MGMT 310 Exam 2 (9)

Which of the following was not identified in the textbook as an attribute of an effective board of directors?

A) Homogeneous set of experiences and talents

Which of the following statements is incorrect regarding boards of directors?

A) If a new venture organizes as a corporation, it is not legally required to have a board of directors, but it is strongly recommended.

A business ________ is an individual who gives professional or expert advice, on a volunteer or fee basis.

A) consultant

The members of heterogeneous teams are ________.

A) diverse in terms of their abilities and experiences

James Williams is the Chief Operating Officer of a startup in the health food industry. He is also a member of his firm's board of directors. In board of directors terminology, James is a(n) ________ director.

A) inside

n the context of boards of directors, a(n) ________ director is someone who is not employed by the firm.

A) outside

According to the textbook, although a board of directors has formal governance responsibilities, its most useful role is to ________.

A) provide guidance and support to the firm's managers

Jason Andersen just finished writing a business plan for a new type of office supply store. One thing Jason included in the "Management Team & Company Structure" section of his business plan is a chart that depicts the most important skills that are needed for his business and where skills gaps exist. Jason included a(n)________ in his business plan.

A) skills profile

Which of the following was not identified in the textbook as an element of a new venture team?

B) Suppliers and vendors

Which of the following statements is incorrect regarding founding teams?

B) Teams that are working together for the first time have an advantage over teams that have worked together before.

A board of directors' three formal responsibilities are to ________.

B) appoint the officers of the firm, declare dividends, and oversee the affairs of the corporation

A board of directors is typically made up of both ________ and ________ directors.

B) inside; outside

The fact that companies often falter because the people who start the firms can't adjust quickly enough to their new roles and because the firm lacks a "track record" with outside buyers and sellers, is referred to as the ________.

B) liability of newness

Which of the following statements is not true regarding the attributes of the founder(s) of a firm?

C) Founders with experience in the same industry as their new ventures will typically have "blinders" on and are typically not as effective as founders new to the industry.

Which of the following statements about advisory boards is incorrect?

C) Similar to a board of directors, an advisory board has legal responsibility for the firm in certain areas.

Shelly Cook recently launched a social network for chefs. One thing Shelly is thinking about is creating is a panel of experts who can provide her ongoing direction and advice regarding the future of her business. Shelly is thinking about creating a(n) ________.

C) advisory board

In the context of boards of directors, a(n) ________ director is a person who is also an officer of the firm

C) inside

A(n) ________ is a person who works for a business as an apprentice or trainee for the purpose of obtaining actual experience.

C) intern

According to the textbook, prior entrepreneurial experience ________.

C) is one of the most consistent predictors of future entrepreneurial performance

Savanna Combs opened a clothing boutique two years ago. Unfortunately, the boutique failed after 18 months. Savanna attributes the failure of her boutique to the facts that her employees couldn't adjust quickly enough to their new roles and that her boutique lacked a "track record" with outside buyers and sellers, which made it difficult to form partnerships and make sales. Savanna suffered from what research calls the ________.

C) liability of newness

A skills profile is a chart that depicts the ________.

C) most important skills that are needed in a business startup and where skills gaps exist

The process of building and maintaining relationships with people whose interests are similar or whose relationship could bring advantages to the firm is called ________.

C) networking

A ________ is the group of founders, key employees, and advisers that move a new venture from an idea to a fully functioning firm.

C) new venture team

Kathy Denver is preparing to launch a home security firm. The team of people that will launch Kathy's firm are as follows: Kathy (CEO), Trevor (VP-Finance), Shelia (VP-Sales), a four- person Board of Directors, a five-person Board of Advisors, and Kathy's primary investor, who will assume an advisory role. The group of people that will launch Kathy's firm is called its ________.

C) new venture team

The members of homogeneous teams are ________ in terms of their ________.

C) similar; abilities and experiences

The high failure rate among new ventures is due, in part, to the liability of newness, which refers to the fact that new companies often falter because ________.

