SPHRi, Module 1 Business Leadership Bank No.2

Module 1: Business Leadership
1.
HR managers monitor their budgets month to month in various ways. Which of the
tasks listed below is NOT a viable task for monitoring an HR budget?
a) Proactively identify unusual situations that influence the current budget and may change next
year's budget.
b) Investigate variances for possible miscommunication, currency fluctuations and judgment errors.
c) Gain insight and perspective about variances and new situations with managers and executives.
d) Eliminate budget items that cannot be substantiated with monetary values.
7.
When an HR professional is evaluating the impact of attendance on productivity, he
or she would most likely be using the statistic called a
a) box-plot.
b) standardized score.
c) correlation coefficient.
d) T-table lookup.
10.
Which is a disadvantage of a matrix structure?
a) Difficult to respond to special customer needs
b) Difficult to coordinate across divisions
c) Difficult to explain to employees
d) Difficult to introduce new product lines
11.
What is the main disadvantage in using an ethnocentric approach for strategic
planning efforts?
a) It does not treat its foreign sites with autonomy.
b) It biases any international input.
c) There is too much opportunity for individual input.
d) The strategic planning process gets too fragmented.
An ethnocentric approach does not treat its foreign sites and subsidiaries with
autonomy. All strategic planning comes from the organization's headquarters.
12.
Which of the following goals is in the line of sight for computer programmers at a
software development firm?
a) Improve communication with customers.
b) Strengthen brand image in the marketplace.
c) Reduce defects in CD-ROM production.
d) Reduce time to market for software products.
Explanation
Studies conducted on the outcome of mergers and acquisitions show that 30% of them
fail within three years, with the majority of those due to disparities in organizational
cultures.
modi_sa@ymail.com SPHRI, module 1 question bank No.2

17.
Which of the following is typically part of an environmental scan?
a) Analysis of unemployment rates
b) Review of internal salary survey data
c) Analysis of the organization's labor contract
d) Analysis of minority employees within the organization
Correct Answer
[a]
Explanation
Environmental scans focus on external changes and attempt to identify and interpret
strategic issues that affect the company.
18.
A field HR unit that reports to the general manager of the unit and has "dotted line"
accountability to corporate HR is referred to as what type of structure?
a) Departmental
b) Functional
c) Matrix
d) Divisional
In the divisional structure, divisions are separated on the basis of product, market, or
region. All the resources necessary to manufacture, sell, or supply the product are put
under the control of the division. There is usually a "dotted line" accountability to
corporate HR, but the field unit actually reports to the general manager of the division.
The matrix relationship creates a dual reporting structure, and
the functional structure has a single reporting relationship directly with a manager in a
like functional area.
19.
A company that must design a new team-building course is unable to use internal
instructional designers due to prior project commitments. The company considers
using a third-party contractor because it can:
a) manage a difficult function.
b) improve competitive advantage.
c) increase employee morale.
d) supplement existing resources.
Correct Answer
[d]
Explanation
Third-party contractors would be best used to supplement existing staff without
assuming tasks that prevent the organization from developing new skills or strategic
capabilities. In this case, the organization already possesses instructional design
capability and has selected a fairly generic course to contract out.
22.

Which of the following functions of operations management is the manager of an
assembly operation performing when the number of widgets produced is compared
quarterly to the department's production goal?
a) Standards
b) Control
c) Inventory
d) Capacity
Correct Answer
[b]
Explanation
In operations, the control function serves as an evaluation method. This evaluation
involves observing what really happened (e.g., analyzing the number of widgets
produced in a quarter) and comparing that outcome to the predefined standard (e.g.,
the department's production goal).
27.
Which of the following statements is true about language and culture?
a) The two affect communication, but they have little impact on each other.
b) Language has a stronger impact on communication than culture.
c) The same words in a language can have different meanings across cultures speaking that
language.
d) The impact of culture on communication is rapidly declining.
Correct Answer
[c]
Explanation
The same words in a language can have different meanings across cultures. For
example, in England "holiday" refers to vacation time, while in the United States
"holiday" refers to a day off from work to commemorate a celebration.
28.
Which type of organizational structure would be MOST effective for reinforcing local
authority and accountability?
a) Matrix
b) Functional
c) Divisional
d) Line and staff
Correct Answer
[c]
Explanation
The divisional structure is separated on the basis of product, market, or region. This
approach is popular in larger organizations that need to reinforce local authority and
accountability.

