MGT Exam 4

Which of the following statements best represents the subjectivist approach to avoiding ethical issues?

"Ethics is simply a point of view."

It has been reported that _____ percent of a company's business comes from current customers and of those customers, _____ percent will be the source of most of the company's profits.

65; 20

_____ employs a pull strategy, generally focusing on non-price benefits and targeting end-users.

Advertising

Ethics is derived, principally, from the _____ norms with which we were raised as children.

All of these are correct

Which of the following is NOT one of the constants that seem to permeate everyone's definition of success?

Ambition

Which socially responsible rule does Paul Brainerd, founder of the Brainerd Foundation in Seattle, Washington, suggest?

Don't wait until later in life to begin giving back.

Which of the following is a characteristic of early adopters?

Early adopters are eager to adopt new products to solve problems and create a competitive advantage for themselves.

Which of the following approaches to avoiding ethical issues is best represented by the statement, "Everyone needs to look out for him- or herself."

Egoistic approach

The _____ is a floorless exchange that trades on the National Market System through a network of broker-dealers from respected securities firms that compete for orders.

National Association of Securities Dealers Automated Quotation (NASDAQ)

Most product liability insurance covers all of the following EXCEPT

the cost of product redesign.

All of the following are adopter groups EXCEPT

the late minority

A _____ is one of the best places to negotiate with sales representatives and to gather contact information for a mailing list.

trade show

Print and broadcast media are two forms of

traditional advertising

During startup, an entrepreneur's main concerns are to acquire sufficient capital, _____, and design a way to deliver a product or service.

validate his or her customers and business model

The time from idea generation through product development, market testing, and product launch is often referred to as the

valley of death

When the value of a venture increases, but the value of its shares do not achieve a corresponding increase, this discrepancy is known as

valuation divergence

_____ is a tool for increasing the level of visibility of an entrepreneur's website when customers search for the company online.

Search engine optimization (SEO)

Which of the following is NOT a step in the process for addressing risk assessment?

Secure a knowledgeable attorney.

Which of the following is NOT one of the four categories of ethical decision making that entrepreneurs face on a daily basis that has been identified by recent research?

Social responsibility

_____ refers to operating a business in a way that exceeds the ethical, legal, commercial, and public expectations that society has of the business.

Social responsibility

A(n) _____ takes an equity position through ownership of stock in a company, normally requires a seat on the board of directors, and often brings their management skills to the new venture in an advisory capacity.

venture capital firm

An entrepreneur's personal _____ is really a function of the core values and vision that the entrepreneur has for his or her life.

definition of success

Developing a strong ethical code and enlisting the cooperation of everyone in the business will allow a company to avoid the ethical problems that business brings.

false

When sales decline and positive cash flow starts looking like a memory, entrepreneurs often

go into a period of denial

All of the following are costs an entrepreneur may incur after acquiring capital EXCEPT

prospectus printing costs.

To prepare for the possible unexpected loss of a key employee like the CEO or CFO, it is a good idea to

purchase key-person insurance.

Entrepreneurs who play too close to the edge of legality are in danger of

pushing the limits of the law

Most venture capitalists (VCs) invest in the _____ stage, because this stage is more likely to bring them to the liquidity event they need in three to five years to make the investment worthwhile.

rapid growth

To the extent that entrepreneurs can predict the points of takeoff (optimism) and slowdown (pessimism) in the _____, they can better manage demand.

sales cycle

A well-written paragraph of a marketing plan includes all of the following EXCEPT the

sales forecast.

In the business model development and testing stage, an entrepreneur will likely require _____, an initial investment typically by the founders and other sources of "friendly money."

seed funding

A small company can have a socially responsible impact on its community if it does a few things by way of preparation. First, the company needs to

set goals

Brand _____ is a set of decisions about a brand's positioning in a marketplace.

strategy

"What skills and experience does the second generation need to acquire?" and "What is the second generation's expectation for the future of the business, and is it congruent with the company's vision?" are two of the questions that should be examined to start the process of _____ planning.

succession

A simple version of the venture capital method involves estimating the _____, the expected return in the harvest year, the post-money valuation, and the pre-money valuation.

terminal value

The term born global usually denotes a company that generates at least _____ percent of its sales in the first _____ from the international marketplace and that derives a competitive advantage from outsourcing and selling in several countries.

25; three years

_____ is a critical first step in identifying and assessing an ethical dilemma.

Awareness

_____ refers to techniques for getting by on as few resources as possible and using other people's resources whenever feasible.

Bootstrapping

Which of the following is the first step in the initial public offering (IPO) process?

Choosing an underwriter

_____ are the fundamental beliefs that a company holds about what is important in business and in life in general.

Core values

Which of the following factors does NOT play a role in the rate at which a new product is adopted across the various customer segments?

Customer relationship

Banks are normally a readily available source of either working capital or seed capital to fund a startup venture

False

Most ethical dilemmas require balancing conflict among three perspectives: ideals (what ought to be true), reality (what is actually true), and utility or cost/benefit.

