Family Business Management
Exam Questions
Course Introduction
Family Business Management explores the unique dynamics, challenges, and opportunities inherent in family-owned and managed enterprises. This course examines topics such as succession planning, governance structures, conflict resolution, professionalization, and the preservation of family legacy. Students will analyze real-world cases, learn best practices for balancing family and business interests, and develop strategies for ensuring organizational growth and longevity across generations. The course prepares future leaders to successfully navigate the complexities of family businesses, both as family members and as external advisors.
Recommended Textbook Entrepreneurship 10th Edition by Robert Hisrich
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Page 2
Chapter 1: Entrepreneurship and the Entrepreneurial
Mind-Set
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Sample Questions
Q1) Role models can include family members as well as industry professionals. A)True
B)False Answer: True
Q2) Previous start-up experience is a good predictor of starting subsequent businesses. A)True
B)False
Answer: True
Q3) Research indicates that male entrepreneurs tend to start their first significant venture in their middle 30s,while women entrepreneurs tend to do so in their early 30s.
A)True
B)False
Answer: False
Q4) The question "What is this technology all about?" is a comprehension question. A)True
B)False
Answer: True
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Chapter 2: Entrepreneurial Intentions and Corporate
Entrepreneurship
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Sample Questions
Q1) Corporate entrepreneurship is most strongly reflected in entrepreneurial activities as well as in top management orientations in organizations.
A)True
B)False
Answer: True
Q2) In 1994 Robert Mondavi came up with:
A)a capsule-free,flange-top bottle design.
B)a new flavor of wine cooler that revolutionized the industry.
C)a new brand of liquor with a unique marketing campaign.
D)a way to vacuum cork bottles.
Answer: A
Q3) Which of the following is true about corporate entrepreneurship?
A)Equity in a new venture should not be used as a reward due to its uncertain value
B)A company must be willing to invest money without a guarantee of a return in the short term
C)Teams should be segmented by department
D)Top management should not be involved in the process
Answer: B
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Chapter 3: Entrepreneurial Strategy: Generating and Exploiting New Entries
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97 Flashcards
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Sample Questions
Q1) If a company has a superior product,customers will always be willing to pay a higher price for higher value.
A)True
B)False
Answer: False
Q2) Regarding entry into a new market,which of the following is(are)true?
A)First movers gain expertise through participation.
B)First movers are not able to detect changes in the market.
C)First movers suffer a cost disadvantage.
D)First movers face more competitive rivalry.
Answer: A
Q3) When an entrepreneur pursues a new entry opportunity only to find out later that he or she had overestimated his or her ability to create customer demand it is a(n):
A)technological error.
B)window of opportunity.
C)error of omission.
D)error of commission.
Answer: D
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Chapter 4: Creativity and the Business Idea
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Sample Questions
Q1) New products may be classified from the viewpoint of either the consumer or the firm.
A)True
B)False
Q2) In the idea stage of the product planning and development process:
A)conversational interviewing is used.
B)product samples are given out.
C)systematic market evaluation is used.
D)multiple brand comparison is useD.
Q3) Using the big-dream approach,a new idea is developed through a list of related issues or suggestions.
A)True
B)False
Q4) Attribute listing is an idea-finding technique that requires the entrepreneur to list the attributes of an item or problem and then look at each from a variety of viewpoints.
A)True
B)False
Q5) Discuss brainstorming,its definitions and tips for having a successful brainstorming session.
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Chapter 5: Identifying and Analyzing Domestic and International Opportunities
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Sample Questions
Q1) Gifts related to business proceedings are illegal in most other countries and should not be offered to foreign business partners.
A)True
B)False
Q2) Philip Morris acquiring Miller Brewing is an example of what type of merger?
A)Market extension merger
B)Horizontal merger
C)Product extension merger
D)Vertical merger
Q3) Contract law varies significantly from country to country,in part reflecting the two types of legal tradition-commercial law and civil law.
A)True
B)False
Q4) Three major types of political risks that might be present are operating risk,transfer risk,and ownership risk.
A)True
B)False
Q5) List the seven various aspects of culture.
Q6) What are the major reasons why an entrepreneur would go global?
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Chapter 6: Intellectual Property and Other Legal Issues for the Entrepreneur
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Sample Questions
Q1) Which of the following is a contract that grants the owner protection,based on the appearance of an object?
A)Utility patent
B)Design patent
C)Plant patent
D)Disclosure document
Q2) The _______ was established to facilitate patent filings in multiple countries.
A)General Agreement on Trades and Tariffs
B)Patent and Trademark Office
C)Sarbanes-Oxley Act
D)Patent Cooperation Treaty
Q3) A design patent has a term of 14-years,beginning on the date of filing with the Patent and Trademark Office (PTO).
A)True
B)False
Q4) Copyright law does not apply to music,especially when downloaded from the Internet.
A)True
B)False
Q5) Identify and describe the three different types of patents.
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Chapter 7: The Business Plan: Creating and Starting the Venture
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Sample Questions
Q1) Discussing an exit strategy in the executive summary is not a good idea under any circumstances.
A)True
B)False
Q2) Pro forma financial statements should be prepared semi-monthly for the first year of the venture.
A)True
B)False
Q3) If the new venture is a manufacturing operation a(n)__________ in the business plan is necessary.
A)ownership plan
B)quality control plan
C)production plan
D)partnership agreement
Q4) The business plan is designed to guide the entrepreneur:
A)through the distribution process.
B)through the first year of operations.
C)in the financing process.
D)in case of a change in ownership.
