Name _____________________________ ID ________________________
October 15, 2013
GEB 1011 Unit 2 Test
1. Which of the following would not be considered a small business?
a. A manufacturing company with 450 workers
b. A wholesaler with 70 employees
c. A retailer with $7 million in annual sales
d. An agricultural business with $700,000 in sales
2. What is an advantage of a home-based business?
i.
ii.
iii.
iv.
a.
b.
c.
d.
e.
More control over the business
Low start-up and operating costs
More visibility to customers
Greater control over personal time
I only
II only
I and II only
II and III only
I, II and IV only
3. Which of the following is the leading cause of today's small business failures?
a. Management shortcomings
b. Poor products and/ or services
c. No marketing plan
d. Excess government regulation
4. Which of the following statements regarding franchising is FALSE?
a. Franchises are more risky than other forms of business ownership.
b. Franchisees have the benefit of name recognition.
c. Franchisors provide a wide range of support to franchisees.
d. Benefits for the franchisor include opportunities for expansion that might not otherwise
be available
5. Sole proprietorships have all of the following advantages EXCEPT ________.
a. Ease of formation
b. Unlimited life
c. Ease of liquidation
d. Owner flexibility
6. Devon and Keith opened a restaurant as a partnership. Two years later, Keith left the restaurant,
and Devon discovered that Keith had charged numerous expenses to their account. These
expenses resulted in thousands of dollars worth of debt for the restaurant. What option does
Devon have in this situation?
a. He doesn’t have to worry because, according to law, everyone is responsible for his/her
own debts.
b. Business creditors will pursue Keith alone since his signature authorized payments.
c. Business creditors will expect Devon to pay at least half the debt since he owns 50
percent of the business.
d. Business creditors will expect full payment from Devon.
7. Many businesses fail during the early years because of ________.
a. Unmotivated owners
b. Poor planning
c. Niche markets
d. Inadequate financing
8. An acquisition occurs when ________.
a. One corporation owns 8 percent of the stock of another corporation
b. One company purchases the property and assumes the obligations of another company
c. Two or more firms combine to form a single company
d. Owners of small companies band together to operate their businesses collectively
9. United Airlines' purchase of Continental Airlines combines the resources and capabilities of both
firms to create the world's largest airline. The newly formed company is an example of a ____.
a. Vertical merger
b. Joint venture
c. Horizontal merger
d. Conglomerate merger
10. Ben is the owner of a small mushroom farm in Pennsylvania. Ben would like to join with other
growers to create an organization that will promote and distribute mushrooms. The form of
ownership that would be most suited for the growers is the ________.
a. Cooperative
b. Government-owned collective
c. Open corporation
d. Joint venture
11. Jada is opening her own bakery. Jada is an example of a(n) ________.
a. Manager
b. Entrepreneur
c. Minority executive
d. Venture capitalist
12. Frank and Evelyn had an idea for a different type of ice cream. They struggled to open their own
small business, and later, to expand production and distribution. Their products are distributed
nationwide and their sales continue to increase. Franz and Arlene are examples of ________.
a. Classic entrepreneurs
b. Serial entrepreneurs
c. Social entrepreneurs
d. Change agents
13. After starting a web design company while still in college, Rodrigo sold the company after
graduation. He then opened a computer repair shop; and most recently, he has started a
marketing firm that specializes in social media. Rodrigo is an example of a(n):
a. Classic entrepreneur.
b. Social entrepreneur.
c. Serial entrepreneur.
d. Lifestyle entrepreneur.
14. Which of the following has contributed the LEAST to the boom in entrepreneurship?
a. Information technology
b. Demographic and economic trends
c. Education
d. The rise of service industries
15. All of the following are important characteristics of entrepreneurs EXCEPT:
a. Tolerance for failure.
b. Internal locus of control.
c. Dependence on others.
d. Creativity.
16. All of the following are major advantages of buying an existing business over starting a new
business EXCEPT:
a. Less risk is involved.
b. Product or service is known in the marketplace.
c. Obtaining financing is often harder.
d. Existing suppliers and employees are in place.
17. Kayla is opening a home health care business that she knows will do well in her community
based on prior research. Although she must repay borrowed funds, Kayla chooses ________ to
maintain complete control over the business without having to answer to investors or partners.
a. debt financing
b. venture financing
c. sole proprietor financing
d. equity financing
18. Michael is a successful financial advisor looking to invest money directly into a new consulting
business in return for equity in the company. Michael is an example of a(n) ________.
a. Serial entrepreneur
b. Venture capitalist
c. Angel investor
d. Intrapreneur
19. _____ are specific geographic areas designated for economic revitalization.
a. Economic stimulus zones
b. Enterprise zones
c. Investor zones
d. Commerce areas
20. ______________ innovate within an organization and participate in programs aimed to increase
creativity within the company, such as ______________.
a. Intrapreneurs; incubators
b. Entrepreneurs; pacing programs
c. Intrapreneurs; venture capitalism
d. Intrapreneurs; skunkworks
21. Jackie is a manager who spends most of her time in day-to-day decisions assigning nonmanagerial employees to specific jobs. Jackie is considered a ________ manager.
a. Staff
b. Supervisory
c. Mid-level
d. Technical
22. Which of the four functions of management creates a well-designed road map of the actions
needed to lead a company forward?
a. organizing
b. directing
c. controlling
d. planning
23. Kiki strongly believes that college students need credit counseling, so she begins a not-for-profit
organization devoted to this need. Kiki is exhibiting ________.
