Entrepreneurship
Smith's Candy Company specializes in small-batch chocolates. Which of the following is an example of a brand touchpoint for Smith's Candy Company:
A. The brand's slogan: “Candy for the people, by the people”
B. A coupon for a competing brand's chocolate bars
C. The organizational culture of Smith's Candy Company
D. An online ad for the brand's chocolate
D
An online ad for the brand's chocolate. A touchpoint is any interaction between a business and a customer or potential customer. Examples of touchpoints include advertisements, publicity, word-of-mouth marketing, engagement with salespeople, interaction with the company's website, and the good itself. A brand slogan itself is not necessarily a touchpoint until a customer comes into contact with that slogan. Similarly, the organizational culture of the company is not a customer touchpoint either. A coupon for a competing brand's chocolate is not a touchpoint for Smith's Candy Company, but instead a touchpoint for the competitor.
When two parties work together to negotiate a result that is mutually beneficial, it is called a __________ outcome.
A. lose-lose
B. win-lose
C. win-win
D. lose-win
C
Win-win. When people collaborate, they work together. A collaborative negotiating style is most likely to create an outcome that benefits both parties. It builds lasting relationships by embracing an “everybody wins” attitude. Use of the accommodating negotiating style often results in a lose-win outcome. The combative and competitive negotiating styles are based on a win-lose attitude. Lose-lose outcomes most often occur when using the avoidance negotiating strategy.
Which of the following is a program some managers implement to achieve quality in all aspects of the business:
A. Gantt chart
B. PERT
C. Theory X
D. Six Sigma
D
Six Sigma. Six Sigma is a program that emphasizes preventing problems to achieve quality in an organization. It stresses strict measurements in design and manufacturing as well as motivating people to be highly productive. Six Sigma focuses on people working together, often in teams, to create a culture of quality that exists in the business and in the business's dealings with customers. Theory X is an authoritative, traditional view of motivation in which workers were viewed as preferring direction, having little ambition, avoiding responsibility, and wanting security. PERT, or program evaluation and review technique, is a method of planning work activities. A Gantt chart is graphic representation of a project's timeline.
All the individuals with needs to satisfy and the willingness to spend money to satisfy those needs compose what is called a(n)
A. market.
B. corporate chain.
C. cooperative.
D. economic system.
A
Market. A market may be an industrial market composed of businesses or a consumer market composed of individuals. A cooperative is a business that is both owned and operated by its customers. A corporate chain consists of a number of similar stores owned and managed by a central corporate organization. An economic system is the organized way in which a country handles its economic decisions and solves its economic problems.
Promotional activities focus on pointing out the differences between competing products when a company's product is in the __________ stage of its life cycle.
A. maturity
B. growth
C. introductory
D. declining
A
Maturity. The maturity stage exists when the product is well established and competition is increasing. The product life cycle begins with the introductory stage that involves the introduction of a new product to the market. Growth follows introduction, and competing products enter the market. The declining stage occurs when sales are dropping as newer products are entering the market. The promotional mix must be adjusted for each phase of the product's life cycle.
The economic basis for the private enterprise economic system is
A. competition.
B. the marketplace.
C. the profit motive.
D. supply and demand
C
The profit motive. The profit motive is the desire to make a profit, which moves people to invest in business. It forms the economic basis for the private enterprise system. If a business did not make a profit, it would eventually cease to exist. A marketplace is any place where the buying and selling of goods and services takes place. Competition is the rivalry between two or more businesses to attract scarce customer dollars. The law of supply and demand is the economic principle stating that the supply of a good or service will increase when demand is high and decrease when demand is low.
William was having a hard time coming up with ideas to solve a problem that he was having at work. He decided to write down some things that he could do to make the problem worse. He then reviewed each negative statement and thought of ways to improve the situation. What problem-solving technique was William using?
