FMB Exam 2 Questions and Answers |
Latest Version | 2024/2025 | Graded A+
What does FMB stand for in the context of business management?
✔✔FMB stands for Family Managed Business.
Why is succession planning important in family businesses?
✔✔Succession planning is crucial to ensure the continuity of the business across generations.
What is the role of governance structures in family businesses?
✔✔Governance structures help in formalizing decision-making processes and managing family-
business relationships.
How can family businesses balance family and business interests?
✔✔By establishing clear boundaries, open communication, and having a strategic plan that
addresses both family and business goals.
What is one key challenge in family businesses during generational transitions?
1
, ✔✔One key challenge is managing potential conflicts between family members regarding
leadership roles.
What is meant by the term "family constitution" in business management?
✔✔A family constitution is a set of guidelines and agreements that govern the relationship
between family members and the business.
Why is professionalization of management important in family businesses?
✔✔Professionalization helps in bringing objectivity, efficiency, and expertise to the business,
ensuring its long-term success.
How does emotional attachment influence decision-making in family businesses?
✔✔Emotional attachment can lead to biased decisions that may not always align with the best
interests of the business.
What role does communication play in the success of a family business?
✔✔Effective communication ensures that family members and stakeholders are aligned on
business goals, reducing conflicts and misunderstandings.
2
Latest Version | 2024/2025 | Graded A+
What does FMB stand for in the context of business management?
✔✔FMB stands for Family Managed Business.
Why is succession planning important in family businesses?
✔✔Succession planning is crucial to ensure the continuity of the business across generations.
What is the role of governance structures in family businesses?
✔✔Governance structures help in formalizing decision-making processes and managing family-
business relationships.
How can family businesses balance family and business interests?
✔✔By establishing clear boundaries, open communication, and having a strategic plan that
addresses both family and business goals.
What is one key challenge in family businesses during generational transitions?
1
, ✔✔One key challenge is managing potential conflicts between family members regarding
leadership roles.
What is meant by the term "family constitution" in business management?
✔✔A family constitution is a set of guidelines and agreements that govern the relationship
between family members and the business.
Why is professionalization of management important in family businesses?
✔✔Professionalization helps in bringing objectivity, efficiency, and expertise to the business,
ensuring its long-term success.
How does emotional attachment influence decision-making in family businesses?
✔✔Emotional attachment can lead to biased decisions that may not always align with the best
interests of the business.
What role does communication play in the success of a family business?
✔✔Effective communication ensures that family members and stakeholders are aligned on
business goals, reducing conflicts and misunderstandings.
2
