Why Do Most Sole Proprietorships Remain Relatively Small

question 120

Multiple Choice

Why do most sole proprietorships remain relatively small?

• A) because their shareholders would rather receive dividends than have earnings reinvested to finance growth
• B) because the owners often disagree about the need to take on additional risk associated with growth
• C) because they have limited ability to raise funds needed to finance growth
• D) because government regulations limit their ability to expand into new areas of business

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Definitions:

Social Loafing

The phenomenon where individuals exert less effort when working in a group than when working alone.

Performing Stage

A phase within team development where the group operates efficiently towards achieving their goals.

Forming Stage

The initial phase of team development, characterized by uncertainty and exploration of team purpose and structure.

Adjourning

The final stage in group development where the group completes its tasks and dissolves.