BA 311 Small Business Management - Ch 5 & 6 - Quiz#3

When a parent retires completely and turns the firm over to a son or daughter, the firm ceases to be a family business.

• True

• False

In a family business, the business's goal is to

• create value for family members.

• create value for customers

• emphasize competition, flexibility, and unity

• emphasize stability, diversity, and flexibility

One of the first steps experts recommend for building a healthy family-to-business relationship is to hold a family retreat.

• True

• False

Sibling rivalry in a family business

• rarely affects non family members in the firm.

• may create disagreements about business policy

• is unusual if roles are determined before the siblings join the business

• is often good because it spurs business competition within the organization

A document that states the principles intended to guide a family firm through times of crisis and change, including the succession process, is called the

• articles of incorporation

• business plan

• family business constitution

• corporate by-laws

To avoid problems with nonfamily employees in a family business, the owner should

• consider nonfamily employees before family members when giving promotions

• avoid all special consideration for family member

• make clear the extent of opportunities for nonfamily members when hiring them

• minimize discussion about future management changes

Which of the following statements about family councils is true?

• A family council should be created before holding a family retreat

• A family council is the organizational and strategic planning arm of a family

• The members of a family council should be appointed by the owner of the family business

• A family council should be looked at as a casual get-together

A family retreat is designed to

• bring family members together to openly discuss family business matters

• focus on family business matters while avoiding extensive communication

• control the lines of communication

• announce the latest policy decisions and other changes in the business

Which of the following usually occurs in the first several meetings of a family council?

• A board of directors is elected

• A code of ethics is generated

• A family constitution is generated

• All of these are correct

A family business constitution is sometimes labeled a

• business plan

• by-law guide

• family creed

• succession plan