Essentials of Entrepreneurship and Small Business Management, 9e (Scarborough)
Chapter 17 Building a New Venture Team and Planning for the Next Generation
1) ________ is the process of influencing and inspiring others to work to achieve a common goal
and then giving them the power and the freedom to achieve it.
A) Management
B) Organizing
C) Leadership
D) Coordination
2) Leadership is ________.
A) essential to a company’s success
B) not an easy skill to learn
C) influencing and inspiring others to work to achieve a common goal and then giving them the
power and the freedom to achieve it
D) All of the above
3) Which of the following pairs describing leadership (first column) and management (second
column) is not accurate?
Leadership Management
A) Comes first Comes second
B) Deals with people Deals with things
C) Involves doing things right Involves doing the right things
D) Focuses on the present Focuses on the future
4) Which of the following is not a behavior typically exhibited by effective leaders?
A) Define and constantly reinforce the vision they have for the company.
B) Respect and support their employees.
C) Require employees to gather necessary resources to complete their tasks; they will be more
likely to “feel ownership” than if you did it for them.
D) Create an environment in which people have the motivation, the training, and the freedom to
achieve the goals they have set.
5) Which of the following is not one of the vital tasks small business leaders must perform?
A) Hire the right employees to the team and constantly improve their skills.
B) Create a culture for retaining employees.
C) Plan for “passing the torch” to the next generation of leadership.
D) Keep flexible and do not be concerned about preparing for the next generation of
management.
6) A leadership style in which a leader takes on the role of a servant first and the role of a leader
second is referred to as a ________ leader.
A) servant
B) passive
C) managerial
D) subservient
7) Questions like “What are you deeply passionate about?”, “What can you be the best in the
world at?” and “What drives your economic engine?” are important to define your ________,
according to the work of Jim Collins.
A) hedgehog concept
B) core competencies
C) critical strategies
D) keys to success
8) Both leadership and management are essential to a small company’s success, but leadership
comes first.
9) Leadership deals with doing things right; management deals with doing the right things.
10) Although a small business manager must assume a wide range of ideas, tasks, and
responsibilities, none is more important than the role of leader.
11) Leadership gets a small business going; management keeps it going.
12) Management and leadership are essentially the same.
13) A strong leader does not share aspects of his or her company’s financial health, its future
plans, or her vision for it with employees.
14) Effective leaders know they must punish workers who take risks and fail so that other
workers do not make the same mistakes.
15) Effective leaders know that what they do is more important than what they say because they
set the example for their employees.
16) Today’s workforce responds best to a leadership style based on instilling fear and
intimidation.
17) Effective leaders make sure that workers have both the tangible and the intangible resources
they need to do their jobs well.
18) Effective leaders recognize that money is not the only reward that motivates workers.
19) Questions like “What are you deeply passionate about?”, “What can you be the best in the
world at?” and “What drives your economic engine?” are important to define your hedgehog
concept, according to the work of Jim Collins.
20) Leadership is an easy skill to learn.
21) The practice known as servant leadership was coined by Robert Greenleaf and states that
leaders are servants first and leaders second, putting their employees and their employees’ needs
ahead of their own.
22) Because their companies are small, entrepreneurs need not develop the leadership skills
managers in larger companies need.
23) If their companies are to grow and reach their potential, entrepreneurs must learn to be
effective leaders.
24) What is leadership? How does leadership differ from management?
25) List at least ten of the seventeen behaviors that effective leaders exhibit.
Mini-Case 17-1: Kansas Manufacturers and Assemblers
Rose Richardson always knew that if she could land a major order for her firm, she could prove
its quality to the industry. Kansas Manufacturing and Assemblers was a job shop manufacturing
and assembling operation specializing in fast turnaround projects for manufacturers with orders
in excess of production capacity. Each job Rose’s firm did was a special order.
In September, a major appliance manufacturer approached Rose and inquired about her ability
and willingness to manufacture and assemble a new appliance. This order could mean a very
substantial profit for the firm, as well as recognition throughout the industry. Rose was asked to
undertake a project that would require a 100 percent assignment of the firm’s personnel for seven
months. In addition, any slight modification in design or material would require overtime. If this
job went as most, changes could be expected. On this short notice, it would be impractical for
Rose to hire additional personnel because it takes weeks, even months, to learn the necessary
skills.
