IIA IIA Certifications IIA-CIA-PART3 Questions & Answers

• Question 881:

  Which of the following is not a step in the establishment of a competitive intelligence system?

  A. Data analysis.

  B. Data collection.

  C. Information dissemination.

  D. Classification of competitors.

  Correct Answer: D

  A competitive intelligence system is established to identify competitor strategies, monitor their new-product introductions, analyze markets for the firm's own new-product introductions and acquisitions, obtain information about nonpublic firms, evaluate competitor RandD activity, learn about competitors' senior executives, and perform other necessary information gathering tasks. Its establishment consists of setting up the system, collecting data, analyzing the data, and disseminating the information. Classification of competitors, however, is not a step in this process. Competitors are classified and targeted by a firm based on that classification following the results of a customer value analysis (CVA).

• Question 882:

  Edward T. Hall has distinguished between high-context and low-context cultures. Which culture is high-context?

  A. United States.

  B. Canada.

  C. Germany.

  D. Japan.

  Correct Answer: D

  Hall drew a distinction between high-context and low-context cultures. 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.

  Section 2:Sec Two (51 to 90)

  Details:

  Industry and Market Analysis

• Question 883:

  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.

  Correct Answer: A

  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 884:

  Dutch researcher Geert Hofstede has examined the cultural dimensions of organizational behavior in 40 countries. The United States ranked the highest in which dimension?

  A. Power distance.

  B. Uncertainty avoidance.

  C. Individualism.

  D. Masculinity.

  Correct Answer: C

  The individualism-collectivism dimension addresses whether the organization or individual must meet his/ her own security needs.

• Question 885:

  According to Edward T. Hall, the perception of time is monochronic or polychronic. Which cultures perceive time as monochronic?

  A. Northern European.

  B. Latin American.

  C. Arabic.

  D. Mediterranean.

  Correct Answer: A

  The perception of time as it relates to business and social life varies with the culture. Polychronic time is based on a perception that time is nonlinear, flexible, and multidimensional. This perception is typical of Mediterranean, Latin American, and Arabic cultures. Monochronic time is based on a perception that time is the same for everyone and is measurable in standard units. This perception is common in Northern Europe and the U.S. These western cultures believe in punctuality and that time is money and should not be wasted.

• Question 886:

  Which country is best described as having an individualistic culture?

  A. India.

  B. Japan.

  C. Canada.

  D. China.

  Correct Answer: C

  Individualistic cultures are societies that place a higher value on the rights and accomplishments of individual persons within the society. Examples are the U.S., U.K,Canada, and Australia. Collectivist cultures focus much more on the goals of family, friends, country, and the organization. Examples are China, India, Mexico, Japan, and Egypt.

• Question 887:

  Cultures have been described as low-context or high-context. Which culture is high- context?

  A. Germany.

  B. Saudi Arabia.

  C. Great Britain.

  D. Swillerland.

  Correct Answer: B

  Hall drew a distinction between high-context and low-context cultures. 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 are more highly valued in a highcontext culture.

• Question 888:

  With the globalization of economies, many organizations have expanded their operations to international locations. As an advisor to management, an internal auditor will most likelyrecommend that a geocentric, or worldwide, attitude be adopted. Select the reason the geocentric attitude is preferred.

  A. It promotes a simpler organizational structure.

  B. It provides greater autonomy for host country managers.

  C. It provides the best balance of local and worldwide objectives.

  D. It promotes tighter organizational control.

  Correct Answer: C

  According to Howard Perlmutter, the geocentric attitude toward international operations is world oriented. The intention is to balance local and worldwide objectives in all aspects of operations, to maintain global standards while permitting local managers to exercise appropriate discretion.

• Question 889:

  According to research on path-goal leadership styles done in many countries, which styles are neither the most nor the least accepted internationally?

  I. Directive

  II. Supportive

  III. Participative

  IV.

  Achievement-oriented

  A.

  l and II.

  B.

  l and Ill.

  C.

  II and IV.

  D.

  Ill and IV.

  Correct Answer: C

  The participative style, although not always the best, is the most widely accepted internationally. The directive style is the least accepted internationally. It was not deemed appropriate in the U.S., U.K., Canada, Australia, Germany, and Sweden. Theachievement orientedstyle was found unacceptable in such countries as Brazil, France, Italy, and Japan. The supportive style was not accepted in such countries as Brazil, France, India, and Sweden.

• Question 890:

  Which of the following management orientations is characterized by an organization's efforts to adapt the product and marketing program to each local environment?

  A. Ethnocentric.

  B. Polycentric.

  C. Geocentric.

  D. Fegiocentric.

  Correct Answer: B

  A polycentric attitude assumes that cultural differences require local managers to make most decisions because they are more knowledgeable about local conditions than are central administrators. Thus, development of local managerial talent is crucial. Another result is that foreign operating performance is primarily evaluated based on results. As a consequence, methods, training, and incentives vary significantly among subsidiaries. Furthermore, control is predominantly local, the firm is identified with the nationality of the host nation, and relatively little communication occurs with central administration or among subsidiaries. One disadvantage is that local operations may have inefficiencies because of duplication of activities. Another disadvantage is loss of goal congruence between local entities and the firm as a whole. Advantages are more capable and motivated local managers, better results in local markets, local development of new product ideas, and stronger support by host governments. Accordingly, the polycentric attitude adapts to each local environment.