Chapter 01
What Is Business?

True / False Questions
 
1. Commercial endeavours refers to the markets the organization serves, the products it offers, and the needs it professes to meet in the marketplace. 
TRUE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-01 A macro-level understanding of what business is.
Topic: 01-01 The Big Picture
 
2. Employee interaction, as one of the three fundamental characteristics of a business, refers to the value-creating skills that employees bring and how such skills are leveraged. 
TRUE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-01 A macro-level understanding of what business is.
Topic: 01-01 The Big Picture
 
3. Organizational culture and formalized decision-making structure refers to the value-creating skills an organization's employees bring to the marketplace. 
FALSE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-01 A macro-level understanding of what business is.
Topic: 01-01 The Big Picture

4. Employee interaction refers to the value-creating skills an organization's employees bring to the marketplace. 
TRUE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-01 A macro-level understanding of what business is.
Topic: 01-01 The Big Picture
 
5. The three fundamental characteristics of a business can be used to provide a micro-level understanding of a business, what it is in business to do, and how it does so. 
FALSE

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 01-01 A macro-level understanding of what business is.
Topic: 01-01 The Big Picture
 
6. The three fundamental characteristics of a business can be used to provide a macro-level understanding of a business, what it is in business to do, and how it does so. 
TRUE

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 01-01 A macro-level understanding of what business is.
Topic: 01-01 The Big Picture
 
7. The definition of business is likely to be personalized by each person associated with the business. 
TRUE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-01 A macro-level understanding of what business is.
Learning Objective: 01-02 An overview of the major components of a business model and how their successful development and execution determines business performance.
Topic: 01-02 What Is Business?

8. A key component of the definition of business provided in your text is that business comprises a set of mission-focused activities. 
TRUE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-01 A macro-level understanding of what business is.
Learning Objective: 01-02 An overview of the major components of a business model and how their successful development and execution determines business performance.
Topic: 01-02 What Is Business?
 
9. Businesses attempt to address or provide a solution to the needs of a particular market, or markets. 
TRUE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-01 A macro-level understanding of what business is.
Learning Objective: 01-02 An overview of the major components of a business model and how their successful development and execution determines business performance.
Topic: 01-02 What Is Business?
 
10. The primary mission of a business cannot include satisfying a society-based need. 
FALSE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-01 A macro-level understanding of what business is.
Learning Objective: 01-02 An overview of the major components of a business model and how their successful development and execution determines business performance.
Topic: 01-02 What Is Business?
 
11. Businesses seek to earn a profit by providing goods and services to others. 
TRUE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-01 A macro-level understanding of what business is.
Learning Objective: 01-02 An overview of the major components of a business model and how their successful development and execution determines business performance.
Topic: 01-02 What Is Business?

12. Revenue is the amount a business earns above and beyond what it spends for expenses. 
FALSE

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 01-01 A macro-level understanding of what business is.
Learning Objective: 01-02 An overview of the major components of a business model and how their successful development and execution determines business performance.
Topic: 01-02 What Is Business?
 
13. To satisfy the needs of a market, a business may either acquire or develop products and services it can deliver at a profit. 
TRUE

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 01-01 A macro-level understanding of what business is.
Learning Objective: 01-02 An overview of the major components of a business model and how their successful development and execution determines business performance.
Topic: 01-02 What Is Business?
 
14. If a business' expenses are greater than its revenue, it will suffer a loss. 
TRUE

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 01-01 A macro-level understanding of what business is.
Learning Objective: 01-02 An overview of the major components of a business model and how their successful development and execution determines business performance.
Topic: 01-02 What Is Business?
 
15. The business model can best be visualized as the underlying operational platform. An organization uses to position its approach to a given market. 
TRUE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-01 A macro-level understanding of what business is.
Learning Objective: 01-02 An overview of the major components of a business model and how their successful development and execution determines business performance.
Topic: 01-02 What Is Business?
Topic: 01-03 The Full Business Model

16. Business models have two primary parts, a company-centric part and a market-centric part. 
TRUE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-01 A macro-level understanding of what business is.
Learning Objective: 01-02 An overview of the major components of a business model and how their successful development and execution determines business performance.
Topic: 01-02 What Is Business?
Topic: 01-03 The Full Business Model
 
17. The company-centric side of the business model can also be understood as the business system. 
TRUE

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 01-01 A macro-level understanding of what business is.
Learning Objective: 01-02 An overview of the major components of a business model and how their successful development and execution determines business performance.
Topic: 01-02 What Is Business?
Topic: 01-03 The Full Business Model
 
18. The portfolio of products and services is part of the market-centric side of the business model. 
FALSE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-01 A macro-level understanding of what business is.
Learning Objective: 01-02 An overview of the major components of a business model and how their successful development and execution determines business performance.
Topic: 01-02 What Is Business?
Topic: 01-03 The Full Business Model

19. Value proposition development is part of the market-centric side of the business model. 
TRUE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-01 A macro-level understanding of what business is.
Learning Objective: 01-02 An overview of the major components of a business model and how their successful development and execution determines business performance.
Topic: 01-02 What Is Business?
Topic: 01-03 The Full Business Model
 
20. Positioning is the ability to develop a unique, credible, sustainable, and valued place in the mind of a customer. 
TRUE

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 01-01 A macro-level understanding of what business is.
Learning Objective: 01-02 An overview of the major components of a business model and how their successful development and execution determines business performance.
Topic: 01-02 What Is Business?
Topic: 01-03 The Full Business Model
 
21. No two companies are alike, and it is their deployment of assets and capabilities, via their business model, that determines which companies are more profitable 
TRUE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-01 A macro-level understanding of what business is.
Learning Objective: 01-02 An overview of the major components of a business model and how their successful development and execution determines business performance.
Topic: 01-02 What Is Business?
Topic: 01-03 The Full Business Model

