MGT100-Lecture Notes questions well
answered
diamond of sustainable growth - correct answer ✔✔Vibrant Entrepreneurship
Effective Financial Systems
Enabling Political Systems
Sophisticated Managerial Capabilities
Sole Proprietorship - correct answer ✔✔a business owned and managed by a single individual
Characteristics of Corporation - correct answer ✔✔Separate legal entity, Limited Liability, Ease
of access in funds, loans, attracts better talent, double taxation, easy transfer of ownership
Shareholders - correct answer ✔✔investors who purchase shares of stocks in exchange for
ownership
Characteristics of Preferred Shares - correct answer ✔✔Convertible: Preferred share to
Common share
Redeemable (Refund): Able to sell shares back to company
Participating in dividends: Share "leftovers" with Common share
Cumulative: Dividends accumulate over time when not paid
Callable: The company can refund your share
Characteristics of Common Shares - correct answer ✔✔Elects board of directors
Gains the most but could also lose the most
,Franchises - correct answer ✔✔A contract-based business arrangement between a
manufacturer and a dealer, to produce and market the supplier's good or service
Advantages of Franchising - correct answer ✔✔Prior Performance Record
Recognizable Company Name (Brand)
Proven Business Model
Tested Management Program
Savings through Volume Purchase of Resources
Disadvantages of Franchising - correct answer ✔✔Initial Franchise Fees
Future Payments (Royalties)
Linked to Reputation and Management
Franchise Agreement Restrictions
Tight Control of Franchisee
Business Plan - correct answer ✔✔Written documentation providing orderly statement of goals,
methods and purpose
Discusses the company's mission and vision
Analyzes unique advantage, customers, and competition
Seed Capital - correct answer ✔✔initial funding used to launch a company
Characteristics of Debt Financing - correct answer ✔✔Interest tax deductible
Risks of bankruptcy
Control over business is not lost
Characteristics of Equity Financing - correct answer ✔✔Dividends are not tax deductible
,Less risks involved
Loses full control over business
Why do small businesses fail? - correct answer ✔✔Management shortcomings
Inadequate financing
Government regulation
Definitions of Entrepreneurship - correct answer ✔✔Working for oneself
Entering a new or existing market with a new or existing product
Creating new organizations of any type- not-for-profits or businesses
Characteristics of Entrepreneurs - correct answer ✔✔vision, high energy level, need to achieve,
self-confidence and optimism, tolerance for failure, creativity, tolerance for ambiguity, internal
locus of control
Why people become entrepreneurs - correct answer ✔✔- Desire to be one's own boss
- Desire to succeed financially
- Desire for job security
- Desire for an improved quality of life
Entrepreneurial Challenges - correct answer ✔✔Great difficulties in raising investment funds for
a new idea
Reality is very different from plans
High failure rate, even with secured fundings
Small Businesses vs. Entrepreneurships - correct answer ✔✔Size: Small businesses remain
small, entrepreneurs aim for rapid growth
, Age: Small businesses maintain their ways for years, while entrepreneurial ventures 'grow-up'
Growth goals: Small businesses may not always aim for growth, while entrepreneurs do
David Birch Model: Mice - correct answer ✔✔- Majority of businesses in Canada (94.7% of
companies employ fewer than 50 people) but together generate enormous economic activity
and employment
- Small retailers, local service firms, independent services
- Changes directions quickly
- Many do not aspire for growth
David Birch Model: Gazelles - correct answer ✔✔- Firm seeking rapid growth AND above-
average profitability
- 20% growth a year, doubling in size in 4 years.
