AOM Final

Geraldo often would rather go fishing than work his business. According to Stephen Spinelli and Robert Adams, which entrepreneurial characteristics does Geraldo lack? a. Commitment b. Courage c. Creativity d. Tolerance of risk

a. Commitment

Eric Ries and Steve Blank popularized a concept that can make the process of starting a new venture less risky by using an interactive process, which they called a. a lean startup b. pivoting c. the build-test-retest loop d. a value proposition

a. a lean startup

Before signing a franchise contract, a potential franchisee should obtain the services of which of the following a. a union representative, an attorney, and a technical writer b. an attorney, an accountant, and a banker c. a banker, an accountant, and a contract law consultant d. an accountant, another franchisee, and a banker

b. an attorney, an accountant, and a banker

Which of the following issues would not be addressed in a short plan a. the problem that needs to be solved for customers b. an in-depth analysis of critical factors c. measures used to gauge success d. milestones to be met

b. an in-depth analysis of critical factors

Which of the following is NOT one of the four stages of the entrepreneurial process? a. harvesting the business b. analyzing the industry c. identifying an attractive opportunity d. acquiring the critical resources needed for growing the business

b. analyzing the industry

The quote "Good artists borrow; great artists steal" is the principle that launched which of the following companies? a. tesla inc. b. apple computer c. amazon d. xerox

b. apple computer

In a family business, the business' goal is to a. create value for family members b. create value for customers c. emphasize competition, flexibility, and unity d. emphasize stability, diversity, and flexibility

b. create value for customers

A U.S. manager is upset with the company's overseas representative for paying a small "access fee" to a local customs official to ensure the expedited release of a customer order. The manager's belief such payments are wrong reflects a sense of _____. a. cultural insensitivity b. ethnical elitism c. ethnical imperialism d. cultural integrity

c. ethnical imperialism

A family business constitution is sometimes labeled a a. business plan b. by-law guide c. family creed d. succession plan

c. family creed

Mark is the owner of Delectable Delights, a specialty store offering chocolates, candies, and fruit baskets. After a recent analysis of the competitive environment, Mark concluded that three distinct consumer segments exist for his products - A, B, and C consumers. In an effort to maximize the effectiveness of its strategy, Mark has decided to limit his efforts to fulfilling the needs of A consumers. He is employing a _____ strategy. a. multi segmentation b. selective c. focus d. concentration

c. focus

Business plan software packages a. focus mostly on preparing slides to present the business concept to prospective investors b. spawn creativity and flexibility on the part of the entrepreneur c. help an entrepreneur think through the important issues in starting a new company d. offer a simple formula that leads startups to success

c. help an entrepreneur think through the important issues in starting a new company

Adam has contracted with about a third of the dozens of artisans in his town in the mountains of South Carolina. His reputation has grown; he now believes the sky's the limit for this web page design and maintenance business. What kind of small business does Adam have? a. Lifestyle business b. microbusiness c. high-potential venture d. attractive small firm

c. high-potential venture

A corporate manager chafes under red tape and bureaucratic regulations until finally deciding to start a separate business. The apparent reward he seeks is a. community service b. a satisfying way of life c. independence d. the satisfaction of working with people

c. independence

Walter wanted to be able to make decisions about issues that directly affected his department but in his corporation, the managers made all the decisions. So Walter left the corporation and started his own firm. Walter was looking for: a. personal fulfillment b. personal satisfaction c. independence d. financial rewards

c. independence

Legend holds that Abraham Lincoln walked miles to return two cents change to a customer. His actions demonstrate a. customer focus b. quality performance c. integrity and responsibility d. social entrepreneurship

c. integrity and responsibility

If a student copies a favorite CD and gives it away to a friend to use, the student is engaged in the theft of ____ property. a. collective b. intangible c. intellectual d. real

c. intellectual

A business model a. is only important for startups with a large amount of uncertainty b. is intended to provide evidence on whether a concept is viable, not if it can be profitable c. is made up of a revenue model, cost structures, and required resources to grow the business d. forces the entrepreneur to be more disciplined about financial projections

c. is made up of a revenue model, cost structures, and required resources to grow the business

