier it will be for new firms to enter and the less competitive the market will be
________ refers to startup ideas centered around providing customers with an existing product or service not available in their market.
new market ideas
Dominant design
new technological design or process that becomes the accepted market standard
Startup ideas involving new or relatively new technology, centered around providing customers with a new product
new technology ideas
Under the restrictions of __________, the buyer promises the seller that he or she will not reveal confidential information or violate the trust that the seller has offered in providing the information.
nondisclosure agreement
Fiedler's Contingency Theory of Leadership
notion that someone who might be an ineffective leader in one situation might be an effective leader in another
Cascading
objectives are structured in a unified hierarchy, becoming more specific at lower levels
When considering SWOT analysis, what is an example of an organizational weakness?
obsolete technology
virtuous circle
occurs when socially responsible behavior improves financial performance, which leads to more responsible behavior in the future -- southwest airlines' efficient operations leads to low fares, which leads to customer loyalty, which leads to high utilization of aircrafts, which makes everything more efficient
low-cost strategy
often involves reducing costs in an attempt to compete on price.
The _____ is a corporate-level strategy that minimizes risk by diversifying investment among various businesses or product lines.
portfolio strategy
personalized power
power simply for their own benefit, for the sake of being in charge
socialized power
power used as a means to help others or achieve goals
forecasting
predictions, projections or estimates of future situations (outcomes, timing)
Strategic positioning attempts to achieve sustainable competitive advantage by:
preserving what is distinctive about a company
In the context of sustainable competitive advantage, _____ are those resources that are not controlled or possessed by many competing firms.
rare resources
Outside directors of a firm offer all of the following to the firm EXCEPT:
rationalization of unethical or illegal behaviors
conceptual skills
refer to a manager's ability to analyze a situation and distinguish between cause and effect.
human skills
refer to a manager's ability to understand, alter, lead, and control the behavior of individuals and groups within the organization.
organizational opportunities
refer to environmental factors that the organization may exploit for a competitive advantage
organizational threats
refer to the environmental factors that hinder an organization's achievement of competitive advantage
organizational weaknesses
refer to the internal drawbacks that hinder an organization in executing strategies in pursuit of its missions
Ethical ______ holds the philosophy "When in Rome, do as the Romans do."
relativism
____ are best defined as the assets, capabilities, processes, employee time, information, and knowledge that an organization uses to improve its effectiveness and efficiency.
resources
Companies are more likely to adopt a(n) _____ when market commonality is large, and companies have overlapping products, services, or customers in multiple markets?
response strategy
A franchisee
sells goods or services supplied by the franchisor or that meet the franchisor's quality standards.
The first step in designing a plan that works is to:
set goals
Women-owned businesses tend to be:
significantly smaller than men's
transactional leader
someone who interacts with followers in a series of transactions aimed at personal and organizational gain. -exchange benefits with their employees and clarify duties through reward and punishment to reach goals -basis for goal setting theory
A _____ is an assessment of the strengths and weaknesses in an organization's internal environment and the opportunities and threats in its external environment.
situational analysis
The least expensive and easiest formation of the forms of organization is a. Corporation b. Partnership c. Limited partnership d. Sole proprietorship
sole proprietorship
When other companies cannot duplicate the value provided by a competitor, then the competitor has established a(n) _____ competitive advantage.
sustainable
Luxury Linens Inc. produces the highest thread-count sheets available anywhere and does so at a price that none of its competitors can duplicate. It can be said that Luxury Linens has a(n) _____.
sustainable competitive advantage
Diego is a manager in a company that manufactures electronic gadgets. He creates a plan to develop cost-effective production technologies over the next one year. The plan also specifies how the company can effectively utilize its people and resources from different departments, and how the budgets can be streamlined to accomplish the objective. His plan is consistent with that of the company's overall objective of increasing its production by 100 percent in the next five years. Diego is most likely developing a(n) _____.
tactical plan
Plans that are used to direct behavior, efforts, and attention over the next six months to two years are known as _____.
tactical plans
what does it mean for a manager to rate their lpc low?
task oriented leader would be more effective under conditions where the environment was either good or poor
Studies of hundreds of technological innovations have shown that nearly all technology cycles follow _____.
the S-curve pattern of innovation
leader position power
the ability of the leader to allocate rewards or punishments to group members
leader-member relations
the ability of the leader to influence followers
competitive advantage
the ability to outperform other organizations by producing goods and services more efficiently.