Q5) Draw the Upside-Down Pyramid Approach to Gathering Market Information.
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Chapter 8: The Marketing Plan
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Sample Questions
Q1) Marketing information that already exists is called secondary data.
A)True
B)False
Q2) Intensive,selective and exclusive are all part of which major consideration in channel selection?
A)Degree of directness
B)Number of channel members
C)Criteria in selection of channel members
D)Number of channels
Q3) Promotion using television is more expensive than promotion using the Internet and direct mail.
A)True
B)False
Q4) Which stage of marketing research is considered to be the most difficult for an entrepreneur due to lack of knowledge or experience in marketing?
A)Analyzing and interpreting the results
B)Gathering data from primary sources
C)Gathering data from secondary sources
D)Defining the purpose or objectives
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Chapter 9: The Organizational Plan
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Sample Questions
Q1) The standard term of a limited liability company is 30 years.
A)True
B)False
Q2) The limited liability company is the only form of organization that allows members to share liability.
A)True
B)False
Q3) Which of the following types of ownership has the most continuity?
A)General partnership
B)Corporation
C)Limited partner
D)Sole proprietorship
Q4) Investors usually insist that the management team not operate the business as a part-time venture.
A)True
B)False
Q5) The limited partners in a venture share control of day-to-day operations with the general partners.
A)True
B)False
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Chapter 10: The Financial Plan
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Sample Questions
Q1) When projecting cash flows for the pro forma cash flow statement,it is important to be conservative in the estimates.
A)True
B)False
Q2) One of the simplest and probably the most widely used small business accounting software package is Intuit's Quickbooks.
A)True
B)False
Q3) Which of the following would be a source of funds?
A)An equipment purchase
B)Retiring a long term liability
C)Inventory
D)Personal funds of founders
Q4) ________ is the amount owners have invested and/or retained from the venture operations:
A)Cash flow
B)Retained earnings
C)Profit
D)Owner's equity
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Chapter 11: Sources of Capital
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Sample Questions
Q1) Typically,debt financing requires:
A)an asset as collateral.
B)a degree of ownership in the firm.
C)reduction of short-term assets.
D)reduction of working capital.
Q2) In a straight commercial loan funds are typically used for what time period?
A)Less than 30 days
B)30-90 days
C)180 days
D)Up to one year
Q3) Under Rule 504 of Regulation D,a company can sell up to $1,000,000 of securities to any number of investors,regardless of their sophistication,in any 12-month period.
A)True
B)False
Q4) Funds obtained from ____ are the least expensive in terms of cost and control.
A)the entrepreneur's personal resources
B)friends and family
C)commercial banks
D)private placement
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Chapter 12: Informal Risk Capital, Venture Capital, and Going Public
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Sample Questions
Q1) Replacement value is used only by insurance companies and in very unique circumstances.
A)True
B)False
Q2) The return on investment ratio measures the ability of the firm to repay long-term debt using current assets.
A)True
B)False
Q3) Which type of risk-capital market is available as a funding source only for high-potential ventures?
A)Informal risk capital market
B)Private venture capital companies
C)Small business investment companies
D)Public equity market
Q4) For a company to go public,larger underwriting firms have more stringent criteria,such as sales as high as $50 million to $100 million,and a 40 to 70 percent annual growth rate.
A)True
B)False
Q5) List three reasons why a Business Angel may reject a proposal.
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Chapter 13: Strategies for Growth and Managing the Implication of Growth
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Sample Questions
Q1) When a manufacturer buys a chain of retail stores that carry its products,it is an example of backward integration.
A)True
B)False
Q2) As a firm grows,higher volume increases production efficiency and increases its bargaining power with suppliers.
A)True
B)False
Q3) In a horizontal diversification strategy,growth:
A)involves taking a step back (up)the value-added chain.
B)occurs at the same level of the value-added chain.
C)involves taking a step forward (down)the value added chain.
D)involves opportunities unrelated to the existing value-added chain.
Q4) What benefits can an entrepreneur receive from better time management?
Q5) Inventory control:
A)is not necessary for small firms.
B)eliminates the need to carry inventory.
C)balances the cost of carrying inventory with the cost of lost sales.
D)requires a computerized inventory system.
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Chapter 14: Accessing Resources for Growth From External Sources
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Sample Questions
Q1) In regards to negotiation,define the following: distribution task,integration task and reservation price.
Negotiating how the benefits of the relationship will be allocated between the parties Exploring possible mutual benefits from the relationship so that the "size of the pie" can be increased
The price (the bundle of resources from the agreement)at which the entrepreneur is indifferent about whether to accept the agreement or choose the alternative
Q2) To be successful the partners in a joint venture should have symmetry.
A)True
B)False
Q3) Negotiating parties will often focus on the distribution task and ignore the integration task.
A)True
B)False
Q4) The U.S.Department of Justice frequently issues guidelines for different types of mergers.
A)True
B)False
Page 16
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Chapter 15: Succession Planning and Strategies for
Harvesting and Ending the Venture
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Sample Questions
Q1) Since 2010 the number of business filings for bankruptcy has steadily increased each year.
A)True
B)False
Q2) When business failure looks probable,the entrepreneur should seek outside advice.
A)True
B)False
Q3) Under Chapter 13,the key to enhancing the bankruptcy process is by stressing the significance of the creditors' support during the process.
A)True
B)False
Q4) The most severe form of bankruptcy is:
A)Chapter 7.
B)Chapter 11.
C)Chapter 13.
D)prepackaged bankruptcy.
Q5) Presently there are about 11,500 ESOP companies in the United States.
A)True
B)False
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