Deck 13: Entrepreneurial Growth

Question 1

The opportunity domain is one of the four driving forces in the growth stages of any firm.

Answer 1

True

Question 2

It is possible to have a negative cash conversion period

Answer 2

True

Question 3

The most critical first task in transitioning a business beyond the startup stage is to sustain an entrepreneurial organization.

Answer 3

False

Question 4

During the early growth, the entrepreneur needs to focus on the company's strategy

Question 5

Essentially customer needs do not change, therefore you need to identify them and maintain focus.

Question 6

Rapidly growing administrative and selling expenditures are often appropriate

Question 7

Performance measures for a growing firm should be simple and inexpensive to track

Question 8

As the organization grows, managerial skills emerge out of entrepreneurial skills.

Question 9

Performance measures in an early-stage company are designed more for helping in entrepreneurial decision-making than for evaluating current performance

Question 10

Execution has the most direct link to profits

Question 11

Managers should constantly develop the firm's entrepreneurial capability.

Question 12

Managing cash is one of the key objectives of a control system

Question 13

Stockholders have the largest impact on a firm's growth potential

Question 14

The Cash Cycle shows the relationship between three key metrics: days in payables, assets turnover, and days sales are outstanding

Question 15

Businesses with less risk and less complexity are the most wanted candidates for acquisitions.

Question 16

At the core of the growth model lays execution.

Question 17

It is always best to appoint a CEO from the employees who were with the company from the very beginning

Question 18

Diversifying opportunities in early stages of the company generates better results than crafting only one

Question 19

A typical acquisition gives the owner 50% in cash and 50% in the acquiring company's stock

Question 20

You should try to implement a complex system of control from the early stages of growth

Question 21

What fraction of firms started today, according to the chapter, will still be growing and profitable in eight years?

A)1/5
B)1/6
C)1/7
D)1/8
E)1/9

Question 22

What does entrepreneurship begin with?

A)Leadership.
B)A loan.
C)Venture capital.
D)Opportunity.
E)A management team.

Question 23

Which of the following is not a part of the driving forces in the growth stages?

A)Leadership
B)The opportunity domain
C)Resources and capabilities
D)Execution
E)The entrepreneur

Question 24

The best management team consists of both internally promoted and externally hired people

Question 25

The company should be driven only by opportunities that leverage current capabilities

Question 26

It will often be acceptable for an entrepreneur to find him/herself routinely doing portions of other people's jobs during growth.

Question 27

Well run companies that manage cash well are likely to be offered more favorable types and terms of funding.

Question 28

Tracked items and metrics should be focused on supporting specifically anticipated decisions to the greatest extent possible.

Question 29

As the company grows, bureaucracy has to be increasingly instilled to help coordinate different departments

Question 30

What is the core of the growth model?

A)Leadership
B)Resources and capabilities
C)The opportunity domain
D)The entrepreneur
E)Execution

Question 31

According to the chapter, 50% of businesses started today will not exist in how many years?

A)2
B)3
C)5
D)6
E)8

Question 32

What option does the entrepreneur have if he or she decides to maintain a business?

A)Become an entrepreneurial leader
B)Take alternate position in the firm
C)Become a manager
D)Seek other employment
E)None of the above

Question 33

What skills become increasingly important at later stages of development for a company?

A)Marketing
B)Managerial
C)Technical
D)Entrepreneurial
E)Opportunity identification

Question 34

Bootstrapping policy should not be discontinued once the company is successful

Question 35

In a typical acquisition deal, what portion of the selling price does the entrepreneur receive in cash?

A)1/2 of the price.
B)1/3 of the price.
C)1/4 of the price.
D)1/5 of the price.
E)1/6 of the price.

Question 36

Tracking performance is necessary to support quality decision making.

Question 37

Key people in the organization are hired professional managers

Question 38

What is NOT an option an entrepreneur must consider beyond startup?

A)Leaving the venture
B)Selling the venture
C)Maintaining the venture
D)Growing the venture
E)All of them are options

Question 39

The majority of your performance tracking efforts should be focused on your competition during your initial growth stages.

Question 40

What is the least likely to lead to a failure in growth management?

A)Having limited time and resources to spend on organization building
B)Spending too much time on day-to-day operations
C)Chasing many opportunities
D)Spending time on planning
E)Not having a strong management team

Question 41

What does cash cycle ratio show?

A)Number of dollars available to pay your short-term liabilities.
B)How quickly you get your receivables paid.
C)Time between purchase of supplies and collection of accounts receivable generated in the sale of a product.
D)How quickly you sell and replace your inventory over a period.
E)Degree to which a company is using borrowed money.

Question 42

Which of the following is not a source of financing for early growth?

A)Angel investors
B)Founder loans
C)Investment from key management
D)Equipment leases
E)All of them are sources

Question 43

Which of the following is NOT characteristic of an effective performance tracking system?

A)Determines where, when, and how to measure a key item, and who is responsible for measuring it.
B)Metrics tied to a decision (should be nearly all metrics)are assigned the latest time before which the measure will be relevant to making the decision.
C)The system is exhaustive of all possible metrics for a given questions.
D)All of the above.

Question 44

What could identification of your firm's range of value chain activities help you to detect?

