business 1003 ch.4&6 quiz
Aaron Medford has invested $600 in the corporate stock of a manufacturer of offshore oil drilling equipment. If the company goes bankrupt, the most Medford could lose would be:
$600
A type of business entity that provides liability protection but is taxed like a partnership is a:
S corporation
To avoid double taxation, a new entrepreneur may elect to organize as a _
S corporation
Fairmont food group purchased Swissrose International Inc., market of several brands of specialty and food service cheese from ConAgra. the _ will make fairmont the largest US importer and marketer of specialty and deli-style cheese
acquisition
Croutakie seemed like a great idea. Chef Leo Nyami and Sara Rice decided to take advantage of the popularity of shitake mushrooms and create some shitake mushrooms products that could be sold to restaurant patrons and other gourmets through their new company. The mushrooms are expensive, and there were other unexpected financial problems, so Nyami and Rice asked Bill Ng to become a limited partner. This means that Ng:
agrees not to participate in day-to-day management of the firm
Jayson Tully is contemplating the purchase of a Popeye's Chicken franchise. Tully has made a list of the disadvantages that he assumes he will face as a new business owner. Which of the following is actually an advantage?
assistance in building plans
Andy Pearson ran PepsiCo Inc. for nearly 15 years, driving revenues from $1 billion to $8 billion. In 1980, Fortune named him one of the 10 toughest bosses in the United States. Pearson was singled out for the relentless demands that he put on his people. As one employee put it, Pearson's talents were often "brutally abrasive." Every year, without hesitation, he fired the least productive 10% to 20% of his workforce. Pearson used a(n) _____ leadership style.
autocratic
Dewayne Gibbons of Burger King decided to introduce a new sliced chicken sandwich without consulting any of his subordinates or the franchise. Managers who use this style of decision making exhibit the _____ style of leadership.
autocratic
In order to attract younger customers to the Lacoste brand of clothing, CEO Robert Siegel made all of the major decisions in product planning, distribution, and promotion. He asked for no input from his employees. Siegel used a(n) _____ style to increase Lacoste's sales.
autocratic
Which of the following demographic groups is having the greatest impact on the growth of the franchising industry?
baby boomers
Which of the following is NOT one of the four functions of management?
budgeting
Airline stewards in China will remove someone from the plane if they attempt to bring their own food with them. Instead, passengers must buy the food sold on the plane. The stewardesses have been given _____ power to deal with passengers who won't obey the rules.
coercive
Jack Welch, former CEO of General Electric, was known by his employees as "Bloody Jack" because of the downsizing and restructuring he insisted the company do if its various departments were unable to achieve organizational goals. Knowing this nickname, you can assume that Welch used _____ power to accomplish his goals for GE.
coercive
At IBM, the MDX group is at a crossroad about how to market a new software package. Judy Ramsby, the head of the group, has told the group of managers that "it is up to the group. As long as they don't violate company policy, the decisions are up to them." Judy Ramsby is practicing a(n) _____ leadership style.
free rein
Franchisors in foreign countries must be aware of:
language differences, local culture, political risks, and currency exchange
_____ is the process of guiding and motivating others toward the achievement of organizational goals.
leadership
Miniature Precision Corporation, a microprocessor manufacturer, recently acquired Cameron-Price, a plastics mold manufacturer. Miniature Precision financed the transaction with 90 percent borrowed money and used Cameron-Price's assets as collateral. This type of merger is commonly known as a(n):
leveraged buyout
Fred Pittman has invested $10,000 in his son's motorcycle repair shop, but he takes no part in its management. Pittman is a(n):
limited partner
Karl Metzger plans to invest $5,000 in a partnership with his brother to produce and sell handcrafted violins, zithers, and other string instruments. Metzger does not plan to work in the business and wants no more liability than his investment. He should be a:
limited partner
The lowest level of management, which usually has the most people to manage, is called _____ management.
supervisory
_____ planning is short-range, detailed planning that is based on long-range planning. It typically has a time frame that is less than one year long.
tactical
The C Corporation is another term for:
the conventional form of corporation
How does the current boom in mergers and acquisitions differ from ones in earlier years?
there is a greater number of US and foreign companies making cross=border acquisitions
Rebecca Siddoway own and operate Country Candies. Siddoway specializes in making rich, creamy toffees that she packages in attractive gift boxes and sells through the mail. What would her first step be if she decides to incorporate her business to make it easier to find investors?
