Answers to Questions and Exercises

1114 WordsNov 2, 20145 Pages
Answers to Questions and Exercises Questions for Review Why are small businesses important to the U.S. economy? Small businesses create new jobs, foster entrepreneurship and innovation, and supply goods and services needed by larger businesses. What is the difference between a small-business owner and an entrepreneur? A person may be a small-business owner only, an entrepreneur only, or both. For example, a person who opens a small pizza parlor with no plans to grow and expand is not really an entrepreneur. The basic distinction between small-business ownership and entrepreneurship is aspiration – the former wants to remain small and support a lifestyle whereas the latter is motivated to grow, expand, and build. From the…show more content…
Answers will vary widely. Answers to Exercising Your Ethics Identify the ethical issues, if any, regarding Mark and Connie’s respective positions on Mark’s proposed $2,000 monthly salary increase. One perspective is that both partners seem to be poor communicators, which is an interpersonal issue rather than an ethical issue. They should both be discussing salary changes in the context of specific contributions. The ethical issue regarding Mark’s position seems to be fairness. Given his interests, skills, and experience, will he really be taking on half of Connie’s responsibilities? The ethical issue regarding Connie’s position seems to be honesty. Removing inventory for personal use is clearly an underhanded way of resolving her resentment toward Mark. What kind of salary adjustments do you think would be fair in this situation? Explain why. Answers will vary. However, in explaining their answers, students should consider how contributions from both partners would change. There is, of course, another way for Mark and Connie to solve their differences. Because the terms of participation have changed, it might make sense to dissolve the existing partnership. What do you recommend in this regard? Answers will vary, but dissolution is worth considering given that both parties appear to feel wronged. Given Connie’s plan to remove inventory for personal use each month, further conflict seems
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