Question 1

A nonfamily employee of a family business complains that the recent promotion of a family member was unfair.The owner should:

Accepted Answer

The best approach is for the owner to discuss the roles and opportunities for both family members and nonfamily employees in order to create an understanding of the promotion process and keep the nonfamily employee motivated. It is important to address any perceived unfairness to prevent negative feelings from festering and negatively impacting the work environment.

Question 2

Explain the role of the entrepreneur's spouse as it affects a family business and show how it can be made most effective if the spouse does not have an active part of daily operations.

Accepted Answer

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Question 3

The socioemotional commitment of family members to a firm occurs along five dimensions;what is the acronym for these dimensions and what do the letters in the acronym stand for?​

Accepted Answer

The answer of The socioemotional commitment of family members to...

Question 4

Which statement is true concerning using available family talent in the succession plan?

Accepted Answer

If the available talent within the family is insufficient, it is important to bring in outside leadership to ensure the company's success, even if it is not a popular decision among family members.

Question 5

What step is best for parents to decrease succession conflict among children active in the firm and those who are not?

Accepted Answer

The answer of What step is best for parents to...

Question 6

A parent might attempt to resolve a transfer of ownership by giving active children in the firm's management _____ stock and giving nonactive children _____ stock.

Accepted Answer

Giving active children preferred stock would give them more control and decision-making power, while giving nonactive children common stock would allow them to still benefit from ownership but with less control.

Question 7

Jan and Jill started a business 20 years.Jill recently stepped down;her daughter Jenny has agreed to start managing the company with Jan's help;and the eventual goal is for Jenny to run the entire company.This process between Jan and Jenny is called ____.

Accepted Answer

The process between Jan and Jenny is called mentoring, which involves an experienced person (in this case Jan) providing guidance and support to a less experienced person (Jenny) to help them develop their skills and knowledge to be able to eventually take over the company. Choices A and B are not accurate as they imply a more equal partnership or consortium between family members, whereas Jenny is being specifically mentored by Jan.

Question 8

Jim,the founder of a family business specializing in real estate,is contemplating turning the business over to his five children.One possibility,the founder believes,is to divide ownership equally among the children.This action would:

Accepted Answer

Dividing ownership equally among the children may potentially hinder the future functioning of the business as decision-making may become difficult with many owners. It may also lead to issues such as disagreements over the direction of the business or unequal levels of involvement from each child. Therefore, it may be more beneficial to consider other ownership structures or options for transferring ownership, such as designating certain children as majority owners or implementing a buyout agreement.

Question 9

Bella decided to hire a nonfamily member as her successor instead of selecting one of her children.What might explain her decision?

Accepted Answer

Bella wanted to bring in new skills and expertise.

Question 10

Family retreats,which open lines of communication,

Accepted Answer

Family retreats are designed to improve communication among family members and promote understanding of each other's perspectives. These retreats usually involve discussing sensitive issues, such as succession planning, family dynamics, and the family business. The founding entrepreneur may act as a communication facilitator. It is essential to involve both family members and in-laws to ensure a comprehensive discussion. The ultimate goal of the family retreat is often the formation of a family council to continue discussions and ensure effective communication among family members. Thus, option D is the best choice.

Question 11

Patricia,a nonfamily employee of a family business,is concerned about competing with family members for future career opportunities.To protect her personal interests,she should:

Accepted Answer

Asking the owner/manager to clarify the extent of opportunities considering her skill set is the best choice. This will allow her to have a clear understanding of her career path and whether there are opportunities for growth within the company. It also shows that she is proactive and interested in her career development, which can be looked upon favorably by the family members who own the business. Aligning herself with the CEO or seeking assurances for promotion ahead of family members may not be feasible or may create tension within the company. Leaving the firm should only be considered as a last resort.

Question 12

What could a founder do to make a succession plan successful? Using the Three-Circle Model of Family Firms,identify issues the founder should discuss with each group.

Accepted Answer

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Question 13

Senior management will be more receptive to the junior generation advancing if the junior generation

Accepted Answer

Senior management will be more receptive to the junior generation advancing if they are proactively sharing their preparation for advancement and seeking advice on implementing their ideas. This shows that the junior generation is taking their role seriously and is willing to learn from the experience of those who have been in the industry for a long time. It also demonstrates a level of respect for the senior management team and a desire to work with them to move the business forward.

Question 14

Explain the concept of family and business overlap in a family business.

Accepted Answer

The answer of Explain the concept of family and business...

Question 15

Discuss guidelines for a successful family business retreat.

Accepted Answer

The answer of Discuss guidelines for a successful family business...

