Family and SME Business Management Quiz
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Questions and Answers

What characterizes a privately held company?

  • It must be a corporation with a board of directors.
  • Shares are owned by private individuals and are not traded publicly. (correct)
  • Shares are publicly traded on the stock market.
  • Ownership is limited to public investors.

What is a key feature of family businesses?

  • A significant portion of ownership is held by family members. (correct)
  • They operate without any governance structure.
  • Decision-making is entirely by external stakeholders.
  • They do not typically involve multiple generations.

Why is succession planning important in family businesses?

  • It ensures the business is sold to outside investors.
  • It is irrelevant if the business is privately owned.
  • It eliminates the role of family members in management.
  • It helps in transferring ownership and leadership to the next generation. (correct)

Which of the following types of companies is considered a publicly held company?

<p>Corporation with shares traded on the stock exchange. (D)</p> Signup and view all the answers

What distinguishes publicly held companies from privately held ones?

<p>Publicly held companies must disclose financial information to the public. (D)</p> Signup and view all the answers

Which of the following is typically NOT a characteristic of a family business?

<p>Conflicted ownership structure. (C)</p> Signup and view all the answers

Which company type generally has fewer governance complexities?

<p>Privately held companies. (D)</p> Signup and view all the answers

What is a common misconception about family businesses?

<p>They are not concerned with succession planning. (C)</p> Signup and view all the answers

What is a key characteristic of family involvement in management within family businesses?

<p>Family members commonly hold key management positions. (A)</p> Signup and view all the answers

Why do family businesses emphasize long-term vision and values?

<p>To preserve the business as a legacy for future generations. (B)</p> Signup and view all the answers

What is the primary purpose of succession planning in family businesses?

<p>To plan for generational leadership transfer. (D)</p> Signup and view all the answers

What unique challenge do family businesses often face?

<p>Conflicts arising from family dynamics. (A)</p> Signup and view all the answers

Which of the following companies is an example of a family business where the founding family maintains control?

<p>Walmart (D)</p> Signup and view all the answers

What aspect complicates succession planning in family businesses?

<p>The need for a successor to have a family connection. (B)</p> Signup and view all the answers

Which characteristic is NOT commonly associated with family businesses?

<p>Focus on short-term profits over long-term stability. (A)</p> Signup and view all the answers

Which of the following statements about family businesses is accurate?

<p>They can experience nepotism but must balance it with business needs. (A)</p> Signup and view all the answers

What does the ownership dimension in a family business refer to?

<p>When a family owns a firm and controls it through its members. (D)</p> Signup and view all the answers

Which of the following best defines a family business?

<p>An overlap of the family and the business entities. (D)</p> Signup and view all the answers

What does the governance dimension of family involvement signify?

<p>When the family controls the firm's governance affecting strategic decisions. (D)</p> Signup and view all the answers

What is implied by generational involvement in a family business?

<p>Family members across generations can own, govern, and manage the firm. (A)</p> Signup and view all the answers

Which statement best describes the family entity in a business context?

<p>It includes individuals related by blood or affinity engaging in social and economic activities. (D)</p> Signup and view all the answers

Which aspect is NOT included in the definition of the business entity?

<p>Controlling family relationships. (B)</p> Signup and view all the answers

Which of the following options is likely a common misconception about family businesses?

<p>Family businesses cannot be profitable. (A), Family businesses are always small in size. (B), Family members typically lack professional skills. (D)</p> Signup and view all the answers

Why is it important for family businesses to distinguish between family and business entities?

<p>To clarify roles and reduce conflicts between family dynamics and business operations. (B)</p> Signup and view all the answers

What are family-oriented goals typically associated with family businesses?

<p>Creating job opportunities for family members (B)</p> Signup and view all the answers

What influences decision-making in family businesses compared to non-family businesses?

<p>The combination of business and family-oriented goals (D)</p> Signup and view all the answers

Which of the following is a misconception about family businesses?

<p>They cannot be competitive in the market. (C)</p> Signup and view all the answers

Which aspect is NOT a dimension that defines a firm as a family business?

<p>Employee engagement strategies (C)</p> Signup and view all the answers

What is a common competitive advantage of family businesses?

<p>Stronger long-term commitment to the business (D)</p> Signup and view all the answers

Which of the following is a characteristic of family businesses?

<p>They may prioritize personal relationships over business gains. (D)</p> Signup and view all the answers

What is a potential drawback of family-oriented governance in businesses?

<p>Generational conflicts affecting decision-making (A)</p> Signup and view all the answers

What type of analysis is essential for understanding the internal and external environment of a family business?

<p>SWOT Analysis (D)</p> Signup and view all the answers

Flashcards

What kind of data is collected in video meetings?

Personal information collected during video meetings, like your name, email, and what you look and sound like. It's used to make sure you're at meetings and to keep records.

What is RA 10173?

This law in the Philippines requires organizations to protect your personal information.

Who can access the data collected in video meetings?