to write the articles of incorporation
A relatively small group of managers at the head of an organization that establishes overall strategy and long-range goals is called _____ management.
top
A term that means that business damages and/or debts can also be attached to the personal assets of the owners is ______ liability.
unlimited
Which of the following is a disadvantage of sole proprietor ownership?
unlimited liability
Which of the following is an example of a disadvantage associated with a partnership?
unlimited liability
The most common form of business organization is the:
sole proprietorship
The form of business ownership that is easiest to dissolve is the:
sole proprietoship
_____ planning is the creation of long-range, comprehensive objectives and the development of long-term courses of action.
strategic
Manila Water, the provider of the water and sewerage services in the capital of the Philippines has purchased the government owned water and sewerage system for the entire country. It promises to make the nation's water and sewerage system run as efficiently and profitably as the one it operates in Manila. Its primary challenge will be the management function of ____ because it needs to convince the 2,000 employees it inherited from the government-owned facility to work more efficiently.
communicating
Luca Villanova has a major decision to make about how to increase attendance for the professional soccer team he owns. He wants to call his players and coaches together, generate alternatives, and come up with a solution by mutual agreement and vote. Villanova is an example of which style of democratic leader?
consensual
Asan Linhoud has a major decision to make regarding whether to create a new sales territory or simply add customers to existing territories. He asks for suggestions from his sales reps but will make his own decision. This style of leadership is called:
consultative
Management needs to be prepared to deal with problems and seize opportunities as they arise. A company often identifies alternative courses of action to be taken if events undercut a strategic or tactical plan. These are called _____ plans.
contingecy
Victorinox is the name of the company that manufactures Swiss army knives. As a result of new regulations governing what passengers could carry with them on airplane trips, the company has lost 30 percent of its business. In other companies, this might have led to business failure, but because Victorinox had _____ plans, it was able to continue to operate profitably.
contingency
A group of cotton growers in north Georgia and North Alabama pooled their resources to build a cotton gin and storage area for the ginned cotton. they marketed their cotton to textile mills under one label. this collective ownership organization is a:
cooperative
_____ are organizations formed by individuals or businesses with similar interests to achieve greater economies of scale and economic power through collective ownership.
cooperatives
Which of the following statements about cooperatives is true?
cooperatives increase their members buying power
Creative Good is a 35-person strategy-consulting firm that believes you must create a good employee experience to offer a good customer experience. Toward this goal, Creative Good focuses on collaborative workshops, full-staff meetings, and a company-wide emphasis on relationships and communication--from the customer to the client, to the employees of Creative Good, and to the company's leaders. This description represents the _____ of Creative Good.
corporate culture
Which of the following statements about corporate culture is true?
corporate culture is based on the accumulated history of the organization, can have a strong impact on a company's success, is tangible, and evolves over time
Jack Smith and four other people own Persimmon Hill Farm, an agric-entertainment farm which provides corn mazes, bonfires, hay rides, and food treats to paying visitors. All of the owners have limited financial risk. Persimmon Hill Farm is a(n):
corporation
What type of business organization generates the most total sales?
corporation
Rebecca Siddoway own and operate Country Candies. Siddoway specializes in making rich, creamy toffees that she packages in attractive gift boxes and sells through the mail. What would be the advantage to Siddoway if she decides to incorporate her business?
corporations have an enhanced ability to attract financing
Textron Corporation is establishing a legal division. The newly appointed head of the division is organizing, hiring people, and operating the division. This division head is performing a(n) _____ management role.
decisional
With its ease of registration and pro-corporate policies, _____ is called the "state of incorporation." About half of the Fortune 500 companies are incorporated there.
delaware
Luca Villanova has a major decision to make about how to increase attendance for the professional soccer team he owns. He wants to call his players and coaches together, generate alternatives, and come up with a solution by mutual agreement and vote. His style of leadership is called:
democratic (participative)
Top management usually performs all of the following tasks EXCEPT:
direct workers on the assembly line
An S corporation:
does not make the owners of the corporation personally liable for its debts
Double taxation in a corporation means:
earnings of the corporation and dividends of the shareholders both are taxed
_____ means giving employees increased autonomy and discretion to make decisions as well as control over the resources needed to make those decisions.
empowerment
Who owns a corporation?
everyone who owns a share of stock in the corporation
The headquarters, seller, and supplier of the service or method of operation of a franchise is called the:
franchisor
Which two different leadership styles use empowerment?
