Business Management
Textbook Exam Questions
Course Introduction
Business Management is an interdisciplinary course that provides students with a comprehensive understanding of the structure, operations, and challenges faced by modern organizations. It covers core concepts such as planning, organizing, leading, and controlling within a business context, while also exploring key functions like marketing, finance, human resources, and operations management. Students will analyze real-world organizational scenarios, develop critical-thinking skills, and learn effective decision-making strategies to enhance productivity and achieve organizational goals. The course emphasizes both theoretical foundations and practical applications, preparing students for leadership roles and equipping them with the tools necessary for successful management in various business environments.
Recommended Textbook
Entrepreneurship 11th Edition by Robert D Hisrich
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Page 2
Chapter 1: The Entrepreneurial Mind-Set
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Sample Questions
Q1) When entrepreneurs make do by applying combinations of the resources at hand to new problems and opportunities,this is known as:
A) sustainable entrepreneurship
B) perceived desirability
C) entrepreneurial intentions
D) bricolage
Answer: D
Q2) Which group in a professional network helps keep a new venture competitive
A) Clients or buyers
B) Mentors
C) Trade associations
D) Suppliers
Answer: C
Q3) The McMullen-Shepherd Model helps identify the common traits of successful entrepreneurs.
A)True
B)False
Answer: False
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Chapter 2: Corporate Entrepreneurship
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Sample Questions
Q1) Entrepreneurially run firms are driven by controlled resources whereas traditionally managed firms are driven by perception of opportunity.
A)True
B)False
Answer: False
Q2) Define and explain the dual process model of coping with negative emotions.
Answer: Student should define process as shifting between a loss orientation and a restoration orientation.The student should also explain the two alternate approaches to loss:
loss orientation An approach to negative emotions that involves working through,and processing,some aspect of the loss experience and,as a result of this process,breaking emotional bonds to the object lost.
restoration orientation An approach to negative emotions based on both avoidance and a proactiveness toward secondary sources of stress arising from a major loss. The entrepreneur can benefit from both orientations while minimizing the costs of maintaining either for too long.
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4
Chapter 3: Generating and Exploiting New Entries
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Sample Questions
Q1) Barriers to entry include all of the following except:
A) patents
B) switching costs
C) environmental instability
D) building customer loyalties
Answer: C
Q2) The decision to exploit or not to exploit a new entry opportunity depends on whether the entrepreneur has sufficient information,and on whether the window of opportunity is still open.
A)True
B)False
Answer: True
Q3) A narrow scope strategy reduces the risks associated with competition.
A)True
B)False
Answer: True
Q4) Knowledge is the basis of the entrepreneurial resource.
A)True
B)False
Answer: True
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Chapter 4: Creativity and the Business Idea
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Sample Questions
Q1) This problem-solving method requires the entrepreneur to list the properties of an item or problem and then look at each from a variety of viewpoints.
A) Value analysis
B) Attribute listing
C) Brainwriting
D) Big-dream approach
Q2) Which of the following was not discussed in the text as a breakthrough innovation
A) The airplane
B) The Internet
C) Spanx
D) Penicillin
Q3) Nanotechnology would be classified as a breakthrough technology.
A)True
B)False
Q4) In the idea stage of the product planning and development process:
A) conversational interviewing is used.
B) product samples are given out.
C) systematic market evaluation is used.
D) multiple brand comparison is used.
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Chapter 5: Identifying and Analyzing Domestic and International Opportunities
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Sample Questions
Q1) ________ is a nonprofit organization that provides free online and in-person assistance to entrepreneurs in the form of training,consulting and mentoring provided mainly by retired executives and entrepreneurs.
A) CSBC
B) NAICS
C) SCORE
D) SIC
Q2) Entrepreneurs doing business in the former U.S.S.R.should be aware that barter,or third-party arrangements,are commonplace.
A)True
B)False
Q3) A product extension merger occurs when acquiring and acquired companies have related production and/or distribution activities but do not have products that compete directly with each other.
A)True
B)False
Q4) An opportunity assessment plan is basically the same thing as a business plan.
A)True
B)False
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Chapter 6: Protecting the Idea and Other Legal Issues for the Entrepreneur
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Sample Questions
Q1) Getting a trademark typically takes 2 years.
A)True
B)False
Q2) Which of the following is not a condition that makes a contract legally enforceable
A) Consideration is given by both parties
B) All parties involved are competent
C) Money is exchanged for products/services
D) Acceptance of the offer must be voluntary
Q3) A trademark is given a 50-year registration with no renewal.
A)True
B)False
Q4) A utility patent grants the owner protection from anyone else making,using,and/or selling the identified invention and generally reflects protection of new,useful,and unobvious processes.
A)True
B)False
Q5) A trade secret is protected by state law.
A)True
B)False
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Chapter 7: The Business Plan: Creating and Starting the Venture
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Sample Questions
Q1) The entrepreneur need not concentrate on environmental analysis since most of the external factors are generally uncontrollable.
A)True
B)False
Q2) Which of the following statements on contingency planning issues is not true
A) It should be a step by step plan and not generalized.
B) To protect the reputation of the company, media should not be contacted during a crisis.
C) Identify managers and or employees responsible for carrying out the contingency plan.
D) In the event of a crisis, the plan should be implemented immediately.
Q3) Standard & Poor's and the U.S.government are good sources of industry and market data.
A)True
B)False
Q4) When gathering financial information,the entrepreneur should develop a budget that includes expected sales and expense figures for the first year.
A)True
B)False
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Chapter 8: The Marketing Plan
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Sample Questions
Q1) An effective way to begin defining the purpose of a marketing plan,is to make a list of all the information needed to prepare the marketing plan.