C) the people who start the firms can't adjust quickly enough to their new roles and the firms lack a "track record" with outside buyers and sellers

Which of the following statements about advisory boards is incorrect?

D) A growing number of startups are forming advisory boards.

Which of the following qualities was not identified in the textbook as a preferred attribute of the founder(s) of a firm?

D) Prior experience working in a government or university position

A(n) ________ is a panel of experts who are asked by a firm's managers to provide counsel and advice on an ongoing basis.

D) advisory board

Calvin Tucker is in the process of launching an educational services firm. He plans to incorporate the firm. Because the firm will be incorporated, Calvin is legally required to have a ________.

D) board of directors

A board of directors' three formal responsibilities are to appoint the officers of the firm, oversee the affairs of the corporation, and ________.

D) declare dividends

A(n) ________ is a chart that depicts the most important skills that are needed in a new venture and where skills gaps exist.

D) skills profile

According to the textbook, which of the following statements is inaccurate regarding the size and composition of the founding team of a firm?

E) A founding team can be too big, causing communication problems and increasing potential for conflict.

Which of the following is incorrect regarding the typical role of consultants in business startups?

E) Help manage the day-to-day activities of the firm

Which of the following statements is untrue regarding founding teams?

E) It is generally believed that new ventures started by an individual have an advantage over new ventures started by a team.

Kelly Andersen founded a technology consulting firm several years ago. Her firm has grown rapidly and is financially successful. One thing that Kelly attributes her success to is that early on she assembled a panel of experts who provided her ongoing direction and advice about her business. What Kelly created is called a(n) ________.

E) advisory board

A(n) ________ is a person who is in business for themselves, works on their own time with their own tools and equipment, and performs services for a number of different clients.

E) freelancer

Adam Miller is a general partner in a venture capital firm that just funded Gold Coast Software, a software firm in Santa Barbara, California. Gold Coast Software is incorporated, and Adam has taken a seat on the firm's board of directors. In board of directors terminology, Keith is a(n) ________ director.

E) outside

A board of directors' three formal responsibilities are to appoint the officers of the firm, declare dividends, and ________.

E) oversee the affairs of the corporation

Homogeneous teams are diverse in terms of their abilities and experiences.

False

It is generally believed that new ventures started by an individual have an advantage over those started by a team.

False

More people are willing to serve on a company's board of directors than board of advisors.

False

Most boards of advisers have between 3 and 5 members.

False

Prior entrepreneurial experience is a poor predictor of future entrepreneurial performance.

False

Similar to a board of directors, an advisory board possesses legal responsibility for the firm.

False

A new venture team is the group of founders, key employees, and advisers that move a new venture from an idea to a fully functioning firm.

True

A skills profile is a chart that depicts the most important skills that are needed and where skills gaps exist.

True

A virtual assistant is a freelancer who provides administrative, technical, or creative assistance to clients remotely from a home office.

True

Although a board of directors has formal governance responsibilities, its most useful role is to provide guidance and support to the firm's managers.

True

An advisory board can be established for general purposes or can be set up to address a specific need.

True

An advisory board is a panel of experts who are asked by a firm's managers to provide counsel and advice on an ongoing basis.

True

Consultants fall into two categories-paid consultants and consultants who are made available for free or at a reduced rate through a nonprofit or government agency.

True

Founding teams that have worked together before, as opposed to teams that are working together for the first time, have an edge.

True

Networking is building and maintaining relationships with people whose interests are similar or whose relationship could bring advantages to a firm.

True

Prior entrepreneurial experience, relevant industry experience, and networking are attributes that strengthen the chances of a founder's success.

True

Studies show that more than one individual starts 50 to 70 percent of all new firms.

True

The fact that a corporation has a board of directors precludes it from having a board of advisors.

True

The term "liability of newness" refers to the fact that companies often falter because the people who start the firms can't adjust quickly enough to their new roles and because the firms lack "track records" with outside buyers and suppliers.

True