Deck 19: Professional Management and the Small Business

Question 1

Company planning helps clarify issues and how these issues can be faced, provides focus and increases credibility with outsiders.

Answer 1

True

Question 2

The maximum number of employees who can be supervised effectively by a capable manager is four.

Answer 2

False

Question 3

When a firm reaches Stage 2, the entrepreneur engages extensively in both the coordination of the efforts of others as well as performing basic work activities.

Answer 3

True

Question 4

Work teams require a lower level of participation of employees than empowerment.

Question 5

A small company's culture unfolds over the lifetime of the business..

Question 6

The formal organization 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 7

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

Question 8

A small business typically has greater constraints in cash flow and employee expertise than found in larger corporations.

Question 9

As a firm moves from Stage 1 to Stage 4, the entrepreneur becomes less of a manager and more of a doer.

Question 10

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

Question 11

A consultant beginning to ask employees for their marketing ideas illustrates empowerment.

Question 12

Budgets are usually prepared for five years in advance using quarterly figures.

Question 13

Stage 4 of small business growth involves the use of budgets, personnel policies, organizational charts, and computerization.

Question 14

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

Question 15

Professional managers often have more sophisticated methods of management than entrepreneurs.

Question 16

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

Question 17

Small firms that hesitate to acquire professional management often limit growth.

Question 18

Someone with a charismatic personality will make a more effective leader.

Question 19

A small business that has expanded beyond the comfort zone of its entrepreneur will end in bankruptcy.

Question 20

Line organization uses a single chain of command.

Question 21

A positive solution should be pursued in negotiations whenever it is feasible to do so.

Question 22

Marcia, owner of Drapes by Design, has groups of employees in production and installation. If she decides to use work teams as part of her leadership approach, she may be able to:

A) earn more in quarterly profits.
B) decrease the number of supervisors.
C) improve product quality.
D) reduce total compensation.

Question 23

Entrepreneurs who follow a win-win negotiating strategy seek a solution that will satisfy at least the basic interests of both parties.

Question 24

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

Question 25

Barry's expectation that employees will complete his requests immediately is typical of ______ leaders.

A) democratic
B) commanding
C) pacesetting
D) affiliative

Question 26

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

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

Question 27

To improve employee morale, an industrial distribution business might consider __________.

A) employee empowerment.
B) formulating policies after gaining employee thoughts.
C) soliciting employee input on the adoption of budgets.
D) the establishment of control standards.

Question 28

Periodic performance review sessions for a company following two-way communication would discuss employee ideas, questions, complaints, and job expectations.

Question 29

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

A) stage of development.
B) product and service offerings.
C) marketing efforts.
D) industry in which the company operates.

Question 30

SBDCs are affiliated with colleges and universities and provide counseling solely through a group of retired executives.

Question 31

What type of leadership style focuses on creating emotional bonds?

A) Affiliative
B) Pace-setting
C) Coaching
D) Coercive

Question 32

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

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

Question 33

Linda's high standards and expectations of employee excellence is typical of ____ leaders.

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

Question 34

Many owner-managers seldom work more than 40 to 60 hours a week.

Question 35

It is critical for entrepreneurs to set aside time to work undisturbed.

Question 36

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

Question 37

The greatest time saver is the effective use of time.

Question 38

If Elizabeth, who just hired her first employee, desires to create an innovative cultural environment within the business, what should she do?

A) Support experimentation while eliminating unnecessary penalties for failure
B) Maintain tight control of all aspects of the business.
C) Reject employee ideas.
D) Treat all employees the same.

Question 39

If a company successfully creates properly functioning self-managed teams among employees, the supervisors will

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

Question 40

Some colleges and universities offer training directly to aspiring small business owners.

Question 41

A hesitancy by an entrepreneur to move through the various organizational stages can

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

Question 42

Having more than one supervisor is a violation of the:

A) span of control
B) delegating
C) controlling
D) chain of command

Question 43

Stage 3 in the growth of a business is characterized by

A) a one-person operation.
B) hands-off management practices.
C) multi-layered organization.
D) the entrepreneur as a player-coach.

Question 44

Mario has just begun to personally supervise employees. His firm likely to be in the ____________ stage of growth.

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

Question 45

Susan 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

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

Question 46

A small firm's basic path to the future is spelled out in a document called a

A) feasibility study.
B) short-range plan.
C) budget.
D) strategic plan.

Question 47

John, 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 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

Founders are least likely to be described as a(n)

A) analytical person.
B) good organizational member.
C) risk taker.
D) systematic problem solver.

Question 50

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

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

Question 51

The owner of a rapidly growing small business needs to talk to a lender for additional financing. Which document would increase the company's credibility?

A) control standards
B) human resource guidelines
C) strategic plan
D) All of the above would be needed.

Question 52

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

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

Question 53

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 54

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.

