What could a founder do to make a succession plan successful? Using the Three-Circle Model of Family Firms, identify issues the founder should discuss with each group.
What will be an ideal response?
A founder should have a well developed plan that is properly communicated to all parties. While it may be hard for the entrepreneur to think about not being at the business, a discussion should be had with
1) a spouse especially about issues related to settling an estate;
2) family members in the business (who may or may not be an owner) so they understand who will be leading the company and why. Family members with possible succession talent should be supported;
3) family members not in the business in relation to the impact the change would make on any inheritance; and
4) nonfamily employees and nonfamily owners in the business as to who will be leading the company and the impact of a change in leadership.
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When certain kinds of assets are built that require public welfare and safety expenditures at the end of the asset's life,
a. these asset retirement costs are expensed when asset retirement occurs. b. a liability simultaneously arises. c. these estimated future expenditures are added to the carrying value of the asset. d. this fact is only reported in the financial statement footnotes.
What are the five characteristics of successful teams? How have researchers investigated these characteristics? Why have these researchers found different results and how are their results different from one another?
What will be an ideal response?
A _____ is a requirement a lender imposes on the borrower as a condition of the loan.
A. factor B. covenant C. corporate bond D. commercial paper
A ____ is a source of revenue flowing into the firm.
A. profit flow B. cash stream C. cash output D. buyer source E. revenue stream