IIA IIA Certifications IIA-CIA-PART3 Questions & Answers

• Question 721:

  Departmentalization is a common form of business integration. Grouping together all related jobs, activities, and processes for a given business objective into a major organizational subunit is an example of:

  A. Product-service departmentalization.

  B. Functional departmentalization.

  C. Geographic location departmentalization.

  D. Customer classification departmentalization.

  Correct Answer: A

  Departmentation by product or service is growing in importance for multiline, large-scale enterprises and is an outgrowth of functional departmentation. The result is that productservice subunits may be treated as separate businesses with a high degree of autonomy. Managers must therefore have a broad perspective, not a merely functional orientation.

• Question 722:

  Departmentation is the grouping of organizational subsystems. The greatest advantage of functional Departmentation is that it:

  A. Provides the benefits of specialization.

  B. Facilitates communication between primary functions.

  C. Helps to focus on achievement of organizational goals.

  D. Is appropriate for geographically dispersed companies.

  Correct Answer: A

  Departmentation by function is the most widely used method and is found in almost every enterprise at some level. The most common departments are selling, production, and finance though other terms maybe used). These often extend upward in the organizational chart to the level below the chief executive. If persons within a department have similar knowledge, skills, and interests, they can specialize in the solution of particular problems. Thus, problem solving becomes more efficient.

• Question 723:

  Departmentalization may be performed by:

  I. Function

  II. Product

  III.

  Geography

  A.

  I only.

  B.

  II only.

  C.

  I and II only.

  D.

  I, II and III.

  Correct Answer: D

  Departmentation may be performed by function, product, and geography. Departmentation by function is found in almost every organization at some level, whether for-profit or nonprofit. The most common departments in for-profit organizations are marketing, production, and finance though other terms maybe used). These often extend upward in the organizational chart to the level below the chief executive. Departmentation by product or service is growing in importance for multiline, large-scale enterprises. It is often an outgrowth of functional departmentation. The result is that product-service subunits may be treated as separate businesses with a high degree of autonomy. Managers must therefore have a broad perspective, not a merely functional orientation. Departmentation by territory geographic location) is favored by national or multinational firms and government agencies with scattered resources, offices, or plants.

• Question 724:

  An adhocracy is most likely to be found in what kind of organizational structure?

  A. Mechanistic.

  B. Organic.

  C. Bureaucratic.

  D. Classical.

  Correct Answer: B

  The organic structure is at the opposite end of the design continuum from a mechanistic organization. An organic structure has groupings of similar persons and resources in subunits horizontal specialization); relatively few policies, procedures, and rules; less stringent formal controls; decentralized staff; and matrix or divisional departmentation.

• Question 725:

  What is a primary reason for planning?

  A. Reacting to employee needs.

  B. Environmental uncertainty.

  C. Reacting to competition.

  D. Organizational policy.

  Correct Answer: B

  Planning is influenced and limited constrained) by external environmental) factors, the effects of which cannot be determined with certainty. Market trends, social change, competitors' actions, and governmental regulation are among these environmental factors.

• Question 726:

  A substantial duplication of functions characterizes which of the following structures?

  A. Simple structure.

  B. Divisional structure.

  C. Machine bureaucracy.

  D. Professional bureaucracy.

  Correct Answer: B

  A division is essentially a self-contained organization. Hence, it must perform all or most of the functions of the overall organization of which it is a part. It is characterized by substantial duplication of functions when compared with more centralized structures.

• Question 727:

  With the shift in some countries' economies toward service industries, a new form of organization has developed. This organization structure is referred to as the professional bureaucracy. While this structure resembles the machine bureaucracy which relies on standardized work processes) in several respects, it is different in one key aspect. This significant difference is that in a professional bureaucracy:

  A. Senior management has had to give up a substantial amount of control.

  B. Tasks are accomplished with a high degree of efficiency.

  C. There is strict adherence to rules.

  D. There is a tendency for subunit conflicts to develop.

  Correct Answer: A

  A professional bureaucracy e.g., a university or library) is a complex and formal but decentralized organization in which highly trained specialists have great autonomy. The jobs performed by these professionals require years of education and training. By their nature, such jobs can be performed effectively only if the employees are afforded substantial autonomy.

• Question 728:

  A small engineering consulting firm accepts special projects from customers in a variety of fields. Its choice of an organic organizational design was most likely based on its:

  A. Lack of concern for self-fulfillment of employees.

  B. Preference for formal communication.

  C. Adoption of directive leadership style.

  D. Participative decision making processes.

  Correct Answer: D

  The organic structure is best suited to a company that emphasizes operational efficiency less than the flexibility needed to respond quickly to changes in its environment and the creativity to find solutions to new problems. Decision making in this context tends to rely on input from many sources and requires multidirectional communication. Hence, a horizontal or flat structure typified by project or matrix management will be appropriate.

• Question 729:

  The structure of an organization generally follows its overall strategy. At one end are loosely structured, organic organizations. At the other end are highly centralized, tightly controlled, mechanistic organizations. Consider the overall strategy of a company that is a pioneer in the combination of laser and robotic technologies. The company's scientists and engineers hold many patents. They are continually looking for ways to improve their products as well as to introduce new ones. Identify the most appropriate structural option for this organization.

  A. Mechanistic.

  B. Imitative.

  C. Organic.

  D. Bureaucratic.

  Correct Answer: C

  Organizational structure depends on the company's overall strategy. This organization has adopted an innovation strategy. It introduces major new products or services. The structure that provides the flexibility required for major innovation is organic, a form of organization characterized by a loose structure, low division of labor, low formalization, and decentralization.

• Question 730:

  A large company uses assembly line techniques to manufacture a single product. Its choice of relatively mechanistic organizational design was more likely based on its:

  A. Need for rapid response to environmental change.

  B. Primary concern for operational efficiency.

  C. Low fixed technology requirements.

  D. Project management emphasis.

  Correct Answer: B

  Mechanistic organizations have vertical structures with duties and authority clearly defined by position in the hierarchy, a stringent set of formal controls, and a centralized staff. Such organizations tend to emphasize efficiency and operate in a stable environment withwell- establishedtechnology. Large firms in basic industries autos, utilities) often adopt this structure.