Steve, Harry, and Chris, who own and operate a family auto parts store, are experiencing tough times during a downturn in the local economy. To help the store weather these adverse conditions, the brothers agree to each take a 25 percent reduction in salary for a one-year period. This decision
A) demonstrates a weakness of financial management.
B) illustrates an important advantage of a family business.
C) reveals a lack of customer orientation in a family business.
D) reflects a lessening of entrepreneurial ambition in second-generation businesses.

Question

Quizplus · Accepted Answer

Family businesses often have the advantage of strong loyalty and commitment among family members, which can lead to decisions such as taking a reduction in salary to help the business during tough times. This decision shows a willingness to sacrifice personal gain for the benefit of the business and the continued employment of its workers.

Steve, Harry, and Chris, Who Own and Operate a Family