22. On the company-centric (business system) side of the business model, the key activities cell refers to how the company combines assets, labour, capital and managerial acumen. 
FALSE

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 01-01 A macro-level understanding of what business is.
Learning Objective: 01-02 An overview of the major components of a business model and how their successful development and execution determines business performance.
Topic: 01-02 What Is Business?
Topic: 01-03 The Full Business Model
 
23. An organization's cost structure includes expenses associated with developing and delivering products or services to the marketplace. 
TRUE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-01 A macro-level understanding of what business is.
Learning Objective: 01-02 An overview of the major components of a business model and how their successful development and execution determines business performance.
Topic: 01-02 What Is Business?
Topic: 01-03 The Full Business Model
 
24. If you are focused on the manufacturing of goods, then a retailer who makes your goods available for sale would be an example of a partner organization. 
TRUE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-01 A macro-level understanding of what business is.
Learning Objective: 01-02 An overview of the major components of a business model and how their successful development and execution determines business performance.
Topic: 01-02 What Is Business?
Topic: 01-03 The Full Business Model

25. Effective deployment of the business model is more important than efficient deployment of the business model. 
FALSE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-03 An awareness of the overarching role of the business owner or "C-suite" management team.
Learning Objective: 01-04 An understanding of how businesses plan.
Topic: 01-04 The Role of the Business Owner or "C-Suite" Manager
 
26. Once strategic direction is determined, management can hand off responsibility for development and execution the business model. 
FALSE

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 01-03 An awareness of the overarching role of the business owner or "C-suite" management team.
Learning Objective: 01-04 An understanding of how businesses plan.
Topic: 01-04 The Role of the Business Owner or "C-Suite" Manager
 
27. The role of the general manager includes development of a well-directed and well-positioned strategy and efficient and effective business model execution. 
TRUE

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 01-03 An awareness of the overarching role of the business owner or "C-suite" management team.
Learning Objective: 01-04 An understanding of how businesses plan.
Topic: 01-04 The Role of the Business Owner or "C-Suite" Manager
 
28. A key element of business success is a business plan. 
TRUE

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 01-07 Via an Appendix, an introduction to the difference between profit and profitability.
Topic: 01-11 The Difference between Profit and Profitability

29. Management is the art of getting things done through organizational resources. 
TRUE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-03 An awareness of the overarching role of the business owner or "C-suite" management team.
Learning Objective: 01-04 An understanding of how businesses plan.
Topic: 01-04 The Role of the Business Owner or "C-Suite" Manager
 
30. A modern manager's main job is to issue orders, then follow up to make sure employees do as they were told. 
FALSE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-03 An awareness of the overarching role of the business owner or "C-suite" management team.
Learning Objective: 01-04 An understanding of how businesses plan.
Topic: 01-04 The Role of the Business Owner or "C-Suite" Manager
 
31. Managers in progressive organizations tend to emphasize teamwork and cooperation rather than discipline and giving orders. 
TRUE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-03 An awareness of the overarching role of the business owner or "C-suite" management team.
Learning Objective: 01-04 An understanding of how businesses plan.
Topic: 01-04 The Role of the Business Owner or "C-Suite" Manager
 
32. Managers in many of today's high-tech firms realize that workers often know much more about technology than they do. 
TRUE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-03 An awareness of the overarching role of the business owner or "C-suite" management team.
Learning Objective: 01-04 An understanding of how businesses plan.
Topic: 01-04 The Role of the Business Owner or "C-Suite" Manager

33. Despite all of the changes in the business environment, the basic way a manager performs his or her job has remained remarkably constant. 
FALSE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-03 An awareness of the overarching role of the business owner or "C-suite" management team.
Learning Objective: 01-04 An understanding of how businesses plan.
Topic: 01-05 Putting Plans into Action
 
34. The business planning cycle begins with business plan development. 
FALSE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-03 An awareness of the overarching role of the business owner or "C-suite" management team.
Learning Objective: 01-04 An understanding of how businesses plan.
Topic: 01-05 Putting Plans into Action
 
35. The business planning cycle outlines the focus and methodology for setting the business model in motion. 
TRUE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-03 An awareness of the overarching role of the business owner or "C-suite" management team.
Learning Objective: 01-04 An understanding of how businesses plan.
Topic: 01-05 Putting Plans into Action
 
36. A company is said to have competitive advantage when it can perform critical activities better than its rivals. 
TRUE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-03 An awareness of the overarching role of the business owner or "C-suite" management team.
Learning Objective: 01-04 An understanding of how businesses plan.
Topic: 01-05 Putting Plans into Action

37. Company growth is a key expected outcome of the business planning cycle. 
TRUE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-03 An awareness of the overarching role of the business owner or "C-suite" management team.
Learning Objective: 01-04 An understanding of how businesses plan.
Topic: 01-05 Putting Plans into Action
 
38. Businesses grow by committing to a single plan, rather than executing a series of planning cycles over time. 
FALSE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-03 An awareness of the overarching role of the business owner or "C-suite" management team.
Learning Objective: 01-04 An understanding of how businesses plan.
Topic: 01-05 Putting Plans into Action
 
39. Questions like "What systems require fine-tuning?" are typically associated with the implementation stage of the planning cycle. 
FALSE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-03 An awareness of the overarching role of the business owner or "C-suite" management team.
Learning Objective: 01-04 An understanding of how businesses plan.
Topic: 01-05 Putting Plans into Action
 
40. Not-for-profit organizations are concerned with wealth creation on behalf of their shareholders and stakeholders. 
FALSE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-03 An awareness of the overarching role of the business owner or "C-suite" management team.
Learning Objective: 01-04 An understanding of how businesses plan.
Topic: 01-05 Putting Plans into Action

