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CAIB 4 EXAM | 105 QUESTIONS
AND ANSWERS WITH COM PLETE
SOLUTIONS
Question 1: What are the two approaches to planning?
Explain each
CORRECT ANSWER:
1) Top Down Planning - Management provides the mission, strategies, and objectives for the brokerage 2) Bottom Up Planning - Management provides the mission and broad strategies. Leaves the objectives, goals, and activities to business units.
Question 2: What are the advantages and disadvantages of
top down planning?
CORRECT ANSWER:
Advantages: Management feels in control and in charge
of decision making.
Disadvantages: Hard to get buy-in from employees
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Question 3: What are the advantages and disadvantages of
bottom up planning?
CORRECT ANSWER:
Advantages: Business units have ownership and buy-in.
Disadvantages: Management feels less in control, there
may be resistance to changes made to the plan by management.
Question 4: Why is Top Down planning not suitable for a
small organization?
CORRECT ANSWER: Stifles innovation, slows
decisions, managers need to know too much.
Question 5: What are the four characteristics of a plan?
CORRECT ANSWER:
1) Simplicity
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2) Practicability 3) Severability 4) Flexibility
Question 6: Explain Simplicity (2 points)
CORRECT ANSWER:
The plan should be explainable in simple terms.The plan should be implemented without extensive training while employees continue their day-to-day operations.
Question 7: Explain Practicability
CORRECT ANSWER: The plan must be realistic
Question 8: Explain Severability (2 points)
CORRECT ANSWER:
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The parts of a plan must be separate and identifiable.Each business unit must see how to apply it to their area
Question 9: Explain Flexibility
CORRECT ANSWER: A good plan must allow for
modification as it is implemented.
Question 10: Explain the difference between a strategic
plan and an action plan
CORRECT ANSWER:
Strategic plans are broad and cover 3-5 years.Action plans give specific activities to support SP. They apply to a particular unit and cover 1-3 years, typically one year.
Question 11: How many components of a strategic plan
are there?