Management of organizations Chapter 5 questions

Which of the following is true of small businesses? a. Small businesses have a weak presence in the economy. b. Small businesses have no impact on the world's mature economies. c. Jobs are created solely by small entrepreneurial companies. d. Small firms specializing in international business create many new jobs.

. Small firms specializing in international business create many new jobs

Which of the following is required to help alert entrepreneurs to potential trouble? a. Sufficient capital b. A positive outlook on life c. Effective control systems d. Dedication

c. Effective control systems

Which of the following is true of most successful entrepreneurs? a. They succeed straight out of college. b. They succeed alone. c. They carefully analyze market conditions. d. They launch their ventures in their spare time.

. They carefully analyze market conditions.

Which of the following statements is true of new businesses? a. Insufficient capital can contribute to new business failure. b. Control systems are unimportant when starting a new business. c. A good outlook on life is irrelevant when starting a new business. d. Luck plays no role in the success of businesses.

a. Insufficient capital can contribute to new business failure.

Small-business investment companies (SBICs): a. take a more balanced approach in their choices than venture capital companies. b. have immediate participation loan programs. c. demand a representative on the board of directors of the business. d. have strict eligibility guidelines.

a. take a more balanced approach in their choices than venture capital companies.

Which of the following is an example of a business in the service industry? a. A department store b. A car rental agency c. A florist d. An automobile dealership

b. A car rental agency

Which of the following is true of SBA financial programs? a. Managers need approval from the SBA before making major decisions. b. Eligible firms must be unable to get private financing at reasonable terms. c. They supply capital in return for stock. d. They require a representative on the board of directors of a company.

b. Eligible firms must be unable to get private financing at reasonable terms

Which of the following is true of innovation? a. All successful software firms started out as large organizations. b. Small businesses supply over half of all innovations in the U.S. marketplace each year. c. All successful new start-ups are innovative dot-com companies. d. Innovations are less likely to come from small businesses than from big businesses.

b. Small businesses supply over half of all innovations in the U.S. marketplace each year.

Due to the strong economies of scale, small businesses generally do not do as well as large businesses in the _____ segment. a. construction b. manufacturing c. retailing d. transportation

b. manufacturing

Steven is a polymer scientist with the motivation and expertise needed to start his own business. If he chooses to finance his business in the same way that most new businesspeople finance theirs, he will: a. borrow money from a lender. b. rely on personal resources. c. form a strategic alliance. d. approach a venture capital company

b. rely on personal resources.

Which of the following is an advantage of a franchise? a. Its start-up costs are either very small or negligent. b. It allows a franchise to build a business from a scratch using its own business model. c. It lets franchisers grow by using the investment money provided by franchisees. d. It allows each franchise outlet to be vastly different from other outlets.

c. It lets franchisers grow by using the investment money provided by franchisees.

A niche market is: a. a market in which several large firms compete. b. an area of organizational threat. c. a segment of a market that is not currently being exploited. d. a market in which customer needs are generic in nature.

c. a segment of a market that is not currently being exploited.

Which of the following is false about control systems? a. A business may not survive without a good control system b. Effective control systems alert entrepreneurs to serious problems. c. Weak control systems can lead to serious problems. d. Control systems are not needed to keep a business on track.

d. Control systems are not needed to keep a business on track.

Which of the following statements on job creation is true? a. Business size, more than entrepreneurial business success, accounts for most new job creation. b. Small firms are the last to hire in times of economic recovery. c. Larger firms hire at a faster rate than smaller firms. d. Large companies are the last to lay off workers during economic downswings.

d. Large companies are the last to lay off workers during economic downswings.

Which of the following statements on small businesses is true? a. More major innovations come from big businesses than small businesses. b. All new start-ups are in the field of high-tech communication. c. Big companies are the first to lay off workers during economic downswings. d. Small businesses sell consumers most of the products made by big manufacturers.

d. Small businesses sell consumers most of the products made by big manufacturers. Hide Feedback

Which of the following is true of entrepreneurs? a. They hire professional managers to run their businesses. b. They assume the risk of the venture but are not actively involved in operating it. c. They run someone else's business. d. They take a personal stake in the success or failure of the business.

d. They take a personal stake in the success or failure of the business.

A retail business: a. sells directly to producers. b. requires fewer employees than wholesalers. c. offers products to wholesalers for sale. d. sells products manufactured by other firms.

d. sells products manufactured by other firms.

Miriam pools all her savings to open a bakery that specializes in wedding cakes. She bakes the cakes, runs the store, and creates a website that allows customers to place orders online. Miriam is a(n) _____. a. small-business investor b. venture capitalist c. entrepreneur d. wholesaler

entrepreneur

A small business: a. is publicly owned. b. is owned by one individual or a small group. c. has only one retail outlet. d. meaningfully influences its environment.

owned by one individual or small group

A two-person software development company with annual sales of $100,000 would be considered a: a. franchise. b. joint venture. c. small business. d. large business.

small business