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IIA IIA-CIA-PART4 Exam
Certified Internal Auditor - Part 4, Business Management Skills (Page 9 )

Updated On: 12-Jan-2026
Page 9 of 108
PDF with 535 Questions

Managerial attitudes toward global operations are viewed by researcher HowardPerl mutteras a key to understanding multinational firms. A polycentric attitude is indicated by

  1. An identification with the nationality of the owner.
  2. Evaluation and control standards that are both local and global.
  3. High information flow in multiple directions.
  4. Relatively little decision making by the central administrative authority.

Answer(s): D

Explanation:

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.



Managerial attitudes toward global operations are viewed by researcher HowardPerl mutteras a key to understanding multinational firms. A geocentric attitude is indicated by

  1. An identification with national perspectives even though the firm is genuinely international.
  2. Control and evaluation methods that are locally determined.
  3. Decision making concentrated in the central administrative authority.
  4. Little communication among subsidiaries.

Answer(s): A

Explanation:

A geocentric attitude is truly internationally oriented while absorbing the best that various cultures offer. It is a completely balanced approach with full collaboration between central administrators and subsidiaries, control and evaluation methods that harmonize local and overall firm standards, and frequent communication in all directions (i.e., between central administrators and subsidiaries and among subsidiaries). Moreover, talent, not nationality, determines personnel decisions throughout the firm.



According to research on the international contingency model of leadership, which path- goal leadership style is most likely to be accepted around the world as culturally appropriate?

  1. Directive.
  2. Participative.
  3. Supportive.
  4. Achievement-oriented.

Answer(s): B

Explanation:

A participative style entails consultation with employees and serious attention to their ideas. The participative style, although not always the best, is the most widely accepted internationally. Every country surveyed found it to be culturally acceptable.



Research on the common characteristics of leaders of global firms found that:

  1. Ambition and relentless drive were more significant than honesty and trustworthiness.
  2. The leaders tended to have multidisciplinary problem solving ability.
  3. Being multilingual was unimportant.
  4. Having traveled extensively before entering the working world was relatively uncommon.

Answer(s): B

Explanation:

A common characteristic of successful leaders of global firms is that they have effective problem- solving skills that draw from a multidisciplinary approach. The best candidates have varied backgrounds and can draw on a multitude of life experiences. They also tend to be flexible and adaptable, have good interpersonal skills, and communicate successfully.



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?

  1. An ethnocentric staffing policy significantly raises compensation, training, and staffing costs.
  2. An ethnocentric staffing policy produces resentment among the firm's employees in host countries.
  3. An ethnocentric staffing policy limits career mobility for parent-country nationals.
  4. An ethnocentric staffing policy isolates headquarters from foreign subsidiaries.

Answer(s): B

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.



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