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Geb 1011   1

Management

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Geb 1011

 

1. The SBA is a private organization rather than a government agency.

  a.  True

  b.  False

 

2. All corporations operate primarily for profit.

  a.  True

  b.  False

3. Managerial decision making involves a four-step process that begins with generating

alternatives and ends with selecting an alternative.

  a.  True

  b.  False

4. All not-for-profit corporations rely solely on volunteers to perform services of the organization.

  a.  True

  b.  False

5. Because there are two or more people in a general partnership, bankers, suppliers, and  other creditors are not concerned about unlimited liability.

  a.  True

  b.  False

6. Accounting and investments are specialized areas within financial management.

  a.  True

  b.  False

7. The effectiveness of a total quality management program is directly related to top

management commitment to its success.

  a.  True

  b.  False

8. Franchising is limited only to fast foods.

  a.  True

  b.  False

9. The purchase of one corporation by another is called a merger.

  a.  True

  b.  False

10. Controlling is the process of evaluating and regulating ongoing activities to ensure

achievement of goals.

  a.  True

  b.  False

Indicate the answer choice that best completes the statement or answers the question.

11. Judy Barnes, Betty Turley, and Bob Turner want to obtain limited liability for their business, but they want to avoid double taxation. Which type of business ownership would you recommend?

  a.  Regular corporation

  b.  General partnership

  c.  Sole proprietorship

  d.  S-corporation

  e.  Not-for-profit corporation

 

12. Which of the following is external to a firm and exists independently of a company?

  a.  Strengths

  b.  Weaknesses

  c.  Goals

  d.  Core competencies

  e.  Opportunities

 

13. Grouping resources and activities to efficiently and effectively accomplish a result is called

  a.  planning.

  b.  organizing.

  c.  directing.

  d.  controlling.

  e.  goal setting.

 

14. ?Managerial communication skills include both oral and written and involve

  a.  ?the ability to speak, listen, and write effectively.

  b.  ?the ability to read and write effectively.

  c.  ?the ability to read, write, and speak effectively.

  d.  ?the ability to write and speak effectively.

 

15. Businesses are generally placed into three broad categories: service industries, production industries, and ____ industries.

  a.  financial

  b.  manufacturing

  c.  distribution

  d.  transportation

  e.  retailing

 

A year ago, Kevin went to work for Inc. He has worked for the finance department ever since he started. He noticed that the corporation was only taxed as though it were a partnership. This was something that he found very odd when he first started working for the company, but he later realized it was a fairly common practice. He recognized that this was one of the advantages of this type of corporation. While the job was challenging, Kevin was not happy. He wanted to work for a company whose main goal was to provide service to the community, not to make a profit. However, Kevin felt

that, considering his present financial situation, he had to continue working for Inc. A

week later, Kevin discovered there was going to be a merger between Inc. and one of its major competitors. Kevin& boss informed him that he would be getting a promotion and a raise. While he was excited about making more money, he still was not happy. He knew then that he would not be working for the company for long.

16. Refer to Inc. Inc. was going through a ____ merger.

  a.  vertical

  b.  horizontal

  c.  conglomerate

  d.  hostile

  e.  leveraged

 

31. Shares of Burger House stock cannot be purchased on any stock exchange or by just any individual. This means that Burger House is a(n)

  a.  alien corporation.

  b.  partnership.

  c.  open corporation.

  d.  family corporation.

  e.  closed corporation.

 

32. Mark owns stock in Walgreens. He has the right to vote on company issues and examine corporate records, and he receives dividends from Walgreens' profits. What type of stock does Mark own?

  a.  Common

  b.  class

  c.  Proxy

  d.  Dividend

  e.  Preferred

 

33. Carmen Catucci is considering going into business. She wants to offer an income tax service. To minimize her chances of failure, she might consider

  a.  buying a franchise.

  b.  starting from scratch.

  c.  dealing only with wealthy people.

  d.  trying to enter the manufacturing industry instead.

  e.  borrowing money from the SBA.

 

34. Vince Martin has been described as a visionary. He has the ability to think in abstract terms and see how all the pieces of his company fit together. Vince has ____ skills.

  a.  technical

  b.  interpersonal

  c.  charisma

  d.  conceptual

  e.  people

 

35. Your friend Steve owns a considerable amount of common stock in Microsoft, a computer software company. He wants to cast his votes on various issues at the annual stockholders meeting in Seattle, but he does not have the time to travel a great distance to the meeting. Instead of attending the meeting, Steve decides to register his votes by

  a.  registered mail.

  b.  preemptive right.

  c.  proxy.

  d.  power of attorney.

  e.  preferred stock.