The Franchise Disclosure Document (FDD) provides
the accepted format for satisfying the franchise disclosure requirements of the FTC.
Churning is
the action by franchisors to void the contracts of franchisees in order to sell the franchise to someone else and collect an additional fee.
The franchisor also provides
the business expertise (marketing plans, management guidance, financing assistance, site location, training, etc.) that otherwise would not be available to the franchisee.
What does the business plan describe?
the business model
emotional intelligence
the capacity to manage one's moods and emotions and the moods and emotions of others.
need for affiliation (nAff)
the degree to which a person strives to be liked, maintain good interpersonal relations, an get along with others.
need for achievement (nAch)
the degree to which a person strives to succeed at challenging tasks and meet personal standards of excellence.
task structure
the degree to which jobs are clearly defined
charisma
the effect that a leader has on others, not a set of behaviors. -a set of communication qualities that can be learned
Before becoming a franchisor, consider
the efficiency of your business model, how you will finance growth, what expert assistance you will need, the content of your operations manual, government disclosure requirements, and businesyour ability to add long-term value for franchisees.
Internal locus of control
the extent to which people believe they have control over what happens to them
Groupthink is most likely to occur when:
the group is insulated from others with different perspectives
Groupthink is most likely to occur when:
the group is insulated from others with different perspectives.
corporate level strategy
the highest level of strategic management - focusing on the org as a whole ("what industry should we be in?")
organizational strengths
the internal skills and capabilities that give the organization special competencies and competitive advantages in executing strategies in pursuit of its mission
business level strategy
the middle level of strategic management -- senior managers below the c suite create these strategies that focus on INDIVIDUAL BUSINESS UNITS (product lines) "how will we compete in this market?"
suppliers bargaining power
the more concentrated the industry, the greater the bargaining power of suppliers -- if there are only a few firms that could supply the product, however, each individual supplier has a lot of bargaining power
Piggyback franchising is
the operation of a retail franchise within the physical facilities of a host store.
stockholders
the owners of a stock
stakeholders
the people and groups that have a claim on and a stake in the company because they supply it with productive resources .
synergy
the performance gains resulting from coordination among multiple systems.
Change agent
the person formally in charge of guiding a change effort
the role of strategy
to generate and sustain value via the linkages between position, resources, and organization
gift of grace
took the term of charisma from the corresponding greek work, which was used in the literature of early christianity and means the gift of grace.
A Franchise Disclosure Document (FDD) is a detailed statement of such information as the franchisor's finances, experience, size, and involvement in litigation. a. True b. False
true
An example of a non-quantitative factor inbuying a business is future community development
true
VRIO analysis
used to analyze the competitive potential of a resource or capability: -Value (valuable resource if it allows a firm to exploit an opportunity or neutralize a threat) -Rarity (is the resource controlled by any other firms? is it rare enough?) -Imitability (is the resource costly to imitate?) -Organization (is the firm organized to capitalize on the resource?)
cost-leadership strategy
used to keep the costs and the prices of a product or service below those of competitors to target a wider market -- requires a business to have access to capital, process engineering, tight controls, etc.
differentiation strategy
used to offer products or services that are of unique and superior value compared to those of competitors and to target a wider market
Carlos is doing a VRIO analysis for a product his company is thinking about producing. The first question he asks is, "Does this new capability allow us to minimize the threat of the main competitor gaining more market share?" He decides the answer to this question is "yes." Which aspect of the VRIO analysis does this question answer?
value
In the large city where Cassandra lives, many people are asking for her restaurant to deliver food to their offices. Her restaurant has never delivered food before but since so many people have requested this service Cassandra decides it's a good idea to do it. In a VRIO analysis, Cassandra has determined the ____ of this capability.