41. For-profit organizations serve their customers and clients via a model of collective interest and social goal achievement. 
FALSE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-03 An awareness of the overarching role of the business owner or "C-suite" management team.
Learning Objective: 01-04 An understanding of how businesses plan.
Topic: 01-05 Putting Plans into Action
 
42. Questions like "What do we want to do?" are associated with the implementation stage of the planning cycle. 
FALSE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-03 An awareness of the overarching role of the business owner or "C-suite" management team.
Learning Objective: 01-04 An understanding of how businesses plan.
Topic: 01-05 Putting Plans into Action
 
43. Questions like "What needs to be changed or improved?" are associated with the positioning stage of the planning cycle. 
FALSE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-03 An awareness of the overarching role of the business owner or "C-suite" management team.
Learning Objective: 01-04 An understanding of how businesses plan.
Topic: 01-05 Putting Plans into Action
 
44. Stakeholders are best understood as the shareholders of a business or the people who have made an equity investment. 
FALSE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-03 An awareness of the overarching role of the business owner or "C-suite" management team.
Learning Objective: 01-04 An understanding of how businesses plan.
Topic: 01-07 Corporate Social Responsibility

45. Stakeholders have a direct or an indirect link to an organization and can be impacted by its policies, actions, and decisions. 
TRUE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-03 An awareness of the overarching role of the business owner or "C-suite" management team.
Learning Objective: 01-04 An understanding of how businesses plan.
Topic: 01-07 Corporate Social Responsibility
 
46. Social and environmental responsibility is not as important as it used to be. 
FALSE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-03 An awareness of the overarching role of the business owner or "C-suite" management team.
Learning Objective: 01-04 An understanding of how businesses plan.
Topic: 01-07 Corporate Social Responsibility
 
47. Short-term performance is one of two fundamental objectives that managers must consider when making decisions about the strategic direction of the organization. 
FALSE

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 01-03 An awareness of the overarching role of the business owner or "C-suite" management team.
Learning Objective: 01-04 An understanding of how businesses plan.
Topic: 01-06 Thinking across Multiple Horizons
 
48. If you are good at being a visionary leader, then you do not have to make the tough decisions. 
FALSE

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 01-06 Via a Management Reflection, an overview of the relationship between business strategy and business model development, and the importance of successfully executing both for a business to achieve its identified objectives.
Topic: 01-08 The Concept of Visionary Leadership

49. Visionary leadership is about inspiring workers to go beyond ordinary expectations. 
TRUE

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 01-05 Exposure to the concept of visionary leadership.
Topic: 01-08 The Concept of Visionary Leadership
 
50. The ability to articulate and communicate the vision is a key skill of the visionary leader. 
TRUE

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 01-06 Via a Management Reflection, an overview of the relationship between business strategy and business model development, and the importance of successfully executing both for a business to achieve its identified objectives.
Topic: 01-08 The Concept of Visionary Leadership
 
51. Tactics include such activities as setting vision and determining the path to long-term profitability. 
FALSE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-06 Via a Management Reflection, an overview of the relationship between business strategy and business model development, and the importance of successfully executing both for a business to achieve its identified objectives.
Topic: 01-09 Management Reflection—The Business Decision-Making Landscape
 
52. The amount of profit or loss earned by a business can be found by subtracting the firm's expenses from its revenues. 
TRUE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-07 Via an Appendix, an introduction to the difference between profit and profitability.
Topic: 01-10 Appendix—The Business Model and Profitability
Topic: 01-11 The Difference between Profit and Profitability
Topic: 01-12 Improving Profitability

53. Profits of a business include the salaries paid to the owners and employees of that business. 
FALSE

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 01-07 Via an Appendix, an introduction to the difference between profit and profitability.
Topic: 01-10 Appendix—The Business Model and Profitability
Topic: 01-11 The Difference between Profit and Profitability
Topic: 01-12 Improving Profitability
 
54. Total revenue - total expenses = profit 
FALSE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-07 Via an Appendix, an introduction to the difference between profit and profitability.
Topic: 01-10 Appendix—The Business Model and Profitability
Topic: 01-11 The Difference between Profit and Profitability
Topic: 01-12 Improving Profitability
 
55. Profitability is the "bottom line" result the organization has been able to achieve. 
FALSE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-07 Via an Appendix, an introduction to the difference between profit and profitability.
Topic: 01-10 Appendix—The Business Model and Profitability
Topic: 01-11 The Difference between Profit and Profitability
Topic: 01-12 Improving Profitability
 
56. Profitability measures how well an organization is using its resources over a specific period of time. 
TRUE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-07 Via an Appendix, an introduction to the difference between profit and profitability.
Topic: 01-10 Appendix—The Business Model and Profitability
Topic: 01-11 The Difference between Profit and Profitability
Topic: 01-12 Improving Profitability

57. The challenge to improve profitability faces both large companies and small companies. 
TRUE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-07 Via an Appendix, an introduction to the difference between profit and profitability.
Topic: 01-10 Appendix—The Business Model and Profitability
Topic: 01-11 The Difference between Profit and Profitability
Topic: 01-12 Improving Profitability

Multiple Choice Questions
 
58. Which of the following most accurately identifies the three fundamental characteristics of a business? 
A. Commercial endeavours, employee interaction, organizational culture and formalized decision-making structure
B. Commercial endeavours, visionary leadership, profit and profitability
C. Strategy, tactics, commercial endeavours
D. Employee interaction, visionary leadership, organizational culture and formalized decision-making structure
E. Strategy, visionary leadership, employee interaction

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 01-01 A macro-level understanding of what business is.
Topic: 01-01 The Big Picture
 
59. The goal of business is usually to earn: 
A. respect
B. resources
C. a profit
D. responsibility
E. independence

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 01-01 A macro-level understanding of what business is.
Learning Objective: 01-02 An overview of the major components of a business model and how their successful development and execution determines business performance.
Topic: 01-02 What Is Business?

