UNCLASSIFIED
UNCLASSIFIED
C-18
Which of the following statements are true concerning globalization by small businesses?
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a. Many small companies are “born global,” meaning that they are launched with globalization in mind.
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b. Rapidly growing economies in places such as India and China make doing business overseas hard to ignore.
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c. Going global necessitates learning about the culture and social norms of the countries in which you plan to do business.
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d. All of the above
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Ughmeh Inc. manufactures front loaders. In the last two years, the company’s output doubled and its production cost per loader went down significantly. The company has realized:
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a. Experience curve efficiencies.
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b. Small firm slipstreaming.
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d. Bulk instream efficiencies.
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Sarah is concerned that her unique canvas purses are being copied and sold in another country. Which of the following strategies is most likely to gain her a champion in the problem country and expand her market at the same time?
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a. Getting an international patent
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c. Complaining to the foreign government
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d. Complaining to the U.S government
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Roberto has decided to do business in Central Africa. Since many countries in the region have unstable governments, he should take into account not only economic risk but:
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a. Internal management risk.
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Matilda is planning a visit to Ecuador to establish a market for her digeridoos. She is going on a:
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b. Cross-border trade trip.
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c. Global path-making trek.
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occur when the insight an employee gains from experience leads to improved work performance
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represent the value of one country’s currency relative to that of another country.
Breaking into international markets can be made easier with a , a company that can tap its network contacts to help set up export contracts.
C-19
Which of the following is the best summary of Daniel Goleman’s study on effective leaders?
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a. Effective leaders eschew any kind of namby-pamby, feel-good management techniques. They know what they want and they expect their subordinates to help them get it.
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b. Effective leaders mobilize people toward a vision, coach them to achieve that vision, promote team-building, and build consensus. They also set high standards and demand compliance when necessary.
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c. They articulate an inspiring vision, identify people who can adopt the vision, and build a small team of highly enthusiastic people. When necessary, they fire people who do not comply fully.
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d. They always use a “soft” approach, never pushing their vision on anyone. Their effectiveness stems from their use of incentives and praise. People who don’t comply with the vision are encouraged to “do their own thing.”
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Making the jump from founder to professional manager is:
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a. Near-impossible for most people.
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b. Easy if your company has been successful so far.
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c. Doable if you take a course in management.
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d. Enjoyable and fulfilling for most startup founders.
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Vadik’s hiking apparel company has grown rapidly in the last two years. He is beginning to show signs of stress and poor health. One day Vadik confides in you that he is overwhelmed with decisions and is not sure how much longer he can last without cracking. What is the first thing you would have him consider doing?
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a. Take tighter control of things so that fewer things go wrong.
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d. Delegate some decision-making authority to subordinates.
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Which of the following is true of urgency and importance when it comes to managing your time?
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a. Critical items are both important and urgent—do them first.
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b. Urgent items are usually important—do them first.
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c. Important items are rarely urgent—do them last.
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d. Fill your allotted time up completely so that distractions cannot creep in.
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SCORE is an acronym for:
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a. Service Corps of Retooled Executives.
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b. Sales Corps of Retired Executives.
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c. Service Corps of Recycled Executives.
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d. Service Corps of Retired Executives.
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A document that expresses future plans in monetary terms is a .
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The term refers to the series of authority links between superiors and subordinates up and down the organization.
are affiliated with colleges or universities as a part of the Small Business Administration’s small business programs.
C-20
If you want your venture to grow, it is important to think of your employees as:
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a. Friends who will connect on a personal and business level.
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b. Cost centers that must be minimized.
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c. Commodities that can be moved around and exchanged at will.
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d. People who can generate revenue for your company.
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You are the founder of a small company that is growing rapidly. In order to ensure future success, you have to set up hiring standards so that you get only the best employees—ones who fit your work environment. You want to see what the job candidate will actually do in various situations. Rather than using just using standard traditional hiring methods, you might consider:
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a. A behavioral interview.
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d. An online meeting.
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Theresa has been working at SnoBub Inc. for three years. Her boss has suggested she start thinking about her long-term career goals and what roles she might take on in the future. Theresa is being steered toward:
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a. Management development.
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Performance-based compensation plans should include all of the following EXCEPT:
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a. Adjusting goals as needs of workers and customers evolve.
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b. Inclusion of employees in planning.
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c. Demotion when goals are not met.
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d. Attainable goals.
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Sarita received 12 weeks of unpaid leave when she had her baby as well as not having any lapse in her health insurance coverage while gone. She benefited from which of the following laws?
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a. The Civil Rights Act of 1964
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b. The Occupational Safety and Health Act of 1970
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c. The Family and Medical Leave Act
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d. The Fair Labor Standards Act (FLSA)
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are firms that locate qualified candidates for high-paying jobs. They typically charge 20-35 percent of the first year’s salary.
For a test to be its results must correspond well with job performance.
refers to paying employees on the basis of the number of units they produce.
C-21
The best definition of operations management is:
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a. Management of materials in a firm.
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b. Protocols developed for crises involving surgery on key people.
