Deck 19: Professional Management in the Entrepreneurial Firm

Question 1

Founders may fail to appreciate the value of good management practices.

Answer 1

True

Question 2

The need for effective management becomes greater as the business expands.

Answer 2

True

Question 3

Entrepreneurs who are professional in their work are sometimes described as using an approach that is scientific in nature.

Answer 3

True

Question 4

As a firm moves from Stage 1 to Stage 4, the pattern of entrepreneurial activities changes in that the entrepreneur becomes less of a manager and more of a doer.

Question 5

The early growth stages of a new business involve significantly less change than that which occurs during the growth of a relative mature business.

Question 6

Owner-managers of small businesses typically overdo the amount of planning.

Question 7

Individuals who are launching promising startups need to have a "tolerance for ambiguity".

Question 8

Intermediate supervision, which occurs in Stage 3 of small business growth, involves the use of budgets, personnel policies, organizational charts, and computerization.

Question 9

A small business typically lacks the marketing research tools that big corporations have.

Question 10

Developing a plan for the firm helps the entrepreneur to think through the issues faced by the firm as well as providing a focus for the firm.

Question 11

Entrepreneurs who follow a win-win strategy are taking an approach that ensures that their own firm will achieve the outcomes that are best for their own firm.

Question 12

In small businesses, poor management is prevalent and inevitable.

Question 13

An automobile dealer wants to use the modern management concept of work teams. To do so, he should reduce direct supervision in the body shop.

Question 14

The last step in the control process is establishing standards.

Question 15

A florist began asking employees for their ideas about the business. This practice is a good illustration of empowerment.

Question 16

Top-level executives in a large corporation have a distinct advantage over the leader of a small business in exerting their influence.

Question 17

Because they are used and tested constantly, naturally evolving organizational structures are as nearly perfect as one can hope for.

Question 18

The intermediate supervision stage of business growth is a turning point because the entrepreneur must learn to rise above direct management and work through an intermediate level of managers.

Question 19

When a firm reaches Stage 2 (player-coach) in its growth, the entrepreneur withdraws from personal participation in production, selling, writing checks, and record keeping.

Question 20

Although the corporate world glorifies the "dog-eat-dog" mentality, research shows that nice people make more money.

Question 21

The most effective communication in a small business occurs when managers give orders and employees simply carry them out.

Question 22

Line organization uses a dual chain of command.

Question 23

A major goal of business incubators is to promote economic development by providing financial assistance to new businesses.

Question 24

Linda Semmes sets high standards and expects excellence from her employees. Her leadership style is typical of ____ leaders.

A) authoritative
B) coercive
C) pacesetting
D) affiliative

Question 25

A small company's culture usually develops quickly during the early stages of its formation.

Question 26

The SCORE program offers entrepreneurs the opportunity to enroll in college courses.

Question 27

Preparing a daily written plan of activities is useful in deciding which tasks deserve highest priority.

Question 28

An informal group can help or hinder the proper functioning of a business organization, even in a small firm.

Question 29

The number of employees who can be supervised effectively by a capable manager is variable, depending on a number of factors.

Question 30

Leadership roles differ greatly, depending on the size of the business and its _____.

A) operating industry
B) methods of marketing
C) stage of development
D) product

Question 31

Budgets are usually prepared three years at a time, in advance, with a breakdown of figures for each month or quarter.

Question 32

It is difficult for entrepreneurs to make the shift from founder to professional manager.

Question 33

Leadership in small firms is more ____ in comparison to the leadership in large corporations.

A) haphazard
B) impersonal
C) personalized
D) more skillful

Question 34

A manager who grants to subordinates the right to act or make decisions is delegating authority.

Question 35

Negotiation is the process of developing workable solutions through discussions and interactions.

Question 36

Barry Ramirez demands that his employees immediately comply with his orders. His leadership style is typical of ____ leaders.

A) authoritative
B) coercive
C) pacesetting
D) affiliative

Question 37

Many owner-managers work from 60 to 80 hours a week.

Question 38

An effective communication tool in small business is a suggestion box to submit employees' ideas.

Question 39

The greatest time saver is the effective use of time.

