71) Small business owners should take the time to check every candidate’s references.
72) Assume the role of a consultant to a small business owner who is about to conduct a job
interview for the first time. Identify the guidelines that will help him develop interview
questions. Also, explain the three phases of an effective interview.
Mini-Case 17-3: The Pride of Vicksburg
Wallace Fry had been a lover of good food from the time he was a child. The only son of
wealthy Southern parents, he spent hours with his mother watching her prepare meals for the
family and friends. By the time Wallace was in high school, he had already won a number of
awards for his original recipes. After leaving Vicksburg, Mississippi, to attend college in the
Midwest, Wallace returned home to what must have been an unbelievable graduation present.
His relatives purchased an old paddlewheel riverboat and had begun initial preparations to have
it moored permanently at the foot of the Vicksburg landing on the Mississippi River. Wallace
was presented with a 50 percent interest in the restaurant named “The Pride of Vicksburg.”
The complete renovations and restoration of the beautiful old riverboat took an additional four
months. Wallace was planning to have his new restaurant open for the spring tourist season. A
number of regional magazines had already run feature stories on the project. With the opening
one month away, Wallace decided it was time to staff the restaurant.
73) Has Wallace waited too long to begin searching for employees?
74) Develop a list of interview questions to help Wallace select the right person for the following
jobs:
∙ Head chef
∙ Wait staff
∙ Dishwasher
∙ Host/Hostess
75) What criteria should Wallace use in selecting employees?
76) What would be the most effective way to recruit personnel for this type of business?
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.”
77) Would you like working for Norm? Why or why not?
78) ________ is the distinctive, unwritten code of conduct that governs the behavior, attitudes,
relationships, and style of an organization.
A) Organizational structure
B) Company culture
C) Hierarchy of command
D) Formal organization
79) A company’s culture manifests itself in ________.
A) how workers dress
B) the language workers use
C) the way workers behave
D) All of the above
80) Company culture has a powerful impact on ________.
A) the way people work together in a business
B) how people in a company do their jobs
C) how people in a company treat their customers
D) All of the above
81) Which of the following statements about a company‘s culture is false?
A) Company culture manifests itself in a variety of ways, from how workers dress and act to the
language they use.
B) As a company grows larger, its culture tends to remain constant.
C) Culture arises from an entrepreneur’s consistent and relentless pursuit of a set of core values
that everyone in the company can believe in.
D) All of the above
82) Successful organizational culture supports exceptional performance and is compatible with
the firm’s stated values and beliefs. Which of the following best illustrates this concept?
A) A “do what is needed regardless” attitude, diversity, respect for work and life balance, a sense
of purpose and a sense of fun, and participative management in a learning environment.
B) Honesty and integrity, diversity, respect for work and life balance, a sense of purpose and a
sense of fun, and dictatorial management in a learning environment.
C) Honesty and integrity, diversity, respect for work and life balance, an appreciation for career
limitations, and participative management in a learning environment.
D) Honesty and integrity, diversity, respect for work and life balance, a sense of purpose and a
sense of fun, and participative management in a learning environment.
83) The type of job design that breaks work down into its simplest form and standardizes tasks is
known as ________.
A) job simplification
B) job enlargement
C) job rotation
D) horizontal job loading
84) The classic auto assembly line is based on which job design principle?
A) Job enlargement
B) Job enrichment
C) Job simplification
D) Job rotation
85) The job ________ design strategy adds more tasks to a job to broaden its scope.
A) simplification
B) enlargement
C) enrichment
D) rotation
86) The advantages of job rotation include ________.
A) the ability to move from one job to others
B) a greater number and variety of tasks
C) additional flexibility for the company
D) All of the above
87) The type of job design that adds more tasks to a job to broaden its scope is known as
________.
A) job rotation
B) job enlargement
C) horizontal job loading
D) Both B and C
88) The job ________ design strategy involves cross-training workers so they can move from
one job in the company to others, giving them a greater number and variety of tasks to perform.
A) simplification
B) enlargement
C) enrichment
D) rotation
89) The job ________ design strategy involves building motivators into a job by increasing the
planning, decision-making, organizing, and controlling functions workers perform.
A) simplification
B) enlargement
C) enrichment
D) rotation
90) In job enrichment, ________ is the degree to which a job requires a variety of different
skills, talents, and activities from the worker.
A) skill variety
B) task identity
C) task significance
D) autonomy
91) In job enrichment, ________ is the degree to which a job gives a worker the freedom,
independence, and discretion in planning and performing tasks.
