IIA IIA Certifications IIA-CIA-PART4 Questions & Answers

• Question 321:

  Of the following entities, a matrix organization would be most appropriate for:

  A. A company operating a set of geographically dispersed telephone call centers that provide technical support.

  B. A company which starts several complex, multidisciplinary engineering and construction projects each year.

  C. A retail company, which sells to customers through multiple stores, located in shopping malls, as well as through a website and mailed catalogs.

  D. A company that provides temporary staffing help to a wide variety of commercial and governmental agencies.

  Correct Answer: B

  A matrix organization consists of a project team of people from various functional areas within the organization. These specialists report simultaneously to the project manager and themanagers of their functional departments. At the end of the project, the team is disbanded.Accordingly, a matrix organization that assigns specialists as needed to various projects is appropriate for such a company.

• Question 322:

  Which particular type of organization structure will likely have unity-of-command problems unless there is frequent and comprehensive communication between the various functional and project managers?

  A. Line and staff.

  B. Strategic business unit.

  C. Centralized.

  D. Matrix.

  Correct Answer: D

  A matrix structure allows authority to flow both vertically and horizontally. A manager is appointed for each project and draws on personnel who are organized by function and report to a manager for each function. This violates the principle of unity of command, which states that each subordinate should have only one superior.

• Question 323:

  Dual reporting is most characteristic of which method of departmentation?

  A. Territorial.

  B. Functional.

  C. Product.

  D. Matrix.

  Correct Answer: D

  A matrix organization consists of a project team of people from various functional areas within the organization. These specialists report simultaneously to the project manager and the managers of their functional departments. At the end of the project, the team is disbanded.

• Question 324:

  The form of departmentation that most readily lends itself to use of profit centers is:

  A. Project.

  B. Functional.

  C. Product.

  D. Matrix.

  Correct Answer: C

  Departmentation by product is growing in importance for multiline, large-scale enterprises. It is an outgrowth of functional departmentation and permits extensive authority for a division executive over a given product or product line. Its advantages include better use of specialized resources and skills, ease of coordination of the activities for a given product, and simpler assignment of profit responsibility. It is compatible with a decentralization strategy and provides, via product profit centers, a basis for allocating capital more efficiently.

• Question 325:

  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 326:

  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 327:

  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 328:

  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 329:

  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 330:

  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.