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c. Planning and control of processes that turn inputs into value-added outputs.
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d. Deployment of groups of employees to off-site locations to accomplish tactical goals.
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Taavetti has a restaurant that is extremely busy during the morning through lunch but slow mid-afternoon. He decides to offer a special discount to diners from 1:30-4:30. Taavetti is using a:
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b. Discount service option.
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c. Demand management strategy.
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d. Customer loyalty tactic.
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The chief principle involved in a just-in-time inventory management system is:
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a. Each unit of inventory should arrive at the business just as the customer wants it and not before.
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b. Allow items to run out before ordering more.
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c. Lead time for inventory purchases should be minimized by projecting demand accurately.
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d. The emphasis is on the pull of inventory rather than its push.
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The main lesson to be drawn from the Five Guys Burgers and Fries example in your book is:
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a. Inventory management is the key to cutting costs in a burger chain.
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b. Consistent, outstanding quality can be the foundation of success for a company.
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c. Food costs kill profits.
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d. Clever props and nice furnishings help “sell the sizzle” in the restaurant business.
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Tamara takes into account local entertainment and sports event scheduling when she staffs her small retail store near downtown in a large city. She is using:
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a. Associative forecasting.
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b. Peer business planning.
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c. Complementary planning.
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d. Seasonal forecasting.
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Leopold has been walking through his manufacturing plant daily and lately has noticed a pile of widgets laying next to the polishing machine waiting to be processed. It appears to be the only place where this kind of holdup occurs. He has found what could be:
The is an index that determines how much inventory of an item to purchase in order to minimize total inventory costs.
sampling involves examining random samples of products for compliance with a predetermined standard.
C-22
In the context of the working capital cycle, working capital is best described as:
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a. Liquid assets that are required to run and grow the business, minus accounts payable.
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b. Liquid assets that are required to run and grow the business, minus accounts receivable.
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c. Long-term assets that are required to run and grow the business, plus accounts receivable.
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d. Long-term assets that are required to run and grow the business, plus accounts payable.
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Chumley’s specialty wool sock business offers a generous credit policy to its customers and is hesitant to rush them to pay. Lately, he has experienced cash shortages even though sales are steady and costs are stable. Which of the following would you recommend he examine first?
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a. The average collection period
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b. His bank’s lock box policy
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c. His company’s economic order quantity
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d. Pledged accounts receivable
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A business that finds it hard to find space to store all its inventory should probably examine which of the following first?
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a. Days in inventory for each product it sells
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b. Ways to package things more tightly
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c. Getting additional storage space
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d. Its stacking policy
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A good rule of thumb for managing accounts payable is to:
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a. Delay paying for as long as is acceptable under the agreement.
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b. Never pay until the bill is thirty days past due.
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c. Avoid using credit for purchases.
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Which of the following capital budgeting techniques measures how long it will take to recover the initial cash outlay of an investment?
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c. The internal rate of return
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d. Pay as soon as the bill is received.
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The is the number of days required to complete the working capital cycle.
A is a post office box for receiving remittances.
refers to some business managers’ tendency to overbuy inventory.
C-23
Anthony wants to insure his investment in a chinchilla herd. Which of the following is the most compelling reason that an insurance company would not be likely to issue a policy?
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a. Chinchillas are an endangered species.
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c. The market value of the herd could go up as well as down; it is not a pure risk. Therefore it is not insurable.
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d. Live animals cannot be insured.
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Dottie had a shop in which she made wind chimes for her business. It burned to the ground after a stray skyrocket from a nearby neighborhood landed on the roof. The shop was 5 years old and cost $50,000 to construct. It showed up on the books as being worth $42,500 after depreciation. However, the replacement cost would be $55,000. Which of the following statements is most likely to be true of Dottie’s payout from the insurance company?
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a. They will not pay because the fire was started by someone else.
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b. They will pay $42,500 because that is the actual cash value of the building.
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c. Dottie will have to find who set off the firework and sue them in order to get paid.
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d. They will pay $55,000 because in general most property insurance policies provide replacement value coverage.
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Proximate cause is best defined as:
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a. An accident caused by activity near the central hub of a business.
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b. A negligent act that clearly produces an accident.
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c. An accident for which one person is sued to try to get at another person.
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d. A cause that is difficult to quantify and thus must be approximated.
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The LEAST attractive option for a small company as regards risk is:
Cheng is concerned about his restaurant surviving if something happens to his building, such as a water pipe bursting. He should consider which kind of optional insurance coverage?
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a. Workers’ compensation insurance
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b. Commercial general liability insurance
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c. Funds transfer fraud coverage
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d. Business interruption insurance
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Aahi worries about what will happen to her jewelry business if her business partner were to have to leave the business permanently due to injury or illness. Her partner Pahi feels the same. Each would like to be able to purchase the other’s stock in such a case. They should consider taking out what kind of insurance?
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a. Key-person life insurance
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b. A business owner’s policy
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c. Disability buyout insurance
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property consists of land and anything physically attached to land, such as buildings.
is achieved by choosing not to engage in a particular hazardous activity.(U)
UNCLASSIFIED
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