Tall Organisation

F1 Midterm Exam Name:________________ Please circle the best answer for each question below.

1.

A country is experiencing high demand and high inflation. Which of the following is most likely? A. Productivity of the country has increased B. Long-run aggregate supply has increased C. Long-run aggregate supply has not increased

2. The implementation of a budgetary control system in a large organization would be the responsibility of the internal auditor. Is this statement true or false? A. True B. False

3.

Robert has a span of control of two. This means that he has: A. Two main job responsibilities B. Two employees who report directly to him C. Two bosses whom he directly reports to D. Two different departments that he has been attached to

4. An organization that has a large number of managerial layers is called a: A. Flat organisation B. Tall organisation C. Narrow organisation D. Wide organization

5.

Business organization will contain only formal groups. A. True B. False

6.

According to Charles Handy’s four cultural stereotypes, which of the following organisations would adopt a role culture? A. A large traditional corporate

B. An owner / operated enterprise C. A NGO D. A public sector organization

7.

In mendelow’s stakeholder mapping system, stakeholders are cateorised in terms of their: A. B. C. D.

Interest and power Influence and money Influence and power Interest and money

8. Standing committees operate on an on-going basis. They are put together to serve a particular function and meet periodically. A. True B. False

9. Changing consumer tastes represent what type of environmental factor? A. B. C. D.

Political Technological Social Economic

10.

The price of a particular set of goods and services has increased over time. This represents the existence of:

A. B. C. D.

11.

Balance of Payments equilibrium Full employment Deflation Inflation

When an organization reduces its number of managerial layers it is said to be:

A. B. C. D.

Downsizing Delayering Rightsizing Rightlayering

12. Country Ruraltania imports $500 million worth of goods and services and also exports $275 million worth of goods and services. Ruraltania will have:

A. A current account deficit B. A current account surplus

C. A current account equilibrium

13.

To increase sales, Perfect Pizza decides to introduce a “buy one –get one free” scheme. This is on example of which one of the 4 “Ps” of marketing?

A. B. C. D.

14.

Product Price Place Promotion

The accounting and purchasing departments perform very different functions and therefore do not share any relationship.

A. True B. False

15.

Excel plc has made payments of salaries to its office staff, consulting fees to its lawyer and taxes to the government. Recording and classifying these expenses under different categories is the responsibility of it’s:

A. Management accountant B. Internal auditor C. Financial accountant D. Cost accountant

16.

Which of the following is not a function of an internal auditor?

A. Determining whether an organisation is maintaining adequate records B. Ensuring that the assets of an organisation are safeguarded and in good working order

C. Stating that the financial statements of the organisation are true and fair D. Determining whether the operations of the organisation are running effectively and efficiently

17.

Which of the following is most likely to be tall organisation?

A. B. C. D.

18.

A large multinational bank An internet start up organisation A law firm None of the above

The grapevine represents the way gossip is spread across an organisation?

A. True B. False

19.

Michael turner is the billionaire chairman of a group of 17 companies. He owns a majority stake in each of these companies and has a hands-on style of leadership. Which of Handy’s for four cultures is his organization likely to fall under

A. B. C. D.

20.

Zeus organisation Apollo organisation Athena organisation Dionysus organisation External stakeholders have a financial link with the organization.

A. True B. False

21.

Which of the following is true for an ad-hoc committee?

1. 2. 3. 4.

22.

The set of policies and procedures that determine how an organization is directed administrated and controlled is called …… …………………..

A. B. C. D.

23.

Corporate governance Social responsibility statement Corporate responsibility statement Social governance

Which of the following structures is best placed to address the need for co-ordination in very complex situations?

A. B. C. D.

24.

It deals with a particular crisis / situation Once that particular purpose is served it gets dissolved permanently It serves a particular function of the organization on an on-going basis None of the above

Functional Divisional Matrix Geographical

The staff of Lively Ltd share a lot of common interests and often meet socially both inside and outside work. The grapevine is regarded by many staff as the most reliable source of company information and

staff have developed their two approaches to many aspects of their work. This form of organisational arrangement I characteristic of which of the following? A. B. C. D.

25.

Which of the following is a disadvantage of a functional structure

A. B. C. D.

26.

Decentralisation Divorce of ownership and control Wide span of control The informal organisation

Lack of economies of scale Absence of standardisation Specialists feel isolated Poor horizontal communication

Information is data that has been processed in such a way that it has a ………. to the person who receives it, who may then use it to improve the quality of decision-making Which word correctly completes this definition?

A. Meaning B. Usefulness C. Significance

27.