60. Questions such as "How will we do it?" and "What needs to be changed?" are typically associated with which stage of the planning cycle? 
A. Direction
B. Positioning
C. Implementation
D. Assessment
E. Questions are associated with all stages equally

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 01-03 An awareness of the overarching role of the business owner or "C-suite" management team.
Learning Objective: 01-04 An understanding of how businesses plan.
Topic: 01-05 Putting Plans into Action
 
61. Which of the following is NOT presented as a key ability of visionary leaders? 
A. Articulate and communicate the vision
B. Create exceptional commitment to vision within the workforce
C. Adjust, build out or reinvent the business model
D. Understand the critical investments necessary for success
E. Demonstrate leadership commitment

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-05 Exposure to the concept of visionary leadership.
Topic: 01-08 The Concept of Visionary Leadership
 
62. If a business is to be successful in the long run, it must treat its customers, employees, and community with social: 
A. meetings.
B. responsibility.
C. agendas.
D. insight.
E. interests.

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 01-03 An awareness of the overarching role of the business owner or "C-suite" management team.
Learning Objective: 01-04 An understanding of how businesses plan.
Topic: 01-07 Corporate Social Responsibility

63. Not-for-profit organizations: 
A. last for only short periods of time as their objective is not to create profits for their owners
B. have a hard time hiring employees as they have no means of paying them
C. are not concerned about meeting their financial needs
D. can provide an opportunity for individuals to address social issues
E. are the same as government organizations

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 01-03 An awareness of the overarching role of the business owner or "C-suite" management team.
Learning Objective: 01-04 An understanding of how businesses plan.
Topic: 01-05 Putting Plans into Action
 
64. All of the following are recognized as abilities of visionary leaders except: 
A. demonstrate leadership commitment
B. drive increases in profitability
C. articulate and communicate vision
D. create commitment to vision
E. enable execution of essential processes

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-05 Exposure to the concept of visionary leadership.
Topic: 01-08 The Concept of Visionary Leadership
 
65. What is the first step in the business decision-making model? 
A. Visualize and assess the business opportunity
B. Adjust, build out or reinvent the business model
C. Assess company resources and capabilities
D. Determine tactics required to achieve objectives
E. Confirm market size and profitability potential

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-06 Via a Management Reflection, an overview of the relationship between business strategy and business model development, and the importance of successfully executing both for a business to achieve its identified objectives.
Topic: 01-09 Management Reflection—The Business Decision-Making Landscape

66. Which of the following is one of the four elements that comprise the key resources cell on the company-centric side of the business model? 
A. Labour
B. Capital
C. Assets
D. Efficiency
E. Acumen

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-01 A macro-level understanding of what business is.
Learning Objective: 01-02 An overview of the major components of a business model and how their successful development and execution determines business performance.
Topic: 01-03 The Full Business Model
 
67. Any activity which seeks to earn a profit by providing a good or service is known as a(n): 
A. industry
B. corporation
C. business
D. service
E. initiative

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-01 A macro-level understanding of what business is.
Learning Objective: 01-02 An overview of the major components of a business model and how their successful development and execution determines business performance.
Topic: 01-02 What Is Business?

68. __________ can most easily be thought of as a set of mission-focused actions aimed at identifying the needs of a particular market, or markets, and the development of a solution to such needs through the acquisition or transformation of goods and services that can be delivered to the marketplace at a profit. 
A. Goods-producing activities
B. Service activities
C. Business
D. Government
E. Not-for-profit activities

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-01 A macro-level understanding of what business is.
Learning Objective: 01-02 An overview of the major components of a business model and how their successful development and execution determines business performance.
Topic: 01-02 What Is Business?
 
69. ______________ refers to the ability of managers to establish a direction for the organization based on the needs identified in the marketplace and the mission (reason for being) of the organization. 
A. Human capital
B. Assets
C. Business acumen
D. Visionary leadership
E. Managerial acumen

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-05 Exposure to the concept of visionary leadership.
Topic: 01-08 The Concept of Visionary Leadership

70. A precise statement of the rationale for a business and a step-by-step explanation of how it will achieve its goals is a 
A. mission statement.
B. corporate charter.
C. business plan.
D. corporate statement.
E. balance sheet.

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 01-03 An awareness of the overarching role of the business owner or "C-suite" management team.
Learning Objective: 01-04 An understanding of how businesses plan.
Topic: 01-05 Putting Plans into Action
 
71. To undertake its core activities: 
A. assets
B. labour
C. capital
D. managerial acumen
E. structure

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-01 A macro-level understanding of what business is.
Learning Objective: 01-02 An overview of the major components of a business model and how their successful development and execution determines business performance.
Topic: 01-03 The Full Business Model
 
72. Which of the following is NOT one of the four core fundamental resource areas an organization will build its business model or system around? 
A. Assets
B. Labour
C. Capital
D. Managerial Acumen
E. Structure

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-01 A macro-level understanding of what business is.
Learning Objective: 01-02 An overview of the major components of a business model and how their successful development and execution determines business performance.
Topic: 01-03 The Full Business Model

73. To start any business you must first have 
A. Investors.
B. an idea.
C. capital.
D. Employees.
E. a business plan.

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 01-03 An awareness of the overarching role of the business owner or "C-suite" management team.
Learning Objective: 01-04 An understanding of how businesses plan.
Topic: 01-06 Thinking across Multiple Horizons
 
74. Which of the following is NOT a suitable definition of strategy? 
A. Is the development of plans and decisions which will guide the direction of the firm and determine its long-term performance.
B. Focuses on the vision of the firm and the opportunity which it believes exists in the marketplace.
C. Checks that the life expectancy of the product or service is long enough to ensure that the initial investment can be recovered and that the firm can make a profit.
D. Is the means by which the organization selects future direction and areas for focus.
E. Checks to see that day-to-day activities are running smoothly and generating profit.