Rose faces an interesting dilemma: If she doesn’t take the job, it may be years before another one
of this magnitude comes along; but if she takes the job and then fails to deliver on time, or fails
to meet the quality specifications because of her overworked employees, her reputation will be
hurt for years. Rose sees this opportunity as a crossroads in the firm’s history, but knows that she
must gain the full and unquestioned support of the employees if the project is to be a success.
26) If you were Rose, how would you go about gaining the commitment of your employees to a
project that will last a full seven months and will likely require each person to work overtime and
weekends and to forgo vacations for the duration of the project?
Mini-Case 17-4: Plumbers Don’t Want Recognition
“If I ever went out to those guys and asked them if they wanted a little more recognition, they
would laugh me out of the shop. People work for money.” Norm Schultz had been a plumber
himself for 18 years before he saved enough money to open a small plumbing contractor
business. The men who worked for Norm knew what was expected of them – a fair day’s work
for a fair day’s pay. “You don’t need to tell a person that he or she is doing a good job; the person
is either doing the work or not working for me!”
Norm’s son-in-law was taking a management course at a local college. When Norm asked him
what he was learning in class, he told him the management of people. Norm was very emphatic
about managing the plumbers who worked for him. “Tell an employee what you expect from the
beginning. Watch to see if they perform the job properly. Treat your people fairly and never
cheat them.” Norm went on to tell his son-in-law that this was the way good managers did things.
“Recognition won’t put bread on the table.”
27) Is Norm Schultz correct in his attitude about workers not wanting recognition?
28) What do you think about Norm Schultz’s attitudes toward employees?
29) Which of the following is true regarding hiring mistakes?
A) Hiring mistakes are expensive.
B) Companies’ informal processes may lead to unpredictable outcomes.
C) Small businesses are most likely to make hiring mistakes because they lack the human
resources experts and the disciplined hiring procedures large companies have.
D) All of the above
30) One of the best sources for prospects for new positions may come from ________.
A) colleges and universities
B) the Internet
C) current employees
D) employment advertisements
31) Which of the following techniques would you not recommend to a company desiring a
stronger recruiting strategy?
A) Look inside the company first — a promotion-from-within policy serves as an incentive for
existing workers to upgrade their skills.
B) Encourage employee referrals — reward employees for successful referrals.
C) Ensure that your recruitment efforts are known — whether in traditional media, the Internet,
or on college campuses.
D) Avoid hiring retired workers — they too often fail to have anything to offer.
32) Posting job openings on the Internet has proven to be ________.
A) a relatively ineffective method of recruiting
B) a cost-effective method to attract candidates from other areas
C) an effective method to attract candidates and is relatively expensive
D) problematic for entrepreneurial businesses
33) A ________ is the process by which a company determines the duties and the nature of the
jobs to be filled and the skills and experience required of the people who are to fill them.
A) job analysis
B) job description
C) job specification
D) management audit
34) Luisa, the director of human resources, is discussing the duties and responsibilities of a new
position and its working conditions with Delmar, the supervisor of the position. Luisa and
Delmar are discussing a ________.
A) job description
B) management audit
C) job specification
D) job analysis
35) Burt is applying for a position as a staff accountant. The job specification for the position
might list all of the following items except ________.
A) BBA in Accounting
B) 3 years of experience
C) prepare daily sales reports
D) knowledge of QuickBooks
36) A job ________ identifies the duties and responsibilities of a position and its working
conditions, while a job ________ identifies the qualifications required of the job candidate in
terms of skills, education, and experience needed.
A) specification; description
B) description; specification
C) analysis; specification
D) analysis; description
37) The ________, published by the Department of Labor, lists more than 20,000 job titles and
descriptions and serves as a useful tool for getting a small business owner started when writing
job descriptions.
A) Title IX Handbook
B) Team Handbook
C) Job Listing Directory
D) Dictionary of Occupational Titles
38) Which of the following types of questions should a business owner ask a candidate in a job
interview?
A) Questions calling for “yes or no” answers.
B) Questions about the candidate’s religious beliefs.
C) Questions based on on-the-job scenarios that require open-ended answers.