A. Attribute listing
B. Reverse brainstorming
C. Mind mapping
D. Appreciative inquiry
B
Reverse brainstorming. When you are having a hard time solving a problem, you might want to try to look at your problem in different ways. The reverse brainstorming method involves finding ways to make the problem worse. After writing down negative statements, you try to generate ideas and possible solutions for your worstcase scenario. By looking at the issue in a different way, you may come up with a unique way to solve the problem. Mind mapping is a problem-solving method that involves drawing out your problem on a large sheet of paper. Appreciative inquiry is a problem-solving method that requires you to think positively about the problem. Attribute listing involves listing characteristics of something and then combining some or all of those attributes into something else.
Swati receives health insurance as an employment benefit. Her monthly premium is $575, and her employer pays 60% of the premium. How much will Swati pay each paycheck for her insurance coverage if she is paid every two weeks? (Round up to the next whole cent.)
A. $106.16
B. $230.00
C. $265.39
D. $160.00
A
$106.16. Health coverage is a benefit some businesses offer their employees. The amount of coverage the company pays varies from business to business. In Swati's case, her monthly premium is $575 with 60% paid by the company. To determine Swati's portion of the coverage, multiply $575 by 40% (or .40), which equals $230. Multiply the monthly amount by 12 to obtain her yearly cost: $230 X 12 = $2,760. Since Swati is paid every two weeks, she receives 26 paychecks in a year. To determine how much she pays for her insurance coverage in each paycheck, divide the yearly amount by 26: $2,760 / 26 = $106.16.
Which of the following statements about bylaws is true:
A. Their governing rules are consistent from state to state.
B. They are the governing rules by which a corporation operates.
C. They are not influenced by the board of directors.
D. They are also known as Articles of Incorporation.
B
They are the governing rules by which a corporation operates. Bylaws refer to the governing rules by which a corporation operates. When a corporation is formed, the board of directors determines the bylaws by creating a single document encompassing all the rules. Bylaws can also be put in place by a society to regulate its citizens and maintain civility. To that end, the governing rules established by bylaws may vary, as corporations are regulated by states. Articles of Incorporation are different than bylaws. Articles of Incorporation are filed to establish a corporation, whereas bylaws are created by a board of directors after a company is formed.
Businesses identify market segments by dividing consumers into groups that have
A. inconsistent values.
B. unusual interests.
C. similar characteristics.
D. financial needs.
C
Similar characteristics. Market segmentation is the division of a total market into smaller, more specific groups. The basis of the division is similar characteristics that are geographic, demographic, or psychographic in nature. Some of the groups or segments have unusual interests, but not all of them do. Most people have financial needs, so this characteristic is too broad to consider for market segmentation purposes. When dividing a group by psychographics, the segment has similar rather than inconsistent values.
Abeytu sent requests for price quotes to seven different chemical companies and is waiting to review the suppliers’ proposed prices before making a selection. Abeytu is conducting
A. competitive bidding.
B. blanket ordering.
C. forecasts.
D. negotiations.
A
Competitive bidding. Abeytu is conducting competitive bidding, which involves sending out a request for bids, reviewing proposed prices (bids), and selecting the best supplier for the job, based on cost or overall terms. Negotiating is the process of one party reaching an agreement with another party to meet specific needs or wants. To forecast means to predict something, such as sales or trends. A blanket purchase order is a special kind of purchase order normally used only for fairly inexpensive goods or services the business uses regularly. Abeytu is not forecasting, blanket ordering, or negotiating in this scenario.
Which of the following is an appropriate action for a manager to take in documenting the solution to an employee complaint:
A. Delegate the documentation of the solution to an employee.
B. Discard the file when the complaint has been resolved.
C. Cover all of the critical aspects of the complaint.
D. Write a lengthy, detailed report of the solution.
C
Cover all of the critical aspects of the complaint. Your objective in documenting the resolution of an employee complaint is to have proof of the way in which the problem was resolved. You should record the critical aspects of the complaint and the disposition of the problem and keep a copy in an individual's personnel file and/or in a master complaint/grievance file. This documentation, which need not be lengthy, can be quite useful, especially in case of a grievance or a lawsuit. The documentation is the manager's responsibility and should not be delegated to an employee.