A business plan a. is best for telling insiders about the company b. is more important than the final outcome c. is not the business d. will ensure success

c. is not the business

Which of the following types of small businesses makes up the largest sector of the US economy? a. high-potential ventures b. gazelles c. lifestyle businesses d. attractive small firms

c. lifestyle businesses

Jeffery's job is to identify potential businesspeople in his country who might want to do business using a particular brand name. When the contract is signed, Jeffery then provides training to the businessperson. Jeffery is most likely a a. franchisee b. franchisor c. master licensee d. co-brander

c. master licensee

Jan and Jill started a business 20 years. Jill recently stepped down; her daughter Jenny has agreed to start managing the company with Jan's help; and the eventual goal is for Jenny to run the entire company. This process between Jan and Jenny is called ____. a. a sibling partnership b. a family consortium c. mentoring d. nepotism

c. mentoring

What do the numbers stand for in Guy Kawasaki's 10/20/30 rule for pitches? a. number of attendees/slides/minutes b. number of selling points/slides/font point size c. number of slides/minutes/font point size d. number of visual aids/slides/minutes

c. number of slides/minutes/font point size

Isabella overheard her customers discussing their desire for more baked treats suitable for diabetics. Immediately she added sugar-free items to her inventory. Isabella has strong: a. creativity b. leadership abilities c. opportunity obsession d. tolerance of risk

c. opportunity obsession

____ refers to the identification of new products or services that may lead to promising businesses. a. focus-based decision making b. elasticity c. opportunity recognition d. cost-benefit analysis

c. opportunity recognition

Miriam opened a yarn craft store in her small town based on her personal interests and hobbies. There were no competitors locally; the merchandise was readily available; and she had the initial capital to open the store. Yet her business failed. Too few customers visited her store. What was Miriam's fatal flaw? a. The merchandise was patent protected b. Miriam could not raise enough capital c. Miriam lacked industry knowledge d. Miriam ignored market limitations

d. Miriam ignored market limitations

Marathon Sporting Goods recently received an award for its outstanding customer service and its dedication to using eco-friendly practices. Marathon's dedication to its customers and the environment is an example of a. a sustainable small business b. ethnical relativism c. social entrepreneurship d. ethnical imperialism

a. a sustainable small business

Tangible resources include a. cash reserves, manufacturing equipment, and an office building b. cash reserves, management expertise, and a favorable reputation c. management expertise, a favorable reputation, and manufacturing equipment d. intellectual property rights, manufacturing equipment, and an entrepreneur's personal network of contacts and relationships

a. cash reserves, manufacturing equipment, and an office building

The most beneficial plan when facing significant change in the external environment is a ______ plan. a. comprehensive b. narrative c. subjective d. short

a. comprehensive

The socioemotional commitment of family members to the firm occurs along all of the following dimensions EXCEPT a. continuity of the business's legacy b. identification of family members with the firm c. binding social ties d. emotional attachment of family members

a. continuity of the business's legacy

A digital ID tag collects data on consumer' buying habits related to a particular Internet address is known as a a. cookie b. bot c. spider d. contact signature

a. cookie

Martin is creating the part of his business plan that includes the name, address, website, and logo of his company. Martin is working on the a. cover page b. table of contents c. executive summary d. company description

a. cover page

Skimming is an unethical business practice involving a. fraudulent reporting of income for income tax purposes b. employees taking cash from the cash register c. sales associates offering gifts and inducements to purchasers d. managers of competing firms agreeing to charge high prices

a. fraudulent reporting of income for income tax purposes

To ensure the success of a family business retreat, David Lansky, CEO of a family business consulting firm, suggests that which of the following guidelines be followed? a. give everyone a chance to participate b. accomplish as many goals, both small and large, as possible c. feel free to deviate from the agenda d. always let an outside expert or facilitator coordinate early sessions

a. give everyone a chance to participate

Small enterprises hire 43 percent of all ______ employees. a. high-tech b. male c. medical d. female

