Question 1

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

Accepted Answer

Delegating authority means giving subordinates the power and right to act or make decisions.

Question 2

When a small business expands beyond the comfort zone of its entrepreneur, bankruptcy is all too often the final outcome.

Accepted Answer

When a small business grows beyond the capabilities of its owner, financial troubles can arise, and bankruptcy is a common result.

Question 3

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

Accepted Answer

Budgets can be prepared for various time frames, but it is common for organizations to prepare annual budgets, which may then be broken down into quarterly or monthly figures. A five-year budget is more likely to be a strategic or long-term plan rather than a detailed budget.

Question 4

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

Accepted Answer

The answer of Top-level executives in a large corporation have...

Question 5

Stage 4 of small business growth involves the use of budgets, personnel practices, organizational charts, and control procedures.

Accepted Answer

This statement is true. Stage 4 of small business growth is often characterized by the implementation of these types of management tools and systems to help manage increased complexity and size.

Question 6

Most very small firms use an organizational structure in which each person reports to one supervisor.

Accepted Answer

This is known as a simple or flat organizational structure, and is commonly used by very small firms with few employees.

Question 7

Once an organizational structure and pattern of management has been established, it should remain static in order for the business to become established and grow.

Accepted Answer

Organizational structure and management patterns should be dynamic and adaptable to changes in the business environment and growth of the company. Flexibility and evolution are necessary for long-term success.

Question 8

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

Accepted Answer

The answer of A consultant beginning to ask employees for...

Question 9

Most entrepreneurs typically overdo the amount of planning.

Accepted Answer

Many entrepreneurs actually under-plan, focusing more on action and improvisation rather than detailed planning, which can lead to challenges in managing growth and adapting to market changes.

Question 10

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

Accepted Answer

The maximum number of employees who can be supervised effectively by a capable manager varies depending on the industry, work environment, and nature of work. Some managers can effectively supervise a larger number of employees, while others may struggle with even a smaller team. Therefore, it is difficult to give a specific number that applies to all circumstances.

Question 11

Research has shown that, surprisingly, relatively simple adjustments in physical space do not have much effect on the mindset that employees assume at work.

Accepted Answer

Research has shown that physical environment can have a significant impact on employee mindset and productivity. Simple adjustments such as adding natural light, plants, and comfortable furniture can improve mood and motivation levels. Additionally, the layout and design of the workspace can promote collaboration and communication among employees.

Question 12

In very small companies, the organizational structure tends to evolve with little conscious planning.

Accepted Answer

In small companies, there may not be a formal plan or structure in place, and the organization often evolves based on the needs and decisions of the owner or founder.

Question 13

As a firm moves from Stage 1 to Stage 4 of small business growth, the small business owner becomes less of a leader and manager and more of a doer.

Accepted Answer

As a small business moves from Stage 1 to Stage 4 of growth, the small business owner becomes more of a leader and manager and must delegate tasks and responsibilities to employees.

Question 14

A flashy, highly charismatic personality is required to be an effective leader.

Accepted Answer

While being charismatic can certainly be helpful in certain situations, it is not a requirement for being an effective leader. Many successful leaders are introverted or soft-spoken, but are able to inspire and motivate their team through their actions and decision-making. Effective leadership is more about skills such as communication, problem-solving, and decision-making, rather than simply having a charismatic or flashy personality.

Question 15

The formal organization stage of business growth is a turning point for a small firm, because the entrepreneur must rise above direct, hands-on management and work through an intervening layer of management.

Accepted Answer

The answer of The formal organization stage of business growth...

Question 16

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

Accepted Answer

Launching a startup requires dealing with uncertainty and risk, and having a tolerance for ambiguity can help entrepreneurs navigate these challenges with more resilience and adaptability.

Question 17

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

Accepted Answer

At Stage 2 of small business growth, the entrepreneur starts delegating tasks and coordinating the efforts of others while still performing basic work activities.

Question 18

Small firms that hesitate to move through the various organizational stages and acquire the necessary professional management often limit their rate of growth.

Accepted Answer

Small firms that do not have professional management may not have the necessary skills and expertise to handle the challenges of growth, which can limit their rate of growth.

Question 19

The challenge for small firm leaders is to develop a professional approach to management, while still retaining the entrepreneurial spirit of the enterprise.

Accepted Answer

Small firm leaders need to balance being professional in their approach to management with keeping the entrepreneurial spirit alive in their business.

Question 20

A company's culture unfolds over the lifetime of the business and usually reflects the character and style of the founder.

Accepted Answer

The answer of A company's culture unfolds over the lifetime...

Quiz 19: Professional Management and the Small Business