Chapter 15 Assignment

T or F: the liquidy event stands for positioning the venture for the realization of a cash return for the owners and investors

True

T or F: the steps in developing a succession strategy, or understanding the contextual aspects, identifying successor qualities and carrying out the succession plan

True

T or F: there are two types of succession pressures: family, and non-family

True

Succession pressure inside the firm exists

When family members want to keep and manage the business

One advantage of the delayed entry strategy for the younger generation succeeding. The older generation of a family business is that

a successor's skills are judged with greater objectivity.

A type of successor, who is interested in efficiency, internal control, and effective use of resources, would be considered a

managerial successor.

The average life expectancy of a privately held firm is

24 years

Which of the following is not a barrier to succession for family members?

Concern about legacy

A typical example of a forcing event is

Death

A harvest plan

Defines win, and how business owners will realize a cash return on investment

T or F: an entrepreneurial successor, as someone who is interested and efficiency, and the effective use of resources

False

T or F: the harvest decision may come when the venture has grown into a stage where an IPO is a possibility

False

Research on family firms demonstrates which of the following facts

Only 16% make it to a third generation

Which of the following is not an example of pressures or interest from within a firm that affect succession issues?

Pressure from a family member to start their own business

Which of the following is not a contextual aspect to be considered in an effective succession plan

Technology

Harvest does not mean

The challenges and responsibilities of a entrepreneur are over

T or F: once a decision is made to harvest the business the way forward is easy

False

T or F: a harvest plan defines how, and when the owners and investors well realize an actual cash return on their investment

True

T or F: an exit strategy is defined as that component of the business plan where an entrepreneur describes a method by which investors can realize a tangible return on their investment

True

T or F: non-family members, sometimes bring pressure on the owner-manager in an effort to protect their personal interests

True

T or F: the forcing events that require an entrepreneur to step aside, and let someone direct the operation are usually unforeseen and create major problems for the business

True

A type of successor, who is high in ingenuity, creativity, and drive would be considered a

entrepreneurial successor.

One advantage of an early entry strategy for the younger generation succeeding the older generation of a family business is.

skills specifically required by the business are developed.

Which of the following steps should be carried out third, when deciding to sell a business

The value of a business

The Oakland scavenger case is profound to owners of family businesses in that

conceivably, the owner can be sued by an employee of a different ethnic origin based upon not being accorded the same treatment as a son or daughter.