Deck 16: Professional Small Business Management

Question 1

All businesses must be managed or they will cease to exist.

Answer 1

True

Question 2

The distinguishing characteristic of the existence stage of growth is that the business owner is running the business alone.

Answer 2

True

Question 3

The four management functions of planning, organizing, leading, and controlling are continuous and interrelated.

Answer 3

True

Question 4

More time will be spent by the business owner performing the basic tasks of running the business, such as cleaning machinery, as the business is beginning than will occur later in the life cycle of the business.

Question 5

Managers are people who must depend on judgment and intuition more than they depend on technology.

Question 6

The distinguishing characteristic of the second stage of growth is that the key problem shifts to cash flow.

Question 7

The greatest concerns in the resource maturity stage are to consolidate and control the finances generated by rapid growth.

Question 8

Figure 16.1 shows that the four functions of management-controlling, planning, leading, and organizing-are not continuous, but they are interrelated.

Question 9

Growing businesses do not necessarily need changes in management techniques.

Question 10

The takeoff stage of small business growth is the stage that all business owners should aspire to reach rapidly and maintain indefinitely.

Question 11

The negotiator role of managing an organization involves continuously going to bat for the resources needed for the success of the company.

Question 12

Managers tend to work on a wide variety of activities that are brief and have little continuity throughout an eight-hour work day.

Question 13

The distinguishing characteristic of the third stage (the success-disengagement stage) of growth is that the business owner is removing a level of supervision.

Question 14

Effectiveness and efficiency, defined, are interchangeable words.

Question 15

Managers have no regular duties that must be performed throughout the day.

Question 16

The four functions of management are planning, leading, organizing, and controlling.

Question 17

A growing business will experience five different stages of growth.

Question 18

Growth is a natural, usually desirable, consequence of being in business.

Question 19

The distinguishing characteristic of the take-off stage of growth is that the business has been reduced to a single department with one supervisor.

Question 20

Management is getting things done through available resources.

Question 21

Your three broad choices for exit strategy include sell, merge, or close.

Question 22

Items that cause people to feel positive about their job are known as motivators according to Herzberg's motivation-hygiene theory.

Question 23

The lowest needs according to Maslow's hierarchy are physiological needs.

Question 24

Small businesses need managers who are also leaders.

Question 25

The art of negotiation is really more important for large businesses than small ones.

Question 26

Delegation empowers employees, meaning that it increases their involvement in their work.

Question 27

When transitioning a small business to professional management, it is important to avoid delegation.

Question 28

Vision is having a written plan of where the business is headed in the future.

Question 29

T F When developing an exit strategy for a current business, it is important to rely on research and analysis and avoid following instincts.

Question 30

Leadership abilities are not necessary for small business owners since they do not work closely with people.

Question 31

In all business negotiations, the goal for each party should be win-lose.

Question 32

The adaptability attribute of leadership means that leaders should be able to roll with the punches and take advantage of the opportunities presented.

Question 33

According to Jim Kouzes, president of Tom Peters Group/Learning Systems, credibility is the major foundation of small business leadership.

Question 34

Motivation is the reason an individual takes an action in satisfying some need.

Question 35

One attribute of a professionally managed small business is that it plans and manages growth.

Question 36

Maslow's hierarchy of needs states that people have a common set of universal needs.

Question 37

Leadership is the process of directing and influencing the actions of members within a group.

Question 38

Skillful negotiators are better at talking than listening.

Question 39

The lowest needs in Maslow's hierarchy are psychological needs.

Question 40

A NFIB survey shows that "poor earnings" are the most important problem facing small business owners.

Question 41

Effectiveness, defined, is achieving which of the following?

A) Stated goals
B) High profit
C) Low expenses
D) Growth

Question 42

Items that people expect on the job are known as hygiene factors according to Herzberg's motivation-hygiene theory.

Question 43

Planning is __________ what to do.

A) Thinking
B) Pretending
C) Organizing
D) Determining

Question 44

From the Chapter 16 Manager's Notes entitled "Help Me, Help Me, Help Me" what is a portal?

A) A round window in the side of a ship
B) A pathway to a browser
C) A gateway to a wide variety of information
D) An online customer service provider

Question 45

According to the Chapter 16 opener, the best skill for managers to possess is to be

A) Tech savvy
B) A jack-of-all-trades
C) Strong negotiators
D) Flexible

Question 46

According to Herzberg, if a lower level need arises for an employee, the employee will still be able to concentrate on higher level needs.

Question 47

Money always motivates people.

Question 48

Efficiency, defined, is

A) Making a high profit with low expenses
B) Using all available resources to produce a high amount of output
C) Accomplishing goals and tasks while making the most of the resources available
D) Doing all tasks the right way the first time

Question 49

Management is the efficient and effective use of resources.

Question 50

Controlling, defined, is comparing what was initially __________ with what was actually __________.

A) Received, bought
B) Ordered, received
C) Planned, accomplished
D) Accepted, defined

Question 51

The negative side of stress, called distress, is caused by uncertain outcome and importance to the individual.

Question 52

A person's physical condition affects his response in stressful situations.