30.
The process of creating an ethical environment MUST begin with:
a) the community.
b) the organization's employees.
c) the organization's customers or constituents.
d) the organization's leaders.
Correct Answer
[d]
Explanation
The process of creating an ethical environment must begin with the organization's
leaders. The process must also receive continuous reinforcement from leadership at
all levels.
33.
The process by which an organization articulates its development requirements in
order to accomplish its goals and objectives is called a/an
a) SWOT analysis
b) needs analysis.
c) impact assessment.
d) ROI analysis.
Correct Answer
[b]
Explanation
A needs analysis (also called a needs assessment) is the first step in the ADDIE
process model.
34.
Which of the following quality tools shows how each item contributes to the total
effect and allows users to focus on the most important items?
a) Run chart
b) Control chart
c) Histogram
d) Pareto chart
Correct Answer
[d]
Explanation
The Pareto chart allows users to focus on the problems that offer the greatest potential
for improvement. For example, you might plot the types of errors commonly made on
shipping orders or the 20% of employees who generate 80% of all employee
absenteeism. From your chart, you can determine where to concentrate your
corrective actions.

36.
An example of implicit culture is:‫ﺿﻣﻧﻲ‬
a) language.
b) views toward power.
c) pace of life.
d) food.
Correct Answer
[b]
Explanation
Implicit culture deals with attitudes and beliefs, not tangible things like language, dress
and food. A view toward power is an example of implicit culture.
38.
The PRIMARY purpose of the balanced scorecard is to
a) identify underperforming employees.
b) measure goals from the perspective of key stakeholders.
c) separate strategies from the mission of the organization.
d) focus on the financial results of the organization.
Correct Answer
[b]
Explanation
The balanced scorecard was designed to provide a concise picture of an
organization's performance from the perspective of various stakeholders. The key
areas assessed in a balanced scorecard are finance, customers, internal business
processes, and learning and growth.
40.
Which of the following communication methods is more likely to be favored by high-
context cultures?
a) Written
b) E-mail
c) Face-to-face
d) Multimedia presentations
Correct Answer
[c]
Explanation
High-context cultures derive value from nonverbal cues.

47.
Culture assimilation in mergers and acquisitions is that:
a) a new company forms, retaining the best aspects of the original companies.
b) the target company completely adopts the management practices of the acquiring company.
c) each company continues to operate as before the merger.
d) posing the acquiring organization's culture and business practices on the acquired
organization.
Correct Answer
[b]
Explanation
Assimilation occurs when employees at the acquired company willingly embrace the
cultural values of the acquiring organization. Answer a is integration that is to combine
the two or more cultures into a new composite culture that preserves the best features
of the previous cultures. Answer c is a separation strategy that occurs when the
merging companies agree to remain distinct entities with minimal exchange of culture
or organizational practices. Answer d is deculturation strategy by imposing the
acquiring organization's culture and business practices on the acquired organization.
Deculturation may be necessary when the acquired firm’s culture doesn’t work, even
when employees in the acquired company aren’t convinced of it.
48.
When a broad representation of employees is heavily involved in the strategic
planning process, which of the following are being developed?
a) Functional and unit strategies
b) Corporate policies
c) Evaluation strategies
d) Code of ethics
Correct Answer
[a]
Explanation
As many employees as possible should be involved in the formulation of unit and
functional strategies. These strategies are the basis for the action plans the employees
will carry out later in the plan. Employee buy-in to the plan will be increased when
employees are involved in strategy development. Note that top managers and
executives are primarily involved in formulating the corporate strategy.
66.
A company intends to capture another 20% of market share by opening ten more
stores within three years in key locations. This type of a company position is an
example of
a) an external opportunity.
b) an organizational vision.
c) a long-term objective.
d) a mission statement.
Correct Answer
[c]

Explanation
A long-term objective outlines specific results that an organization seeks to achieve in
pursuing its basic mission. This type of objective generally is achieved within a three-
to five-year time frame.
69.
What is difference between offshoring and outsourcing?
a) Offshoring occurs when a firm moves a division across its borders; outsourcing occurs when a
company relocates a division within its borders.
b) Offshoring does not involve a company's core competencies; outsourcing allows for movement of
core competencies to a vendor.
c) Offshoring relocates a service or process to a lower-cost foreign location; outsourcing uses a
vendor to supply a service or process.
d) There is no difference; both allow companies to realize cost savings.
Correct Answer
[c]
Explanation
In offshoring, a company moves a service or process to a lower-cost location. For
example, a U.S. computer company may move its help desk to India. In outsourcing,
a company contracts with a vendor to provide a product or service. The company may
outsource to a domestic or international vendor. For example, a U.S. company may
outsource the customer service function to a small town in another state.
70.
Each of the HR competency models examined included strategic and operational
components. What item below is an example of an operational competency?
a) Delivery of HR services and practices
b) Business knowledge and acumen
c) Change management practices
d) Effective communication
Correct Answer
[a]
Explanation
Delivery of HR services and practices is an example of an operational competency.
74.
Which of the following is NOT a purpose of strategy statements?
a) They make it easier to find talented employees.
b) They explain how the organization will achieve its goals.
c) They align functional goals with the strategic goals.
d) They provide guidance in making operational decisions.