Question 16

In preparing for succession,the senior generation has certain responsibilities.One of these is that:

Accepted Answer

The answer of In preparing for succession,the senior generation has...

Question 17

A family council is most effective when:

Accepted Answer

A family council is established to provide governance to the organization, engage in strategic planning and family succession planning. It is important for both family and nonfamily members to be involved in the council, but its primary purpose is to maintain and strengthen the family business over time. It is not a casual get-together or focused on maintaining harmony between family and nonfamily employees.

Question 18

A family retreat is designed to:

Accepted Answer

A family retreat is a time for family members to come together, relax, and openly discuss any matters related to the family business. It is an opportunity to build relationships, establish common goals, and discuss different perspectives on business matters. Family retreats help strengthen family bonds, improve communication, and create a sense of unity among family members. The other options are not the primary purpose of a family retreat.

Question 19

A family business constitution is sometimes labeled a _____.

Accepted Answer

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Quiz 5: The Family Business

A nonfamily employee of a family business complains that the recent promotion of a family member was unfair.The owner should:

Explain the role of the entrepreneur's spouse as it affects a family business and show how it can be made most effective if the spouse does not have an active part of daily operations.

The socioemotional commitment of family members to a firm occurs along five dimensions;what is the acronym for these dimensions and what do the letters in the acronym stand for?

Which statement is true concerning using available family talent in the succession plan?

What step is best for parents to decrease succession conflict among children active in the firm and those who are not?

A parent might attempt to resolve a transfer of ownership by giving active children in the firm's management _ stock and giving nonactive children _ stock.

Jan and Jill started a business 20 years.Jill recently stepped down;her daughter Jenny has agreed to start managing the company with Jan's help;and the eventual goal is for Jenny to run the entire company.This process between Jan and Jenny is called ____.

Jim,the founder of a family business specializing in real estate,is contemplating turning the business over to his five children.One possibility,the founder believes,is to divide ownership equally among the children.This action would:

Bella decided to hire a nonfamily member as her successor instead of selecting one of her children.What might explain her decision?

Family retreats,which open lines of communication,

Patricia,a nonfamily employee of a family business,is concerned about competing with family members for future career opportunities.To protect her personal interests,she should:

What could a founder do to make a succession plan successful? Using the Three-Circle Model of Family Firms,identify issues the founder should discuss with each group.

Senior management will be more receptive to the junior generation advancing if the junior generation

Explain the concept of family and business overlap in a family business.

Discuss guidelines for a successful family business retreat.

In preparing for succession,the senior generation has certain responsibilities.One of these is that:

A family council is most effective when:

A family retreat is designed to:

A family business constitution is sometimes labeled a _____.

Quiz 5: The Family Business

A nonfamily employee of a family business complains that the recent promotion of a family member was unfair.The owner should:

Explain the role of the entrepreneur's spouse as it affects a family business and show how it can be made most effective if the spouse does not have an active part of daily operations.

The socioemotional commitment of family members to a firm occurs along five dimensions;what is the acronym for these dimensions and what do the letters in the acronym stand for?​

Which statement is true concerning using available family talent in the succession plan?

What step is best for parents to decrease succession conflict among children active in the firm and those who are not?

A parent might attempt to resolve a transfer of ownership by giving active children in the firm's management _____ stock and giving nonactive children _____ stock.

Jan and Jill started a business 20 years.Jill recently stepped down;her daughter Jenny has agreed to start managing the company with Jan's help;and the eventual goal is for Jenny to run the entire company.This process between Jan and Jenny is called ____.

Jim,the founder of a family business specializing in real estate,is contemplating turning the business over to his five children.One possibility,the founder believes,is to divide ownership equally among the children.This action would:

Bella decided to hire a nonfamily member as her successor instead of selecting one of her children.What might explain her decision?

Family retreats,which open lines of communication,

Patricia,a nonfamily employee of a family business,is concerned about competing with family members for future career opportunities.To protect her personal interests,she should:

What could a founder do to make a succession plan successful? Using the Three-Circle Model of Family Firms,identify issues the founder should discuss with each group.

Senior management will be more receptive to the junior generation advancing if the junior generation

Explain the concept of family and business overlap in a family business.

Discuss guidelines for a successful family business retreat.

In preparing for succession,the senior generation has certain responsibilities.One of these is that:

A family council is most effective when:

A family retreat is designed to:

A family business constitution is sometimes labeled a _____.

The socioemotional commitment of family members to a firm occurs along five dimensions;what is the acronym for these dimensions and what do the letters in the acronym stand for?

A parent might attempt to resolve a transfer of ownership by giving active children in the firm's management _ stock and giving nonactive children _ stock.