Free IIA-CIA-PART4 Exam Braindumps (page: 34)

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Globalization and localization are shaping the competitive structure of industries. The scenario contributing to the most competitive environment is when:

  1. Global forces dominate.
  2. Local forces dominate.
  3. Mix of global and local forces dominate.
  4. Neither global nor local forces dominate.

Answer(s): C

Explanation:

Competitiveness of firms is greatest, and the competitive environment is most intense, when the benefits of global integration and coordination and the benefits of localization (flexibility, proximity, and quick response time) are achieved.



Globalization assists in achieving economies of scale, which is:

  1. Cost benefit
  2. Timing benefit.
  3. Learning benefit.
  4. Arbitrage benefit.

Answer(s): A

Explanation:

Cost benefits are obtained from economies of scale as a firm expands its operations. Average costs of output decline because of standardization of products or processes, and increased bargaining power versus suppliers of raw materials, components, and services. Moreover, economies of scale may arise from centralized production or from marketing, logistical, or purchasing factors.



A manager can use power and authority to accomplish objectives. The relationship between these two important concepts is best explained as follows:

  1. Power is the right to do things, while authority is the ability to do things.
  2. Authority is the right to do things, while power is the ability to do things.
  3. Power and authority are both required to accomplish a task.
  4. Power and authority are simply two words that describe the same concept -- how to get things done in organizations.

Answer(s): B

Explanation:

Authority is the officially sanctioned privilege to direct others. A clear hierarchy of authority enhances coordination and accountability. Power is the ability to marshal organizational resources to obtain results. A manager may have both authority and power, or one without the other.



A company's decisions are made solely by one person, who is the CEO and major shareholder. Which of the following powers is this person least likely to relate to the other individuals to whom the person has delegated some authority?

  1. Coercive power.
  2. Legitimate power.
  3. Referent power.
  4. Reward power.

Answer(s): C

Explanation:

A person who is the head of a company may exert influence through five types of power. Referent power is the capacity for the individual's personality and style to cause others to identify with or like him or her. Thus, it is the one type of power not necessarily held by a CEO and major shareholder. This person has the ability to reward others and apply pressure. (S)he also has the right to expect cooperation.






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