a. high-tech

Franchisors support their franchisees by doing all of the following EXCEPT a. hiring employees b. reducing purchasing costs c. designing promotional campaigns d. providing training

a. hiring employees

The advocacy group Business for Social Responsibility contends that which of the following is a long-term benefit of ethnical and responsible business practices? a. improved financial performance b. ironclad customer loyalty c. increased customer turnover d. fewer regulatory situations

a. improved financial performance

Although unethical practices receive extensive attention in the news, most entrepreneurs and other business leaders are people of principle, whose ______ regulates their quest for profits. a. integrity b. self-sacrifice c. synchronous behavior d. loyalty

a. integrity

Two general approaches that can help identify business ideas are _____ and ______ analyses. a. outside-in; inside-out b. industry; competitve c. upside-down; inside-out d. upward; downward

a. outside-in; inside-out

Which of the following is an almost certain way to fail as an entrepreneur? a. overestimate what you can do b. tolerate uncertainty c. share ownership in the business in an equitable way d. focus on a niche market

a. overestimate what you can do

In a family business, the interests of the family and the interests of the business are best described as a. overlapping b. conflicting c. coinciding d. having no relationship with each other

a. overlapping

The marketing plan should include which of the following topics? a. pricing strategies b. the degree of patent or copyright protection c. the spending habits of potential customers d. competitors' existing distribution channels

a. pricing strategies

According to a study by the National Federation of Independent Business the most common source of new ideas for small business startups is a. prior work experience b. hobbies and personal interests c. a chance happening d. existing records of a business

a. prior work experience

Zelda worked for years in a medical clinic as a builder and coder. Now she operates her own billing service for several doctors. Zelda has a(n) _______ personality. a. technician b. manager c. entrepreneur d. artisan

a. technician

Jill is writing a business plan for a small home based operation. If well written, the business plan will assist her in determining if a. the business aligns with her personal goals b. an investor would be a perfect fit for the proposed company c. suppliers can be found for the operation d. outsiders can be made into insiders

a. the business aligns with her personal goals

Which of the following statements is an example of an economic trend? a. the federal reserve announces that it will decrease the interest rate charged to banks b. congress passes legislation that increases the tax rate on corporations c. a new computer chip is developed that will allow for miniaturization of many electronic devices d. the European Union declares an increase in tariffs on all agricultural goods

a. the federal reserve announces that it will decrease the interest rate charged to banks

When considering the content of a comprehensive business plan, an entrepreneur should think first and foremost about a. the opportunity, as identified by his or her feasibility analysis b. formulating effective strategies and financial projections c. who will be reviewing the plan d. how to protect the confidentially of the plan

a. the opportunity, as identified by his or her feasibility analysis

Which of the following is the foundation of all relationships, including those in business? a. trust b. tolerance c. quality performance d. acceptance

a. trust

Which of the following statements about using available family talent in the succession plan is true? a. Younger family members working in the business should realize that mistakes early on in their careers should be considered in their future advancement b. If the available talent is not sufficient inside the company, the owner must bring in outside leadership or supplement family talent to avoid a decline in the business under the leadership of second- or third-generation family members c. If a younger family member would like to advance his or her career by working on a new direction for the company, a negative decision by his or her parent means he or she should not discuss his or her ideas with the board of directors d. It is rare a younger member will have the skill set to rescue a struggling company; therefore, younger members should not be considered for a succession plan

b. If the available talent is not sufficient inside the company, the owner must bring in outside leadership or supplement family talent to avoid a decline in the business under the leadership of second- or third-generation family members