False

Social ventures, those that are structured with a focus on providing a benefit to society, are attractive to traditional types of investors because they typically produce a significant return on investment.

False

The principal disadvantage of a public offering is that it provides the offering company with a tremendous source of interest-bearing capital for growth and expansion, paying off debt, or product development.

False

Typically, an alliance involves more interaction and coordination than a merger but less than a license agreement.

False

Acquirers can be categorized in which of the following two ways?

Financial and strategic

_____ value refers to the amount that could be recovered by selling off all a company's assets.

Liquidation

Which of the following should be known about a company in order to answer the question "Why does the business exist?"

Its purpose

Which of the following is NOT part of the "5 Ps" of marketing?

Purpose

A(n) _____ is an offering document that describes an investment and its risks.

prospectus

Ellie is a pragmatic customer who tends to wait until a new product is proven and plenty of people are using it before she purchases it. Which of the following customer groups would Ellie most likely belong to?

The early majority

Aristotle, the Greek philosopher, said that _____ is the first of the human virtues because without it, the others are not possible.

courage

After filing a registration statement, an advertisement called a "tombstone" announces a public offering in the financial press.

True

Launch objectives are the key goals for a marketing campaign.

True

Promotion tends to be more price-focused or incentive-focused and therefore is usually considered a push strategy.

True

Strategies are the plans for achieving the goals and, ultimately, accomplishing the mission of a company.

True

With very few exceptions, most entrepreneurs do not scale—meaning they have a difficult time moving from the entrepreneur role to the executive role.

True

Smaller businesses for sale often use the services of _____, whereas high-growth ventures are more likely to employ the services of _____.

business brokers; investment banks

In a phased sale, the _____ specifies the amount of control the new owner can exert over the business before the sale has been completed and the amount of proprietary information that will be shared with the buyer between Phases 1 and 2.

buy-sell agreement

Generally, banks make loans on the basis of what are termed the five Cs: character, capacity, capital, collateral, and condition. In the case of entrepreneurs, _____ and _____ become the leading consideration, because the new business's performance estimates are based purely on forecasts.

capacity; condition

Geoffrey Moore's modification of the adoption/diffusion curve shows the _____, a period when the early adopters have been exhausted and the technology abruptly stops selling.

chasm

Many investors suggest structuring a(n) _____ deal for friends and family because this tactic avoids having to place a valuation on the company that is likely to be wrong.

convertible debt

_____ purchase a product at a discount off list price and then sell it and handle collections themselves, thus solving the problem of cultural differences and the related difficulties in these transactions.

Wholesalers

A successful franchise system will need to have all of the following characteristics EXCEPT

a business that cannot by systematized or easily replicated.

The process of developing _____ begins with a company's self-examination to identify values held by individuals and alert everyone to inconsistencies in how people deal with particular issues.

a code of ethics

The Conway Center for Family Business reports that about _____ of all family businesses survive the transition from first- to second-generation ownership.

a third

By focusing on what an entrepreneur does best and letting others do the rest, the _____ strategy helps the business grow more rapidly, keeps unit costs down, and turns out new products more quickly.

alliance

Private investors, who are called _____, are part of the informal risk-capital market, the largest pool of risk capital in the United States.

angels

With a(n) _____ strategy, either a company gains control of some or all of its suppliers or the company becomes its own supplier by starting another business from scratch or acquiring an existing supplier that has a successful operation.

backward

The American Marketing Association defines the term _____ as a "name, term, design, symbol, or any other feature that identifies one seller's good or service as distinct" from other sellers.

brand

Maintaining sufficient inventory is an example of a(n) _____ strategy.

buffer

The research and development (R&D) limited partnership is useful for entrepreneurs starting _____ ventures that carry significant risk due to the expense of R&D.

high-tech

Agreeing to manufacture a product under a different label is an example of a(n) _____ strategy.

horizontal integration

Returning to private status once a company has been a public company

is an almost insurmountable task.

Once chosen to guide a corporation through the initial public offering (IPO) process, an underwriter draws up a _____, which outlines the terms and conditions of the agreement between the underwriter and the entrepreneur/selling stockholder.

letter of intent

The _____ for a startup is a living guide to how a company plans to build customer relationships over its life in order to fulfill the company's mission statement.

marketing plan

A company's _____ is what brings everyone together to achieve a common objective and is closely related to the company's purpose.

mission

Management guru Peter Drucker always asserted that a company's _____ should "fit on a t-shirt."

mission

A _____ precisely identifies the environment in which the company operates and communicates the company's fundamental philosophy.

mission statement

In Eastern culture, ethical leaders are viewed as being

modest

All of the following are leadership tendencies that seem to be a problem for entrepreneurs attempting to manage growing organizations EXCEPT

not enough loyalty to the original founding team.

A conflict of interest occurs when a person's private or personal interests clash with his or her

professional obligations