A good way to make numerical facts in a complex written report easy for readers to grasp is to present the facts in a(n) __________ format.
A. technical
B. separate
C. descriptive
D. illustrated
D
Illustrated. Graphs, charts, tables, and other kinds of illustrations are good ways to present numerical data in a written report because they make the data easy to see at a glance. When numerical data are described within the text, they may be overlooked or their significance may not be as readily apparent as when they are illustrated. Numerical facts that support the report should generally be included at the appropriate place within the text, not in a separate format. Presenting data in a technical or symbolic format may make them more difficult to understand.
A manufacturing company is required by the local government to dispose of its waste in an environmentally safe way. This is an example of how process design can be affected by __________ factors.
A. human
B. technological
C. regulatory
D. natural
C
Regulatory. Because the manufacturing company is required by local government to dispose of its waste safely, the company must design its waste disposal process to abide by the regulations. This is an example of regulatory factors affecting business process design. Human factors affecting process design include stress, employee morale, and fatigue. Technological factors that can affect process design include the cost of any equipment or hardware that is necessary for the process. The term “natural factors” is not usually used to describe factors affecting process design.
What factors should a company's logistics manager first consider when evaluating the performance of distribution channel members?
A. Credit rating and utility costs
B. Utility costs and variable expenses
C. Cost efficiency and customer service
D. Customer service and insurance rates
C
Cost efficiency and customer service. Channel members must be able to meet a company's standards in terms of costs (e.g., delivery charges) and customer services (e.g., responsiveness in solving problems or answering questions). A logistics manager often considers a channel member's credit rating to make sure that the member is in a stable financial position. However, utility costs, variable expenses, and insurance are not generally the first considerations.
Which of the following is an effective persuasive technique:
A. Speak loudly during your entire conversation.
B. Explain why your coworker is the wrong choice.
C. Cross your arms to make people feel comfortable.
D. Look people in the eye when speaking to them.
D
Look people in the eye when speaking to them. This is an effective persuasive technique because you are using appropriate body language. Crossing your arms will not usually make people feel comfortable. You should speak in a normal tone of voice and speak a little louder to make a point. Explaining why your coworker is the wrong choice uses negativity, which often makes you look mean-spirited or insecure.
Which of the following makes it easier than ever for small businesses to engage in international trade:
A. Decreasing international middle class
B. Language barriers
C. Increased regulation
D. Technological advances
D
Technological advances. Due to the prevalence of the internet and other technologies, it is easier for businesses of any size to engage in international trade. A rising international middle class, rather than a decreasing one, makes it easier than ever for small businesses to engage in international trade. Language barriers and increased regulation do not make it easier to engage in international trade.
Company A owns 100 shares of Company Z stock. Company Z pays a dividend to Company A on a quarterly basis. Company A is obligated to pay __________ taxes on those dividends.
A. excise
B. sales
C. capital gains
D. income
D
Income. Shareholders who receive dividends on their investments are obligated to pay income taxes on those dividends. Investors pay capital gains taxes when they sell their securities, not when they earn dividends. Sales taxes are assessed on purchased items. Excise taxes are indirect taxes charged on specific goods such as gasoline and alcohol.
Samir has worked for the same employer for 15 years. During that time, Samir has learned a great deal and developed expertise that enables him to make a significant positive impact on business operations and outcomes. Samir's expertise is a form of
A. innovation.
B. knowledge.
C. recruiting.
D. training.
B
Knowledge. Knowledge is an intangible combination of human experiences, insights, and intuitions that provide structure for interpreting and reacting to the world around you. Knowledge is the result of long-term learning that has been retained and then applied to practical situations. Innovation is the creation of new or more effective products, processes, services, technologies, or ideas. Training involves teaching or developing a specific skill. While Samir's expertise may be the result of training, his expertise itself is a form of knowledge. Recruiting entails seeking out and attracting qualified potential employees.