Morris built a thriving business by selling tailor-made clothing at off-the-rack prices. All other custom-clothing stores charge much higher prices. We can say that Morris has a(n) a. a core competency b. a competitive advantage c. a serendipity d. opportunity alertness

b. a competitive advantage

At a minimum, a business plan should include all of the following elements EXCEPT a. a significant amount of hard evidence b. a primary focus on the products the entrepreneur is selling c. candor about the risks, gaps, and assumptions that might be proved wrong d. a logical statement of a problem and its solution

b. a primary focus on the products the entrepreneur is selling

Candace sells the muffins in her bakery at a higher price than the big-box grocery but she has a steady stream of customers willing to pay what she asks. Candace also supports local charities. What would likely happen if she lowered her prices and stopped her charitable contributions? a. income taxes would decrease b. customers would go elsewhere c. business would increase d. none

b. customers would go elsewhere

Michaela is using the Ethics Resource Center's decision-making process to resolve an ethnical dilemma. She has identified all the solutions to her problem. What is Michaela's next step? a. choose a solution as quickly as possible, as time is of the essence b. evaluate each of the identified alternatives c. choose an obvious solution that has been used in the past d. discard any "off-the-wall" solutions

b. evaluate each of the identified alternatives

Entrepreneurs should think carefully about their community commitments, because building a business on a foundation of "doing good" may add to a small company's a. bottom line b. financial burden c. payroll d. local profile

b. financial burden

A Harris poll inquiring into the reasons that entrepreneurs give for owning a company found that the number-one reason is to a. fill a niche b. improve financial well-being c. be the boss d. follow a passion

b. improve financial well-being

An Ebay retailer selling counterfeit Gucci and Louis Vuitton handbags is in violation of laws related to a. Internet fraud b. intellectual property c. bait-and-switch marketing d. ethical imperialism

b. intellectual property

Clark, the owner of DEF LLC, bragged about hiding company income from the IRS but was surprised when he learned his sales manager was accepting kickbacks from customers. Clark should have remembered a. kickbacks are common in his industry b. lapses in integrity are passed down from superiors to subordinates c. his sales manager could alert the IRS and Clark could be prosecuted for tax evasion d. bragging nearly always leads to trouble

b. lapses in integrity are passed down from superiors to subordinates

In a small organization, a(n) _______ has much greater influence on employees than _________ does. a. code of ethics; a leader behavior b. leader's behavior; his or her stated philosophy c. ethics training program; the leader's stated philosophy d. code of ethics; the amount of legislation affecting the organization

b. leader's behavior; his or her stated philosophy

Many entrepreneurs are highly motivated by the prospect of a. an easy life b. making money c. freedom from long hours d. job security

b. making money

Although Abner started the business by making his own product, his greater talent is planning for the future and arranging for growth. Abner has a(n)___________ personality. a. technician b. manager c. entrepreneur d. opportunistic

b. manager

Because a firm has considerable discretion in reporting performance results, financial reports can sometimes be _____ without technically being illegal. a. inaccurate b. misleading c. unreliable d. bellicose

b. misleading

The sources and uses table is part of the ______ of the business plan. a. critical risks section b. offering section c. exit strategy d. financial plan

b. offering section

Jeff Bezos' original business plan involved taking orders for books and having the items shipped directly from the publisher to the customer. He modified the plan to include other products such as toys and decided to buy the toys from the producers and ship them from his own warehouse. This modification of the original plan is called: a. change of plan b. pivot c. serendipity d. competitive move

b. pivot

A firm understanding income is guilty of a. bait and switch b. skimming c. scaling d. relativism

b. skimming

The idea behind ________ is that gains and losses in non financial characteristics of the relationship between the family and the business affect strategic and policy decisions regarding the company. a. co-preneurship b. socioemotional wealth c. nepotism d. altruism

b. socioemotional wealth

The registry maintained by the US Small Business Administration a. lists warnings about certain franchisors b. speeds up loan processing for franchisees c. rates franchisors according to a four-star rating d. registers all franchisors operating in the US

b. speeds up loan processing for franchisees

All of the following are trends in the general environment EXCEPT a. demographic trends b. strategic trends c. global trends d. sociocultural trends

b. strategic trends

Which of the following usually occurs in the first several meetings of a family council? a. a board of directors is elected b. a code of ethics is generated c. a family constitution is generated d. all of these are correct

c. a family constitution is generated

Bill Gates and Steve Ballmer, founders of Microsoft, would be considered a. franchisors b. franchisees c. an entrepreneurial team d. sole proprietors

