Deck 14: Entrepreneurial Growth

Question 1

Rapidly growing administrative and selling expenditures are often appropriate

Answer 1

True

Question 2

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

Answer 2

True

Question 3

As the organization grows, managerial skills negate the importance of entrepreneurial skills.

Answer 3

False

Question 4

Execution has the most direct link to profits

Question 5

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

Question 6

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

Question 7

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

Question 8

Growing companies who choose to expand through acquisition do so by primarily looking beyond their opportunity domain.

Question 9

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

Question 10

Managers should constantly develop the firm's entrepreneurial capability.

Question 11

It is possible to have a negative cash conversion period

Question 12

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

Question 13

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

Question 14

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

Question 15

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

Question 16

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

Question 17

At the core of the growth model lays execution.

Question 18

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

Question 19

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

Question 20

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

Question 21

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 22

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 23

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 24

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 25

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

Question 26

Professional managers for companies in later growth stages are almost always internal candidates because of their unique experience with the company.

Question 27

Tracking performance is necessary to support quality decision making.

Question 28

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

Question 29

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

Question 30

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 31

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 32

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 33

What is the core of the growth model?

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

Question 34

Financing for longer term investments that incur a higher degree of risk are often funded through equity rather than bank loans.

Question 35

What does entrepreneurship begin with?

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

Question 36

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 37

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

Question 38

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

Question 39

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

Question 40

Bootstrapping policy should not be discontinued once the company is successful

Question 41

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 42

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 43

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 44

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 45

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

A) Willingness and ability to become key participants in the strategic planning process.
B) Whether or not the board member is a stakeholder with the ability to exert control over the firm.
C) Finding alternative perspectives and depth and breadth of experience.
D) The board member's likely willingness to join the company as a senior manager in the future.

Question 46

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 47

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 48

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 49

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 50

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 51

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 52

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) Problems are solved without the entrepreneur being involved in the underlying mechanics.

Question 53

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 54

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 55

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 56

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 57

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 58

What should an entrepreneur focus on during early growth?

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

Question 59

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 60

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