laissez-faire and participative
Croutakie seemed like a great idea. Chef Leo Nyami and Sara Rice decided to take advantage of the popularity of shitake mushrooms and create some shitake mushrooms products that could be sold to restaurant patrons and other gourmets through their new company. Nyami and Rice have recently abandoned their business because they could not pay its outstanding business debts. Since Nyami and Rice are both liable for the debts, their business was a(n):
general partnership
The growing popularity of bread machines has become a new business opportunity for Shelly Clemins and Jan Schoenbarr. The women make and sell bread machine covers and fabric gift bags to hold the bread loaves made in the machines. The women share the responsibilities of running the business (called Bread & Butter) as well as its profits equally. Bread & Butter would be an example of a(n):
general partnership
Three Sisters Specialty Foods, owned by Judith Coker, Millie Humphreys, and Jade Watson, sells eggless cake mixes for people on a restricted diet. Coker recently purchased an industrial grade mixer without conferring with her sisters who were upset when they learned that they were all three liable for the payments on the mixer. Three Sisters is an example of a:
general partnership
A firm's stockholders have the right to do all of the following EXCEPT:
get discounts on the company's product or service
_____ skills refer to a manager's ability to operate in diverse cultural environments.
global management
Which of the following describes a disadvantage associated with a corporation?
government regulations, cost of formation, complexity of formation, and double taxation
sole proprietorships:
have unlimited liability
Paul Hyatt owns and operates DeepClean, a Florida-based company that cleans up mold and mildew in homes and businesses. As the sole proprietor of the business, he has unlimited liability, which means:
he is fully liable for all business debts
The franchisor generally does NOT provide the franchisee with:
help in employee selection
International Association of Food Industry Suppliers has completed its _____ merger with the Food Processing Machinery Association. The action represents a coming together of equals in which both boards and staffs are committed to creating a new association that is stronger and better equipped to serve its members' growing needs to more effectively compete in their marketplaces.
horizontal
North American van lines and allies van lines combined in a _ merger that will create the world's largest moving company. prior to the merger, North American was the leading company in moving high-end merchandise such as computer and hospital equipment, while allied specialized in households
horizontal
Kent Huston is a middle manager at a management consulting company. He has the ability to negotiate, impress the right people, and make the right connections. Huston has _____ skills.
human relations
When Linda McAnem began Stirya, a New York-based computer services company, she ran it as a sole proprietorship. As the business grew, she realized that she did not want to be personally liable for the business's debts and wanted her business accounts to be separate from her personal accounts. Therefore, she should have:
incorporated Stirya
Which of the following is NOT one of the five key types of power?
influential
The manager of a chain of dry cleaning stores gathers the competitions' advertisements for analysis and review. She needs these data to help the chain devise its own advertising strategy. The manager is acting in the _____ role.
informational
When manager Mariah Pitner delivered the company's financial report to local bankers and analysts, she was acting in a(n) _____ role.
informational
The _____ role of a manager consists of relationships with other people as figurehead, leader, and liaison.
interpersonal
When John Mackey, CEO of Whole Foods Markets, hosted a fundraising event in his role as honorary chairman of the national People for the Ethical Treatment of Animals (PETA) organization, he is fulfilling his _____ managerial role.
interpersonal
A corporation:
is a taxable entity, can own property, can sue and be sued, and is subject to the laws of the state in which it was formed
The franchise agreement:
is the contract that details the terms of the franchise
A _____ is when two or more companies form a special entity to undertake a specific project, usually for a specific period of time.
joint venture
Hard Rock Cafe International and Sol Melia Hotels and Resorts have allied to develop a multimillion-dollar hotel. This relationship is a _____ because their alliance will end as soon as the hotel is completed.
joint venture
The development of new drugs is very expensive. for this reason Genentech, a large biotechnical company, has entered into a _ with Swiss-owned Roche to develop a vaccine for tuberculosis. when the vaccine is developed or when the two biotechnical companies determine the vaccine cannot be developed using their current methodology, this relationship will dissolve.
joint venture
Thom Georges wants to open a store where he sells nothing but antique architectural features that he can salvage from old houses being torn down to make way for progress. he has an eye for the kind of doors, windows, mantels, and so forth that decorators want, but does not have all the funding he needs to get started. he has invited his parents to invest $40000 in the enterprise. he has told them that if they do invest, they would have liabilities in the firm equal to but no greater than their investment. Georges is trying to get them to form a _ with him
limited partnership
_____ is the process of guiding the development, maintenance, and allocation of resources needed to attain organizational goals.