c. an entrepreneurial team

In considering the role of younger family members, the best philosophy is to recognize that a. a child should have a right to a job in the business if he or she desires b. no family member should be hired at any level c. children should have a right to choose their own careers d. sibling rivalry will always be an issue with second-generation managers

c. children should have a right to choose their own careers

Which of the following would be classified as an opportunity when conducting a SWOT analysis? a. positive reputation in the marketplace b. slowed market growth c. emerging technologies d. strong network of personal contacts

c. emerging technologies

Economist Israel Kirzner proposed that entrepreneurs have a unique capability, which he called _____, to recognize existing opportunities for businesses. a. innovative thinking b. market awareness c. entrepreneurial alertness d. opportunity recognition

c. entrepreneurial alertness

Bob and his sister Betty are co-owners of their late parents' business. Bob actively manages the business; Betty supplies only capital from her inheritance but does not work in the business. They squabble over the distribution of profits from the business. Bob likely sees his sister as a ___________ while Betty views her brother as a _____________. a. predator; parasite b. co-owner; employee c. parasite; predator d. stockholder; manager

c. parasite; predator

Each month, Tomas must report his gross income and pay a percentage of that amount to his franchisor. This percentage is a. negotiable every month b. finance charges c. royalty fees d. an investment cost

c. royalty fees

Today's smartphones bear little resemblance to the original analog cell phones of the early 1990s. Their capabilities exceed those of the early desktop computers. It seems nearly every adult carries at least one cell phone. Which of the trends does this represent? a. sociocultural b. demographic c. technological d. global

c. technological

In what way is a franchisee's freedom to run the business greatly reduced? a. most franchisors are located near the franchisee b. the franchisees are technically employees of the franchisor c. the franchisee is bound by the terms of the franchise contract d. the franchisee is completely dependent on the franchisor for funding

c. the franchisee is bound by the terms of the franchise contract

Which of the following statements about a macro-level and micro-level analysis is true? a. a macro-level analysis assesses the overall attractiveness in which the startup will be established b. a macro-level industry assessment is focused on the probability of a startup's success over the long run c. a macro-level analysis should clarify the unique vale that the startup idea would offer customers d. a macro-level analysis is focused on identifying market niches

d. a macro-level analysis is focused on identifying market niches

Which of the following questions is key for forecasting revenues? a. who are the most likely customers b. what events will trigger the need or desire for the type of product or service c. how will customers make decisions on whether to buy the product or service d. all of these are correct

d. all of these are correct

Milton Friedman argued that businesses a. should avoid social responsibility whenever it is possible to do so b. should be required to use their resources to meet their social responsibilities c. can only earn profits if they do so in a socially responsible manner d. are justified in being socially responsible only if doing so enhances the firm's value

d. are justified in being socially responsible only if doing so enhances the firm's value

When dealing with weaknesses in a business plan, the entrepreneur should a. use technical jargon to confuse readers b. ignore them because they might not attract investors c. assume that investors will not find them d. be straightforward with them and have an action plan

d. be straightforward with them and have an action plan

Marketplace Farms is a regional cooperative of apple and orange growers. In order to compete against larger regional growers, the company relies on inexpensive packaging processes and lower cost labor instead of machines. Marketplace Farms is relying on what type of strategy? a. price-based b. marketing-based c. efficiency-based d. cost-based

d. cost-based

When a company delivers an excellent product with first-rate service, ____ and _____ are likely to follow. a. profits; a good reputation b. customer satisfaction; profits c. healthy sales; profits d. customer satisfaction; healthy sales

d. customer satisfaction; healthy sales

The recruiter from IBM made William an offer almost too good to be true. The problem was William's dad, who always expected William to join him in running the family business. William's difficulty in accepting either offer may be based on the fear of: a. failure b. success c. commitment d. disappointing his father

d. disappointing his father

A business plan is more likely to make a difference when the entrepreneur and management team a. identify all unexpected events b. make decisions realizing that change may hurt the new company c. understand the plan is static d. effectively execute the plan

