IIA IIA-CIA-PART4 Online Practice Questions and Exam Preparation

IIA IIA-CIA-PART4 Online Questions & Answers

• Question 101:

  Globalization assists in achieving economies of scale, which is:

  A. Cost benefit
  B. Timing benefit.
  C. Learning benefit.
  D. Arbitrage benefit.
  A. Cost benefit

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  Cost benefits are obtained from economies of scale as a firm expands its operations. Average costs of output decline because of standardization of products or processes, and increased bargaining power versus suppliers of raw materials, components, and services. Moreover, economies of scale may arise from centralized production or from marketing, logistical, or purchasing factors.

• Question 102:

  Which of the following is a management approach to motivating employees?

  I. Providing performance feedback.

  II. Presenting opportunities for responsibility.

  III.

  Satisfying personal needs.

  A. Ill only.
  B. I and II only.
  C. II and Ill only.
  D. I, II, and Ill
  I. Providing performance feedback. II. Presenting opportunities for responsibility. III. Satisfying personal needs.
  D. I, II, and Ill

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  Performance feedback is an important part of goal-based approaches to motivating employees. Moreover, presenting opportunities for responsibilities will motivate employees by helping them meet the personal need for achievement. Thus, satisfying personal needs is a method of motivating employees. Many motivational theories are based on analysis of employee needs.

• Question 103:

  After three years of steadily decreasing profits despite of increased sales and a growing economy, which of the following is the preferred course of action for a chief executive officer to take?

  A. Set a turnaround goal of significantly increasing profits within two months.
  B. Reduce staff by 10 percent in every unit.
  C. Reduce staff in the nonvalue-adding functions by 20 percent.
  D. Encourage innovation at all levels and use an early retirement program to reduce staff size.
  D. Encourage innovation at all levels and use an early retirement program to reduce staff size.

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  (Organizational decline loss of effectiveness and efficiency coupled with inflexibility) may lead to downsizing, merger, reorganization, or liquidation. It results from decreased demand, resource limitations, or mismanagement. One characteristic of a declining organization is lack of innovation. Moreover, the most important cause of organizational decline is management complacency. In turn, a characteristic of management complacency is lack of innovation. Consequently, the CEO should encourage innovation at all levels. Also, downsizing has many negative effects. The enlightened view is that employees are not readily disposable commodities, but rather valuable resources who should be terminated only as a last resort. This view seeks alternatives to involuntary termination. One such alternative is a voluntary retirement program that offers accelerated retirement benefits, severance allowances, or other compensation.

• Question 104:

  Which of the following characteristics is common with a mature group?

  A. Harmony is emphasized at the expense of addressing the problems.
  B. No attempt to force unanimity.
  C. Members begin to identify with the group.
  D. Redistributions of power and authority may occur.
  B. No attempt to force unanimity.

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  A mature group is in the end stage of group development and tends to be more effective and productive compared to groups in earlier stages. A mature group engages in rational discussion of decisions with tolerance of dissent and no attempt to force unanimity.

• Question 105:

  Gray market activity is in essence a form of arbitrage. To prevent this activity by their distributors, multinational firms:

  I. Raise prices charged to lower-cost distributors.

  II. Police the firms' distributors.

  III.

  Change the product.

  A. I only.
  B. I and II only.
  C. II and Ill only.
  D. I, II, and Ill.
  I. Raise prices charged to lower-cost distributors. II. Police the firms' distributors. III. Change the product.
  D. I, II, and Ill.

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  In a gray market, products imported from one country to another are sold by persons trying to make a profit from the difference in retail prices between the two countries. These activitiesclearly lower the profits in some markets of the multinational firm that was the initial seller. One response is to monitor the practices of distributors and retaliate if necessary. A second response is to charge higher prices to the low-cost distributors to reduce their incentives to participate in a gray market. A third response is to differentiate products sold in different countries, e.g., by adapting the product or offering distinct service features.

• Question 106:

  In many jobs, excessive specialization can eventually lead to poor motivation, boredom, and alienation. In order to cope with the potential problems in such a situation, managers should: A. Focus on the employees' higher-level needs in order to help them achieve self- actualization.

  B. Remove dissatisfiers such as low salary, bad supervision, lack of job security, and poor working conditions.
  C. Implement an optimal organizational rewards system and provide all needed training to keep employees up to date on technology.
  D. Change the jobs to fit the employees' needs or rotate employees to jobs that satisfy the employees' needs.
  D. Change the jobs to fit the employees' needs or rotate employees to jobs that satisfy the employees' needs.

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  Job design theories of motivation specifically address the issue of overspecialization. These theories focus on the match between the person and the job as the key to motivation. The recommendation for dealing with the potential problems of overspecialization and boredom is either to enrich the job or to move the employee to a job that provides the appropriate level of challenge.

• Question 107:

  A technological factor that may lead to overbuilding in an industry is:

  A. The need to add capacity in large increments.
  B. The lack of a credible market leader.
  C. Changes in industry structure.
  D. Inflated future expectations.
  A. The need to add capacity in large increments.

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  The need to add capacity in large increments is a technological factor that may lead to overbuilding. The following are other such factors:

  (1)

  the presence of economies of scale or a steep learning curve encourages preemption:

  (2)

  long lead times for adding capacity increase the risk of competitive inferiority if a firm does not act quickly to begin raising its capacity; (3) when the minimum efficient scale increases, large plants are becoming more efficient even though demand is not growing; and

  (4)

  changes in production technology result in new construction while old plants remain in operation, particularly when exit barriers are high.

• Question 108:

  Which of the following are common techniques for effective time management?

  I. Finding out how much time is worth

  II. Developing an action plan

  III. Learning to say "No"

  A. I only.
  B. I and II only.
  C. II and Ill only.
  D. I, II, and Ill.
  I. Finding out how much time is worth II. Developing an action plan III. Learning to say "No"
  B. I and II only.
  D. I, II, and Ill.

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  performs a particular duty.

  Developing an action plan can help manage time because it allows an individual to focus on a single goal. By learning to say "No," managers can avoid performing tasks that are not part of the daily plan, which can be crippling to proper time

  management.

• Question 109:

  In deciding whether to have a work group make a decision or to make the decision personally, a manager should consider

  A. When the decision is needed.
  B. How important it is for the work group to accept the decision.
  C. Whether there are strong individuals in the work group who could dominate the decisionmaking process.
  D. All of the answers are correct.
  D. All of the answers are correct.

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  If the decision is needed immediately, group decision making may not be indicated because assembling the group and the often inefficient interactions of its members are time consuming. Another disadvantage of group decision making is the possibility a few people will dominate the deliberations. If they lack ability, the group may not be effective. An advantage of the decision-making process is that it fosters acceptance by the members of the group. Participation by the individuals who will be required to implement the solution adopted increases the likelihood of its success.

• Question 110:

  Timing of entry into an emerging industry is a critical choice. Pioneering firms face high risk but low barriers. Which of the following is not a factor that favors early entry?

  A. The bases of competition and market segments will change.
  B. The learning curve advantage will persist.
  C. Customer loyalty will be high.
  D. Cost advantages can be secured.
  A. The bases of competition and market segments will change.

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  If the bases of competition and market segments will change significantly, an early entrant may lose the advantage obtained by being an early entrant. Other factors not favoring early entry include the following:(1) costs of opening the market are high and the benefits cannot be retained by the firm, (2) early competition will be expensive and larger and stronger competitors will emerge later, and (3) early products and processes will become obsolete.