Question 40

Although management consultants can be helpful to business performance, they do not serve small businesses.

Question 41

The founder of a firm is most likely to be described as a

A) creative person.
B) good manager.
C) low risk taker.
D) good organization member.

Question 42

Which of the following is not a constraint on management in small firms?

A) Bureaucratic red tape
B) Lack of money
C) Limited managerial staff
D) Lack of marketing research talent

Question 43

Harry Ramirez wishes to create greater enthusiasm among employees in his industrial distribution business. A widely used approach that he might take is

A) empowerment of employees.
B) formulating of policies.
C) establishment of control standards.
D) adoption of budgets.

Question 44

Susan Keller has seen her retail shop grow to the point that she has designated supervisors for the office and two selling areas. Her shop's stage of growth is called

A) one-person operation.
B) player-coach.
C) intermediate supervision.
D) formal organization.

Question 45

If Fran Fishburn, who runs a wholesale flower business, successfully creates properly functioning self-managed teams among her employees, her supervisors

A) will feel threatened by her leadership approach to teams.
B) will likely become fewer in number.
C) will likely attempt to delegate mundane tasks to the teams.
D) will need to maintain close supervision.

Question 46

Elizabeth Vaughn desires to create an innovative cultural environment within her business. Which one of the following should she not do?

A) support experimentation but penalize failure
B) set aside her ego
C) open up to ideas of others
D) tap into the unique gifts of all employees

Question 47

Workers act on their own and to make decisions about the processes they're involved with are considered to be

A) empowered employees.
B) policy-capable subordinates.
C) work-team ready.
D) nascent managers.

Question 48

A corporate marketing executive is moving to a managerial position in a small firm, where she may logically expect to find

A) adequate financial resources and adequate staff.
B) inadequate financial resources and inadequate staff.
C) adequate financial resources and inadequate staff.
D) inadequate financial resources and adequate staff.

Question 49

Stage 1 in the growth of a business is characterized by

A) entrepreneur as player-coach.
B) multilayered organization.
C) hands-off management practices.
D) one-person operation.

Question 50

The founder of a firm is least likely to be described as a

A) creative person.
B) good manager.
C) risk taker.
D) courageous person.

Question 51

The use of written policies, budgets, and job descriptions is most closely associated with which of the following stages of growth?

A) One-person operation
B) Player-coach
C) Intermediate supervision
D) Formal organization

Question 52

Which of the following would least concern a corporate manager considering joining a small firm?

A) Lack of bureaucratic red tape
B) Lack of money
C) Limited managerial staff
D) Lack of marketing research talent

Question 53

Marcia Mendez, who runs a drapery business, has groups of employees who work in production and in installation. If she decides to use work teams as part of her leadership approach, she must increase

A) supervision.
B) compensation.
C) independence.
D) quality.

Question 54

Mario has just begun to personally supervise employees, his firm is in the stage of growth called

A) one-person operation.
B) intermediate supervision.
C) player-coach.
D) formal organization.

Question 55

Controlling is the managerial function that involves the manager's

A) thinking through issues confronting a firm and developing a plan to increase productivity.
B) keeping track of performance and investigating when results are out of line.
C) developing an atmosphere of cooperation and teamwork.
D) keeping an optimum number of people under supervision.

Question 56

A new business has been launched with four employees who work for the entrepreneur-owner. As the owner contemplates growth in sales and personnel, she realizes that the next step of growth will involve the special problem of

A) intermediate supervision.
B) formal policies.
C) direct supervision.
D) quality management.

Question 57

A small business operations manager is confronted with a quality problem. A typical small business handicap that will hamper his efforts to solve the problem is a lack of

A) time.
B) chain of command.
C) accounting data.
D) specialized staff assistance.

Question 58

Research has shown that nice people

A) play the part of a doormat
B) cannot achieve success in the corporate world
C) spend less time in court
D) make less money than others

Question 59

Less-than-professional management behavior on the part of an entrepreneur can

A) provide a spark to the business because of the spontaneity it introduces.
B) be interpreted as evidence of creativity.
C) act as a drag on business growth.
D) normally provide a competitive edge to the firm.

