IIA IIA Certifications IIA-CIA-PART4 Questions & Answers

• Question 341:

  Which of the following is true with regard to the contingency approach to solving problems within an organization?

  A. The organization's environment plays the largest role in finding situational determined answers.

  B. The organization may be less adaptive when the environment is more uncertain.

  C. The organization should search fora design format that can be used in all cases.

  D. The contingency approach focuses on a closed systems thinking.

  Correct Answer: A

  The contingency approach arguesfor situationaldetermined answers, the key is finding the relevant factors in the organization's environment.

• Question 342:

  A likely effect of a bureaucratic structure on employee motivation is that:

  A. Employee performance will be mediocre because of inflexible standards and impersonal surroundings.

  B. An employee will pursue organizational goals because of his/her participation in establishing them.

  C. Morale will be high because of each employee's feeling of belonging and ownership.

  D. Job enrichment will be high because of each employee's involvement in developing and adapting his/her job description and required tasks.

  Correct Answer: A

  In a bureaucracy, standards for evaluating job performance do not fluctuate because required tasks never change. The work environment is impersonal, which limits individual growth of employees because no incentive for extraordinary performance is present.

• Question 343:

  Which of the following scenarios illustrates an organization that has become out of balance by focusing too much on efficiency rather than effectiveness?

  A. The job is not completed and resources are wasted.

  B. The job is completed but resources are wasted.

  C. The job is not completed but resources are not wasted.

  D. The job is completed and resources are not wasted.

  Correct Answer: C

  In the narrowest sense, effectiveness is achievement of objectives. It is contrasted with efficiency, which is the ratio of output to input. In the broadest sense, an organization must achieve its objectives efficiently to be considered effective. When the job is not completed but resources are not wasted, the organization is out of balance by focusing too much on efficiency.

• Question 344:

  The alignment of managerial goals with organizational goals usually requires:

  I. Assigning responsibility for activities.

  II. Delegating the authority to perform necessary tasks.

  III. Establishing accountability.

  IV.

  Measuring and evaluating performance.

  A.

  I and IV only.

  B.

  I, II, and III only.

  C.

  II, Ill, and IV only.

  D.

  I, II, Ill, and IV.

  Correct Answer: D

  Authority is the right to direct and exact performance from others, including the right to prescribe the means and methods by which the work will be done. The right to direct should be distinguished from the ability the power) to accomplish tasks. Responsibility is the obligation to perform. In the classical view, this obligation is formally imposed by a superior and is inherent in any job. In the behavioral view, responsibility must and should be delegated; there is a successive dividing and passing down of obligation. The appropriate amount of authority or power must be delegated with the responsibility. However, a higher position cannot escape ultimate responsibility. Accountability is the duty to account for the fulfillment of the responsibility. In practice, accountability is the duty to report performance to one's superior and the physical means for reporting or being able to substantiate performance, i.e., record keeping. Thus, measuring and evaluating performance is related to accountability. Consequently, an organizational structure is effective if it facilitates the contribution of individuals toward the attainment of enterprise objectives.

• Question 345:

  After three years of steadily decreasing profits despite of increased sales and a growing economy, which of the following is the preferred course of action for a chief executive officer to take?

  A. Set a turnaround goal of significantly increasing profits within two months.

  B. Reduce staff by 10 percent in every unit.

  C. Reduce staff in the nonvalue-adding functions by 20 percent.

  D. Encourage innovation at all levels and use an early retirement program to reduce staff size.

  Correct Answer: D

  (Organizational decline loss of effectiveness and efficiency coupled with inflexibility) may lead to downsizing, merger, reorganization, or liquidation. It results from decreased demand, resource limitations, or mismanagement. One characteristic of a declining organization is lack of innovation. Moreover, the most important cause of organizational decline is management complacency. In turn, a characteristic of management complacency is lack of innovation. Consequently, the CEO should encourage innovation at all levels. Also, downsizing has many negative effects. The enlightened view is that employees are not readily disposable commodities, but rather valuable resources who should be terminated only as a last resort. This view seeks alternatives to involuntary termination. One such alternative is a voluntary retirement program that offers accelerated retirement benefits, severance allowances, or other compensation.