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-03 An awareness of the overarching role of the business owner or "C-suite" management team.
Learning Objective: 01-04 An understanding of how businesses plan.
Topic: 01-04 The Role of the Business Owner or "C-Suite" Manager
 
75. The idea of a decision-making ecosystem" is related to which of the three characteristics one can use to assess a business: 
A. employee interaction
B. organizational capacity
C. commercial endeavours
D. markets the organization serves
E. Organizational culture and decision-making structure

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-01 A macro-level understanding of what business is.
Topic: 01-01 The Big Picture

76. _________ occurs when a company possesses capabilities that enable it to perform critical activities better than its rivals. 
A. Positioning
B. Managerial acumen
C. Competitive advantage
D. Profit
E. Profitability

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-03 An awareness of the overarching role of the business owner or "C-suite" management team.
Learning Objective: 01-04 An understanding of how businesses plan.
Topic: 01-04 The Role of the Business Owner or "C-Suite" Manager
 
77. Which of the following is not typically included in the framework for thinking about a business? 
A. A system of integrated actions
B. Develops and grows a market for its goods and/or services
C. Creates organizational value (wealth) on behalf of its stakeholders
D. Develops wealth for its employees
E. Delivers the right solution to the right customer

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 01-01 A macro-level understanding of what business is.
Topic: 01-01 The Big Picture
 
78. A company does not have competitive advantage when: 
A. it can offer customers a product/service that has more value to them than similar products offered by other companies.
B. the business plan is competitive and executed properly.
C. customers are attracted to the company's product/service offering(s).
D. the company generates money, or revenue, from the sale of the product.
E. the company's product/service offer is perceive to be equal to that offered by other companies.

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 01-03 An awareness of the overarching role of the business owner or "C-suite" management team.
Learning Objective: 01-04 An understanding of how businesses plan.
Topic: 01-04 The Role of the Business Owner or "C-Suite" Manager

79. A business incurs a ___________ if its costs and expenses exceed its revenues. 
A. loss
B. liability
C. debit
D. dividend
E. bonus

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-01 A macro-level understanding of what business is.
Learning Objective: 01-02 An overview of the major components of a business model and how their successful development and execution determines business performance.
Topic: 01-02 What Is Business?
 
80. Which of the following is not part of the company-centric side of the business model? 
A. Product portfolio
B. Key partners
C. Customer segments
D. Key resources
E. Key activities

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 01-01 A macro-level understanding of what business is.
Learning Objective: 01-02 An overview of the major components of a business model and how their successful development and execution determines business performance.
Topic: 01-03 The Full Business Model
 
81. The business plan should do all of the following except: 
A. explain the business.
B. include estimates of income and expenses.
C. establish a strategy for acquiring sufficient funds.
D. include an analysis of the competition.
E. act as a shackle to limit the business's flexibility and decision making.

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 01-03 An awareness of the overarching role of the business owner or "C-suite" management team.
Learning Objective: 01-04 An understanding of how businesses plan.
Topic: 01-05 Putting Plans into Action

82. Today's progressive managers: 
A. usually prefer to use the autocratic style of leadership.
B. tend to emphasize teamwork and cooperation rather than discipline and order-giving.
C. face fewer challenges and problems than managers in the past.
D. can rely on a much higher level of worker loyalty to the organization than in the past.
E. are beginning to revert to a command-and-control approach.

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-03 An awareness of the overarching role of the business owner or "C-suite" management team.
Learning Objective: 01-04 An understanding of how businesses plan.
Topic: 01-04 The Role of the Business Owner or "C-Suite" Manager
 
83. Profitability analysis takes into consideration all of the following except: 
A. return on the capital invested
B. return on equity
C. financial leverage
D. comparisons between competitors to determine which organizations are the most effective in their utilization of their resources
E. market capitalization

Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 01-07 Via an Appendix, an introduction to the difference between profit and profitability.
Topic: 01-11 The Difference between Profit and Profitability
 
84. Which of the following is LEAST characteristic of visionary leaders? 
A. Build support and critical mass for vision
B. Eliminate opposition to vision and strategy
C. Free up resources to complete critical initiatives
D. Ensure accountability is embedded in reward and performance programs
E. Create shared understanding of vision

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-05 Exposure to the concept of visionary leadership.
Topic: 01-08 The Concept of Visionary Leadership

85. ____________ is the amount a business earns over and above what it spends for salaries and other expenses. 
A. Profit
B. Revenue
C. Interest
D. Dividends
E. Tax

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-01 A macro-level understanding of what business is.
Learning Objective: 01-02 An overview of the major components of a business model and how their successful development and execution determines business performance.
Topic: 01-02 What Is Business?
 
86. _______ represent the infrastructure and resource base of the organization. 
A. Assets
B. Liabilities
C. Labour
D. Capital
E. Managerial acumen

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-01 A macro-level understanding of what business is.
Learning Objective: 01-02 An overview of the major components of a business model and how their successful development and execution determines business performance.
Topic: 01-02 What Is Business?
 