Correct Answer
[a]
Explanation
Strategy statements are about providing clear guidance so no functional unit is working
at cross purposes and all unit goals are aligned with the organization's strategic goals.
76.
In which of the following cultures is a detailed contract, as opposed to a verbal
agreement or a handshake, more likely to be a necessity?
a) Particularist
b) Outer-directed
c) Ascriptive
d) Universalist
Correct Answer
[d]
Explanation
Universalism focuses on rules and the existence of one right way, while particularism
embraces many right ways, relationships and trust. For example, in a universalist
culture, a written, detailed agreement or contract is likely to be a necessity. On the
other hand, in a particularist culture, a strong handshake agreement may be sufficient,
and requiring a written agreement may be perceived as an insult.
87.
Which of the following is most likely to reflect the views of employees in an
individualist culture?
a) Who you know is more important for determining financial success than what you know.
b) Those who try hard should not be penalized for failing to meet goals because they have no
ultimate control over the outcomes.
c) Anyone can be financially successful if they try hard and demonstrate accomplishments.
d) Financial rewards are more likely to be sought for the team than for the individual.
Correct Answer
[c]
Explanation
Individualism primarily values personal freedom, human rights and competitiveness.
This may be contrasted with collectivism, which values cooperation, harmonious
relationships and social responsibility. For example, in an individualist culture,
compensation for having the highest sales in the group may make work fun and
exciting. However, in a collectivist culture, praise and rewards are more likely to be
sought for the team than for the individual.

88.
In general, outsourcing should NOT be used for:
a) many HR functions.
b) strategic capabilities.
c) data processing.
d) global sites.
Correct Answer
[b]
Explanation
It is best to keep strategic capabilities within the confines of the company. If
outsourcers get involved with strategic capabilities, they may become competitors.
90.
Of the management functions, which of the following illustrates the control step?
a) Developing a system to track the number of people leaving the organization
b) Comparing the ROI for a training initiative to the plan
c) Forecasting the number of employees needed for a department
d) Assigning resources among three departments developing a new work procedure
Correct Answer
[b]
Explanation
The essential elements of the control process are (1) the establishment of standards,
(2) measurement, (3) comparing performance with the standards, and (4) taking
corrective actions. The action that best illustrates the control step is when you compare
the ROI for a training initiative to the planned ROI.
91.
When developing a new staffing strategy based on identified organizational needs,
an HR director is performing which management function?
a) Organizing
b) Coordinating
c) Directing
d) Planning
Correct Answer
[a]
Explanation
The organizing function of management involves designing structures that assist in
goal accomplishment. The design effectively assigns resources to the organizational
tasks needed. The organizing function follows the planning function, which focuses on
forecasting and goal setting and has already been completed by the HR director in this
scenario.

92.
Resource planning and allocations are made during which stage of the strategic
planning process?
a) Formulation
b) Development
c) Implementation
d) Budgeting
Correct Answer
[c]
Explanation
Resource planning and allocations are made after the strategy has been developed in
the implementation stage. The true test of a strategy is if resources and budget are
assigned to strategic objectives.
100.
Which of the following business activity is likely to be higher in the value chain?
a) Research and development
b) Service
c) Operations
d) Marketing and sales
Correct Answer
[b]
Explanation
Service is the last primary activity completed before the product reaches the customer.
103.
Which of the following activities is HR transactional? ‫ادﻣن‬
a) Collaborating with stakeholders ‫اﺳﺘﺮاﺗﯿﺠﻲ‬
b) Communicating with employees ‫ﻋﻤﻠﯿﺎت‬
c) Tracking performance management‫ﻣﮭﻤﮫ ادارﯾﺔ‬
d) Managing performance ‫ﻋﻤﻠﯿﺎت‬
105.
Is it really necessary to send out an RFP for outsourcing services?
a) No, it is especially unnecessary in diffuse cultures.
b) No, these companies know what they are doing.
c) Yes, it helps ensure that the best, most cost-effective services are provided.
d) Yes, it is standard international business procedure.
Correct Answer
[c]
Explanation
Request for proposal (RFP) refers to a request in which a company announces to
vendors and companies that funding is available for a particular project, service or
program and that they can submit a bid. The RFP helps ensure that specific
objectives are established. It also can be an important step in involving internal
employees in the selection and thereby build commitment for the new partner.
106.
A statement that describes what an organization does that is different from others is
a:
a) value statement
b) corporate goal
c) mission statement
d) strategic plan
Correct Answer
[c]
Explanation
A mission statement is a declaration of the purpose for your business, which
describes who the organization is, what it does, where it is going, and how it is
different from others.
113.
Decentralization of staff functions would be recommended for an organization that
requires
a) extensive collaboration among operating units.
b) contractual negotiations with external agents.
c) local adaptability and decision making.
d) knowledgeable customer service and sales representatives.
Correct Answer
[c]
Explanation
Decentralization is the degree to which decision-making authority is given to lower
levels in an organization's hierarchy. This usually leads to the creation of a lean, flat
structure. The decentralization of staff functions is recommended when local
adaptability and decision making is needed, often due to conflicting strategies and
complexities.
114.
A company is engaged in an environmental scan as part of corporate strategy
development. Which of the following is an economic factor that should be included in
the environmental scan?
a) Unemployment trends
b) Population shifts
c) Consumer price index data
d) Gross product analysis

