IIA-CIA-PART4 Online Practice Questions and Answers

Correct Answer: B

Firms that operate globally must choose a marketing program after considering the need for adaptation to local circumstances. The possibilities lie on a continuum from a purely standardized marketing mix to a purely adapted marketing mix. The former chooses to standardize products, promotion, and distribution. The latter adapts the elements of the mix to each local market. Worldwide standardization of all elements should be the lowest cost marketing strategy. However, even well established global brands ordinarily undergo some adaptation to local markets.

Correct Answer: A

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.

Correct Answer: B

Groups in the acceptance stage of group development tend to be effective and efficient. This stage is characterized by personal and mutual understanding, tolerance of individual differences, constructive conflict about substantive matters, realistic expectations about group performance, and acceptance of the authority structure. The resulting trust engenders cohesiveness and a free exchange of information between group members.

Correct Answer: A

Cost synergy results in cost reduction. It manifests itself in many ways, for example, in recycling of by- products or in the design, production, marketing, and sales of a line of products by the same enterprise.

Correct Answer: D

Facial, gestural, and postural body language, and other forms of nonverbal communication, may have different meanings in different cultures. Furthermore, because of the differences in language even within the same country, special care must be taken not to make mistakes or offend others in a foreign land. It is nearly impossible for someone with only a few semestersof a foreign language to understand the subtleties of nonnative communication. Attitudes, such as stereotyping, also may cause misunderstandings. In addition, time is a barrier to intercultural communication. The perception of time as it relates to business and social life varies with the culture. Polychronic time is based on a perception that time is nonlinear, flexible, and multidimensional. This perception is typical of Mediterranean,Latin American, and Arabic cultures. Monochronic time is based on a perception that time is the same for everyone and is measurable in standard units. This perception is common in Northern Europe and the U.S. These western cultures believe in punctuality and that time is money and should not be wasted. However, communication difficulties due to the long distances separating senders and receivers have been minimized by electronic communication, such as email, fax, and teleconferencing.

Correct Answer: A

Job enlargement is a quantitative horizontal) extension of the job. It does not necessarily involve any greater worker control, responsibility, or challenge. An example is job rotation through assignment to duties requiring similar skills.

Correct Answer: B

If badly designed job descriptions occur, then the best resolution is reorganization.

Correct Answer: C

In added value negotiating, the two sides make multiple deals to "add value" to the process. Clarifying interests, identifying options, designing alternative deal packages, selecting a deal, and perfecting a deal are all steps in added-value negotiating.

Correct Answer: A

The decision to integrate should consider not only direct economic issues (needed investment and effects on costs), but also broader strategic issues and the potential difficulties of administering a vertically integrated firm. Thus, the extent of integration depends on the balance of economic and administrative benefits and costs. This balance varies with the industry, the firm's position, and whether the firm engages in full integration, tapered (partial) integration, or quasi- integration (use of alliances, not ownership, to achieve the effects of integration).

Correct Answer: C

Acquisitions are more likely to earn above-average profits when the expected present value to the seller of continuing operations is low, e.g., because the seller needs funds, has capital limits, or has management weaknesses. Above-average profits also are more likely when the market for acquisitions is imperfect. For example, (1) the buyer may have better information, (2) there are few bidders, (3) the economy is weak, (4) the seller is weak, or (5) the seller has reasons to sell other than profit maximization. Moreover, the buyer may have a unique ability to operate the seller.