management
Ottens Flavors, Philadelphia, announced its combination with MK Flavors & Co., Mexico City. The Mexican operation will offer the U.S.-based company an increased market presence in Central and South America. The new company will be renamed MK Ottens Flavors. MK Ottens Flavor was created through a(n):
merger
The combination of two companies that join to form one company is called a:
merger
Plant manager Peter Kwillen receives the master budget from divisional headquarters and breaks it down for the three shift managers. He coordinates with other plant managers and manages lower-level managers. Kwillen is a(n) _____ manager.
middle
Two co-workers at Nortel came up with an idea for renting software over the Internet. Nortel's top management liked the idea and set up a special division called Channelware devoted to taking the idea and making a new product. The establishment of a new company and assigning the employees in the division the task of making an idea a reality requires which management function?
oranizing
_____ is the process of arranging the structures and relationships of human and material resources to carry out an organization's plans.
organizing
Management involves:
organizing, controlling, leadership, and planning
The fact that a corporation has limited liability means:
owners' liabilities are limited to the amount invested
Which of the following statements about a general partnership is true?
partners in a general partnership co-own the company's assets
Pete Yankin and Ken Lowery consider themselves to be experts on hunting in the mountains in North Carolina. As a result, the two men established a company that markets hunting expeditions. Yankin and Lowery share responsibilities for booking the trips, gathering supplies, and guiding groups of five to seven hunters into locations where they can hunt for deer and bear. Since the two will share any profit equally, this would be an example of a(n):
partnership
Which of the following statements about the taxation of partnerships is true?
partnerships file tax returns but pass profits and losses on to partners who report them on their tax returns
Kayla Langton is considering the purchase of a bonus building care franchise. Langton is likely to get assistance from the commercial cleaning franchisor in which of the following areas?
permission to use company logo in advertising, site selection, employee training, and accounting procedures
The world's largest bank. Deutsche Bank set as its objective to make its name more recognizable in the United States. The success of its decision to sponsor a PGA golf tournament to accomplish this organizational objective will ultimately depend on which management function?
planning
According to the Sports Business Journal, Levy Restaurants is the leading purveyor of premium food at major sports venues. Levy has fed the masses at the Super Bowl, the Grammys, the Kentucky Derby, and the NBA All-Star Game. It catered last year's World Series and the MTV Video Music Awards, plus hundreds of regular-season games of football, baseball, basketball, hockey, and NASCAR races. So when the company purchased 150 pounds of steak and chicken, eighty pounds of noodles, ingredients for 48 gallons of shrimp bisque, 400 sushi rolls, and 25 pounds of jambalaya and succotash, it was more than likely a _____ decision.
programmed
An S corporation is generally set up to:
reduce tax burdens
Hassan Nasrallah, the leader of Hizbullah: grew up very poor but very smart, and although he wears the robes of a minor Shiite cleric, he is a world-class politician. He has been called the most charismatic figure in the Muslim world. Nasrallah exerts _____ power over his followers.
referent
A disadvantage of franchising to the franchisee is:
restricted operating freedom
Manila Water, the provider of the water and sewerage services in the capital of the Philippines has purchased the government owned water and sewerage system for the entire country. It promises to make the nation's water and sewerage system run as efficiently and profitably as the one it operates in Manila. Its primary challenge will be to convince the 2,000 employees it inherited from the government-owned facility to work more efficiently. Manila Water sought to boost employee morale by linking pay to performance. In other words, management has used its _____ power to improve employee productivity.
reward
Before selling stock to the public, a corporation must register with the:
securities and exchange commission
Jules Sylvester had always loved reptiles. When he was asked by a movie producer if he could locate some anaconda snakes for a movie, a business was born. Sylvester is the proud owner and operator of Reptile Rentals. The California-based business, which he started with no financial help from anyone, is often called on to provide "creepy, crawly" moments in the movies. Jules Sylvester is an example of a:
sole proprietorship
The form of business ownership that has the most difficulty in raising capital is the:
sole proprietorship
Multinational oil companies such as ExxonMobil, Royal Dutch Shell, or BP are active all the way along the supply chain from locating crude oil deposits, drilling and extracting crude, transporting it around the world, refining it into petrochemicals such as gasoline, to distributing the fuel to company-owned retail stations, where it is sold to consumers. To gain this complete control of the various resources needed to product oil and gas, the companies had to have engaged in _____ mergers.
vertical