Question 55

Margaret has launched a new event planning company with four employees. With the growth in sales and personnel, the next step of growth will involve

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

Question 56

A budget is prepared as part of a

A) strategic plan.
B) short-range plan.
C) organizational plan.
D) long-range plan.

Question 57

A monthly production schedule is prepared as part of the

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

Question 58

As a firm grows, the small business owner needs to fill key positions with persons who

A) could be future managers.
B) can complement weaker areas of the entrepreneur.
C) are able to survive in the culture.
D) All of the above are true.

Question 59

In a line-and-staff organization, which division is a line activity?

A) Production
B) Legal
C) Human Resources
D) Accounting

Question 60

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

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

Question 61

Vivian would like to improve two-way communication with her subordinates. Which of these ideas would be most helpful her?

A) Post daily updates on the bulletin board.
B) Announce daily production requirements over the public address system.
C) Engage employees in conversations to discuss their ideas and problems
D) Manage by walking around.

Question 62

SCORE refers to

A) the grade assigned to a small firm by the SBA.
B) the management knowledge possessed by an entrepreneur.
C) a group of retired executives who act as consultants to small firms.
D) an alliance of small firms for the purpose of bidding on government contracts.

Question 63

Match the term with its definition. Some terms may not be used.
a.Budget
e.Long-range plan
b.Chain of command
f.Professional manager
c.Delegation of authority
g.Self-managed work teams
d.Empowerment
h.Short-range plan
A document that expresses future plans in monetary terms

Question 64

Match the term with its definition. Some terms may not be used.
a.Budget
e.Long-range plan
b.Chain of command
f.Professional manager
c.Delegation of authority
g.Self-managed work teams
d.Empowerment
h.Short-range plan
Authorization of employees to make decisions or take actions on their own

Question 65

Scott, 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) take corrective action.
B) set standards.
C) increase inspection.
D) increase two-way communication.

Question 66

Match the term with its definition. Some terms may not be used.
a.Budget
e.Long-range plan
b.Chain of command
f.Professional manager
c.Delegation of authority
g.Self-managed work teams
d.Empowerment
h.Short-range plan
A firm's overall plan for the future

Question 67

Entrepreneurs can get management assistance from peers through

A) outside consultants.
B) SCORE advisors.
C) volunteer work in the community.
D) networking.

Question 68

Kathleen believes she could be more efficient in the use of her time. To determine where improvements can be made, Kathleen should first:

A) list long term objectives.
B) record time spent on various activities during the day.
C) list projects that need attention.
D) assign priorities to unfinished tasks.

Question 69

Match the term with its definition. Some terms may not be used.
a.Budget
e.Long-range plan
b.Chain of command
f.Professional manager
c.Delegation of authority
g.Self-managed work teams
d.Empowerment
h.Short-range plan
Groups of employees with freedom to function without direct supervision but with responsibility for results

Question 70

Nancy just added her eighth employee, a human resource manager who will be responsible for all future hiring, training, retaining, and firing decisions. The company is in a ________ organizational structure.

A) delegated
B) line-and-staff
C) line
D) span of control

Question 71

The consulting resources of universities are made available to small business firms by

A) student consulting team programs.
B) SCORE.
C) business incubators.
D) management consultants.

Question 72

Effective time management requires

A) firmly established priorities.
B) self-discipline.
C) using a good time management system.
D) All of the above are required.

Question 73

Small business service organizations that are patterned after the Agricultural Extension Service are known as

A) student consulting team programs.
B) Small Business Development Centers.
C) business incubators.
D) SCORE.

Question 74

Controlling is the managerial function that involves the managers

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

Question 75

James is talking to another supervisor about the number of employees who report directly to him. James is talking about his:

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

Question 76

LaToya, as the owner of a minority firm, should look to which organization first for assistance?

A) SBDC
B) SCORE
C) sponsorship of student consulting team projects
D) virtual incubators

Question 77

Which time management suggestion would be the most critical for a small business owner?

A) Set aside time to work undisturbed.
B) Have a daily written plan and highlight priorities.
C) E-mail, cell phones and the Internet should be used to save time, not be a distraction.
D) Complete trivial tasks first to have something completed.

Question 78

Match the term with its definition. Some terms may not be used.
a.Budget
e.Long-range plan
b.Chain of command
f.Professional manager
c.Delegation of authority
g.Self-managed work teams
d.Empowerment
h.Short-range plan
A plan that governs a firm's operations for one year or less

Question 79

Match the term with its definition. Some terms may not be used.
a.Budget
e.Long-range plan
b.Chain of command
f.Professional manager
c.Delegation of authority
g.Self-managed work teams
d.Empowerment
h.Short-range plan
The official, vertical channel of communication in an organization

Question 80

Marvin has just launched a consulting business. Business has been slower than expected. What advice would you give Marvin?

A) Post an ad in the local newspaper.
B) Tap into his personal and professional network.
C) Find a different line of work.
D) Take a full-time position with a company while he builds his business part-time.