d. effectively execute the plan

Recent research findings suggest that companies that are successful in transferring ownership and management from one generation to the next are characterized by a. centralized management b. diversification c. transfer of equal ownership shares among all heirs d. entrepreneurial behavior

d. entrepreneurial behavior

Tim is married to Susan. Tim's parents are his ______, and Susan's parents are Tim's ______. a. family of attachment; family of origin b. natural family; inherited family c. natural family; extended family d. family of origin; family of attachment

d. family of origin; family of attachment

An example of a business adversely affected by environmental protection laws would be a a. glass manufacturer b. military contractor c. fast-food restaurant d. fast lube and oil center

d. fast lube and oil center

Xavier believed his labor was only making others rich while he struggled from paycheck to paycheck. He started his own small business and now labors only for himself. Xavier's motivation is: a. personal fulfillment b. personal satisfaction c. independence d. financial rewards

d. financial rewards

A business plan can be thought of as a a. crystal ball picture b. money plan c. contingency plan d. game plan

d. game plan

A common problem for a founder in passing the business on to a daughter or son is a. introducing the child to outsiders such as bankers b. finding a suitable position fo the son or daughter within the business c. arranging the transition from part-time to full-time employment d. giving little thought to the child's talent, aptitude, and temperament

d. giving little thought to the child's talent, aptitude, and temperament

Entrepreneurs who want to start or build a business based on inside-out analysis will first need to a. have an in-depth understanding of the general environment b. select and implement a focus strategy c. determine the strength, position, and likely responses of rival businesses d. have a solid grasp of the resources and capabilities that are available to them

d. have a solid grasp of the resources and capabilities that are available to them

To protect the interests of both family and the business in a family business, the owner should a. recognize a basic obligation to supply family members with employment of some types b. refuse to hire family members but instead reward them with generous dividends c. personally make all personnel decisions affecting family members d. identify the positions, if any, that are reserved for family members when hiring nonfamily employees

d. identify the positions, if any, that are reserved for family members when hiring nonfamily employees

One of the primary goals of a prospective investor is to a. make as much money as possible b. minimize losses c. avoid risk at all costs d. maximize potential return on an investment

d. maximize potential return on an investment

Carmen operates a franchise tanning salon. Negative publicity about the effects of tanning has diminished her ability to grow the business. Carmen has a(n): a. high-potential venture b. attractive small firm c. gazelle d. microbusiness

d. microbusiness

Rick was sop successful with his Sweet Treats franchise that he opened several other Sweet Treats locations. Rick could best be described as a a. franchisor b. franchise c. master license d. multiple-unit owner

d. multiple-unit owner

The close relationship of business factors and family concerns in a family business are best described as a. separation of domains b. a generational gap c. an example of blood being thicker than water d. overlapping

d. overlapping

Tatiana was laid off from her manufacturing job and in desperation launched a business providing transportation services for the non-drivers in her community. We would classify Tatiana as: a. social entrepreneur b. creative entrepreneur c. corporate refugee d. reluctant entrepreneur

d. reluctant entrepreneur

Living above the workshop made it easy to involve the children in the daily business decisions. The children knew from the time they could write they were expected to work in and eventually manage and own the business. This family's commitment to the business is based on a. family control and influence b. identification of family members with the firm c. binding social tie d. renewal of family bonds to the firm though dynastic succession

d. renewal of family bonds to the firm though dynastic succession

Michael owns a dry-cleaning business. He is planning to retire at the end of the year and his son, Bryant, will take over the business. Bryant is a(n) a. intrapreneur b. corporate refugee c. franchisee d. second-stage entrepreneur

d. second-stage entrepreneur

An ethnical business not only treats customers and employees honestly but also acts as a good citizen in its community. These broader obligations of citizenship are called a. community commitment b. philanthrophy c. environmentalism d. social responsibilities

d. social responsibilities

In a business plan, the key statement in the financial plan is the a. break-even analysis b. estimate of returns and allowances c. salary expense statement d. statement of cash flows

d. statement of cash flows