1. The Parallel Planning Process creates three decision screens in which possible strategy alternatives are subject to. The ________________ reflects the interaction of commitment between the family and management. A. Strategic Fit

B. Vision Fit

C. Family Fit

D. None of the above

2. According to the author, the single most common shortcoming of the successor group is failure to fully understand the _______________ of the company.

A. Core competence

B. Business structure

C. Financial aspects

D. Succession plan

E. All of the above

3. Complexity is a measure of business development in a stage theory. A company that survives the early stages marked by simple structures usually begins to differentiate its structures in the later stages of development. This differentiating of structures is marked by all of the following except_____________________ A. Centralized organizational processes

B. Distinct functional units

C. Growing layer of middle management

D. Human resource systems

4. Balancing family and business interests can be a delegate process. To ensure that the familys interests are considered along with those of the business, a family business should develop ______________

A. Business Strategy Plan

B. Family Enterprise Continuity Plan

C. Succession Plan

D. Strategic Commitment Plan

5. Succession planning should be conducted when ____________________

A. Potential successors(s) graduate from school

B. The business owner is ready to retire

C. The business is 5 years old

D. Potential successor(s) are still children

E. Never

6. There may be many obstacles to family planning. Identifying these obstacles will enable the family to explore what planning means to stakeholders in the family enterprise and that process will stimulate ideas for actions to help overcome the obstacles. Which of the following suggested action steps is matched with the correct stakeholder?

A. Spouse; Create personal estate and financial plans

B. Senior Generation; Engage in management development activities

C. Successors; Phase down involvement over time

D. Other stakeholders; Identify a future role that contributes to the firm

7. Although the fundamental business remains the same, the conceptual business changes as the business reaches a certain level of performance. As the business becomes larger and more stable, the conceptual business becomes a matter of ____________________

A. Financial planning

B. Personal management

C. Asset management

D. Family management

E. B & D

8. Business development can be measured by the growth and complexity of the business. According to Gersick, criteria from both of these indicators are used to identify developmental stages for a business. List these stages of development.

A.

Start-up

Expansion/Formalization

Maturity

B.

Start Up

Going public

Selling

C.

Start up

Incorporating

Selling Shares

D.

None of these are correct

9. Used as a tool for integrating and balancing family and business thinking, the Parallel Planning Process is founded on four premises. List the four premises according to Ward in Strategic Planning.

A.

Family income is the foundation for the planning process

Strategic thinking has implications for tax savings

Successful families and businesses are driven by a Shared Future Vision

Long-term family business success requires formulating family and business plans

B.

Family values and business philosophy are the foundation for the planning process

Strategic thinking has implications for the family as well as for the management team

Successful families and businesses are driven by profit motive only

Long-term family business success requires isolating in laws and limiting access to only blood relatives.

C.

Family values and business philosophy are the foundation for the planning process

Strategic thinking has implications for the family as well as for the management team

Successful families and businesses are driven by a Shared Future Vision

Long-term family business success requires formulating family and business plans

D.

None of these are correct

10. Developing a succession plan is not easy and therefore it is advisable for a family business to hire an advisor to assist in the process. According to Jaffe, in order to achieve successful succession planning, an advisor should follow six steps, what are these six steps?

A.

Step One; Get a commitment from all family members-founder included-to work on succession planning

Step Two; Help family members set aside competitive ways and teach them more constructive ways to work together

Step Three; Adopt a business planning process that begins with a mission statement and strategic plan

Step Four; Create a personal development plan for family members who work in the business

Step Five; Develop an appropriate governance structure for the ownership-management interface of the business

Step Six; Put in place legal and financial structures to implement the succession plan

B.

Step One; Get an appraisal

Step Two; Talk to a lawyer

Step Three; Adopt a business planning process that begins with a mission statement and strategic plan

Step Four; Create a personal development plan for family members who work in the business

Step Five; Develop an appropriate governance structure for the ownership-management interface of the business

Step Six; Put in place legal and financial structures to implement the succession plan

C.

Step One; Get a commitment from all family members-founder included-to work on succession planning

Step Two; Help family members set aside competitive ways and teach them more constructive ways to work together

Step Three; Go public on an exchange to build family wealth and stock options

Step Four; Create a personal development plan for family members who work in the business

Step Five; Develop an appropriate governance structure for the ownership-management interface of the business

Step Six; Put in place legal and financial structures to implement the succession plan

D.

None of these