• Question 346:

  Which of the following is the best measure of productivity to use to evaluate several departments in a large retail store?

  A. Number of customers served per employee per day.

  B. Revenue per square foot.

  C. Number of units sold per department per day.

  D. Average number of units stocked per month per department.

  Correct Answer: B

  Productivity is the ratio of real output to a unit of input. Increased productivity is the goal of every organization because its effect is to improve the ultimate measures of performance, such as the profits of a business. For a retail store, a critical output of interest is revenue per square foot. The floor space in the store is a limited resource whose productivity should be analyzed.

• Question 347:

  A new manager of a production department has been asked to assess the effectiveness of that department. The organization needs to satisfy both internal and external constituents and takes a broad approach to effectiveness. To complete the assignment successfully, the manager should:

  A. Measure the daily productivity of the department.

  B. Do a survey of employee morale, as it is often a major underlying factor in productivity.

  C. Compare the past year's production against annual goals.

  D. Consider short-, medium-, and long-term effectiveness.

  Correct Answer: D

  Kreitner Management, 9th ed., page 298) states, "Organizational effectiveness can be defined as meeting organizational objectives and prevailing societal expectations in the near future, adapting and developing in the intermediate future, and surviving in the distant future." In the near term about one year), it should be effective in achieving its goals, efficient in its use of resources, and a source of satisfaction to its constituencies owners, employees, customers, and society). In the intermediate term 2 to 4 years), it should adapt to new possibilities and obstacles and develop its abilities and those of its members. In the long term 5+ years), the organization should be able to survive in an uncertain world.

• Question 348:

  Which of the following has been identified as the most important cause of organizational decline?

  A. Centralization.

  B. Management complacency.

  C. Poor employee morale.

  D. Lack of innovation.

  Correct Answer: B

  Management complacency often is characterized by a lack of innovation, faulty perception of markets and competition, failure to observe or appraise the initial indicators of decline, and lack of focus on daily objectives. Therefore, the characteristics listed are the product of poor management.

• Question 349:

  Faced with 3 years of steadily decreasing profits despite increased sales and a growing economy, which of the following is the healthiest course of action for a chief executive officer to take?

  A. Set a turnaround goal of significantly increasing profits within 2 months.

  B. Reduce staff by 10% in every unit.

  C. Reduce staff in the nonvalue-adding functions by 20%.

  D. Encourage innovation at all levels and use an early retirement program to reduce staff size.

  Correct Answer: D

  Organizational decline loss of effectiveness and efficiency coupled with inflexibility) may lead to downsizing, merger, reorganization, or liquidation. It results from decreased demand, resource limitations, or mismanagement. One characteristic of a declining organization is lack of innovation. Moreover, the most important cause of organizational decline is management complacency. In turn, a characteristic of management complacency is lack of innovation. Consequently, the CEO should encourage innovation at all levels. Also, downsizing has many negative effects. The enlightened view is that employees are not readily disposable commodities, but rather valuable resources who should be terminated only as a last resort. This view seeks alternatives to involuntary termination. One such alternative is a voluntary retirement program that offers accelerated retirement benefits, severance allowances, or other compensation.

• Question 350:

  A corporation adheres to an open-systems perspective belief that the organization must adapt to changes in the environment to be successful. Which of the following would be inconsistent with the corporation following an open-systems framework?

  A. The corporation attempts to utilize resources in order to be self-sufficient.

  B. The corporation experiments with different production methods to find the method that is the most efficient and effective.

  C. The corporation emphasizes the overall result of projects instead of the individual inputs.

  D. The corporation requires employees to undergo monthly training seminars.

  Correct Answer: A

  Open systems acknowledge the need to interact with their environment and therefore are not able to be self-sufficient. Self-sufficiency is a quality inherent in closed systems because closed systems try to avoid interaction with the external environment.