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Exam Name: Certified Internal Auditor - Part 4, Business Management Skills
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IIA-CIA-Part4 Exam Dumps Total Q&A: 535 Questions and Answers
Last Update: 2014-08-28
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NO.1 Paul Hersey and Ken Blanchard developed a situational leadership model with two
dimensions:task and relationship behaviors. In this model, the delegating leadership style is
appropriate when followers have:
A. Low maturity.
B. Low to moderate maturity.
C. Moderate to high maturity.
D. High maturity.
Answer: D
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Explanation:
The dimensions of the delegating leadership style are low task and low relationship. Consequently,
task- and relationship-related behaviors are low. The leader provides little direction or support
because the maturity of followers is high. They are willing and able to do what is necessary.
NO.2 Which of the following factors is least typical of an industry that faces intense competitive
rivalry?
A. Price-cutting.
B. Large advertising budgets.
C. Frequent introduction of new products.
D. A high threat of substitutes.
Answer: D
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Explanation:
A high threat of substitutes reduces the attractiveness of an industry. It tends to increase the price
elasticity of demand and therefore limits price increases and profit margins. If other factors are
constant, fewer entrants result in less intense competition.
NO.3 Which of the following is least likely to be an example of synergy?
A. A shopping mall with several businesses providing different products and performing different
services.
B. A car dealership providing warranties on automobile parts to maximize customer value.
C. A manufacturing company hiring a new manager with technological experience lacking in the
company.
D. Military Humvees being converted into sports utility vehicles for sale to civilians.
Answer: B
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Explanation:
Synergy occurs when the combination of formerly separate elements has a greater effect than the
sum of their individual effects.
However, a car dealership's provision of warranties reflects anoperational strategy designed to
provide post-purchase services to gain a competitive advantage and maximize customer value. It
does not reflect the complementary sharing of resources, technology, or competencies. In contrast,
synergy arises from selling a line of carsthat share some components or abrand identification.
NO.4 For a multinational firm, which of the following is a disadvantage of an ethnocentric staffing
policy in which all key management positions are filled by parent-company nationals?
A. An ethnocentric staffing policy significantly raises compensation, training, and staffing costs.
B. An ethnocentric staffing policy produces resentment among the firm's employees in host
countries.
C. An ethnocentric staffing policy limits career mobility for parent-country nationals.
D. An ethnocentric staffing policy isolates headquarters from foreign subsidiaries.
Answer: B
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Explanation:
An ethnocentric staffing policy has the advantage that expatriates may understand the objectives,
policies, and procedures of the parent firm better than local employees do.
However, ethnocentrism in hiring has the following disadvantages, among others:
(1) Expatriate managers have difficulty in adapting to a new culture, language, and physical
environment;
(2)training and relocation costs may be high;
(3)host-country governments prefer local control;
(4)the morale and performance of host-country employees will suffer.
NO.5 Some studies show that managers spend 60 to 70% of their time communicating and that
nearly 60% of that time is spent listening. Listening effectiveness is best increased by:
A. Resisting both internal and external distractions.
B. Waiting to review key concepts until the speaker is through talking.
C. Tuning out messages that do not seem to fit the meeting purpose.
D. Factoring in biases to evaluate the information being given.
Answer: A
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Explanation:
Concentrating on what the speaker is saying is critical to effective listening. This result is best
achieved by resisting internal and external distractions. Physical distractions such as noise, a
tendency to be overly aware of the speaker's physical and other differences from the listener,
focusing on interesting details at the expense of major points, or emotional reactions to a statement
with which the listener disagrees should be avoided.
NO.6 The creation of regional free trade zones is a global phenomenon. Trade barriers are lowered
in these areas, and other steps are taken to promote economic cooperation. For example, a
common currency has been adopted by the nations of:
A. NAFTA.
B. Mercosul.
C. APEC.
D. The European Union.
Answer: D
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Explanation:
The European Union (Eli) is a collection of 27 European nations that have lowered trade barriers
among member states, and most of the nations share a common currency and trade policy. The
euro is the common currency of the European Union.
NO.7 Rivalry among existing firms in an industry is more likely to be strong when:
A. The industry is in the rapid growth stage.
B. Investment intensity is low.
C. A few firms are dominant.
D. Capacity must be expanded in large increments.
Answer: D
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Explanation:
The intensity of rivalry and the threat of entry may vary with the extent of capacity expansion
dictated by the need to achieve economics of scale. If it must be made in large increments to
achieve economics of scale, competition will be more intense. The need for large-scale expansion to
achieve production efficiency may result in an excess of industry capacity over demand. However, if
capacity may be expanded in small increments, industry capacity is less likely to be excessive, the
supply-demand balance is less likely to be upset, and price cutting is less likely to be necessary.
NO.8 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.
Answer: A
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Explanation:
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.