- Often includes radical business innovations/implementation of new technology
- Firms may "take off" into the Gazelle stage after years of steady growth due to new
opportunities, changes in management
David Birch Model: Elephants - correct answer ✔✔Large, well-known firms
Considerable overall market power
Difficulty in changing direction quickly
Collectively, they have fired more people than they have hired in the past 25 years
Why did Nordstrom fail in Canada? - correct answer ✔✔- Overestimation of the Canadian
market
- Failure to understand the differences between the Canadian vs. U.S. market
- Wanting the store experience of luxury shopping
- Competition
- Shrinking middle class
answered
diamond of sustainable growth - correct answer ✔✔Vibrant Entrepreneurship
Effective Financial Systems
Enabling Political Systems
Sophisticated Managerial Capabilities
Sole Proprietorship - correct answer ✔✔a business owned and managed by a single individual
Characteristics of Corporation - correct answer ✔✔Separate legal entity, Limited Liability, Ease
of access in funds, loans, attracts better talent, double taxation, easy transfer of ownership
Shareholders - correct answer ✔✔investors who purchase shares of stocks in exchange for
ownership
Characteristics of Preferred Shares - correct answer ✔✔Convertible: Preferred share to
Common share
Redeemable (Refund): Able to sell shares back to company
Participating in dividends: Share "leftovers" with Common share
Cumulative: Dividends accumulate over time when not paid
Callable: The company can refund your share
Characteristics of Common Shares - correct answer ✔✔Elects board of directors
Gains the most but could also lose the most
,Franchises - correct answer ✔✔A contract-based business arrangement between a
manufacturer and a dealer, to produce and market the supplier's good or service
Advantages of Franchising - correct answer ✔✔Prior Performance Record
Recognizable Company Name (Brand)
Proven Business Model
Tested Management Program
Savings through Volume Purchase of Resources
Disadvantages of Franchising - correct answer ✔✔Initial Franchise Fees
Future Payments (Royalties)
Linked to Reputation and Management
Franchise Agreement Restrictions
Tight Control of Franchisee
Business Plan - correct answer ✔✔Written documentation providing orderly statement of goals,
methods and purpose
Discusses the company's mission and vision
Analyzes unique advantage, customers, and competition
Seed Capital - correct answer ✔✔initial funding used to launch a company
Characteristics of Debt Financing - correct answer ✔✔Interest tax deductible
Risks of bankruptcy
Control over business is not lost
Characteristics of Equity Financing - correct answer ✔✔Dividends are not tax deductible
,Less risks involved
Loses full control over business
Why do small businesses fail? - correct answer ✔✔Management shortcomings
Inadequate financing
Government regulation
Definitions of Entrepreneurship - correct answer ✔✔Working for oneself
Entering a new or existing market with a new or existing product
Creating new organizations of any type- not-for-profits or businesses
Characteristics of Entrepreneurs - correct answer ✔✔vision, high energy level, need to achieve,
self-confidence and optimism, tolerance for failure, creativity, tolerance for ambiguity, internal
locus of control
Why people become entrepreneurs - correct answer ✔✔- Desire to be one's own boss
- Desire to succeed financially
- Desire for job security
- Desire for an improved quality of life
Entrepreneurial Challenges - correct answer ✔✔Great difficulties in raising investment funds for
a new idea
Reality is very different from plans
High failure rate, even with secured fundings
Small Businesses vs. Entrepreneurships - correct answer ✔✔Size: Small businesses remain
small, entrepreneurs aim for rapid growth
, Age: Small businesses maintain their ways for years, while entrepreneurial ventures 'grow-up'
Growth goals: Small businesses may not always aim for growth, while entrepreneurs do
David Birch Model: Mice - correct answer ✔✔- Majority of businesses in Canada (94.7% of
companies employ fewer than 50 people) but together generate enormous economic activity
and employment
- Small retailers, local service firms, independent services
- Changes directions quickly
- Many do not aspire for growth
David Birch Model: Gazelles - correct answer ✔✔- Firm seeking rapid growth AND above-
average profitability
- 20% growth a year, doubling in size in 4 years.
- Often includes radical business innovations/implementation of new technology
- Firms may "take off" into the Gazelle stage after years of steady growth due to new
opportunities, changes in management
David Birch Model: Elephants - correct answer ✔✔Large, well-known firms
Considerable overall market power
Difficulty in changing direction quickly
Collectively, they have fired more people than they have hired in the past 25 years
Why did Nordstrom fail in Canada? - correct answer ✔✔- Overestimation of the Canadian
market
- Failure to understand the differences between the Canadian vs. U.S. market
- Wanting the store experience of luxury shopping
- Competition
- Shrinking middle class