87. Key resources include all of the following EXCEPT: 
A. assets
B. liabilities
C. labour
D. capital
E. managerial acumen

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-01 A macro-level understanding of what business is.
Learning Objective: 01-02 An overview of the major components of a business model and how their successful development and execution determines business performance.
Topic: 01-02 What Is Business?
Topic: 01-03 The Full Business Model

88. __________________ refers to the value-creating skills which an organization's employees bring to the marketplace. 
A. Organizational efficiency
B. Employee interaction
C. Labour supply
D. Organizational value
E. Stakeholder efficiency

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 01-01 A macro-level understanding of what business is.
Topic: 01-01 The Big Picture
 
89. _________ refers to the immediate-term actions which a firm executes in order to meet the short-term objectives set forth in the current planning cycle. 
A. Strategy
B. Tactics
C. Leadership
D. Culture
E. Resources and capabilities

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-06 Via a Management Reflection, an overview of the relationship between business strategy and business model development, and the importance of successfully executing both for a business to achieve its identified objectives.
Topic: 01-09 Management Reflection—The Business Decision-Making Landscape

90. Which of the following is NOT part of the process called The Business Planning Cycle? 
A. Management team understands its strategic opportunities and its capabilities, competencies, and overall capacity.
B. Management team develops a business plan via a process which outlines its focus and methodology for using its resources.
C. Management team capitalizes on its identified strategic opportunities.
D. Management team creates valuable products and services.
E. Management team creates a unique position in the marketplace built around a competitive advantage.

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 01-03 An awareness of the overarching role of the business owner or "C-suite" management team.
Learning Objective: 01-04 An understanding of how businesses plan.
Topic: 01-05 Putting Plans into Action
 
91. "I Can't Believe That It's Medicine" is an advertising slogan for a new antacid. The manufacturer claims that their antacid works faster and tastes better than any competing brand. These claims are part of the firm's __________ strategy. 
A. partnership
B. portfolio
C. new product development.
D. positioning
E. value chain

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-01 A macro-level understanding of what business is.
Learning Objective: 01-02 An overview of the major components of a business model and how their successful development and execution determines business performance.
Topic: 01-02 What Is Business?
Topic: 01-03 The Full Business Model

92. __________ is the ability to develop a unique, credible, sustainable, and valued place in the minds of our customers for our brand, products, and/or services. 
A. Positioning
B. Relative merit assessment
C. Opportunity assessment
D. Revenue model development
E. Primary segment development and exploitation

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-01 A macro-level understanding of what business is.
Learning Objective: 01-02 An overview of the major components of a business model and how their successful development and execution determines business performance.
Topic: 01-02 What Is Business?
Topic: 01-03 The Full Business Model
 
93. Which of the following is NOT one of the three fundamental characteristics against which a business can be initially assessed? 
A. Commercial endeavours
B. Organizational capacity
C. Organizational culture
D. Employee interaction
E. Organizational decision-making structure

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-01 A macro-level understanding of what business is.
Topic: 01-01 The Big Picture

94. The idea that strategy is 5% thinking and 95% execution, and execution is 5% technical competence and 95% people capabilities is most closely associated with which characteristic of a business? 
A. Commercial endeavour
B. Organizational capacity
C. Organizational efficiency
D. Employee interaction
E. Organizational structure

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-01 A macro-level understanding of what business is.
Topic: 01-01 The Big Picture
 
95. Which of the following is NOT typically included on the company-centric side of the business model? 
A. activities
B. resources
C. partners
D. revenue model
E. product/service portfolio

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-01 A macro-level understanding of what business is.
Learning Objective: 01-02 An overview of the major components of a business model and how their successful development and execution determines business performance.
Topic: 01-02 What Is Business?
Topic: 01-03 The Full Business Model

96. Marketing research and data analytics are most commonly associated with: 
A. value proposition development
B. opportunity assessment
C. portfolio management
D. value chain configuration
E. assembly of key resources

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-01 A macro-level understanding of what business is.
Learning Objective: 01-02 An overview of the major components of a business model and how their successful development and execution determines business performance.
Topic: 01-02 What Is Business?
 
97. _______________ is the art of getting things done using organizational resources. 
A. Socialization
B. Justification
C. Preparation
D. Management
E. Cultural alignment

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-03 An awareness of the overarching role of the business owner or "C-suite" management team.
Learning Objective: 01-04 An understanding of how businesses plan.
Topic: 01-04 The Role of the Business Owner or "C-Suite" Manager
 
98. ___________ summarizes to whom a product or service is geared and the benefits the purchaser will realize as a result of using the product or service. 
A. Value proposition
B. Product mix
C. Product differentiation
D. Opportunity assessment
E. Product portfolio

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-01 A macro-level understanding of what business is.
Learning Objective: 01-02 An overview of the major components of a business model and how their successful development and execution determines business performance.
Topic: 01-03 The Full Business Model

99. Which of the following is typically NOT used to describe commercial endeavours? 
A. Markets the organization serves
B. Needs the organization professes to meet in the marketplace
C. Products the organization offers
D. Services the organization offers
E. Transaction processes the organization develops

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-01 A macro-level understanding of what business is.
Topic: 01-01 The Big Picture
 
100. _____________ measures how well a company is using its resources over a specific period of time to generate earnings relative to its competitors. 
A. Profit
B. Profitability
C. Profit potential
D. Profit target
E. Profit expectation

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-07 Via an Appendix, an introduction to the difference between profit and profitability.
Topic: 01-10 Appendix—The Business Model and Profitability
 
101. Businesses differ from not-for-profit organizations in that a business's focus is on: 
A. price.
B. goods.
C. profit.
D. organization.
E. plans.

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 01-01 A macro-level understanding of what business is.
Learning Objective: 01-02 An overview of the major components of a business model and how their successful development and execution determines business performance.
Topic: 01-02 What Is Business?