Correct Answer
[c]
Explanation
Consumer price index data is an example of an important economic factor that
should be included in an environmental scan.
115.
An American company and a China company purchase shares in a firm. The
companies share profits, control and liability according to the amount each has
invested. This is an example of:
a) turnkey operation.
b) licensing.
c) equity partnership.
d) franchising.
Correct Answer
[c]
Explanation
An equity partnership occurs when partners buy shares in an operation. Issues such
as leadership and division of profits are defined by a partnership agreement.
120.
Senior management has asked the HR Director to select a consultant to assist with
strategic planning for the coming fiscal year. What action can be taken to ensure that
the consultant's work will be complete and accurate?
a) Schedule a meeting with senior management to determine the organization's needs and define its
goals.
b) Write the first draft of goals and objectives for the organization.
c) Develop an estimate of the consultant's cost and earmark this amount in the HR department's
budget.
d) Send a request for proposal to prospective contractors to determine the potential costs involved.
Correct Answer
[a]
Explanation
Gathering information from the key stakeholders to analyze needs and define goals
is key, before starting the budgeting or the request for proposal, for establishing a
third-party contract.
124.
All of the following are potential benefits of corporate social responsibility programs
EXCEPT:
a) creating a pool of educated employees.
b) enabling the company to produce a wider variety of products.
c) reducing employee turnover.
d) lowering the cost of producing products.

Correct Answer
[b]
Explanation
Corporate social responsibility programs result in a variety of benefits for both the
organization and society including the ability to produce higher quality products at a
lower cost.
129.
The MOST effective corporate citizenship program is one that:
a) requires involvement of less senior employees.
b) has no effect on the organization's net earnings.
c) creates visibility for the organization.
d) aligns long-term investments with the organization's strategic goals.
Correct Answer
[d]
Explanation
The most effective corporate citizenship program is one that aligns long-term
investments with the organization's strategic goals.
Module 1: Business Leadership
4.
Which of the following is NOT part of HR's role in developing an ethical workplace?
a) Work with external auditors to ensure accurate reporting and compliance.
b) Maintain a high level of trust with stakeholders.
c) Protect the interests of stakeholders.
d) Avoid activities that create actual, apparent or potential conflicts of interest.
Correct Answer
[a]
Explanation
As HR professionals, we must maintain a high level of trust with our stakeholders.
We must protect the interests of our stakeholders as well as our professional
integrity and should not engage in activities that create actual, apparent or potential
conflicts of interest. HR professionals must also avoid activities that are in conflict
with--or may appear to be in conflict with--one's responsibilities and duties as a
member of the human resource profession and/or as an employee of any
organization.
8.
In low-context cultures, the focus of communication is on:
a) relationships.
b) nonverbal cues.
c) cultural filters.
d) words.
Correct Answer
[d]
Explanation
Words provide the majority of the meaning for communication in low-context
cultures.
High context refers to nonverbal cues and the relationship between speaker and
listener as being the most important part of the communication message.
13.
Why is a global mindset important?
a) It is a technique for managing staff resources.
b) If it exists for employees, global strategy objectives are more likely to be achieved.
c) It is a method to move from the incubator to the guided missile corporate culture.
d) It is part of explicit culture and is, therefore, very difficult to change.
Correct Answer
[b]
Explanation
With a global mindset, global strategy objectives are much more likely to be
achieved. Without this mindset, the enterprise will be misaligned.
17.
Which of the following enables employees working on a virtual team to contribute to
a discussion topic and share ideas?
a) Podcasts
b) Public web site
c) Corporate blogs
d) Extranet
Correct Answer
[c]
Explanation
Blogs are web sites used to communicate news and share comments. Employees
can post brief contributions to a discussion topic, and the blogs can be used to share
information and ideas among team members.
24.
Which of the following organizational development roles is NOT assumed by the HR
professional?
a) Implement the change.
b) Serve as change agents.
c) Provide organizational glue.
d) Conduct evaluations.
Correct Answer
[a]
Explanation
HR professionals prepare employees and managers to accept a change, but they do
not actually implement most changes.
32.
An organization that has designed and published its values, provided training on the
values, and outlined an individual's responsibilities in upholding the values has
developed a
a) strategic plan.
b) corporate philanthropy plan.
c) code of ethics.
d) mission and vision statement.
Correct Answer
[c]
Explanation
An organization that has designed and published its values, provided training on the
values, and outlined an individual's responsibilities in upholding the values has
developed a code of ethics.
37.
An organization in which managers are developing action plans and assigning staff
members to projects is in which stage of strategic planning?
a) Evaluation
b) Manipulation
c) Implementation
d) Formulation
Correct Answer
[c]
Explanation
During the strategy implementation phase of strategic planning, the plan is put into
action. Managers develop action plans and allocate resources toward achieving
organizational objectives.

