Quiz 2

Question 1

Angel Investors

Answer 1

Investors who invest capital in start-up businesses. The term angel is in reference to the fact that traditional lenders will not normally lend to companies at the early stages of operations.

Question 2

Business Plan

Answer 2

A precise statements of the rationale for a business and a step-by-step explanation of how it will achieve its goals.

Question 3

Entrepreneurship

Answer 3

The process of creating and managing a business to achieve desired objectives.

Question 4

External Shock

Answer 4

Events that occur in a company’s external environment that the company could not control.

Question 5

Franchise

Answer 5

A license to sell another’s products or to use another’s name in business or both.

Question 6

Franchisee

Answer 6

The purchaser of a franchise.

Question 7

Franchisor

Answer 7

The company that sells a franchise.

Question 8

Intrapreneurs

Answer 8

Individuals in large firms who take responsibility for the development of innovations within the larger organization.

Question 9

Small Business

Answer 9

Any independently owned and operated business that is not dominant in its competitive area and does not employ more than 500 people.

Question 10

Undercapitalization

Answer 10

The lack of funds to operate a business normally

Question 11

Venture Capitalists

Answer 11

Persons or organizations that agree to provide some funds for a new business in exchange for ownership interest or stock.

Question 12

Bribes

Answer 12

Payments, gifts, or special favors intended to influence the outcome of a decision.

Question 13

Business Ethics

Answer 13

Principles and standards that determine acceptable conduct in business.

Question 14

Code of Ethics

Answer 14

Formalized rules and standards that describe what a company expects of its employees.

Question 15

Consumerism

Answer 15

The activities that independent individuals, groups, and organizations undertake to protect their rights as consumers.

Question 16

Ethical Issue

Answer 16

An identifiable problem. situation, or opportunity that requires a person to choose from among several actions that may be evaluated as right or wrong, ethical, or unethical.

Question 17

Corporate Citizenship

Answer 17

The extent to which businesses meet the legal, ethical, economic, and voluntary responsibilities placed on them by their stakeholders.

Question 18

Plagiarism

Answer 18

The act of taking someone else’s work and presenting it as your own without mentioning the source.

Question 19

Social Responsibility

Answer 19

A business’s obligation to maximize its positive impact and minimize its negative impact on society.

Question 20

Whistleblowing

Answer 20

The act of an employee exposing an employer’s wrongdoing to outsiders, such as the media or government regulatory agencies.

Question 21

Facts about Small Businesses

Answer 21

1. 98 percent of all employer firms are small businesses
2. they employ 90 percent of all private-sector employees.
3. Many opportunities for women to succeed in business.
4. Roughly 83.5 percent of the jobs created in Canada between 2013-2017
5. 2.9 million Canadians are self-employed
6. 99 percent of small businesses are in the service sector
7. Small firms spend approximately $4 billion on R&D annually.

Question 22

Industries that Attract Small Business

Answer 22

1. Retailing
2. Wholesaling
3. Services
4. Manufacturing
5. Technology

Question 23

Advantages of Small Business Ownership

Answer 23

1. Independence
2. Enjoyment
3. Financial Rewards
4. Low start-up costs
5. Focus
6. Reputation

Question 24

Disadvantages of Small Business Ownership

Answer 24

1. High stress level
2. Limited Financial rewards
3. Time demands
4. High failure rate

Question 25

Top Ten Challenges for Small Business

Answer 25

1. Underfunded 2. Not understanding your competitive niche. 3. Lack of effective utilization of websites and social media 4. Lack of marketing and business plan 5. Poor site selection, if operating a retail store. 6. Pricing mistakes ( too high or too low) 7. Underestimating the time commitment for success. 8. Not finding complementary partners to bring in additional experience. 9. Not hiring the right employees and/or not training them properly. 10. Not understanding legal and ethical responsibilities.

Question 26

Advantages of Franchises

Answer 26

1. management training and support 2. brand name appeal 3. standardized quality of goods and services 4. National Advertising programs 5. Financial Assistance 6. Proven products/business formats. 7. Centralized buying power 8. Site selection and territorial power 9. Greater chance for success.

Question 27

Disadvantages of Franchises

Answer 27

1. Franchise fees and profit sharing with the franchiser 2. Strict adherence to standardized operations 3. Restrictions on purchasing 4. Limited product line 5. Possible market saturation 6. Less freedom in business decisions.

Question 28

Demographic Trends

Answer 28

1. Baby boomer Generation 2. Millennials 3. Gen Z 4. Immigrants.

Question 29

Technological and Economic Trends

Answer 29

1. Internet 2. Increase in service exports 3. Economic turbulence provides both opportunities and threats. 4. Energy markets and alternative fuels.

Question 30

Making a Big Business Act "Small"

Answer 30

1. Many larger firms are emulating smaller firms to improve their bottom line. 2. Downsizing or Right-sizing 3. Intrapreneurs.

Question 31

The difference between Social Responsibility and Ethics

Answer 31

Ethics: Decisions made by an individual or workgroup that society evaluates as right or wrong. Social Responsibility: Impact of the entire organization's activities on society.

Question 32

Social Responsibility Issues

Answer 32

1. Relations with owners and stockholders 2. Employee relations 3. Relations 4. Environmental issues 5. Response to environmental issues 6. Community Relations

Question 33

Business Law

Answer 33

- Refers to the laws and regulations that govern the conduct of business. - The most basic ethical and social responsibility concerns have been codified as laws and regulations that encourage business to conform to society's standards, values, and attitudes.

Question 34

Role of Ethics in Business

Answer 34

- Society's judgment directly affects an organization's ability to achieve its goals. - Well-publicized incidents of unethical and illegal activity increase public pressure to raise standards. - Fairness and honesty.

Question 35

Legal and Ethical Issues

Answer 35

- Ethical conflicts can evolve into legal disputes. - Business ethics goes beyond legal issues. - Not limited to for-profit organizations.

Question 36

Improving Ethical Behavior in Business

Answer 36

- Ethical decisions in organizations are influenced by three factors... 1. Individual moral standards and values. 2. Influence of managers and co-workers. 3. Opportunity to engage in misconduct. - Professional code of ethics - Whistleblowing

Question 37

Arguments For Social Responsibility

Answer 37

1. Business creates problems and should therefore help solve them. 2. Businesses should be more responsible because they have the financial and technical resources to help solve social problems. 3. As members of society, businesses should do their fair share to help others. 4. Socially responsible decision-making by businesses can prevent increased government regulation. 5. Social responsibility is necessary to ensure economic survival: If businesses want educated and healthy employees, customers with money to spend, and suppliers with quality goods and services in years to come, they must take steps to help solve the social and environmental problems that exist today.

Question 38

Arguments Against Social Responsibility

Answer 38

1. Sidetracks managers from the primary goal of business - earning profits. 2. Participation in social programs gives businesses greater power, perhaps at the expense of segments of society. 3. Some people question whether business has the expertise needed to assess and make decisions about social problems. 4. Many people believe that social problems are the responsibility of government agencies and officials, who can be held accountable by voters.