Question 60

As his small business prospers and grows from Stage 1 to Stage 4, Carlos Perez realizes that he also must grow by increasing his

A) doing skills.
B) advertising skills.
C) managing skills.
D) legal skills.

Question 61

The best feature of an organizational structure that evolves naturally is its

A) economy.
B) clarity.
C) practicality.
D) use of staff positions.

Question 62

In a line-and-staff organization, which of the following is a staff activity?

A) Production
B) Warehousing
C) Receiving
D) Human resource management

Question 63

A printing shop owner believes that his business is running rather haphazardly and wants to get it under control. The first step he should take is to

A) increase inspection.
B) set standards.
C) take corrective action.
D) draw up a strategic plan.

Question 64

The first step in planning and improving one's use of time should be

A) listing long-run objectives.
B) recording time spent on various activities during the day.
C) listing projects that need attention.
D) assigning priorities to unfinished tasks.

Question 65

The fact that the daily "brush fires" of doing business tend to push aside planning until it is forgotten is the message of

A) Parkinson's law of planning.
B) the Peter principle.
C) the tyranny of the urgent.
D) Murphy's law of strategic action.

Question 66

To improve control of operations, a shop owner wishes to measure performance at the process stage. The owner might

A) inspect raw materials.
B) use quality control.
C) set sales quotas.
D) improve personnel-selection methods.

Question 67

For small businesses, the most likely form of organizational structure is

A) functional.
B) line.
C) line-and-staff.
D) committee.

Question 68

Faced with the challenge of recruiting, selecting, and compensating a growing number of employees, a small business owner is planning to hire a human resource manager. This owner is apparently going to establish

A) an informal organization.
B) a line-and-staff organization.
C) a Stage 2 organization.
D) a line organization.

Question 69

The manager of a rapidly growing small business is unsure about where the business will be in 3 to 5 years. She should focus on

A) business policies.
B) procedures.
C) budgets.
D) strategic plans.

Question 70

Shirley Lessman is planning to launch a business and has been encouraged to start in a business incubator. This will give her access to

A) bank loans.
B) free rent.
C) prepaid insurance.
D) management counsel.

Question 71

In a line organization, each employee has

A) one supervisor.
B) two supervisors.
C) three supervisors.
D) an indefinite number of supervisors.

Question 72

Which of the following refers to the fact that subordinates are to report to only one superior?

A) span of control
B) informal organization
C) formal organization
D) chain of command

Question 73

A monthly production schedule is an example of a

A) strategic plan.
B) short-range plan.
C) tactical plan.
D) operational plan.

Question 74

In a line-and-staff organization, which of the following is a line activity?

A) Production
B) Human resources management
C) Accounting
D) Legal work

Question 75

Organizations that provide both space and management services to new businesses are

A) almost always funded solely by the government.
B) usually organized by Small Business Development Centers.
C) referred to as business incubators.
D) often put together by management consultants to create consulting opportunities.

Question 76

A budget is an example of a

A) policy.
B) short-range plan.
C) strategic plan.
D) nonrecurring procedure.

Question 77

A busy owner-manager is trying to cope with the problem of excessive time pressure that requires her to work 60 to 70 hours per week. She should realize that this work schedule is

A) light, because 50 percent or more of all owner-managers work 80 hours or more per week.
B) fairly typical, because many owner-managers work this amount or more each week.
C) heavy, because more than one-half of all owner-managers work a normal 40 to 45 hour week.
D) unusually heavy, because most owner-entrepreneurs function as idea people, leaving the details to others and working only 20 to 30 hours per week on average.

Question 78

The number of subordinates reporting to one superior constitutes that manager's

A) span of control.
B) informal organization.
C) organizational structure.
D) chain of command.

Question 79

A survey of time usage has been recommended to a small business owner by a management consultant. This will provide the owner with a basis for improving the business by

A) classifying time spent according to functional areas of the business.
B) avoiding procrastination.
C) focusing attention on the most crucial tasks.
D) minimizing use of meetings.

Question 80

Frequent and flagrant disregard of the chain of command undermines the position of the

A) founder.
B) operative employee.
C) staff specialist.
D) bypassed manager.