76. Which of the following statements is true about a franchise agreement?
a.
The franchisee is free to modify the franchisor’s products.
b.
The franchisee can consult the franchiser for managerial and financial help.
c.
The franchisee and not the franchiser takes the responsibility of marketing and advertising activities.
d.
The franchisee can keep all the profits made by the venture.
e.
The franchisee does not have to pay a start-up cost for the venture.
and financial help.
p. 147
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United States – BUSPROG: Reflective Thinking
United States – AK – DISC: Creation of Value
Structure of Entrepreneurial Organizations
Bloom’s: Comprehension
Digital Story: Connect
77. Which of the following is an advantage of a franchising agreement?
a.
The franchisee is not required to pay a start-cost.
b.
The franchisee can easily establish a business with reduced risks.
c.
The franchisee enjoys maximum independence in running the venture.
d.
The franchisee gets to modify the franchiser’s products.
e.
The franchisee can create an individual identity in the community.
p. 148
MGMT.GRIF.16. 5-4 – LO: 5-4
United States – BUSPROG – Analytic – Business knowledge and analytic skills
United States – AK – DISC: Creation of Value
Structure of Entrepreneurial Organizations
Bloom’s: Comprehension
MGMT.GRIF.16. 5-4 – LO: 5-4
United States – BUSPROG: Analytic
United States – AK – DISC: Creation of Value
Structure of Entrepreneurial Organizations
Bloom’s: Comprehension
Digital Story: Connect
78. Identify an advantage of a franchising agreement.
a.
The franchiser gets all the profits made by the franchisee venture.
b.
The franchisee has scope for innovation and can modify products.
c.
The franchiser does not have to help the franchisee manage the venture.
d.
The franchisee does not have to pay a start-up cost.
e.
The franchiser can grow rapidly from franchising agreements.
p. 148
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United States – BUSPROG – Analytic – Business knowledge and analytic skills
United States – AK – DISC: Creation of Value
Structure of Entrepreneurial Organizations
Bloom’s: Comprehension
Digital Story: Connect
79. The most significant disadvantage of a franchising agreement is that:
a.
the franchisee is required to create an operations process from scratch.
b.
the risks involved in franchising are higher compared to starting a business from scratch.
c.
the franchisee may have to pay a high start-up cost.
d.
the franchisee will have to set up the business from scratch.
e.
the franchisee does not receive any management consultation.
80. Which of the following is a disadvantage of franchising agreements?
a.
The franchisee cannot use the trademarks and business plans.
b.
The franchisee loses some independence in running the venture.
c.
The franchiser does not get any investment from the franchisee.
d.
The franchisee must establish management and operation processes from scratch.
e.
The franchiser has no control over what products the franchisee sells.
Digital Story: Connect
81. What is a disadvantage of starting a business through a franchise agreement?
a.
The franchisee does not get management consultation from the parent company.
b.
The franchise agreement may be difficult to terminate.
c.
The venture will have to be built step by step.
d.
The risks of failure are higher for a franchisee compared to an entrepreneur who starts a business from scratch.
e.
The franchisee cannot use trademarks of the parent company.
p. 150
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United States – BUSPROG – Analytic – Business knowledge and analytic skills
United States – AK – DISC: Creation of Value
Bloom’s: Comprehension
Digital Story: Connect
82. Which of the following statements is true about franchising?
a.
A franchise agreement gurantees success to the franchisee.
b.
Each franchise outlet is probably a carbon copy of every other outlet.
c.
The franchisee gets to use the parent company formulas and trademarks for free.
d.
The franchisee has the freedom to sell new products and modify the products of the parent company.
e.
Most franchising agreements can be easily terminated.
same everywhere.
p. 150
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United States – BUSPROG – Analytic – Business knowledge and analytic skills
p. 148
MGMT.GRIF.16. 5-5 – LO: 5-5
United States – AK – DISC: Creation of Value
Bloom’s: Comprehension
Digital Story: Connect
83. Which of the following is a recent business trend?
a.
Better survival rates of entrepreneurial ventures
b.
Emergence of brick-and-mortar ventures
c.
Decline in the number of small businesses in the retail industry
d.
Decline in opportunities for women
e.
Increased preference for jobs in large corporations
p. 151
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United States – BUSPROG – Analytic – Business knowledge and analytic skills
United States – AK – DISC: Creation of Value
The Performance of Entrepreneurial Organizations
Bloom’s: Knowledge
Digital Story: Engage
84. Which of the following factors is responsible for the failure of a small business?
a.
Managerial inexperience
b.
Strong control systems
c.
Excess capital
d.
Entrepreneurial competence
e.