Question 53

At work on a typical day, Kathleen, a sales manager, spends a portion of her day talking to customers and suppliers, but she also organizes work activities and leads a team of assistants. She has to ensure that quality standards are being met within the company. This example demonstrates that

A) The functions of management are continuous and interrelated
B) Leadership is the most important function of management
C) Controlling is the most important function of management
D) The functions of management need to be delegated to a large pool of employees

Question 54

Fear always motivates people

Question 55

For a situation to create eustress for a person, two conditions are necessary: The outcome must be uncertain, and it must be a matter of importance to the person.

Question 56

Management can be described as planning, leading, organizing, and controlling in order to achieve the __________ of the organization.

A) Needs
B) Goals
C) Debts
D) Financial well-being

Question 57

Which of the following people were responsible for first articulating the four functions of management in 1916?

A) Henry Mintzberg
B) Henri Fayol
C) Henry Ford
D) Frederick Herzberg

Question 58

Parkinson's law states that "anything that can go wrong, will go wrong."

Question 59

Organizing involves all but which of the following?

A) Assembling financial resources
B) Assembling human resources
C) Assembling materials
D) Assembling invoices

Question 60

Leading, defined, is the process of getting the most __________ possible from the available __________.

A) Work, employees
B) Output, resources
C) Profit, resources
D) Resources, suppliers

Question 61

Gina's Pizza has been in operation for three years, and the business has recently expanded to include multiple locations with a head manager at each location. Gina's Pizza is most likely in which business growth stage?

A) Survival
B) Success
C) Takeoff
D) Resource maturity

Question 62

According to Table 16.1 titled "What's Bugging You," the single biggest problem during the first year of operation and during periods of rapid growth was reported to be

A) Taxes on business income
B) Internal financial management
C) Obtaining external financing
D) Cost of health insurance

Question 63

Which of the following was not listed as a possible small business exit strategy?

A) Turn into a large business
B) Sell via an ESOP
C) Sell to a strategic buyer
D) Take the company public

Question 64

The _________ approach to determining a company's worth involves the cost to recreate the operating assets of the business.

A) Asset-based
B) Income
C) Market
D) Liability-based

Question 65

The __________ stage of growth involves the owner adding levels of supervision to lead departments or divisions.

A) Formal organization
B) Success-disengagement
C) Take-off
D) Resource-maturity

Question 66

Within the __________ role of management, the manager needs to determine the direction of the company.

A) Entrepreneur
B) Resource allocator
C) Monitor
D) Leader

Question 67

According to Figure 16.2 in Stages of Business Growth, the management style appropriate for the existence stage is _____?

A) Direct supervision
B) Supervised supervision
C) Functional
D) Line and staff

Question 68

Within the __________ role, the manager needs to identify fresh new ideas and innovations.

A) Entrepreneur
B) Resource allocator
C) Monitor
D) Leader

Question 69

The best stage of growth is __________.

A) Existence
B) Success-disengagement
C) Take-off
D) No single stage is better than the other stages

Question 70

The __________ stage of growth involves the owner hiring other people.

A) Existence
B) Solo
C) Survival
D) Resource-maturity

Question 71

Connie's consulting business has grown steadily over the course of four years. However, Connie recently has found that some of the jobs are not being completed on time, and there is more stress due to a greater reliance on partners and employees. Connie is most likely experiencing which of these?

A) Owner's fatigue
B) Growing pains
C) Exit strategy issues
D) Resource maturity

Question 72

According to an NFIB study, small business owners cited what as the most important problem that they face?

A) Energy prices
B) Cost of health insurance
C) Governmental paperwork
D) Locating qualified employees

Question 73

The _________ approach to determining a company's worth involves looking at what others have paid for comparable businesses.

A) Asset-based
B) Income
C) Market
D) Liability-based

Question 74

The __________ stage of growth involves the owner running the business alone.

A) Existence
B) Survival
C) Success-disengagement
D) Resource-maturity

Question 75

Bob Boyd is developing an exit strategy for his sporting goods business, since he plans to retire within the next three years. Bob knows that one of the company's greatest strengths is that there is a core group of motivated employees who have been with the company for years. Based on this information, which exit strategy would be the best option for Bob?

A) Sell to a strategic buyer
B) Sell to a key employee or group of employees
C) Take the company public
D) Undertake a planned liquidation

Question 76

One of Brandon's primary roles on the production line is to continuously determine if quality control standards are being met. This relates to which managerial role?

A) Entrepreneur
B) Resource allocator
C) Monitor
D) Leader

Question 77

During the ________ stage of business growth, the greatest concerns are to consolidate and control the finances and to professionalize the organization.

A) Survival
B) Success
C) Takeoff
D) Resource maturity

Question 78

Wendy has recently been approached by a Rita to sell her art gallery. Rita has been in the art business for over twenty years, but has never owned her own gallery. She tells Wendy that this has been one of her dreams since she was young. If Wendy sells the gallery to Rita, which exit option will she adopt?

A) Take the company public
B) Sell to a strategic buyer
C) Sell to a financial buyer
D) Sell to a key employee or group of employees

Question 79

Signs of growing pains include all but which of the following?

A) Jobs not delivered on time
B) Costs that rise out of control
C) A feeling that chaos is ruling the business
D) Inadequate building size

Question 80

As seen in Figure 16.2 in Stages of Business Growth, the major strategy of the take-off stage of business growth is _____?

A) Existence
B) Survival
C) Growth
D) Return on investment