A) task identity
B) task significance
C) autonomy
D) feedback
92) In job enrichment, ________ is the degree to which a job gives the worker direct, timely
information about the quality of her/his performance.
A) task identity
B) task significance
C) autonomy
D) feedback
93) In job enrichment, ________ is the degree to which a job substantially influences the lives or
work of others (employees or final customers).
A) skill variety
B) task identity
C) task significance
D) autonomy
94) The type of job design that involves building motivators into a job by increasing the
planning, decision-making, organizing, and controlling functions workers perform is ________.
A) job enrichment or vertical job loading
B) job enlargement or vertical job loading
C) job enrichment or horizontal job loading
D) job simplification or lateral job loading
95) In job enrichment, ________ is the degree to which a job allows a worker to complete a
whole or identifiable piece of work.
A) skill variety
B) task identity
C) task significance
D) autonomy
96) An arrangement under which employees work a normal number of hours with options
regarding when they start and stop work is ________.
A) hoteling
B) flextime
C) job sharing
D) flexspace
97) Cora arrived at work at 7 a.m. today, and she will get off at 4 p.m. so that she can watch her
son’s soccer game. Her office mate, Emma, is not a “morning person” and usually arrives at the
office at 10 a.m. and gets off at 7 p.m. Their company uses ________.
A) job sharing
B) flextime
C) flexplace
D) job enrichment
98) Arturo, a sales representative for a small manufacturer, works out of an office in his home,
using his laptop computer, a fax machine, and a beeper to communicate with the home office,
which is located in a city 58 miles away. Arturo actually goes to the main office, on average,
once every 10 to 14 days. His company is using which work arrangement?
A) Job sharing
B) Flextime
C) Flexplace
D) Job enrichment
99) Maria is excited about the new opportunity her company has offered her – she will be able to
work from her home office with a company computer and a high-speed Internet connection while
she spends time with her newborn son. This is possible because of the implementation of
________.
A) telecommuting
B) hoteling
C) job sharing
D) job rotation
100) A compensation system in which employees’ pay depends on how well they perform their
jobs is known as ________.
A) a profit-sharing plan
B) open book management
C) a pay-for-performance compensation system
D) a commission compensation plan
101) Company culture is the distinctive, unwritten code of conduct that governs the behavior,
attitudes, relationships, and style of an organization.
102) Growth requires changes in a company‘s management style, organizational strategy, and
methods of operations.
103) Studies comparing large companies to small ones have found that large companies’ inability
to react quickly is a major barrier to their growth.
104) An assembly line is based on the principle of job simplification.
105) 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.
106) 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.
107) Job enrichment increases the planning, decision-making, organizing, and controlling
functions in a job.
108) The concept of empowering employees is based on the principle of job enrichment.
109) Flextime is a work arrangement in which two or more people share the same 40-hour-a-
week job.
110) To be effective, a small business leader must perform three vital tasks. List and briefly
explain these three tasks.
111) Explain the differences among job simplification, job enlargement, job rotation, and job
enrichment. Why should small business owners utilize these concepts?
112) Are job descriptions necessary in a restaurant?
113) The majority of first-generation family businesses do not survive into the second
generation.
114) Why is developing a management succession plan so important to the founder of a family
business? Identify and briefly describe the steps of a successful plan.
115) List and briefly identify the five estate planning tools the owners of a family business
should consider.
Mini-Case 17-2: Passing the Baton
Carol Wingard started a small jewelry manufacturing company when she was in her late 20s, and
has worked hard to build it into a highly successful family business. Now, 40 years later, she was
“ready to sit down and enjoy life.” Seven family members, including her two sons, Ralph and
Cooper, work in the business. Ralph, with 30 years of experience, and Cooper, with 22 years of
experience, are both vice presidents of the company.
Carol has always intended to pass the business on to her sons, who together own 20 percent of
the company’s stock. However, she has always been too busy running the business to put
together a formal management succession plan. For the past decade, many of the employees have
whispered among themselves about who would be named President if Mrs. Wingard stepped
down and exactly what would happen to the business.
Now that she has decided to retire, Carol wants to begin developing a management succession
plan.
116) Carol calls you and announces her plans to retire within a year. What advice would you
offer her about a management succession plan?
117) What tools would you suggest to Carol to minimize the estate taxes involved in passing the
business on to Ralph and Cooper? Explain the advantages and disadvantages of at least three
choices and explain why you make the final recommendation that you do.
118) 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.
119) Discuss the three options that entrepreneurs may consider when they sell their business to
insiders.