Question 1

Explain the differences among job simplification, job enlargement, job rotation, and job enrichment. Why should small business owners utilize these concepts?

Accepted Answer

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Question 2

List and briefly identify the five estate planning tools the owners of a family business should consider.

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Question 3

The majority of first-generation family businesses do not survive into the second generation.

Accepted Answer

According to research, approximately 70% of first-generation family businesses do not survive into the second generation.

Question 4

The concept of empowering employees is based on the principle of job enrichment.

Accepted Answer

Empowering employees involves giving them more responsibility, decision-making power, and autonomy in their work. This aligns with the principles of job enrichment, which involves giving employees more challenging and fulfilling tasks to perform in order to enhance their job satisfaction and motivation.

Question 5

Flextime is a work arrangement in which two or more people share the same 40-hour-a-week job.

Accepted Answer

Flextime is a work arrangement where employees have the ability to choose their own work hours, within certain parameters set by the employer. Job sharing, on the other hand, involves two or more people sharing the responsibilities of a single full-time job, which can include 40 hours or more per week.

Question 6

Mini-Case 17-2: Passing the Baton
Carol Wingard started a small jewelry manufacturing company when she was in her late 20s, and has worked hard to build it into a highly successful family business. Now, 40 years later, she was "ready to sit down and enjoy life." Seven family members, including her two sons, Ralph and Cooper, work in the business. Ralph, with 30 years of experience, and Cooper, with 22 years of experience, are both vice presidents of the company.
Carol has always intended to pass the business on to her sons, who together own 20 percent of the company's stock. However, she has always been too busy running the business to put together a formal management succession plan. For the past decade, many of the employees have whispered among themselves about who would be named President if Mrs. Wingard stepped down and exactly what would happen to the business.
Now that she has decided to retire, Carol wants to begin developing a management succession plan.
-Carol calls you and announces her plans to retire within a year. What advice would you offer her about a management succession plan?

Accepted Answer

The answer of Mini-Case 17-2: Passing the Baton
Carol Wingard started...

Question 7

Studies comparing large companies to small ones have found that large companies' inability to react quickly is a major barrier to their growth.

Accepted Answer

Studies have found that the size of a company can affect its ability to respond quickly to changes and opportunities in the market. This can be a disadvantage for large companies, as decision-making processes may be slower and more bureaucratic compared to smaller companies that have more flexibility and agility.

Question 8

Growth requires changes in a company's management style, organizational strategy, and methods of operations.

Accepted Answer

Growth often requires companies to adapt and evolve their management style, organizational strategy, and operations in order to effectively handle the challenges of expansion and maximize their potential for success.

Question 9

The principle of job enlargement is to make a job more varied and to allow employees to perform a more complete unit of work by broadening its scope.

Accepted Answer

The principle of job enlargement is indeed to make a job more varied and allow employees to perform a more complete unit of work by broadening its scope.

Question 10

Job enlargement is based on the premise that the best way to design a job is to break it down into its simplest form and to standardize each task.

Accepted Answer

Job enlargement actually involves expanding the range of tasks or duties assigned to a job in order to increase variety and opportunities for learning and development. It is the opposite of breaking a job down into its simplest form and standardizing each task.

Question 11

Mini-Case 17-3: The Pride of Vicksburg
Wallace Fry had been a lover of good food from the time he was a child. The only son of wealthy Southern parents, he spent hours with his mother watching her prepare meals for the family and friends. By the time Wallace was in high school, he had already won a number of awards for his original recipes. After leaving Vicksburg, Mississippi, to attend college in the Midwest, Wallace returned home to what must have been an unbelievable graduation present. His relatives purchased an old paddlewheel riverboat and had begun initial preparations to have it moored permanently at the foot of the Vicksburg landing on the Mississippi River. Wallace was presented with a 50 percent interest in the restaurant named "The Pride of Vicksburg."
The complete renovations and restoration of the beautiful old riverboat took an additional four months. Wallace was planning to have his new restaurant open for the spring tourist season. A number of regional magazines had already run feature stories on the project. With the opening one month away, Wallace decided it was time to staff the restaurant.
-Are job descriptions necessary in a restaurant?

Accepted Answer

The answer of Mini-Case 17-3: The Pride of Vicksburg
Wallace Fry...

Question 12

What tools would you suggest to Carol to minimize the estate taxes involved in passing the business on to Ralph and Cooper? Explain the advantages and disadvantages of at least three choices and explain why you make the final recommendation that you do.

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Question 13

To be effective, a small business leader must perform three vital tasks. List and briefly explain these three tasks.

Accepted Answer

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Question 14

An assembly line is based on the principle of job simplification.

Accepted Answer

An assembly line breaks down a larger process into smaller and simpler tasks, also known as job simplification. Each worker on the assembly line performs a specific task repeatedly, leading to increased efficiency and productivity.

Question 15

Discuss the three options that entrepreneurs may consider when they sell their business to insiders.

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Question 16

A leveraged buyout is an arrangement in which managers and/or employees borrow money from a financial institution and pay the owner the total agreed-on price, pro-rated over a seven-year period.

Accepted Answer

A leveraged buyout (LBO) typically involves a group of investors, usually including private equity firms, borrowing a large sum of money to acquire a company, using the assets of the company being purchased as collateral. The debt is then paid off with the company's cash flow or by selling off some of its assets. Managers and employees may be involved in an LBO, but they are not typically the primary financiers. Additionally, the payment terms for an LBO typically vary and can be shorter or longer than seven years, depending on the agreement reached by the parties involved.

Question 17

Company culture is the distinctive, unwritten code of conduct that governs the behavior, attitudes, relationships, and style of an organization.

Accepted Answer

Company culture refers to the shared values, beliefs, customs, practices and social behaviors that define an organization's unique character and dictate how its members interact with each other and with external stakeholders. It shapes the overall work environment, communication patterns, decision-making processes, work ethics, incentives, recognition systems, and other aspects of organizational life. A strong and positive company culture can foster employee engagement, satisfaction, loyalty, creativity, and productivity, while a toxic culture can lead to high turnover, low morale, poor performance, and reputational damage.

Question 18

Why is developing a management succession plan so important to the founder of a family business? Identify and briefly describe the steps of a successful plan.

Accepted Answer

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Question 19

Job enrichment increases the planning, decision-making, organizing, and controlling functions in a job.

Accepted Answer

Job enrichment is the process of increasing the complexity and challenge of tasks in a job in order to improve employee satisfaction and motivation. This typically involves adding tasks or responsibilities that require higher-level skills, such as planning, decision-making, organizing, and controlling. Therefore, job enrichment does increase these functions in a job.

Quiz 17: Building a New Venture Team and Planning for the Next Generation