A)New markets.
B)Legal liabilities.
C)Ways to shift your core business.
D)Resource draining side projects.
E)All of the above.

Question 45

A series of steps showing the activities and entities that we need to coordinate in order for the company to execute its product or service is called:

A)Customer value delivery
B)Value chain
C)STEP
D)Customer value proposition
E)Attributes model

Question 46

Which of the following is not mentioned in the chapter as a key objective for a control system?

A)To create culture
B)To institute control
C)To manage cash
D)To track performance
E)All of the above are mentioned

Question 47

Which of the following is NOT an important factor is recruiting a board of directors?

A)Mitigating the risk of personal biases in decision making.
B)Whether or not the board member is a stakeholder with the ability to exert control over the firm.
C)A board members experience as an entrepreneur
D)The board members likely willingness to join the company as a senior manager in the future.

Question 48

What purpose should the board of directors serve as a company professionalizes?

A)Mentorship.
B)Strategic.
C)Operating.
D)Credit lending.
E)To represent suppliers.

Question 49

What do customers usually want the company to do with its products?

A)To improve the products they know best.
B)To introduce new products.
C)To change brand names of existing products.
D)To produce products inside the country.
E)None of the above.

Question 50

What best characterizes an entrepreneur?

A)Resource driven
B)Maintains consistency and predictability
C)Implements the business
D)Opportunity driven
E)Enhances efficiency of organization

Question 51

After tracking key metrics in your company's performance, what should alert you that it may be time to consider making adjustments in your policies?

A)If your metrics are below your expectations.
B)If the changes in your company are not the result of changes in your policies.
C)If the marketing expenditures are hard to predict.
D)If your metrics require in-depth analysis.
E)If receivables collection period is more than 30 days.

Question 52

Which of the following are signs that your venture may be growing too fast?

A)The percentage of your cash flows from operations is declining against your cash flows from financing.
B)Profit margins are shrinking as sales are rising.
C)Customer complaints are declining while sales are rising.
D)A & B only
E)B & C only

Question 53

An effective control system includes all of following except:

A)Account payables policies
B)Accounts receivables and collections policies
C)Assessment of performance and expenditures
D)An inventory management system
E)A risk-assessment ratios tracking

Question 54

Who or what has the largest impact on a firm's growth potential?

A)Stakeholders
B)Uncertainty
C)Environmental conditions
D)Technology changes
E)Competitors

Question 55

A positive cash conversion period means that:

A)You have an inefficient receivables control system
B)You are getting cash in before you deliver products/services
C)You have a very efficient receivables control system
D)You are receiving cash after you deliver products/services
E)Customers pay you before you provide them products/services

Question 56

Which of the following is a sign that an entrepreneur is delegating well.

A)You are making more decisions, but accomplishing less
B)People are working hard, but critical mistakes are increasing
C)Action isn't taken without the entrepreneurs' involvement
D)Cross talk commonly solves problems before they are brought to the attention of the entrepreneur.

Question 57

According to the Driving Forces of Growth Model, opportunity domain interacts with which of the following?

A)Stakeholders
B)Environmental conditions
C)Profitability
D)Coordination
E)Organizational capabilities

Question 58

Which of the following may be a common error when an entrepreneur tries to transition to an entrepreneurial leader (pick one).

A)Leads the venture through changes in both the organization and the competitive environment.
B)Sets a vision and empowers others to carry it out.
C)Avoids hiring managers whose domain experience exceeds their own.
D)Leverages the core business to grow in-line with critical capabilities.
E)All of the above

Question 59

The chapter warns that which of the following can lead to poor coordination between different activities within the company?

A)Overdue collections
B)Inventory outages
C)Uncontrolled growth
D)Diminishing cash flows
E)None of the above

Question 60

What should an entrepreneur focus on during early growth?

A)Expansion
B)Strategy
C)Operations
D)Accounting
E)Networking

Question 61

Describe the process of transition from entrepreneur to entrepreneurial leader.

Question 62

Discuss some ways that cash management in a down cycle is critical to the long term development of an organization's intangible capabilities.

Question 63

Discuss some potential pitfalls of decentralization common to new leaders

Question 64

What are the driving forces of growth? What is the core of the growth model?

Question 65

What are the ways of nurturing entrepreneurs in an organization?

Question 66

Describe why performance measure must be linked to anticipated decisions.

Question 67

Name some of the sources of financing.What features do creditors look for in growing organizations?

Question 68

Discuss some options to support either the integration of outside managers into a venture, or to prepare existing employees for management roles.

Question 69

Once a company has moved beyond the startup stage, what are the three main paths that the founder can choose? What are some of the subordinate options within each of those three paths?

Question 70

Discuss some ways to help an organization remain entrepreneurial as it implements control systems.

Question 71

How should entrepreneurs form their management team? What common problems might they face?

Question 72

What are the components of the cash cycle? How can the company improve its cash conversion period?

Question 73

What is the danger of chasing too many opportunities? Explain the significance of the opportunity domain.

Question 74

Why is a control system so important for a growing organization? What are the features of a well-functioning control system?

Question 75

Describe some of the reasons that entrepreneurs fail to manage their companies' growth.