Deck 19: Professional Management and the Small Business

Question 1

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

Answer 1

True

Question 2

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

Answer 2

True

Question 3

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

Answer 3

False

Question 4

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

Question 5

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

Question 6

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

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.

Question 8

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

Question 9

Most entrepreneurs typically overdo the amount of planning.

Question 10

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

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.

Question 12

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

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.

Question 14

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

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.

Question 16

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

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.

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.

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.

Question 20

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

Question 21

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

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

Question 22

Entrepreneur Danny Meyer's own unique management approach, which involves moving things "back to center," nudging employees in the right direction to keep them motivated in a positive way, and insisting on excellent performance, is called

A) constant, urging reminding.
B) constant, gentle pressure.
C) employee empowerment.
D) a team-builder style.

Question 23

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

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

Question 24

Greater firm profitability results from engaged employees because they

A) feel less threatened.
B) are more productive and customer-focused.
C) focus on important features of the business.
D) require less supervision.

Question 25

Small business development centers (SBDCs) provide a wide range of services, including business plan consultation and export and import support, but they do not help with market research or financial lending assistance.

Question 26

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

Question 27

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

A) visionary
B) general
C) populist
D) paragon

Question 28

Which of the following determines the "feel" of a business and is the "silent teacher" that sets the mood for employee conduct?

A) Organizational culture
B) Organizational structure
C) Delegation of authority
D) The employer's leadership style

Question 29

Which of the following type of leadership styles focuses on building consensus through participation?

A) Populist
B) Visionary
C) Coach
D) General

Question 30

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

Question 31

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 32

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

A) populist
B) general
C) paragon
D) visionary

Question 33

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

Question 34

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

Question 35

The greatest time saver is the effective use of time.

Question 36

The Service Corps of Retired Executives (SCORE) program offers entrepreneurs management advice for a small fee.

Question 37

The first step in time management should be to divide your tasks into categories of "important" and "not important."

Question 38

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

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

Question 39

Showing up at an event and handing out a lot of business cards is an effective form of networking.

Question 40

Many small business owners seldom work more than 40 hours a week.

Question 41

Susan has seen her retail shop grow to the point that she has designated supervisors for the office and two selling areas. Which of the following stages of small business growth is her shop in?

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

Question 42

An organization in which the primary channel of communication is rigid will

A) be efficient.
B) fail.
C) be chaotic.
D) be bureaucratic.

Question 43

The organizational structure of small companies is often characterized by

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

Question 44

A 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 45

From Stage 1 to Stage 4 of small business growth, the small business owner becomes less of a _____ and more of a _____.

A) manager; doer
B) consultant; doer
C) manager; visionary
D) doer; leader

Question 46

The use of written policies, budgets, and job descriptions is most closely associated with which of the following stages of small business growth?

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

Question 47

A corporate marketing executive is moving to a managerial position in a small firm, where she may logically expect to find a _____ of cash and an _____ number of support staff.

A) surplus; adequate
B) shortage; inadequate
C) surplus; inadequate
D) shortage; adequate

Question 48

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 49

Most very small firms use a _____ organization.

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

Question 50

Stage 2 in the growth of a business is characterized by

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

Question 51

A budget is usually prepared _____ in advance, with a breakdown of figures for each _____.

A) two years; quarter
B) five years; year
C) one year; quarter
D) six months; month

Question 52

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 53

A monthly production schedule is prepared as part of a(n) _____ plan.

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

Question 54

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

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

Question 55

A budget is prepared as part of a(n) _____ plan.

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

Question 56

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 57

Managers who can easily become distracted by fighting the everyday fires of business and, in the process, ignore or postpone planning succumb to what is sometimes called

A) "Parkinson's law of planning."
B) the "Peter principle."
C) the "tyranny of the urgent."
D) "Murphy's law of strategic action."

Question 58

What is the difference between a line organization and a line-and-staff organization?

A) A line-and-staff structure has staff specialists who perform specific services or act as management advisers in particular areas.
B) In a line-and-staff organization, each person may report to more than one supervisor.
C) Line organizations are used in large firms, whereas most very small firms use a line-and-staff organization.
D) The span of control in a line organization is larger than the span of control in a line-and-staff organization.

Question 59

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

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

Question 60

Founders are least likely to be described as

A) creative.
B) a good organizational member.
C) innovative.
D) risk-taking.

Question 61

The personal shopper business that Jeff and Christy have developed has grown, so they are busy 50 hours weekly. This schedule leaves little time for them as a couple. They have decided to hire outside employees to take over some of their business responsibilities. What suggestions should they follow to ease this transition?

Question 62

Describe the four stages of small business growth and how the owner would function.

Question 63

Discuss what makes a leader effective.

Question 64

SCORE refers to

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

Question 65

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.

Question 66

Andrea designed a new household cleaning product that can be used on any surface, is environmentally friendly, and performs better than other current products. As the company grew, she added employees to produce the cleaner. Recently, a grocery store chain asked to sell the cleaner in a regional area. Should Andrea continue as the CEO? At what level is the company in its development? What factors should Andrea consider as the company continues to grow?

Question 67

In order for an individual to supervise effectively, what is the optimal span of control?

A) Two to four people
B) Four to six people
C) No more than 10 people
D) It depends on a number of factors.

Question 68

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 (SBDCs).
C) business incubators.
D) Service Corps of Retired Executives (SCORE).

Question 69

Entrepreneurs can gain management assistance from peers through

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

Question 70

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 the amounts of time she spends on various activities during the day.
C) list projects that need attention.
D) assign priorities to unfinished tasks.

Question 71

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

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

Question 72

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 using a _____ organizational structure.

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

Question 73

Jenny is the owner-manager of a small accounting practice. She holds biweekly employee meetings to cover company goals, focus points for the future, and keep the employees updated on current tax changes. She has developed significant bonds with the employees, so they share work (and personal) problems with her more than in the past. Often Jenny can be found assisting new clients and aiding in paperwork completion, especially around April 15. What type of leadership style(s) does Jenny display and how?

Question 74

Effective time management requires

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

Question 75

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 76

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

A) Give orders and have employees carry them out.
B) Announce daily production requirements over the public address system.
C) Engage employees in conversations to openly share ideas and problems.
D) Manage by walking around.

Question 77

Which of the following is a reason why many small firm managers are reluctant to use outside advisers?

A) An outsider could never truly understand the business.
B) Bringing in an outside adviser would cost too much.
C) The manager can solve problems themselves.
D) All of these are correct.

Question 78

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 79

Discuss span of control, including what it is, what factors affect the span of control, and what the optimal span of control for a small firm is.

Question 80

James is talking to another supervisor about the number of employees that he supervises. James is talking about

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