102. ____________ is the "bottom line" result an organization has realized for an identified, immediate period of time. 
A. Profit potential
B. Profit target
C. Profitability
D. Profit
E. Profit expectation

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-07 Via an Appendix, an introduction to the difference between profit and profitability.
Topic: 01-10 Appendix—The Business Model and Profitability
 
103. Too much emphasis on developing future products and/or services, versus responding to customer needs today, may result in the business: 
A. falling short of social responsibility expectations
B. liquidity issues if it is unable to cover its expenses in the short term
C. remaining healthy and continues to grow
D. acquiring external capital funding commitments which will enable them to reinvest in the organization
E. ensuring that it remains vibrant and responsive to community needs

Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 01-07 Via an Appendix, an introduction to the difference between profit and profitability.
Topic: 01-10 Appendix—The Business Model and Profitability
 
104. Which of the following is typically NOT used to describe commercial endeavours? 
A. Value-creating skills of employees
B. Markets the organization serves
C. Services the organization offers
D. Products the organization offers
E. Needs the organization professes to meet in the marketplace

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-01 A macro-level understanding of what business is.
Topic: 01-01 The Big Picture

105. _______, managers need to understand where the market is going and how their products and services will fit into the market and meet customer needs. ________, they need to ensure that the right product reaches the right customer at the right time and at the right place for the right price. 
A. Tactically; tactically
B. Strategically; strategically
C. Strategically; tactically
D. Decisively; tactically
E. Defensively; tactically

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 01-06 Via a Management Reflection, an overview of the relationship between business strategy and business model development, and the importance of successfully executing both for a business to achieve its identified objectives.
Topic: 01-09 Management Reflection—The Business Decision-Making Landscape
 
106. ____________ is the development of plans and decisions which will guide the direction of the firm and determine its long-term performance. 
A. Vision
B. Planning
C. Strategy
D. Execution
E. Tactic

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-03 An awareness of the overarching role of the business owner or "C-suite" management team.
Learning Objective: 01-04 An understanding of how businesses plan.
Topic: 01-04 The Role of the Business Owner or "C-Suite" Manager

107. The _______ of the value proposition is the perceived sum of your company's ability to deliver in each of the areas noted within the value proposition equation, versus the _____ of your competitors' value propositions measured across these same benefit areas. 
A. total; strength
B. strength; strength
C. strength; weakness
D. weakness; weakness
E. weakness; strength

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-01 A macro-level understanding of what business is.
Learning Objective: 01-02 An overview of the major components of a business model and how their successful development and execution determines business performance.
Topic: 01-03 The Full Business Model
 
108. Which of the following is NOT one of the key elements that comprise the commercial endeavours characteristic of the "big picture" model of the enterprise? 
A. Markets the organization serves
B. Products the organization offers
C. Structure of the organization
D. Services the organization offers
E. Needs the organization meets

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-01 A macro-level understanding of what business is.
Topic: 01-01 The Big Picture

109. Last year, MacTeck Enterprises had total revenues of $34 million while its total expenses were $22 million. Based on this information, MacTeck: 
A. earned a profit of $12 million.
B. earned a profit of $56 million.
C. suffered a loss of $12 million.
D. suffered a loss of $22 million.
E. paid tax of $12 million.

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 01-01 A macro-level understanding of what business is.
Learning Objective: 01-02 An overview of the major components of a business model and how their successful development and execution determines business performance.
Topic: 01-02 What Is Business?
 
110. Which of the following is the best example of a business? 
A. A community college
B. The Salvation Army
C. The Girl Guides of Canada
D. Walmart
E. The YMCA

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 01-01 A macro-level understanding of what business is.
Learning Objective: 01-02 An overview of the major components of a business model and how their successful development and execution determines business performance.
Topic: 01-02 What Is Business?

111. In order to achieve long-term growth and profitability, businesses are constantly searching for new markets and new opportunities to further grow the scope and focus of their organizations: 
A. because management behavior is unpredictable
B. because they recognize that the demand for current products and services could disappear
C. to ensure the immediate survival of the firm
D. in order to achieve long-term growth and profitability
E. because it is too difficult to do business in Canada

Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 01-07 Via an Appendix, an introduction to the difference between profit and profitability.
Topic: 01-10 Appendix—The Business Model and Profitability
Topic: 01-11 The Difference between Profit and Profitability
Topic: 01-12 Improving Profitability
 
112. Which of the following is NOT typically included on the market-centric side of the business model? 
A. Key resources
B. Positioning
C. Value proposition
D. Opportunity assessment
E. Revenue model

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-01 A macro-level understanding of what business is.
Learning Objective: 01-02 An overview of the major components of a business model and how their successful development and execution determines business performance.
Topic: 01-03 The Full Business Model

113. Which of the following is NOT one of the key areas of the company-centric side of the business model? 
A. Activities
B. Resources
C. Value proposition development
D. Partners
E. Products and services

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-01 A macro-level understanding of what business is.
Learning Objective: 01-02 An overview of the major components of a business model and how their successful development and execution determines business performance.
Topic: 01-03 The Full Business Model
 
114. The role of the top-level management team is to anticipate, recognize, and act upon opportunities that then drive the creation of products and/or delivery of services believe to offer solutions to problems in a unique, important, and _____ way. 
A. interesting
B. varied
C. valued
D. insightful
E. efficient

Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 01-03 An awareness of the overarching role of the business owner or "C-suite" management team.
Learning Objective: 01-04 An understanding of how businesses plan.
Topic: 01-04 The Role of the Business Owner or "C-Suite" Manager

115. A value proposition which has a positive price/quality relationship is considered superior to those of your competitors, if it: 
A. is more unique
B. is more important
C. your product is more value-driven
D. provides greater opportunity to communicate to the potential purchaser
E. all of the choices are correct

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-01 A macro-level understanding of what business is.
Learning Objective: 01-02 An overview of the major components of a business model and how their successful development and execution determines business performance.
Topic: 01-03 The Full Business Model

Short Answer Questions
 
116. What is a business? 
A business can most easily be thought of as mission-focused activities aimed at identifying the needs of a particular market, or markets, and the development of a solution to such needs through the acquisition and/or transformation of goods and services that can be delivered to the marketplace at a profit.

