Family Business Management
Final Test Solutions
Course Introduction
Family Business Management explores the unique dynamics and challenges that differentiate family-owned businesses from other organizational forms. This course examines issues such as succession planning, governance structures, conflict resolution, and the balance between family and business interests. Students will learn strategies for managing growth, professionalizing operations, and sustaining the business across generations. Through case studies, interactive discussions, and practical assignments, the course prepares participants to address the complexities of family relationships within the business environment, ensuring long-term success and legacy preservation.
Recommended Textbook
Entrepreneurship 10th Edition by Robert Hisrich
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15 Chapters
1220 Verified Questions
1220 Flashcards
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Page 2
Chapter 1: Entrepreneurship and the Entrepreneurial
Mind-Set
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52 Verified Questions
52 Flashcards
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Sample Questions
Q1) Previous start-up experience is a good predictor of starting subsequent businesses. A)True
B)False Answer: True
Q2) Entrepreneurs have stronger intentions to act when taking action is perceived to be impossible and risky.
A)True
B)False Answer: False
Q3) Superficial similarities exist when the underlying mechanisms of the technology resemble,or match,the underlying mechanisms of the market.
A)True
B)False Answer: False
Q4) Role models can include family members as well as industry professionals.
A)True
B)False
Answer: True
Page 3
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Chapter 2: Entrepreneurial Intentions and Corporate
Entrepreneurship
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54 Verified Questions
54 Flashcards
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Sample Questions
Q1) Traditionally managed firms typically punish failure.
A)True
B)False
Answer: True
Q2) Having an entrepreneurial orientation towards the control of resources means:
A)that one focuses on accessing others' resources.
B)that one focuses on purchasing resources.
C)that one has a belief that resources are unlimited and therefore easy to obtain.
D)that one focuses on using a hierarchy management structure in allocating resources.
Answer: A
Q3) Entrepreneurial activities tend to immediately affect the bottom line,and hence are seldom overlooked and receive extensive funding and support.
A)True
B)False
Answer: False
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Page 4
Chapter 3: Entrepreneurial Strategy: Generating and Exploiting New Entries
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97 Verified Questions
97 Flashcards
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Sample Questions
Q1) Technological knowledge:
A)is gained through market research.
B)can lead to a new product that is the basis for a new entry.
C)does not help unless the market applicability is obvious.
D)does not help if the market is limiteD.
Answer: B
Q2) In emerging industries:
A)environmental factors do not affect customer demand.
B)entrepreneurs confront demand certainty.
C)environmental changes are highly likely.
D)it is easier to respond effectively to sudden changes.
Answer: C
Q3) _____ refers to the probability,and magnitude,of downside loss.
A)Reward
B)Risk
C)Liability of newness
D)Technology error
Answer: B
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Chapter 4: Creativity and the Business Idea
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76 Verified Questions
76 Flashcards
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Sample Questions
Q1) The files of the U.S.Patent Office are kept confidential and entrepreneurs cannot study their contents.
A)True
B)False
Q2) Members of the distribution channel are usually good sources of ideas for new products.
A)True
B)False
Q3) New products may be classified from the viewpoint of either the consumer or the firm.
A)True
B)False
Q4) The entrepreneur's ability to recognize a business opportunity is a result of his or her knowledge and experience.
A)True
B)False
Q5) Discuss brainstorming,its definitions and tips for having a successful brainstorming session.
Q6) List,in order,the stages of the product planning and development process.
Page 6
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Chapter 5: Identifying and Analyzing Domestic and International Opportunities
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73 Verified Questions
73 Flashcards
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Sample Questions
Q1) ______ is a nonprofit organization that provides free online and in-person assistance to entrepreneurs in the form of training,consulting and mentoring provided mainly by retired executives and entrepreneurs.
A)CSBC
B)NAICS
C)SCORE
D)SIC
Q2) According to the text,the most prevalent reason for mergers is:
A)taxation.
B)economies of scale.
C)currency fluctuations.
D)to combine complementary resources.
Q3) _____________ is the process of an entrepreneur conducting business activities across national borders.
A)Intrapreneurship
B)International entrepreneurship
C)Domestic entrepreneurship
D)Direct importing
Q4) List the seven various aspects of culture.
Q5) 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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76 Verified Questions
76 Flashcards
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Sample Questions
Q1) Copyrights can protect all of the following except: A)music.
B)molded plastic parts.
C)sculptures.
D)models.
Q2) An oral agreement is enforceable indefinitely.
A)True
B)False
Q3) A utility patent grants the owner protection from anyone else making,using,and/or selling the identified invention and generally reflects protection of new,useful,and unobvious processes.
A)True
B)False
Q4) A trade secret is protected by state law.
A)True
B)False
Q5) 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
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Chapter 7: The Business Plan: Creating and Starting the Venture
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86 Verified Questions
86 Flashcards
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Sample Questions
Q1) European online retail sales are expected to continue to grow by about 10% each year until 2018.
A)True
B)False
Q2) The four Cs of credit are computers,capital,compromise,and collateral.
A)True
B)False
Q3) Investors often place more emphasis on the entrepreneur's _________ than lenders do.
A)character
B)experience
C)financial records
D)personal viewpoint
Q4) Which of the following documents is not usually included in the Financial Plan?
A)Statement of cash flows
B)Income statement
C)Price lists from suppliers
D)Projected balance sheet
Page 9
Q5) Identify and explain,give examples when appropriate,of key areas that should be investigated when conducting an environmental analysis.
