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

IIA IIA-CIA-PART4 Online Questions & Answers

• Question 221:

  In some regions of the world, business is conducted more often through personal relationship building than through legal contracts. This is an example of a

  A. Cultural factor.
  B. Commercial factor.
  C. Technical factor.
  D. Legal factor.
  A. Cultural factor.

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  In high-context cultures (e.g., Japanese, Chinese, Arabic, and Korean), much meaning is transmitted by nonverbal cues and situational circumstances. Thus, a person's status in a firm, rank in society, and reputation convey the primary message. In low-context cultures (e.g., Northern Europe and North America), primary messages are transmitted verbally. Hence, precise written contractual agreements are highly valued. In contrast, social events aremore highlyvalued in a high-context culture. Attitudes, tastes, behavior, and social codes are culturalfactors. Accordingly, a preference for personal relationships rather than precise writtencontracts is a cultural factor.

• Question 222:

  A strategic business unit (SBU) has a relative market share (RMS) of 2.0 and a market growth rate (MGR) of 9.5%. According to the portfolio model for competitive analysis created by the Boston Consulting Group, such an SBU is considered a

  A. Star.
  B. Question mark.
  C. Cash cow.
  D. Dog.
  C. Cash cow.

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  The annual MGR reflects the maturity and attractiveness of the market and the relative need for cash to finance expansion. An MGR of 10% or more is generally regarded as high. The RMS reflects an SBU's competitive position in the marketsegment. An RMS of 1.0 or moresignifies that the SBU has a strong competitive position. Cash cows have high RMS and low MGR. They are strong competitors and cash generators in low-growth markets.

• Question 223:

  According to management literature, worker absenteeism, turnover, and error rates are likely to be greatest:

  A. When workers alternate in performing different jobs.
  B. In simplified assembly-line jobs.
  C. In job sharing situations.
  D. When flexible working hours are provided.
  B. In simplified assembly-line jobs.

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  The literature tends to support the theory that, while job satisfaction has an economic importance only indirectly related to productivity, satisfied workers exhibit lower rates of absenteeism, turnover, tardiness, apathy, and sabotage. Organizations with more organic or flexible organization structures may use more of the worker's skills and present a greater variety of work challenges, thus improving morale. Mass production technology usually involves repetitious, boring tasks.

• Question 224:

  What governmental factor most likely will lead to overbuilding in a global industry?

  A. Tax incentives are given to local subsidiaries of foreign firms.
  B. The government favors an indigenous industry that has a small minimum efficient scale.
  C. Environmental regulations are imposed on domestic firms.
  D. Anti-bribery laws impede domestic firms from competing globally.
  A. Tax incentives are given to local subsidiaries of foreign firms.

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  Governmental factors may lead to overbuilding. For example, tax incentives may promote excess capacity by permitting foreign subsidiaries to pay no tax on earnings retained in the business. A nation also may wish to create an indigenous industry. When the minimum efficient scale is great in relation to world demand, the excess production in the country may contribute to global overcapacity. Furthermore, governmental employment pressures may result in overbuilding to create jobs or avoid job loss.

• Question 225:

  A firm sold the same product in many foreign countries but changed the ad copy to allow for language and cultural differences. According to teegan's model of adaptation strategies, the firm adopted a strategy of:

  A. Product adaptation.
  B. Communication adaptation.
  C. Dual adaptation.
  D. Straight extension.
  B. Communication adaptation.

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  Communication adaptation is a strategy that does not change the products, but advertising and marketing campaigns are changed to reflect the local culture and beliefs. For example, a firm may use one message but with changes in language, name, and colors. It may use a consistent theme but change the ad copy in each market. Another option is for a firm to devise a group of ads from which each market may choose the most effective. Still another option is to develop promotion campaigns locally.

• Question 226:

  Following a decision to change the composition of several work teams, management encounters significant resistance to the change from members of the teams. The most likely reason for the resistance is:

  A. Possible inefficiencies of the new arrangement.
  B. The breakup of existing teams.
  C. Understaffing for the tasks involved.
  D. The selection of a more costly approach to performing the assigned tasks.
  B. The breakup of existing teams.

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  Commitment to a group depends on its attractiveness and cohesiveness. Attractiveness is a favorable view from the outside. Cohesiveness is the tendency of members to adhere to the group and unite against outside pressures. Group attractiveness and cohesiveness are fostered by its prestige and status, cooperation among the members, substantial member interaction, small size of the group, similarity of members, good public image, and common external threat. Thus, members of cohesive work groups often exert pressure to resist changes that threaten to break up the group.

• Question 227:

  Which of the following is a regional free-trade zone currently limited to South American nations?

  A. APEC
  B. Mercosul.
  C. The Triad Market.
  D. NAFTA.
  B. Mercosul.

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  Mercosul is a free-trade agreement among South American nations. They include Argentina, Brazil, Uruguay, and Paraguay. Chile and Bolivia are associate members.

• Question 228:

  The belief that successful leadership occurs when the leader's style matches the situation is the basis for:

  A. The contingency approach to leadership.
  B. The managerial-grid model of leadership.
  C. A behavioral approach to leadership.
  D. An achievement-oriented approach to leadership theories.
  A. The contingency approach to leadership.

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  According to Fred E. Fiedler's contingency theory, people become leaders not only because of personality attributes, but also because of various situational factors and the interaction between the leaders and the situation. Thus, the right person at the right time may rise to a position of leadership if his/her personality and the needs of the situation complement each other. The same person might not become a leader in different circumstances because of failure to interact successfully with that situation. The contingency theory model has three dimensions. (1) Position power is a function of the formal authority structure. It is the degree to which the position held enables a leader to evaluate, reward, sanction, or promote the group members independent of other sources of power, such as personality or expertise. (2) Task structure is how clearly and carefully members' responsibilities for various tasks are defined. Quality of performance is more easily controlled when tasks are clearly defined. (3) Leadermember relations reflect the extent to which group members like, trust, and are willing to follow a leader.

• Question 229:

  Which of the following is a benefit of implementing an electronic communication system?

  A. Relatively low capital expenditures are required.
  B. The company's comparative advantage over smaller firms that cannot afford such a system will increase.
  C. There is little need for additional resource allocation to facilitate implementation of the system.
  D. The sophistication of electronic communication systems eliminates the need for backup files and data recovery systems.
  B. The company's comparative advantage over smaller firms that cannot afford such a system will increase.

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  Implementation of an electronic communication system improves the technology of a company. This increases the company's advantage over smaller companies that cannot afford electronic communication systems.

• Question 230:

  If the demand for a product is inelastic,

  A. A price decrease causes total revenue to increase.
  B. A price increase causes total revenue to increase.
  C. A price decrease leaves total revenue unchanged.
  D. A price increase leaves total revenue unchanged.
  B. A price increase causes total revenue to increase.

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  If the demand for a product is inelastic, the coefficient of price elasticity of demand (percentage change in quantity demanded - percentage change in price) is less than 1.0. The relationship between price changes and total revenue (TR) changes is TR = price x quantity. The result is that a price increase causes total revenue to increase.