D) Questions about the candidate’s physical traits, characteristics, and family life.
39) A(n) ________ interview is where the interviewer gives candidates a typical job-related
situation to assess how they respond.
A) situational
B) puzzle
C) circumstantial
D) exploratory
40) A ________ interview involves offbeat questions to determine how job candidates think and
reason, allowing the interviewer to assess their capacity for creativity.
A) situational
B) puzzle
C) circumstantial
D) game-based
41) Effective interviewers spend about ________ percent of the interview talking and ________
percent listening.
A) 25; 75
B) 50; 50
C) 75; 25
D) 90; 10
42) Which of the following is not a recommended guideline for developing questions to ask
candidates in job interviews?
A) Develop a series of core questions and ask them of every candidate.
B) Ask only questions calling for “yes or no” answers to avoid any controversy regarding the
direction the job interview took; this way, you have better control of the situation.
C) Create hypothetical situations candidates would likely encounter on the job and ask how they
would handle them.
D) Ask candidates to describe a recent success and a recent failure and how they dealt with them.
43) Which of the following best represents the three phases of an effective job interview?
A) Breaking the ice, asking informative questions, and providing as much information about the
company (good and bad) as possible.
B) Breaking the ice, asking informative questions, and selling the candidate on the company.
C) Breaking the ice, asking informative questions, and selling the candidate on the company
regardless of their potential fit.
D) Breaking the ice, asking questions in an interrogative manner, and selling the candidate on the
company.
44) Successful interviewers always listen for these in an interview to see whether it matches the
candidate’s words. This interviewer is referring to the candidate’s ________.
A) work experience
B) job-related skills
C) nonverbal clues or body language
D) nervousness
45) Which government agency is responsible for enforcing employment laws?
A) The Fair Labor Standards Commission
B) The National Labor Relations Board
C) The Equal Employment Opportunity Commission
D) The Justice Department
46) If a job candidate files charges of employment discrimination against a company, the burden
of proof in the case falls on ________.
A) the employer to prove that all pre-employment questions are job-related and
nondiscriminatory
B) the candidate to prove that some pre-employment questions and actions were discriminatory
C) the Equal Employment Opportunity Commission representing the job candidate in the lawsuit
D) None of the above
47) Although many business owners see checking references as a formality and pay little
attention to it, the process is ________.
A) expensive and often meaningless
B) necessary and often invaluable
C) optional, based on the position’s salary and relative importance
D) a questionable practice that may bias the hiring process
48) According to a survey by CareerBuilders, almost ________ of candidates either exaggerated
or falsified information about their previous employment on their resumes.
A) one-third
B) three-fourths
C) half
D) two-thirds
49) Every new employee a business owner hires determines the heights to which the company
can climb or the depths to which it will plunge.
50) 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.
51) Companies desiring to improve their recruitment efforts are finding that the Internet offers
tremendous reach at a relatively low cost and is very effective.
52) Information gathered during a job analysis provides the foundation for creating job
descriptions and job specifications.
53) A job analysis describes what the job is, what its duties and responsibilities are, and what
work conditions are involved.
54) 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.
55) A job description sets forth a job’s duties and responsibilities; a job specification translates
these duties into the qualifications needed for that job.
56) 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.
57) 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.
58) Small companies are least likely to make hiring mistakes because most owners have
developed clearly defined job specifications and job descriptions.
59) To give the interviewing process more consistency, a business owner should develop a series
of core questions and ask them of every candidate.
60) The most effective job interviews are unplanned, unstructured interactions between the small
business owner and the job applicant.
61) A situational interview gives the candidate a typical job-related situation to see how they
respond.
62) The intent of a situational interview is to make the interviewee as uncomfortable as possible
without violating legal or ethical standards.
63) 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.
64) Effective interviewers ignore candidates’ nonverbal clues (i.e., body language) in interviews
because they know that most candidates are so nervous that their nonverbal communication is
meaningless.
65) Effective interviewers spend about 75 percent of the interview talking and about 25 percent
listening.
66) 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.
67) An effective job interview contains three phases: breaking the ice, asking questions, and
selling the candidate on the company.
68) 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.
69) The Equal Employment Opportunity Commission (EEOC) supplies employers with a list of
questions it considers illegal in interviews.
70) 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.