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Entrepreneurship: Starting & Operating a Small Business, 4e (Mariotti)
Chapter 13 Management, Leadership, and Ethical Practices
1) Madam C. J. Walker was an entrepreneur who became ________.
A) the first female pharmacist in America
B) the first African-American businessperson to become a millionaire
C) the first entrepreneur to franchise a business
D) the first self-made female millionaire
Learning Object.: 13.1 Identify leadership styles.
AACSB Category: Application of knowledge
2) Research indicates that ________ is the most important characteristic required for successful
leadership.
A) self esteem
B) business knowledge
C) drive
D) intelligence
Learning Object.: 13.1 Identify leadership styles.
AACSB Category: Reflective thinking
3) A leader is someone who gets things done through ________.
A) coercion
B) power
C) influence
D) force
Learning Object.: 13.1 Identify leadership styles.
AACSB Category: Reflective thinking
4) When a business grows too big for the entrepreneur to run it alone, he/she should consider
________.
A) franchising the business
B) taking management classes to become a better manager
C) slowing down marketing efforts to bring the business's growth back under control
D) raising capital and using it to hire managers
Learning Object.: 13.1 Identify leadership styles.
AACSB Category: Analytical thinking
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5) A share of a company's profits paid to an investor is called a ________.
A) commission
B) stock
C) dividend
D) return
Learning Object.: 13.1 Identify leadership styles.
AACSB Category: Analytical thinking
6) If a business owner wants his/her pay to be a variable operating cost, a ________ is most
appropriate.
A) bonus
B) wage
C) salary
D) commission
Learning Object.: 13.1 Identify leadership styles.
AACSB Category: Reflective thinking
7) Why are entrepreneurs not always the best managers for their businesses?
A) Managers are better at coming up with fresh ideas for new businesses than entrepreneurs are.
B) Entrepreneurs have a difficult time motivating employees.
C) Entrepreneurs tend to be creative types who get bored with the day-to-day details of running a
business.
D) They tend to have short attention spans.
Learning Object.: 13.1 Identify leadership styles.
AACSB Category: Reflective thinking
8) One of the most important things you can do when you start a business is to learn how to
manage your ________ so that you can get more done with efficiency.
A) sales
B) time
C) costs
D) None of the above.
Learning Object.: 13.1 Identify leadership styles.
AACSB Category: Reflective thinking
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9) No matter the size of a business, the leader sets the ________ for how the organization
operates. If the leader is chaotic, chances are the business will be too. If the leader is well
organized and efficient, the business may well be too.
A) asset optimization
B) expense constraints
C) profit expectations
D) tone
Learning Object.: 13.1 Identify leadership styles.
AACSB Category: Reflective thinking
10) Great leaders are ________.
A) pessimists
B) coercive
C) power hungry
D) optimists
Learning Object.: 13.1 Identify leadership styles.
AACSB Category: Reflective thinking
11) A pacesetting style of leadership consists of a leader who sets very high personal
performance standards and challenges employees to meet them too.
Learning Object.: 13.1 Identify leadership styles.
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12) Why is it important for an entrepreneur to pay him/herself regularly in a consistent manner
out of the business's earnings?
Learning Object.: 13.1 Identify leadership styles.
AACSB Category: Analytical thinking
13) According to expert Daniel Goleman, what are the main managerial styles, their advantages
and disadvantages/drawbacks?
Answer:
1) Coercive style - Coercion is to force (or coerce) someone to do something. This style can be
effective in a disaster scenario or with problem employees who need a forceful manager. In most
situations, however, this style destroys or hurts employee morale. It can decrease employee's
2) Authoritative style - This style takes a "come with me" approach, setting the goal but letting
the employees find the best way to achieve it. This style works well if the leader is an expert. It
3) Affiliative Style - This is a "people first" style. It is effective in a teambuilding stage but can
4) Democratic style - This style gives employees a strong voice in how the company is run. This
style can build morale and work with employees capable of handling responsibility. It is less
effective when employees need strong leadership. This style emphasizes consensus decision
5) Pacesetting style - This style sets high performance standards. This is good when employees
6) Coaching style - This style focuses on helping employees grow through training and support.
It is good for starting a business, but it is less useful with an experienced team, or those who may
be resistant to change.
Learning Object.: 13.1 Identify leadership styles.
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18) When checking a job applicant's references, you should create a few questions that are
pertinent to the job being filled and the related career paths.
Learning Object.: 13.2 Describe the basic tasks handled by managers.
AACSB Category: Analytical thinking
19) You may not be able to afford full-time employees for your business early on, but you can
still hire quality people without having to provide full-time salaries and benefits. Describe some
methods for doing so.
1) Bring people who have the skills the business needs in as partners. Partners share the risks and
2) Hire experts to work on specific tasks on a contract or hourly basis. For example, a business
3) Hire part-time employees who are paid an hourly wage or a set fee for a certain amount of
4) Use interns who work for free in exchange for experience that helps them build their resumes
and become more employable.
Learning Object.: 13.2 Describe the basic tasks handled by managers.
2) Post the job: Put a job ad in newspapers, solicit employee
referrals, online sites such as Indeed (http://www.indeed.com) and Monster.com
5) Interview candidates. Using the resumes, select the ones you want to meet face-to-face.
6) Check references. Make sure that the person has done what they say they have done, and
check with at least two previous employers or colleagues to talk about the person's character and
9) Orientation: Introduce the new employee to the firm. Teach him/her about the company and
the job.
Learning Object.: 13.2 Describe the basic tasks handled by managers.