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 01-01 A macro-level understanding of what business is.
Learning Objective: 01-02 An overview of the major components of a business model and how their successful development and execution determines business performance.
Topic: 01-02 What Is Business?

117. What are the three fundamental characteristics against which an organization can be assessed? 
An efficient and effective operating platform will also possess three fundamental characteristics against which it can be assessed. These three characteristics are its commercial endeavours, its employee interaction model, and its organizational culture and formalized decision-making structure.

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 01-01 A macro-level understanding of what business is.
Learning Objective: 01-02 An overview of the major components of a business model and how their successful development and execution determines business performance.
Topic: 01-01 The Big Picture
 
118. What is visionary leadership? 
Visionary leadership refers to the ability of managers to establish a direction for the organization based on the needs identified in the marketplace and the mission (reason for being) of the organization. This is then translated into a strategic plan designed to guide the organization to fulfilling such needs while meeting its mission.

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-05 Exposure to the concept of visionary leadership.
Topic: 01-08 The Concept of Visionary Leadership
 
119. What is a business model? 
Combined, the application of assets, labour, capital, and managerial acumen, in support of the transformation and sale of goods and services, determines a company's cost base and overall operating platform or business model. The business model has two sides. The company-centric side that reflects how the business is organized, and the market-centric side, that reflects how the business interacts with markets and customers.

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-01 A macro-level understanding of what business is.
Learning Objective: 01-02 An overview of the major components of a business model and how their successful development and execution determines business performance.
Topic: 01-03 The Full Business Model

120. What is the "second" business objective (after making profit)? 
This second objective is to set in motion the ability of the organization to achieve long-term growth and profitability. Businesses recognize that the demand for the products and services which they currently offer will change, and could, in fact, disappear over time. Given this, businesses are constantly searching for new markets and new opportunities to further grow the scope and focus of their organizations. Although immediate-term operating performance is based on the products and services which a business offers today, new products and services will need to be developed in order to ensure that the organization remains healthy and continues to grow.

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-03 An awareness of the overarching role of the business owner or "C-suite" management team.
Learning Objective: 01-04 An understanding of how businesses plan.
Topic: 01-06 Thinking across Multiple Horizons
 
121. What are stakeholders? 
Stakeholders are individuals, groups, or organizations which have a direct or indirect relationship with an organization, and which can be impacted by its policies, actions and decisions. Stakeholders could include customers, suppliers, government, employees, etc.

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-03 An awareness of the overarching role of the business owner or "C-suite" management team.
Learning Objective: 01-04 An understanding of how businesses plan.
Topic: 01-06 Thinking across Multiple Horizons
 
122. Do you agree with the idea that when consumers calculate the value of a product, then look at the benefits and then subtract the costs? Why/why not? 
Answers will vary.

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-01 A macro-level understanding of what business is.
Learning Objective: 01-02 An overview of the major components of a business model and how their successful development and execution determines business performance.
Topic: 01-03 The Full Business Model

123. What do managers mean when they say they are developing strategy? 
The focus of developing strategy is to draw conclusions relating to where a company will compete, what will be its competitive scope, and how it will execute in a way that outperforms rivals. This can also be referred to as strategic planning.

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-03 An awareness of the overarching role of the business owner or "C-suite" management team.
Learning Objective: 01-04 An understanding of how businesses plan.
Topic: 01-04 The Role of the Business Owner or "C-Suite" Manager
 
124. Explain the differences between strategy and tactics. 
Strategic planning is long-range planning that determines major goals of the organization and the policies and strategies for obtaining and using resources to achieve those goals. Strategic planning deals with such fundamental questions as which customers to serve, what products and services to sell, and the geographic areas in which the firm will compete. Students may note that top managers are very involved in strategic planning.

Tactical planning is short-range planning that involves the process of developing detailed, short-term decisions about what is to be done, who is to do it, and how it is to be done. Tactical planning involves setting annual budgets and deciding on other details which contribute to reaching strategic objectives. Students may point out that lower level managers are more heavily involved in tactical planning.

Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 01-06 Via a Management Reflection, an overview of the relationship between business strategy and business model development, and the importance of successfully executing both for a business to achieve its identified objectives.
Topic: 01-09 Management Reflection—The Business Decision-Making Landscape

125. When does a business have a competitive advantage? 
A company has a competitive advantage when it possesses capabilities that enable the company to perform critical activities better than its rivals. If the associated business plan is competitive and executed properly, and customers are attracted to the company's product/service offering(s), the company generates money, or revenue, from the sale of the product.

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 01-06 Via a Management Reflection, an overview of the relationship between business strategy and business model development, and the importance of successfully executing both for a business to achieve its identified objectives.
Topic: 01-04 The Role of the Business Owner or "C-Suite" Manager
 
126. What is a value proposition? 
Simply stated, a value proposition is a statement which summarizes whom a product or service is geared towards and the benefits which the purchaser of the product or service will realize as a result of using the product. It is made up of service benefits, product benefits, brand benefits, cost benefits, and emotional benefits. The strength of the value proposition is the perceived sum of your company's ability to deliver in each of the areas noted within the value proposition equation, versus the strength of your competitors' value propositions measured across these same benefit areas.

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-01 A macro-level understanding of what business is.
Learning Objective: 01-02 An overview of the major components of a business model and how their successful development and execution determines business performance.
Topic: 01-03 The Full Business Model