A)True
B)False
Q2) Telephone surveys have the poorest response rate.
A)True
B)False
Q3) Focus groups should be led by the entrepreneur.
A)True
B)False
Q4) Which survey method results in the most in-depth information and the best response rate
A) Telephone
B) Mail
C) Personal
D) Internet
Q5) Describe the steps in the marketing plan flowchart.
Q6) Networking can be used as an informal method of gathering primary data.
A)True
B)False
Page 10
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Chapter 9: The Organizational Plan
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Sample Questions
Q1) Discuss the main advantages of an LLC over an S-Corp.
Q2) A limited liability corporation:
A) has unlimited liability.
B) is automatically taxed as a partnership.
C) is decreasing in popularity among venture capitalists.
D) had been the most popular choice of organization structure by new ventures and small businesses.
Q3) The corporation is considered a legal person that is taxable and absorbs liability.
A)True
B)False
Q4) The only source of capital for a corporation is the sale of shares of stock.
A)True
B)False
Q5) Our text tells us that much of an entrepreneur's time during start-up is spent:
A) putting out fires.
B) negotiating.
C) delegating.
D) allocating resources.
Q6) Discuss the advantages and disadvantages of an S-Corporation.
Page 11
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Chapter 10: The Financial Plan
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Sample Questions
Q1) Using a spreadsheet software package is helpful when developing budgets as it helps to gauge the impact of different financial scenarios.
A)True
B)False
Q2) The ________ budget is used to evaluate expenditures that will impact the business for more than one year.
A) production
B) operating
C) depreciation
D) capital
Q3) Rent and insurance are examples of variable costs.
A)True
B)False
Q4) The first step in preparing a pro forma income statement is to separate fixed and variable costs.
A)True
B)False
Q5) Explain how to do a simple cost benefit analysis and explain how it helps the entrepreneur make important decisions.
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Chapter 11: Sources of Capital
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Sample Questions
Q1) The SBA's Microloan program provides short-term loans of up to $100,000 to small businesses for working capital or purchase of inventory.
A)True
B)False
Q2) Long-term loans from commercial banks are usually readily available to small startup firms.
A)True
B)False
Q3) Explain what problems an entrepreneur might avoid by using bootstrap financing instead of outside capital.
Q4) Bootstrap financing decreases the company's flexibility and drive for sales.
A)True
B)False
Q5) All owners,regardless of percentage of ownership,are required to personally guarantee SBA loans.
A)True
B)False
Q6) Briefly define debt financing and equity financing.Which key factors favor one type of financing over another
Page 13
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Chapter 12: Informal Risk Capital, Venture Capital, and Going Public
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Sample Questions
Q1) Seed capital is an example of expansion or development financing.
A)True
B)False
Q2) Venture capital firms prefer to invest in:
A) high-potential ventures.
B) conventional small businesses.
C) privately-held middle market firms.
D) ventures during the early stages.
Q3) Venture capitalists:
A) usually don't know one another.
B) tend to put more time and effort into business plans that were referred to them.
C) tend to invest in any area that has a good rate of return.
D) like entrepreneurs to bring in an accountant to verify financials.
Q4) The securities of certain smaller companies going public must also be qualified under international blue-sky laws.
A)True
B)False
Q5) Identify the main advantages and disadvantages of going public.
Page 14
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Chapter 13: Strategies for Growth and Managing the Implication of Growth
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Sample Questions
Q1) Entrepreneurs who have the necessary abilities for the transition to more professional management practices and the aspiration to grow their business:
A) have little potential for firm growth.
B) will achieve growth only if the entrepreneur replaces himself or herself with a professional manager.
C) are the most likely to achieve growth.
D) usually form lifestyle firms.
Q2) The grocery and pharmaceutical industries have developed a computerized system to link chain members together and manage demand,distribution,and marketing.
A)True
B)False
Q3) Forward integration occurs when the firm acquires one of its suppliers.
A)True
B)False
Q4) In managing fixed assets,the entrepreneur should buy,instead of lease,whenever possible.
A)True
B)False
Page 15
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Chapter 14: Accessing Resources for Growth From External Sources
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Q1) The ________ is the price at which the entrepreneur is indifferent about whether to accept the agreement or choose an alternative.
A) break-even price
B) franchise price
C) bargaining zone
D) reservation price
Q2) A joint venture is the purchase of an entire company,or part of a company.
A)True
B)False
Q3) What are the four major factors in joint venture success
Q4) Terminating a franchise results in more lawsuits than any other issue in franchising.
A)True
B)False
Q5) An acquisition is the purchase of a company,or part of a company,in which the acquired company ceases to exist independently.
A)True
B)False
Q6) Discuss the main advantages of an acquisition.
Page 16
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Chapter 15: Succession Planning and Strategies for
Harvesting and Ending the Venture
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Q1) The sale of the company to employees is an exit strategy.
A)True
B)False
Q2) Explain the advantages and disadvantages of an ESOP.
Q3) An ESOP:
A) is a device to transfer the business to a small group of key loyal employees.
B) eliminates the need to perform a complete valuation of the venture.
C) motivates employees because they realize they are working for themselves.
D) removes the need for a continuous performance appraisal.
Q4) A two- to three-year plan to sell a business to employees is:
A) an ESOP.
B) an acquisition.
C) succession.
D) the most popular method of exit.
Q5) All of the following are benefits of an ESOP except:
A) the company can deduct contributions to an ESOP.
B) it offers a planned exit in writing.
C) it offers a unique incentive to employees.
D) it is relatively simple to establish.
Q6) What are some of the warning signs of bankruptcy Page 17
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Page 18