Which of the following four system types found within most management information systems would provide reports on activities such as output levels, sales ledger and credit accounts in arrears:

A. B. C. D.

Database systems Direct control systems Enquiry systems Support systems

28.The ski resort John works at has closed down with the onset of spring. What type of unemployment does this result in for John? A. B. C. D.

Demand deficient Seasonal Frictional Structural

29.Employees and finance providers belong to which two of the following stakeholder groups?

A. B. C. D.

Internal, connected External, internal Connected, outsiders Internal, suppliers

30.The government has announced a large public works program to create a network of interlinking highways. This is an example of: A. Fiscal policy B. Monetary policy C. Neither of the above

31.The ‘agency problem’ refers to which of the following situations? A. Shareholders acting in their own short tem interests rather than the long term interests of the company B. A vocal minority of shareholders expecting the directors to act as their agents and pay substantial dividends C. Companies reliant upon substantial government contracts such that they are effectively agents of the government D. The directors acting in their own interests rather than the shareholders’ interests

32.An audit committee should: A. B. C. D.

Comprise at least three NEDs Include at least one senior member of the internal audit team. Include one member from the external audit firm. Carry out a detailed review of critical elements of the Balance Sheet.

33.The predominant form of business entity is: A. B. C. D.

Quoted companies Sole traders and partnerships Limited liability partnerships Limited liability companies

34.Working capital is calculated as: A. The excess of B. The excess of C. The excess of D. The excess of

current assets over current liabilities bank borrowings over current assets long term liabilities over short term liabilities Fixed Assets over current assets

35.Which of the following pricing strategies is aimed at gaining market share?

A. B. C. D.

Penetration pricing Going rate pricing Price skimming Loss leaders

36.A company with a marketing orientation believes that: A. Products should be sold actively and aggressively B. Meeting customer needs better than competitors is the key to corporate success C. The level of sales, advertising and sales promotion is key to corporate success D. Producing goods and services of optimum quality is the key to corporate success

37.Which of the following pricing strategies is designed to achieve the highest possible profit margin? A. B. C. D.

Opportunistic pricing Product life cycle skimming Predatory pricing Reference pricing

38.A sharp increase in commercial bank lending in a country might lead to which of the following? A. Appreciation B. Inflation

39.Which of the following is not an advantage of having accounting reports presented in a predetermined format? A. Information recorded is easier to read and understand B. Comparisons between different organisations become easier to make C. Information recorded becomes more accurate

40.One factor that might influence a company to flatten its organizational structure could be: A. B. C. D.

Increased complexity of transactions An improved management information system A commitment to increase mentoring and training of junior staff A decision to follow geographic departmentation

41.Which of the following is not an advantage of centralisation A. B. C. D.

Promotes greater consistency and uniformity across the organisation Provides opportunities for cost savings and economies of scale Promotes greater efficiency across the organisation Promotes innovation and innovative thinking amongst employees

42.Changes in the number of unemployed is: A. A leading indicator B. A current indicator C. A lagging indicator

43.The highest level of interest rates is associated with which phase of the business cycle? A. B. C. D.

Recovery Growth Peak Recession

44.What government action would be most effective in reducing inflation? A. B. C. D.

Increasing civil servant wages Increasing exports of goods Requiring market vendors to lower selling prices Increasing required commercial bank reserves

45.Human resource management plays which role in Mintzberg’s basic organization structure? A. B. C. D.

Technostructure Strategic apex Support staff Operating core

46.Public limited companies differ from limited companies in that: A. B. C. D.

Public limited companies have greater liability to the general public Limited companies can only be owned by individuals Public limited companies may raise funds through the stock market Limited companies are limited by capital invested 47.Which of the following might be an advantage of a Shamrock organization? A. B. C. D.

Flexibility in scaling operations up or down Coordination in managing functions that cover more than one department Increased control over production Focus on the needs of a niche market

48.A system that pools data from internal and external sources and makes information available to senior managers in an easy to use form is known as a: A. B. C. D.

Transaction Processing System Decision Support System Management Information System Executive Support System

49.Company culture can be used to achieve: i. ii. iii. iv.

Improved internal control Improved customer service Lower staff turnover Economies of scale

A. ii, iii B. ii, iv C. i, ii, iii D. I, ii, iii, iv

50.The five fundamental principles of the ACCA code of ethics are: i. ii. iii. iv. v. vi. vii. viii. A. i, ii, iii, iv, viii B. i, iii, iv, vi, viii C. i, ii, iii, vi, viii D. i, iii, iv, v, vi

Integrity Responsibility Objectivity Professional competence and due care Courtesy Confidentiality Skepticism Professional behavior