Managing Family Business Chapter 2

What is the most important practice in using family meetings to resolve internal conflicts? a. Active, two-way communication to address the sources of conflict b. Maintaining equality among later generations of family members in hiring, promotions, benefits, and other opportunities c. Avoiding secrecy to make sure that conflict doesn't arise from lack of information d. Reminding all family members to manage their emotions and act objectively for the good of the whole

a. Active, two-way communication to address the sources of conflict

Read the article provided and answer the following questions. "Close family ties, and a secret recipe, keep business going." Pittsburgh Post-Gazette [Pittsburgh, PA] 24 Dec. 2016. Business Insights: Essentials. Web. 6 Jan. 2017. http://bi.galegroup.com/essentials/article/GALE%7CA474869127/938af153941272a01e8c329371672e4b?u=tlearn_trl According to the article, which of the following is a pitfall that a family business can fall into? a. Failure to innovate b. Stretching themselves too thin c. Hiring non-family members to work in the business d. Using the same suppliers year after year

a. Failure to innovate

What is the most important feature of a family employment policy? a. To assure family members and nonfamily managers that employment decisions will be made fairly, transparently, and with the best interests of the company in mind b. To ensure that family members stay engaged and active in the company as the company grows and moves away from its roots c. To provide second- and later-generation leaders with a clear mandate for taking over control from the founder d. To manage the entry of relatives by marriage into the family business through prenuptial agreements and training in the family ethos

a. To assure family members and nonfamily managers that employment decisions will be made fairly, transparently, and with the best interests of the company in mind

How can a family business help its members stay committed to stewarding the family business? a. Make sure that the business stays liquid and provides individual gain for members b. Keeping family members, even inactive ones, engaged in the decisions and goals of the business c. Pay the family management less than market value to maintain high dividends for all family members d. Being scrupulously fair because of the zero-sum dynamic

b. Keeping family members, even inactive ones, engaged in the decisions and goals of the business

Read the article provided and answer the following questions. "Close family ties, and a secret recipe, keep business going." Pittsburgh Post-Gazette [Pittsburgh, PA] 24 Dec. 2016. Business Insights: Essentials. Web. 6 Jan. 2017. http://bi.galegroup.com/essentials/article/GALE%7CA474869127/938af153941272a01e8c329371672e4b?u=tlearn_trl According to the article, what is the number one thing that determines if a family-owned business will succeed generation after generation? a. There is a succession plan in place that determines who, in the next generation, will run the business. b. Someone in the next generation shares the passion for the business and has the appropriate skill set. c. The family discusses all aspects of the business every day. d. There is some level of innovation that occurs in the company.

b. Someone in the next generation shares the passion for the business and has the appropriate skill set.

How is a genogram helpful for running family businesses? a. It helps identify a line of succession to provide the business with stability. b. It documents family relationships to help identify instances of nepotism. c. It helps family members understand how important family events affect business and family relationships. d. It isn't; it is primarily helpful for outsiders who want to understand the dynamics of the family as the members already know everything in it.

c. It helps family members understand how important family events affect business and family relationships.

Both the story of the Bingham family and the story of the Blethen family show a. how family-run newspapers have responded to the change in the newspaper industry. b. the role of the board in family firm management. c. the importance of conveying family responsibility between generations. d. why family businesses must continue to grow to provide opportunities for family members to stay involved.

c. the importance of conveying family responsibility between generations.

What is an example of how a family business could apply the ECI-U model? a. Recognizing that family businesses will have less objective decision making than other businesses b. Avoiding having family members with personal disagreements working on the same project c. Emphasizing the importance of charisma and inspirational leadership in choosing a second-generation leader d. Creating governance rules that acknowledge the need to take emotional responses into account

d. Creating governance rules that acknowledge the need to take emotional responses into account

What is the best way to ensure that family goals and visions are carried forward to later generations? a. Ensure that family shareholders who aren't involved in day-to-day management see regular returns to remind them of the family's business value b. Create a trust that provides clear guidelines and limitations based on the founder's wishes c. Choose and train a successor early and raise them believing in the vision d. Develop a sense of the family legacy through regular discussion and family history projects

d. Develop a sense of the family legacy through regular discussion and family history projects

Which of the following is not a feature of the theory of family systems? a. Individuals can create new patterns of behavior that are different from the influences of their family of origin. b. Individuals may react to tension by following behaviors learned from their family of origin. c. Nonfamily members need to understand family dynamics. d. Family systems theory applies to one generation at a time and focuses on the dynamics in a single generation.

d. Family systems theory applies to one generation at a time and focuses on the dynamics in a single generation.

Which of the following is not a challenge to family unity regularly faced by family businesses? a. Failure to provide constructive discussion of sensitive issues b. Infrequent family councils or meetings c. Geographically-separated family members d. The presence of outside board members or managers

d. The presence of outside board members or managers

Read the article provided and answer the following questions. "Close family ties, and a secret recipe, keep business going." Pittsburgh Post-Gazette [Pittsburgh, PA] 24 Dec. 2016. Business Insights: Essentials. Web. 6 Jan. 2017. http://bi.galegroup.com/essentials/article/GALE%7CA474869127/938af153941272a01e8c329371672e4b?u=tlearn_trl Ricci's Italian Sausage successfully manages conflict because: a. they employ a staff of non-family members who do not play a role in decision-making. b. they offer only six or seven items, which means less things to argue over. c. they utilize a family mediator to resolve disputes. d. they have a common goal to make the company better for the next generation.

d. they have a common goal to make the company better for the next generation.