Chapters 5-7 practice test

The first step in the rational decision-making model is to:

Define the situation

Because economic and competitive environments frequently change, organizations should

Develop contingency plans.

The goal of an intrapreneur is to

Develop new products and generate new profits for the corporation.

Franchisors may send reverse royalties to franchisees who

Feel their sales have been hurt by the franchisor's online sales.

A good business plan will

describe all aspects of the business, including product, the target market, the nature of the competition, any financial resources, and the owner's qualifications.

Middle managers are responsible for

developing tactical plans and controlling.

Which of the following statements about buying a franchise is most accurate?

Before purchasing a franchise, the buyer should carefully evaluate the franchise, the franchisor, his or her own situation, and the nature of the market.

For a prospective entrepreneur, enrolling in an introduction to business or small business management course offered through their community college

Can be helpful by offering them an opportunity to meet experienced small business owners.

A merger involving a software producer and a clothing manufacturer is an example of a (BLANK) merger.

Conglomerate

(BLANK) is the management function that involves determining whether an organization is progressing toward its goals, rewarding employees for doing a good job, and taking corrective action when they are not.

Controlling

A(n) (BLANK) is state-chartered legal entity with authority to act and to have liability separate from its owners.

Conventional corporation

A (BLANK) is an organization that is owned and controlled by the people who use it - producers, consumers, and workers with similar needs pool their resources for mutual gain.

Cooperative

The form of business ownership best suited to raising large amounts of money for expansion is the

Corporation.

One disadvantage of (BLANK) is the initial cost of formation.

Corporations

Double taxation means

Corporations pay taxes on their profits. If they distribute after-tax profits to the stockholders, the stockholders also pay taxes on the distribution.

(BLANK) planning is a part of contingency planning that is used to deal with sudden and unexpected changes in the business environment.

Crisis

In a company in which an effective vision has provided

Employees are likely to have a sense of purpose and a common set of values.

A business's size is measured

In relation to other firms in its industry.

The executive summary section of the business plan contains

Information that will capture the attention of bankers and other investors who receive many business plans every day .

(BLANK) is concerned with finding the right information and making that information accessible and understood by everyone in an organization.

Knowledge management

Which of the following activities is part of the planning function of management?

Looking at market forecasts to identify future business opportunities and challenges

Some people argue that business failures are

Lower than traditionally reported.

(BLANK) is the art of utilizing organizational resources to accomplish goals at work.

Management

Conversation with people who start their own business often reveal that

Many small business owners got their entrepreneurial idea from a previous job.

A (BLANK) is two firms combining to form one company.

Merger

When investors successfully take a firm private, the company's stock is

No longer sold to investors on the open market.

A(n) (BLANK) would be used by a department manager as a tool for making daily and weekly assignments.

Operational plan

Global franchising offers

Opportunities for both large and small franchises.

A significant disadvantages of owning a sole proprietorship is the

Overwhelming time commitment often required of the owner.

A market consists of potential buyer of a good or service. However, for a market to exist

People must have unsatisfied wants and needs as well as a willingness and ability to buy.

Which of the following would be a concern addressed in a strategic plan?

Should the firm make a long-term commitment to expand into new markets?

One of the best places for young entrepreneurs to start shopping for an SBA loan is a

Small Business Development Center.

A (BLANK) is a form of business that is owned, and usually managed, by one person.

Sole proprietorship

Which of the following best summarizes the type of leader future organizations are likely to need? In the future, organizations will need leaders who:

Supply a vision, establish corporate values, and promote corporate ethics.

To many businesspeople, one of the major attractions of a sole proprietorship is

The chance to be their own boss.

Which of the following statements is characterisitic of entrepreneurs?

They look at problems and see opportunities.

Which of the following activities would be part of the leading function of management?

Training and coaching workers to help them understand their jobs and preform it effectively

The Spotlight on Small Business box "Student Startups" features students who

Turned a passion into a business opportunity

One of the four primary functions of management is

controlling

To be considered part of a market, an individual must

have both a willingness to buy and the financial resources needed to buy.

When two companies in the same industry agree to become one firm, the result is called a

horizontal merger

When a firm makes use of SWOT analysis, one of its objectives is to

identify the things it does well as an organization and the things it needs to improve.

One of the challenges of running a home-based business is

keeping work and family tasks separate.

As firms make greater use of empowerment and teams, managers will find that they

must become more like coaches and counselors than bosses.

Small business employees

often find more job satisfaction than their counterparts in big business.

The most popular type of business for franchising is

restaurants.

The first step in controlling consists of

setting clear performance standards

In sole proprietorship, the profits earned by a business are

the property of the owner, except for taxes owed to the government.

One way to get into business is to buy an existing company. The value of the business used to determine a fair purchase price is based on:

the value of what the business owns, what it earns, and what makes it unique.

Which of the following best describes the outlook for small businesses in international markets?

the world is a larger, and potentially a more lucrative market than the U.S. domestic market.