A Founder of a Family Business Is Contemplating Turning the Business

question 4

Multiple Choice

A founder of a family business is contemplating turning the business over to his five children. One possibility, the founder believes, is to divide ownership equally among the children. This would

• A) be impossible.
• B) be inherently unfair to the children.
• C) potentially hinder the future functioning of the business.
• D) require an S corporation.

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Definitions:

Competitive Effectiveness

The ability of an organization to implement strategies that secure a competitive edge and achieve desired outcomes efficiently.

Sustainable Competitive Advantage

The enduring ability of a company to remain more efficient, profitable, or innovative than its competitors.

Competitive Advantage

A distinctive feature or standpoint enabling a company to surpass its rivals in performance.

Market Environmental Forces

The external factors, such as economic, social, technological, legal, and competitive forces, that affect a company's ability to operate successfully in a particular market.