value
needs based positioning
when a firm attempts to serve most or all needs of a particular group of customers -- works well when groups of customers have different needs and a narrowly tailored set of activities can best serve them (ex: IKEA do it yourself)
vertical integration
when a firm expands into the industries that provide supplies used in producing its products, or into the industries that distribute and sell its products
variety based positioning
when a firm produces a subset of an industry's products or services -- example: Jiffy Lube focuses almost exclusively on oil changes
access based positioning
when a firm segments customers who are accessible in different ways rather than on actual differences between them -- due to geography, age, etc. A firm uses this to serve the BROAD NEEDS OF MANY CUSTOMERS (ex: Uber)
unrelated diversification
when an organization operates several unrelated businesses
When would a company use a VRIO analysis?
when deciding whether or not a new product might work in the marketplace
mission statement
where the an organization's reason for being is expressed
House's Path-Goal
which theory assumes leaders are flexible and that they are able to change their style of leadership as the situation requires?
When significant improvements in performance can only be gained through radical new designs or new performance-enhancing materials, it is likely that a company is at the _____.
end of the technology cycle
Xamber Tools, a metal tool manufacturing firm, is facing a threat of organizational decline due to the rising costs of raw materials, decreasing profits and lower market share. To fix these problems, the management decides to cut costs of production to increase efficiency and profit. The cost cut does not help the company, and the company eventually files for bankruptcy. In this scenario, Xamber Tools is most likely in the _____ of organizational decline.
faulty action stage
A specific group of customers with an identifiable but narrow range of product or service interests refers to:
niche market
Damien Richard is the CEO of QuickShop, a chain of supermarkets. QuickShop is soon going to employ the latest technology, which will help customers reduce their shopping time by an ask-and-get approach. In this approach, a customer has to just name the product, and the robots will bring it to them. QuickShop's employees are worried about losing their jobs if this technology is employed. On speaking to several of the employees, Damien finds that many of them have misguided opinions about the implementation of the technology, causing them to have insecurities. What should Damien do to help them adapt to the change more easily?
He must educate his employees about the need for the change and explain its benefits to them before employing it
Which of the following statements is true about the compression approach to managing innovation?
It aims at consistent improvement of existing designs
In terms of change tools and techniques, which of the following is true of organizational development?
It emphasizes employee participation in diagnosing, solving, and evaluating problems.
S-curve pattern of innovation
pattern of technological innovation characterized by slow initial progress, then rapid progress, and then slow progress again as a technology matures and reaches its limits
In the context of managing change, _____ support the status quo of an organization
resistance forces
Technological lockout
the inability of a company to competitively sell its products because it relies on old technology or a nondominant design
For the 10 years ending 2010, one of the most dramatic trends has been?
the increase in minority business owners.
Discontinuous change
the phase of a technology cycle characterized by technological substitution and design competition
Incremental change
the phase of a technology cycle in which companies innovate by lowering costs and improving the functioning and performance of the dominant technological design`
Technological discontinuity
the phase of an innovation stream in which a scientific advance or unique combination of existing technologies creates a significant breakthrough in performance or function
When Red Arc Enterprises, a shipping company, was merged with a larger shipping company, there was a strong resistance to change among the employees of Red Arc. When the CEO of Red Arc got to know of this, he met everyone and explained why the change was necessary and how it could serve to benefit everyone. According to Kurt Lewin, Red Arc is in the _____ stage of managing organizational change.
unfreezing
Multifunctional teams
work teams composed of people from different departments
Small business accounts for about what proportion of U.S. firms with employees?
99%
Which of these is not a motivation for founding a company?
Community satisfaction
When Fletcher Motors, an automobile manufacturer, learned that it took longer than any other manufacturer to assemble a vehicle, it purchased existing flexible manufacturing systems to replace its older ones. Which stage of the technology cycle is illustrated in the scenario?
Discontinuous change
in the context of the experiential approach to innovation, which of the following is true of design iteration?
Frequent design iterations improve understanding.
____ is the successful implementation of creative ideas in organizations.
Organizational innovation
Which of the following occurs in the adoption stage of organizational development interventions?