Only those with permission can see your personal data. It's not shared without your consent.

What happens to collected data after it's no longer needed?

Data is kept only as long as necessary, and then safely removed.

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What is a family business?

A business primarily owned and managed by family members.

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What does "significant family ownership" mean?

Large family ownership in a company, with family members having significant control over decisions.

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What is generational participation in a family business?

When multiple generations in a family actively participate in the business, ensuring its continuation.

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How do family members contribute to the business?

Family members may work in various roles within the business, from day-to-day operations to high-level strategies.

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Why is legacy important in family businesses?

Family businesses emphasize the long-term future of the business and their legacy, putting importance on sustainability over immediate profits.

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What is a private company?

A business where ownership is not public, often owned by individuals or a small group of people.

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What is a public company?

A business where shares are bought and sold freely on public stock exchanges.

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How does governance differ between private and public companies?

Public companies have clear rules and regulations for governance, transparency, and financial reporting.

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Give three examples of well-known family businesses.

Walmart, Ford Motor Company, and Samsung are all examples of family businesses.

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What is the relationship between ownership and management in family businesses?

In family businesses, ownership and management often overlap, as family members take on influential roles.

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What is the core principle underlying family businesses?

The interplay of family values and business goals is essential in defining the nature of a family business.

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What is "ownership" in the context of family involvement?

Family members may hold ownership stakes, influencing major business decisions.

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What is "governance" in the context of family involvement?

Family members actively contribute to the strategy and direction of the business.

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What is "management" in the context of family involvement?

Family members hold important management positions and play active roles in day-to-day operations.

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What is "generational involvement" in the context of family involvement?

The participation of multiple generations of the family in various aspects of the business – ownership, governance, and management.

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Why is governance and management important for family businesses?

The challenge for family businesses is to balance family goals with business objectives.

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What are the challenges of merging family dynamics with business goals?

Family businesses need to address potential issues like conflicts and favoritism while maintaining operational efficiency.

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What is the focus of the upcoming group project?

A project that requires detailed analysis of a family-owned company, including its strengths, weaknesses, and potential.

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What is a SWOT analysis?

A tool to assess the internal and external factors affecting a business, highlighting its strengths, weaknesses, opportunities, and threats.

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What is strategic goal formulation?

Setting clear goals and objectives that align with the company's mission and vision.

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What is the McKinsey 7S framework?

A framework for developing and implementing strategies, considering factors like structure, systems, skills, style, shared values, staff, and strategy.

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What are the deadlines for the group project?

Submissions are due on time, and late submissions will not be accepted.

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Study Notes

Data Privacy Notice

  • DLS-CSB complies with the Data Privacy Act of 2012 (RA 10173) and emphasizes protection of personal information.
  • Information collected during video meetings includes name, email, image, audio, for attendance and documentation purposes.
  • Access to personal information is limited to authorized personnel and is not disclosed without consent.
  • Personal data is retained only as long as necessary, after which it will be securely disposed of.

Family Business Concepts

  • Family businesses are defined by ownership and control predominantly by family members.
  • Key characteristics include:
    • Significant family ownership with decision-making control.
    • Participation of multiple generations aiming for succession.
    • Family involvement at various management levels—operational to strategic.
    • A long-term vision prioritizing legacy over immediate profits.

Distinction between Private and Public Companies

  • Private companies are owned by individuals or groups without publicly traded shares, including sole proprietorships and limited liability companies.
  • Public companies have shares that are freely traded on stock exchanges, leading to differences in governance, transparency, and financial disclosure obligations.

Examples of Family Businesses

  • Walmart: Started by Sam Walton; still under Walton family control.
  • Ford Motor Company: Long-standing leadership by the Ford family.
  • Samsung: Managed by the Lee family across many generations.

Business Ownership and Management Structures

  • Family businesses have overlapping ownership and management roles; family members often hold influential positions.
  • The interplay between family and business entities is central to defining a family business.

Dimensions of Family Involvement

  • Ownership: Family members own and control the firm.
  • Governance: Family members influence critical strategic decisions.
  • Management: Active family participation in top management roles.
  • Generational Involvement: Participation of various family generations in ownership, governance, and management.

Importance of Family Business Governance and Management

  • Family businesses aim to merge family-oriented goals with business objectives.
  • Unique challenges include managing family dynamics, such as conflicts and nepotism, while maintaining business efficacy.

Group Activity

  • Upcoming group project focused on family-owned companies requires analysis and strategic recommendations.
  • Tasks include situational analysis (SWOT), strategic goal formulation, and an implementation plan using the McKinsey 7S framework.
  • Submission deadlines are strictly enforced with late submissions not accepted.

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Related Documents

Week 1 - Concept of Family Business - PDF

Description

Test your knowledge on Family and Small Medium Enterprises (SME) business management concepts. This quiz prepared by Assoc. Professor Angel Martin S. Manalansan focuses on key principles and practices relevant to SMEs. Challenge yourself and enhance your understanding of this vital area of business management.

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