85) Every new employee a business owner hires determines the heights to which the company
can climb or the depths to which it will plunge.
86) Business owners must recognize that what they do before they start interviewing candidates
for a position determines to a great extent how successful they will be in the hiring process.
87) Companies desiring to improve their recruitment efforts are finding that the Internet offers
tremendous reach at a relatively low cost and is very effective.
88) Information gathered during a job analysis provides the foundation for creating job
descriptions and job specifications.
89) A job analysis describes what the job is, what its duties and responsibilities are, and what
work conditions are involved.
90) A job analysis describes the process by which a firm determines the duties and nature of the
jobs to be filled and the skills and experience required of the people who are to fill them.
91) A job description sets forth a job’s duties and responsibilities; a job specification translates
these duties into the qualifications needed for that job.
92) The Dictionary of Occupational Titles, a listing of more than 20,000 job titles and
descriptions, is a useful tool for getting a small business owner started when writing job
descriptions.
93) The job specification outlines the duties and responsibilities of a job and its working
conditions, while the job description outlines the characteristics-skills, education, experience-a
person needs to fill a job.
94) Small companies are least likely to make hiring mistakes because most owners have
developed clearly defined job specifications and job descriptions.
95) To give the interviewing process more consistency, a business owner should develop a series
of core questions and ask them of every candidate.
96) The most effective job interviews are unplanned, unstructured interactions between the small
business owner and the job applicant.
97) A situational interview gives the candidate a typical job-related situation to see how they
respond.
98) The intent of a situational interview is to make the interviewee as uncomfortable as possible
without violating legal or ethical standards.
99) In the breaking-the-ice phase of the interview process, skilled interviewers often use the job
description to explain the nature of the job and the company’s culture to candidates.
100) Effective interviewers ignore candidates’ nonverbal clues (“body language”) in interviews
because they know that most candidates are so nervous that their nonverbal communication is
meaningless.
101) Effective interviewers spend about 75 percent of the interview talking and about 25 percent
listening.
102) Effective interviewers skip the breaking-the-ice phase of a job interview and immediately
start asking candidates tough questions so they can see how the candidates respond under stress.
103) An effective job interview contains three phases: breaking the ice, asking questions, and
selling the candidate on the company.
104) Interviewers should avoid asking job candidates questions based on hypothetical on-the-job
scenarios and how the candidate would handle them because the Equal Employment Opportunity
Commission considers such questions to be illegal.
105) The Equal Employment Opportunity Commission (EEOC) supplies employers with a list of
questions it considers illegal in interviews.
106) In addition to contacting the references a job applicant provides, experienced employers
also call an applicant’s previous employers to attempt to get a clear picture of the applicant’s job
performance, character, and work habits.
107) Small business owners should take the time to check every candidate’s references.
108) Company culture is the distinctive, unwritten code of conduct that governs the behavior,
attitudes, relationships, and style of an organization.
109) Growth requires changes in a company’s management style, organizational strategy, and
methods of operations.
110) Studies comparing large companies to small ones have found that large companies’ inability
to react quickly is a major barrier to their growth.
111) An assembly line is based on the principle of job simplification.
112) Job enlargement is based on the premise that the best way to design a job is to break it
down into its simplest form and to standardize each task.
113) The principle of job enlargement is to make a job more varied and to allow employees to
perform a more complete unit of work by broadening its scope.
114) Job enrichment increases the planning, decision-making, organizing, and controlling
functions in a job.
115) The concept of empowering employees is based on the principle of job enrichment.
116) To enrich employees’ jobs, a business owner must build five core characteristics into them:
skill variety, task identity, task significance, autonomy, and feedback.
117) In job enrichment, task identity is the degree to which a job substantially influences the
lives or the work of others, employees or final customers.
118) Flextime is a work arrangement in which two or more people share the same 40-hour-a-
week job.
119) Companies using flextime schedules often experience lower levels of tardiness and
absenteeism.
120) Flexplace is a work arrangement in which employees work at a place other than the
traditional office, such as a satellite branch closer to their homes or, in many cases, at home.
121) Job sharing is a work arrangement in which two or more people share a single full-time job
responsibilities.
122) Telecommuting employees reap benefits such as flexibility and reduced commuting times
and expenses.
123) Money can be a powerful short-term motivational tool, but it usually does not have a lasting
motivational effect.
124) By linking employees’ compensation directly to the company’s financial performance, a
business owner increases the likelihood that workers will achieve performance targets that are in
their best interest and in the company’s best interest.
125) Although they are very inexpensive from a business owner’s perspective, motivators such as
praise, recognition, feedback, job security, and others are not very effective at encouraging
workers to achieve higher levels of performance.
126) The key to using rewards to motivate employees involves tailoring them to the needs and
characteristics of the workers.
127) Entrepreneurs tend to rely more on nonmonetary rewards such as praise, recognition, game
tickets, dinners, and others to create a work environment where employees take pride in their
work, enjoy it, are challenged by it, and get excited about it.
128) More than 80 percent of businesses throughout the world are family owned.
129) About one-third of Fortune 500 companies are family owned.
130) The majority of first-generation family businesses do not survive into the second
generation.
131) Most business founders intend to pass their companies on to their children, and have a
formal management succession plan for doing so.
132) It is generally safe for a business founder to assume that his children will succeed him in
managing the family business.
133) The oldest child is the best choice for a successor to manage a company.
134) A major advantage of family businesses is that there is always a guaranteed successor
within the family whenever the owner decides to step down.
135) The preparation of a successor is a two-way process, showing the direction of the business
and what led to its success, but also learning and listening.
136) For management succession to be successful, the process should start early in the
successor’s life.
137) The process of transferring power should be quick and absolute.
138) Once a business owner transfers power and control to her successor, he or she should not
hesitate to step back into the business to fix problems when they occur.
139) One of the primary concerns of entrepreneurs transferring their businesses to the next
generation is minimizing the tax bite of the transfer.
140) Without proper estate planning, the heirs to a successful business may be required to sell it
just to pay the estate tax bill.
141) A buy/sell agreement allows the founder of the business to sell it outright to the successor
and avoid taxation on the transfer.
142) The IRS permits annual gifts of up to $100,000 from a parent to each child per year to be
exempt from federal gift taxes.
143) A trust is a contract between a grantor and a trustee, which shields all assets from any
federal tax and permits the small business owner to pass on his business without incurring tax
liabilities.
144) An estate freeze is a strategy that minimizes estate taxes by creating two classes of stock for
a business, preferred voting stock for the parents and nonvoting common stock for the children.
145) Creating a family limited partnership allows business-owning parents to transfer their
company to their children (thus lowering their estate taxes) while still retaining control over it for
themselves.
146) Having a solid management succession plan in place, well before retirement is near, is
absolutely critical.
147) A leveraged buyout is an arrangement in which managers and/or employees borrow money
from a financial institution and pay the owner the total agreed-on price, pro-rated over a seven-
year period.
148) An Employee Stock Ownership Program is an arrangement in which employees and/or
managers contribute a portion of their salaries and wages, over time, toward purchasing shares of
a company’s stock from the founder until they own the company outright.
149) “ESOP” is an acronym for Employee Stabilization Ownership Program.
150) What is leadership? How does leadership differ from management?
151) List at least ten of the seventeen behaviors that effective leaders exhibit.