IIA-CIA-PART4 Online Practice Questions and Answers

Correct Answer: C

Attractiveness of a foreign market is a function of such factors as geography, income, climate, population, and the product. Another major factor is the unmet needs of a developing nation, for example, China or India. Entry into a market abroad may be based on many factors, for example, psychic proximity. Thus, a first-time venture abroad might be in a market with a related culture, language, or laws.

Correct Answer: D

Price escalation is caused by an accumulation of additional costs, e.g., currency fluctuations; transportation expenses; profits earned by importers, wholesalers, and retailers; and import duties.

Correct Answer: B

The GE model is a multifactor portfolio matrix with two variables. Business strength or competitive position (BUS) is on one axis, and market attractiveness (MAT) is on the other. To measure BUS and MAT, the firm must isolate the multiple factors affecting each, quantify them, and create an index. Factors will vary with each business. The measurements will provide the values on the exes of the matrix.

Correct Answer: B

Net liquidation value is reduced when the fixed costs of exit are high, e.g., the cost of labor settlements, payments to professionals involved in the divestiture (CPAs, attorneys, etc.), cancellation of contracts (with distributors, suppliers, managers, etc.), and resettlement orretraining. Moreover, announcement of exit may have such effects as reduced employee productivity, loss of customers, and a decline in supplier reliability. However, some required investments, such as in environmental safeguards, may be avoided. Thus, avoiding the capital investment in environmental safeguards maybe a reason to exit an industry if the investment exceeds the expected profits. This is an example of a fixed cost that is not an exit barrier.

Correct Answer: D

Upward influence methods used by employees of authoritarian managers are most likely to consist of ingratiating tactics and upward appeals. Rational persuasion is the method used most often by employees of participative managers.

Correct Answer: D

An organizational chart is used to represent the organizational structure of an entity. It normally resembles a pyramid, with the chief executive on top and the operating work force on the bottom. Lines show reporting relationships, lines of authority, and task groupings. An organizational chart depicts promotional or career tracks and illustrates the span of control and the number of organizational levels.

Correct Answer: C

Nonprofit service organizations include charities and universities. Nonprofit service organizations serve particular groups of clients.

Correct Answer: B

Staff positions in any organization advise and support the line positions. They indirectly help to achieve the organization's basic objective. Each staff position's authority is, at most, functional. Such authority is exercised only over activities related to the staff's function or specialty.

Correct Answer: B

A team is most likely to be effective when it is fully empowered. Empowerment follows from properly training and equipping team members, and providing them with all necessary information. A team will not be effective if its members lack the needed skills.

Correct Answer: C

The degree of product differentiation and the costs of switching from one competitor's product to another increase the intensity of rivalry and competition in an industry. Less differentiation tends to heighten competition based on price, with price cutting leading to lower profits. Low costs of switching products also increase competition.

Correct Answer: B

The communication process has five elements:the sender, the symbols in which the message is encoded, the medium through which the message flows, the receiver, and feedback. Because the effectiveness of communication can be known only by its impact on the receiver and the perceived change in the receiver's behavior, the received message must govern the definition. The sent message may be garbled in encoding, in transmission, or in the receiver's decoding.

Correct Answer: B

A liaison, or media liaison, is an individual in an organization who has been formally assigned the job of facilitating communication. This is usually in the form of a public relations liaison, but in large organizations, internal communication could also be a part of the job.

Correct Answer: A

The benefits of electronic communication include better control of information, more timely information, elimination of tedious tasks, improvement of competitiveness due to improved technology, standardization of procedures by computer programs, assistance for strategic planning, and optimization of organizational resources to improve productivity.

Correct Answer: B

If badly designed job descriptions occur, then the best resolution is reorganization.

Correct Answer: B

Backward integration is appropriate when the firm's current suppliers are unreliable. Stable relationships between internal sellers and buyers create economies because they need not fear loss of the related buyers and sellers. They also need not fear undue economicpressure from each other. Furthermore, because the relationship is locked in, more efficient procedures for their relationship (e.g., dedicated controls and records) may be implemented. Another advantage is that internal sellers and buyers may more fully adapt to each other's needs than they would or could in dealings with outsiders.