Organizational members accept ownership and responsibility for the change, which is then carried out through the entire organization.
A change in how we fundamentally see a situation is called a--
Paradigm shift
In an organization, which of the following acts as a hindrance to a creative work environment?
Presence of internal conflict
Explain why innovation matters to companies.
Technology cycles typically follow an S-curve pattern of innovation. Early in the cycle, technological progress is slow, and improvements in technological performance are small. As a technology matures, however, performance improves quickly. Finally, as the limits of a technology are reached, only small improvements occur. At this point, significant improvements in performance must come from new technologies. The best way to protect a competitive advantage is to create a stream of innovative ideas and products. Innovation streams begin with technological discontinuities that create significant breakthroughs in performance or function. Technological discontinuities are followed by discontinuous change, in which customers purchase new technologies, and companies compete to establish the new dominant design. Dominant designs emerge because of critical mass because they solve a practical problem, or because of the negotiations of independent standards bodies. Because technological innovation both enhances and destroys competence, companies that bet on the wrong design often struggle, while companies that bet on the eventual dominant design usually prosper. When a dominant design emerges, companies focus on incremental change, lowering costs, and making small but steady improvements in the dominant design. This focus continues until the next technological discontinuity occurs.
Discuss the different methods that managers can use to better manage change as it occurs.
The basic change process involves unfreezing, change intervention, and refreezing. Resistance to change stems from self-interest, misunderstanding, and distrust as well as a general intolerance for change. Resistance can be managed through education and communication, participation, negotiation, top management support, and coercion. Knowing what not to do is as important as knowing what to do to achieve successful change. Managers should avoid these errors when leading change: not establishing a sense of urgency, not creating a guiding coalition, lacking a vision, undercommunicating the vision, not removing obstacles to the vision, not creating short-term wins, declaring victory too soon, and not anchoring changes in the corporation's culture. Finally, managers can use a number of change techniques. Results-driven change and the General Electric fastworks reduce resistance to change by getting change efforts off to a fast start. Organizational development is a collection of planned change interventions (large-system, small-group, person-focused), guided by a change agent, that are designed to improve an organization's long-term health and performance.
Discuss why not changing can lead to organizational decline.
The five-stage process of organizational decline begins when organizations don't recognize the need for change. In the blinded stage, managers fail to recognize the changes that threaten their organization's survival. In the inaction stage, management recognizes the need to change but doesn't act, hoping that the problems will correct themselves. In the faulty action stage, management focuses on cost cutting and efficiency rather than facing up to the fundamental changes needed to ensure survival. In the crisis stage, failure is likely unless fundamental reorganization occurs. Finally, in the dissolution stage, the company is dissolved through bankruptcy proceedings; by selling assets to pay creditors; or through the closing of stores, offices, and facilities. If companies recognize the need to change early enough, however, dissolution may be avoided.
Discuss the different methods that managers can use to effectively manage innovation in their organizations.
To successfully manage innovation streams, companies must manage the sources of innovation and learn to manage innovation during both discontinuous and incremental change. Because innovation begins with creativity, companies can manage the sources of innovation by supporting a work environment in which creative thoughts and ideas are welcomed, valued, and encouraged. Creative work environments provide challenging work; offer organizational, supervisory, and work group encouragement; allow significant freedom; and remove organizational impediments to creativity. Discontinuous and incremental change require different strategies. Companies that succeed in periods of discontinuous change typically follow an experiential approach to innovation. The experiential approach assumes that intuition, flexible options, and hands-on experience can reduce uncertainty and accelerate learning and understanding. A compression approach to innovation works best during periods of incremental change. This approach assumes that innovation can be planned using a series of steps and that compressing the time it takes to complete those steps can speed up innovation.
Design iteration
a cycle of repetition in which a company tests a prototype of a new product or service, improves on that design, and then builds and tests the improved prototype
Product prototype
a full-scale, working model that is being tested for design, function, and reliability
Organizational development
a philosophy and collection of planned change interventions designed to improve an organization's long-term health and performance