a. Strategic planning
b. The organizing function of management
c. Vision
d. Strategic management
24. Which type of planning determines the primary objectives of an organization, and then acts and
allocates resources to achieve those objectives?
a. tactical planning
b. strategic planning
c. contingency planning
d. operational planning
25. Which of the following components to the SWOT analysis are both internal to the organization?
a. Strengths; Threats
b. Opportunities; Weaknesses
c. Strengths; Weaknesses
d. Opportunities; Threats
26. McDonald’s has decided to add a pork sandwich to its menu. This is an example of a ________.
a. Contingency plan
b. Line organization
c. Non-programmed decision
d. Programmed decision
27. Autocratic leaders have all of the following characteristics EXCEPT ________.
a. Concentration of power with the manager
b. Two-way communication
c. Decisions are made by the manager with little to no consultation from subordinates
d. Employees are closely supervised
28. Hewlett Packard (HP) is subdivided by its different lines (such as laptops, desktops, mobile
devices, printers, and servers). HP is departmentalized by ________.
a. process
b. customer
c. function
d. product
29. A company that is based on a direct flow of authority from the top executive to subordinates is
known as a ________ organization.
a. functional
b. line
c. matrix
d. line-and-staff
30. A company that retains decision making at the top is known as:
a. independent
b. autocratic
c. centralized
d. programmed
31. All of the following are core responsibilities of human resource managers EXCEPT ________.
a. employee recruitment
b. company budget forecasts
c. employee compensation and benefits
d. employee training and performance evaluation
32. Robert is a middle manager for All Dogs Food Co. He has requested an evaluation by a panel to
include coworkers, superiors, subordinates, and several of the company’s clients. This type of
evaluation is called a ________.
a. management development program
b. Professional Analysis, Inc. (PAI) review
c. status performance appraisal
d. 360-degree performance review
33. Most companies base their compensation policies on all of the following factors EXCEPT
________.
a. government legislation
b. cost of living
c. worker’s previous salary
d. worker productivity
34. Gain sharing is an employee benefit that provides ________.
a. increased stock options if the company is doing well
b. bonuses for recruiting new employees for needed positions
c. bonuses based on surpassing performance goals
d. salary increases based on learning new job skills
35. All of the following are examples of flexible working arrangements EXCEPT ________.
a. paid time off
b. 401(k) plans
c. compressed workweeks
d. job sharing plans
36. Rose was recently let go from her position at an insurance agency as a result of downsizing. This
is an example of ________.
a. voluntary separation
b. voluntary turnover
c. involuntary turnover
d. involuntary separation
37. Robert’s company is no longer hiring for the position because they contracted with an outside
business to provide technical and computer support. This is an example of ________.
a. downsizing
b. outsourcing
c. offshoring
d. restructuring the organization
38. A need produces ________, which leads to ________.
a. motivation; goal-directed behavior
b. goal-directed behavior; rewards
c. responsibility; satisfaction
d. stress-directed behavior; motivation
39. Joanne is the captain of her college basketball team. Her long-term goal is to be named to the
All American women’s basketball team. Joanne is motivated by ________.
a. esteem needs
b. social needs
c. self-actualization needs
d. physiological needs
40. David is the head chef in a restaurant and has decided to increase the number of tasks
performed by the kitchen staff. The added tasks do not result in increased challenge or
authority. David’s efforts are called job ________.
a. enrichment
b. sharing
c. enlargement
d. management
41. All of the following are used to empower employees EXCEPT ________.
a. sharing company information
b. giving them decision-making authority about hiring decisions
c. allowing a team the final say in the logo’s colors
d. giving them more tasks at the same level they are already in
42. Jahn is a member of a semi-permanent team that performs the day-to-day functions of the
organization. Jahn is a member of a(n) ________ team.
a. self-managed
b. work
c. problem-solving
d. cross-functional
43. Which stage of team development is marked by conflicts over the team's mission and the roles
of team members?
a. forming stage
b. norming stage
c. storming stage
d. performing stage
44. Ingrid’s team is engaged in problem solving and appears focused on accomplishing tasks. Ingrid's
team is likely in which stage?
a. forming stage
b. norming stage
c. storming stage
d. performing stage
45. Countries like the United States which tend to rely on explicit written and verbal messages are
considered ________ cultures
a. high-context
b. low-context
c. external
d. diverse
46. William is listening to one of his fellow team members speak at a meeting. He believes she is
just trying to get the team leader to adopt her idea. William is being a(n) ________ listener.
a. offensive
b. cynical
c. polite
d. active
47. Which of the following is considered an upward communication channel?
a. posting notices on bulletin boards
b. giving employees policy manuals
c. completing an employee survey
d. reporting news in company newsletters
48. Steve and Renee are city council members who vehemently disagree over a new zoning
ordinance. Their arguments have become personal, and other council members are irritated and
avoiding meetings. Steve and Renee need to resolve their ________ conflict.
a. mutual
b. affective
c. internal
d. cognitive
49. Under __________, employees receive stock shares or the value of the stock upon retiring or
leaving the company.
a. stock certificates
b. treasury bills
c. stock options
d. Employee Stock Ownership Plans (ESOPs)
50. During the meeting with the salesperson, Mary was hanging on every word, eager to find some
sort of sign that the salesperson was not being honest with her. Mary was engaged in:
a. Offensive Listening
b. Cynical listening
c. Active listening
d. Passive listening
Extra Credit Question (Possible 5 points):
Do a SWOT analysis for Starbucks Corporation.
Strengths
Weaknesses
SWOT
Opportunities
Threats