Complacency among competitors
p. 151
MGMT.GRIF.16. 5-5 – LO: 5-5
United States – BUSPROG: Analytic
United States – AK – DISC: Creation of Value
The Performance of Entrepreneurial Organizations
Bloom’s: Comprehension
Digital Story: Connect
85. _____ is a general factor that contributes to the success of small businesses.
a.
Escalation of commitment
United States – AK – DISC: Group Dynamics
Bloom’s: Comprehension
Digital Story: Connect
b.
External locus of control
c.
Satisficing
d.
Managerial competence
e.
Self-dealing
86. An independently owned and operated enterprise with relatively little influence over its environment is defined in the
text as a(n) _____.
small business
Easy
p. 129
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United States – BUSPROG: Analytic
United States – AK – DISC: Creation of Value
The Nature of Entrepreneurship
Digital Story: Engage
87. _____ businesses supply over half of all “innovations” introduced into the U.S. marketplace each year.
Small
Easy
p. 129
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United States – BUSPROG: Analytic
United States – AK – DISC: Creation of Value
Digital Story: Engage
a
Easy
p. 151
MGMT.GRIF.16. 5-5 – LO: 5-5
United States – BUSPROG: Analytic
United States – AK – DISC: Creation of Value
The Performance of Entrepreneurial Organizations
Bloom’s: Knowledge
Digital Story: Engage
88. The roles of entrepreneurial firms in our economy are innovation, _____, and importance to large business.
89. Primarily because they require few resources, _____ businesses are the fastest-growing segment of small-business
enterprise.
90. A(n) _____ is simply a segment of a market that is not currently being exploited.
91. A firm that exploits a marketing opportunity ahead of its competitors is said to have a(n) _____.
92. One important part of a business plan is the entrepreneurs’ estimate of the amount of business they expect, also called
a(n) _____.
93. A group of small investors seeking to make profits on companies with rapid growth potential is called a(n) _____.
94. José has just founded a company to develop educational software, and he has brought together a group of educators
and parents to help him better understand the needs of children. This group is called a(n) _____.
95. A contract between an entrepreneur and a parent company where the entrepreneur pays the parent company for the use
of its trademarks, products, formulas, and business plans is called a(n) _____.
96. Minorities and _____ are starting more small businesses than in the past.
97. Discuss the concept of entrepreneurship.
98. Explain the first mover advantage and how it differs for small businesses and large organizations.
99. More than half of all new businesses do not last six years. What are four general factors that cause failure of business?
Match the following numbered items with the most correct response.
A response may be used once, more than once, or not at all.
a.
Starting a business from scratch
b.
Buying an existing business
c.
Buying a franchise
DIFFICULTY:
Easy
REFERENCES:
p. 142
LEARNING OBJECTIVES:
MGMT.GRIF.16. 5-4 – LO: 5-4
NATIONAL STANDARDS:
United States – BUSPROG: Analytic
STATE STANDARDS:
United States – AK – DISC: Creation of Value
TOPICS:
Structure of Entrepreneurial Organizations
KEYWORDS:
Bloom’s: Knowledge
NOTES:
Digital Story: Engage
100. Historical records answer questions about cash flow problems
101. Less uncertainty about sales and cash flow
ANSWER:
POINTS:
102. Established relationships with the community
ANSWER:
POINTS:
103. Responsible for building a customer base
ANSWER:
POINTS:
104. Can choose suppliers and employees without worrying about existing agreements
ANSWER:
POINTS:
105. Obtains ongoing access to advice from experts
ANSWER:
POINTS:
106. Provides a proven business plan
ANSWER:
POINTS:
107. More difficult to obtain information about projected revenues, cash flow
ANSWER:
POINTS:
ANSWER:
POINTS:
Match the following numbered items with the most correct industry.
A response may be used once, more than once, or not at all.
a.
Service
b.
Retailing
c.
Construction
d.
Finance and insurance
e.
Wholesaling
f.
Transportation
g.
Manufacturing
DIFFICULTY:
Easy
REFERENCES:
p. 133-138
LEARNING OBJECTIVES:
MGMT.GRIF.16. 5-1 – LO: 5-1
NATIONAL STANDARDS:
United States – BUSPROG: Analytic
STATE STANDARDS:
United States – AK – DISC: Creation of Value
TOPICS:
Strategy for Entrepreneurial Organizations
KEYWORDS:
Bloom’s: Application
NOTES:
Digital Story: Perform
108. Amtrak, railroad operator
109. Brannon Homes, builder of homes
ANSWER:
c
POINTS:
110. 4Wheel Parts, seller of accessories to auto dealers
ANSWER:
e
POINTS:
111. Six Flags Inc., theme park operator
ANSWER:
a
POINTS:
112. Nannies-R-Us, babysitting providers
ANSWER:
a
POINTS:
113. El Galindo, maker of tortilla chips
ANSWER:
POINTS:
114. Citibank
ANSWER:
POINTS:
ANSWER:
POINTS: