BUS 137 - Unit 2 Review

Which of the following is true of innovation?

• Innovations are less likely to come from small businesses than from big businesses

• All successful new start-ups are innovative dot com companies

• All successful software firms started out as large organizations

• Small businesses supply over half of all innovations in the U.S. marketplace each year

Which of the following is an advantage of a franchise?

• It lets franchisers grow by using the investment money provided by franchisees

• It allows each franchise outlet to be vastly different from other outlets.

• It allows a franchise to build a business from scratch using its own business model

• Its start-up costs are either very small or negligent

Which of the following statements on job creation is true?

• Larger firms hire at a faster rate than smaller firms

• Large companies are the last to lay off workers during economic downswings

• Business size, more than entrepreneurial business success, accounts for most new job creation

• Small firms are the last to hire in times of economic recovery

A two-person software development company with annual sales of $100,000 would be considered a:

• large business

• franchise

• joint venture

• small business

Which of the following is true of entrepreneurs?

• They run someone else's business

• They take a personal stake in the success or failure of the business

• They hire professional managers to run their businesses

• They assume the risk of the venture but are not actively involved in operating it

Which of the following is true of small businesses?

• Jobs are created solely by small entrepreneurial companies

• Small firms specializing in international business create many new jobs

• Small businesses have no impact on the world's mature economies

• Small businesses have a weak presence in the economy

Which of the following is true of most successful entrepreneurs?

• They carefully analyze market conditions

• They launch their ventures in their spare time

• They succeed alone

• They succeed straight out of college

Which of the following statements is true of new businesses?

• A good outlook on life is irrelevant when starting a new business

• Insufficient capital can contribute to new business failure

• Luck plays no role in the success of businesses

• Control systems are unimportant when starting a new business

Which of the following is an advantage of product departmentalization?

• Managers focus on helping the group rather than the organization

• The speed and effectiveness of decision making are enhanced

• Administrative costs decrease

• The organization is able to use skilled specialists to deal with unique customers

Which of the following is a characteristic of organic organizations?

• Centralized authority

• Specialized jobs

• High fluidity

• Stable environments