What is an example of a way to manage physical risks?
A. Make sure employees know where all of the building exits are.
B. Back up computer data offline and online.
C. Develop an evacuation plan for tornadoes.
D. Train multiple employees to handle important responsibilities.
A
Make sure employees know where all of the building exits are. Building risks are the most common type of physical risk. To manage this risk, it's important to make sure employees know how to quickly exit the building in case of an emergency. Training multiple employees to handle important responsibilities is a way to protect against the risk of illness. Backing up computer data offline and online is a way to manage technological risks. Developing an evacuation plan for tornadoes is an example of managing a location risk.
Which of the following people would make the best entrepreneur:
A. A risk-averse person who wants to work 9:00 a.m. to 5:00 p.m.
B. A person who lacks self-confidence
C. A risk-taker who has a strong work ethic
D. A person who works so hard, they make themselves sick
C
A risk-taker who has a strong work ethic. Entrepreneurship requires risk-taking, a strong work ethic, and selfconfidence. It often requires working much longer hours than 9:00 a.m. to 5:00 p.m. Entrepreneurs must work hard, but they are also in charge of protecting their own health. Getting sick means missing work and losing money.
Why would a bank examine a business's balance sheet?
A. To determine whether to declare the company bankrupt
B. To meet its oversight responsibilities of the business community
C. To recognize its most profitable customers
D. To determine whether the company qualifies for additional credit
D
To determine whether the company qualifies for additional credit. By examining the balance sheet, banks determine what a business owns as well as what it owes. If the business does not have sufficient assets, the bank will probably avoid loaning it money. Businesses, not banks, declare themselves in bankruptcy. Banks do not have oversight responsibilities of the business community. A bank would examine a company's income statement to determine profitability
Efficient operations management is an important business activity because it improves a company's ability to be
A. flexible.
B. competitive.
C. innovative.
D. responsible.
B
Competitive. Operating efficiently is an important business activity because businesses want to produce and sell their goods and services at the most reasonable prices possible in order to be competitive. Controlling operating costs and offering goods and services that are in demand are ways that businesses can operate efficiently and increase their ability to compete with other companies. Operations management may affect a business's ability to be innovative, responsible, and flexible but those are not major purposes.
Businesses often use direct advertising strategies because
A. It reduces the need to include other elements in the promotional mix.
B. Direct advertising is less expensive than other forms of promotion.
C. They can select and reach qualified prospects.
D. The promotional message reaches a larger group of people.
C
They can select and reach qualified prospects. By possessing the means to qualify potential customers, businesses can reduce waste in terms of sending promotional messages to uninterested parties. As a result, the businesses can focus their efforts on developing a customer base that is most likely to buy. Direct advertising is not necessarily less expensive than other forms of promotion. Direct advertising messages generally reach a select target audience that varies in size. Promotional mix refers to the combination of communication channels that a business uses to send its messages to consumers. Use of direct advertising strategies does not necessarily mean businesses do not need to use other promotional methods to reach customers.
To craft its brand promise, a business startup should consider its core values and
A. when it plans to establish a customer loyalty program.
B. what it intends to provide its customers on a consistent basis.
C. how many employees will interact with customers on a regular basis.
D. how it will reward workers for dedication to the corporate brand.
B
What it intends to provide its customers on a consistent basis. A business startup should base its brand promise on its core values and what it needs to consistently deliver to customers in order to shape their perceptions in positive ways. The business's brand promise establishes customers' expectations for the quality and consistency of their experiences with the business, so it is important to consider whether the brand promise is something that the business is realistically capable of giving to every customer. The number of employees who will interact with customers, the business's plans for a customer loyalty program, and its reward system for dedicated workers are details that a business might consider when branding itself, but they are not details that need to be considered when developing a brand promise.