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Chapter 8: The Marketing Plan
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88 Verified Questions
88 Flashcards
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Sample Questions
Q1) Warby Parker was started by:
A)Neal Blumenthal
B)Sergy Bryn
C)Mark Zuckerberg
D)Google
Q2) Focus groups should be led by the entrepreneur.
A)True
B)False
Q3) Once the marketing goals and objectives have been established,the entrepreneur can begin to develop the __________ and __________ to achieve them.
A)marketing plan;industry analysis
B)marketing mix;consumer research
C)marketing strategy;action plan
D)market research;industry analysis
Q4) Marketing research involves the gathering of information in order to determine who will buy the product and what the most effective promotion strategy would be.
A)True
B)False
Q5) Identify the 4 major considerations in distribution channel selection.
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Chapter 9: The Organizational Plan
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90 Verified Questions
90 Flashcards
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Sample Questions
Q1) In which form of organization does the owner have greatest control?
A)Sole proprietorship
B)Limited partnership
C)General partnership
D)Corporation
Q2) In which form of organization would it be possible for individuals that don't have any ownership stake in the business to make decisions?
A)Sole proprietorship
B)Limited partnership
C)General partnership
D)Corporation
Q3) In a limited liability partnership (LLP)death or withdrawal of a partner:
A)results in automatic transfer of ownership to surviving partner(s).
B)may result in problems trying to find a market for the shares.
C)always results in termination of the partnership.
D)has no effect on the partnership.
Q4) A board of advisors has less decision making authority than a board of directors does.
A)True
B)False
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Chapter 10: The Financial Plan
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89 Flashcards
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Sample Questions
Q1) Depreciation is considered a cash outlay,not an expense.
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 software programs is most widely used by entrepreneurs?
A)Quickbooks
B)Vision Point
C)Peachtree
D)all of these.
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
Q5) Define the contribution margin and its importance.
Q6) Define capital budgeting.
Page 12
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Chapter 11: Sources of Capital
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Sample Questions
Q1) The SBA 7(a)loan program has a maximum loan amount of $5 million.
A)True
B)False
Q2) When a bank grants a line of credit,a "commitment fee" is assessed at the start of the loan.
A)True
B)False
Q3) Private offerings involve more time,expense,and paperwork than public offerings.
A)True
B)False
Q4) The asset base for loans usually is accounts receivable,inventory,equipment,and real estate.
A)True
B)False
Q5) When borrowing from friends and family,the entrepreneur should avoid putting agreements in writing to avoid future disagreements.
A)True
B)False
Q6) Explain the three major components of an R&D partnership.
Page 13
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Chapter 12: Informal Risk Capital, Venture Capital, and Going Public
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95 Verified Questions
95 Flashcards
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Sample Questions
Q1) Discuss the informal risk-capital market and key characteristics of business angels.
Q2) Private venture capital firms use both state and federal grant money to invest in other businesses.
A)True
B)False
Q3) The return on investment ratio measures the ability of the firm to repay long-term debt using current assets.
A)True
B)False
Q4) The ____ is calculated by dividing liabilities by total assets.
A)debt ratio
B)current ratio
C)inventory turn over
D)net profit margin
Q5) The due diligence phase of the venture-capital process includes:
A)outlining the principle terms.
B)a detailed review of the company's history.
C)preparation of an investment memorandum.
D)a preliminary study of the business plan.
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Chapter 13: Strategies for Growth and Managing the Implication of Growth
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Sample Questions
Q1) Even if there is a belief that the pursuit of growth will improve firm performance and enhance personal wealth,some entrepreneurs will still avoid growing their business.
A)True
B)False
Q2) A cash sensitivity analysis is used to provide a pessimistic and an optimistic cash estimate.
A)True
B)False
Q3) ________ is the process of improving an individual's productivity through more efficient use of time.
A)Time management
B)Delegation
C)The principle of effectiveness
D)The principle of prioritized planning
Q4) When a retail tire store buys a tire wholesaler this is an example of horizontal integration.
A)True
B)False
Q5) What benefits can an entrepreneur receive from better time management?
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Chapter 14: Accessing Resources for Growth From External
Sources
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94 Flashcards
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Sample Questions
Q1) Discuss the main advantages of an acquisition.
Q2) Which of the following are not factors in the success of joint ventures according to the text?
A)Chemistry and symmetry.
B)Symmetry and reasonable expectations.
C)Finance and education.
D)Timing and chemistry.
Q3) Which of the following is the most significant advantage of an acquisition according to the text?
A)Established image and track record
B)Location
C)Cost
D)Existing employees
Q4) What are the 4 major factors in joint venture success?
Q5) The integration task phase of negotiation explores mutual benefits for the parties.
A)True
B)False
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Q6) Explain the potential issues that could occur in establishing an international joint venture.
Chapter 15: Succession Planning and Strategies for
Harvesting and Ending the
Venture
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Sample Questions
Q1) Chapter 11 bankruptcy allows a firm to reorganize and prepare strategies to improve future profits.
A)True
B)False
Q2) Identify and define the three major types of bankruptcy. Provides the opportunity to reorganize and make the venture more solvent Voluntarily allows individuals with regular income the opportunity to make extended time payments
Requires the venture to liquidate,either voluntarily or involuntarily
Q3) From the chapter on the characteristics of an entrepreneur,we know that after the failure of a business entrepreneurs are likely to:
A)continue starting new ventures.
B)look for a position working for someone else.
C)go to work for the government.
D)try again and fail.
Q4) Bankruptcy can be used as a bargaining chip with creditors to allow the venture to voluntarily reorganize.
A)True
B)False
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