 

36. ?Maurice and Stanley have sold stock to eight of their friends and have enough money to expand the business and to open another store. During a shareholders’ meeting, Maurice, Stanley, and the eight other shareholders unanimously agreed that it would be better to pass through the company’s profits and losses like a partnership. All of the shareholders are individuals and United States citizens. The shareholders could vote to change the corporation into a(n)

  a.  ?S-corporation.

  b.  ?limited liability company.

  c.  ?alien corporation.

  d.  ?foreign corporation.

 

37. A former CEO at International Telephone and Telegraph had a reputation for publicly

humiliating subordinates who annoyed or disappointed him. This manager obviously needed to improve his ____ skills.

  a.  conceptual

  b.  diagnostic

  c.  functional

  d.  interpersonal

  e.  negotiating

 

38. The broadest set of plans developed as a guide for major policy setting and decision making is called a(n)

  a.  management process.

  b.  strategic plan.

  c.  contingency plan.

  d.  mission.

  e.  objective.

 

Personal Wellness

Angela has been working for a local small business called Personal Wellness for the last three years. It is a retail business that sells sporting goods equipment. When she started to work there, she noticed several things that were possibly the cause of the business not doing as well as it hoped. Angela has been thinking of starting her own small business because she feels she has learned much through working for Personal Wellness.

Angela manager asked her to create a business plan for Personal Wellness. The manager hoped that this plan would put things into perspective to help the company do better. After creating the plan, Angela suggested that Personal Wellness contact a group of senior and graduate students to provide management counseling for the company. Angela wants to make sure that her leaving does not become the cause of the company going under.

39. Refer to Personal Wellness. A business plan should answer all of the following  questions except

  a. Which accounting firm will audit the company?

  b. What exactly is the nature and mission of the new venture?

  c.  Why is this new enterprise a good idea?

  d.  How much will the new venture cost?

  e.  What are the entrepreneur goals?

 

40. Which of the following statements is true regarding the profitability of new businesses?

  a.  It may take several years for a new business to begin showing a profit.

  b.  Profitability is not an important issue for new businesses.

  c.  Most new businesses will turn a profit within the first year.

  d.  If a company does not show a profit within the first year, it will fail.

  e.  Most new businesses are highly profitable when they first start.

 

41. Approximately what percentage of the jobs in the United States do small businesses provide?

  a.  5 percent

  b.  10 percent

  c.  30 percent

  d.  over 50 percent

  e.  nearly 90 percent

42. Most Small Business Administration loans are actually made by

  a.  the Small Business Administration.

  b.  the government.

  c.  private lenders.

  d.  private foundations.

  e.  insurance companies.

 

43. Which of the following is not considered a basic step of benchmarking?

  a.  Forming a benchmarking team

  b.  Collecting and analyzing data

  c.  Acting on results of data collection

  d.  Goal setting

  e.  Identifying objectives

 

44. Which of the following would least likely be stated in the articles of partnership?

  a.  Who will make the final decisions

  b.  How much each partner will invest

  c.  What the duties of each partner are

  d.  What products the company will sell

  e.  What will happen if a partner dies or wants to dissolve the partnership

 

45. ____ resources are used to meet obligations to investors and creditors.

  a.  Tangible

  b.  Intangible

  c.  Material

  d.  Financial

  e.  Human

 

46. ?Digital communications are used by managers 

  a.  ?to manage an organization effectively and to stay informed.

  b.  ?to eavesdrop on employees.

  c.  ?to track company vehicles to prevent employees from loitering.

  d.  ?to prevent theft of company property.

 

47. In the early days of franchise agreements, franchising was used primarily for automobile dealerships and

  a.  auto-parts stores.

  b.  dry cleaners.

  c.  fast-food outlets.

  d.  larger restaurants.

  e.  service stations.

48. A distribution of earnings to the stockholders of a corporation is a(n)

  a.  par distribution.

  b.  dividend.

  c.  earnings per share.

  d.  distributed payment.

  e.  common payment.

 

49. The order of difficulty and expense, from most to least, when forming a business organization is as follows:

  a.  corporation, sole proprietorship, partnership.

  b.  corporation, partnership, sole proprietorship.

  c.  partnership, corporation, sole proprietorship.

  d.  partnership, sole proprietorship, partnership.

  e.  sole proprietorship, partnership, corporation.

 

50. Manju Iyer asks for your advice in opening a new business. She plans to provide tax-related services to individuals and small-business owners in her community. Of course, she wants an attractive means of starting and operating her business with a reasonable hope of succeeding in it. What will be your advice?

  a.  Start your own independent business.

  b.  Form a partnership with a CPA.

  c.  Consider purchasing a franchise.

  d.  Forget about opening the business because it is too risky.

  e.  First secure a loan from the Small Business Administration.