40.
The PRIMARY purpose of strategic planning is to
a) focus on financial forecasting.
b) allocate resources.
c) create a detailed project plan.
d) integrate organizational units and employees with a focus on business success.
Correct Answer
[d]
Explanation
Strategic planning integrates the goals and activities of major business units of an
organization (finance/accounting, marketing/sales, operations, information
technology, and human resources) and employees in order to achieve organizational
success. Strategic planning is a process, not just a written project plan, that helps
management focus on how to succeed.
44.
A statement that describes what an organization does that is different from others is
a:
a) value statement
b) corporate goal
c) mission statement
d) strategic plan
Correct Answer
[c]
Explanation
A mission statement is a declaration of the purpose for your business, which
describes who the organization is, what it does, where it is going, and how it is
different from others.
51.
What is the main difference between participants in a nonequivalent group design
experiment and those in a classic experimental design?
a) Participants in a classic design are assigned randomly; those in the nonequivalent group design
are not.
b) Participants in a classic design are observed; those in the nonequivalent group design are not.
c) Participants in a classic design need less direction than those in the nonequivalent group design.
d) Participants in a classic design are more experienced than those in the nonequivalent group
design.
Correct Answer
[a]
Explanation
The main difference between the two groups is random assignment. Participants in a
classic design are assigned randomly. Those in nonequivalent group designs are
not.
53.
Decentralization works best in organizations where
a) a uniform policy is important.
b) a quick response to problems is desired.
c) contracts are negotiated with outside agents.
d) employees do not want additional responsibility.
Correct Answer
[b]
Explanation
Decentralization is the degree to which decision-making authority is given to lower
levels in an organization's hierarchy. Pushing a decision down to its lowest authority
level in an organization produces a quick response to problems.
56.
Which of the following is NOT the purpose of trend analysis for an HR professional?
a) Aligning organization's strategies with upcoming world economic development.
b) Predicting the impact on organization's operation due to significant external changes.
c) Understanding how organization's policies can adapt to certain country's cultural environment.
d) Creating an organization's research and development strategy considering the external economy,
culture and society development.
Correct Answer
[c]
Explanation
As you conduct trend analysis, you seek a better understanding of how circumstance
through the world may influence your organization. How HR related policies can adapt
to specific country's cultural environment doesn't fall into this scope.
58.
Which of the following is typically part of an environmental scan?
a) Analysis of unemployment rates
b) Review of internal salary survey data
c) Analysis of the organization's labor contract
d) Analysis of minority employees within the organization
Correct Answer
[a]
Explanation

Environmental scans focus on external changes and attempt to identify and interpret
strategic issues that affect the company.
61.
"Host-country nationals (HCNs) usually staff and manage the local subsidiary"
describes which staffing orientation?
a) Ethnocentric ( Head quarter )
b) Geocentric
c) Regiocentric
d) Polycentric
Correct Answer
[d]
Explanation
A polycentric staffing orientation occurs when host-country nationals (HCNs) staff and
manage the local subsidiary. HCNs do not usually get promoted to headquarters
positions.
65.
A temporary grouping of personnel and resources for the accomplishment of a
specific objective is a
a) functional team.
b) task force.
c) committee.
d) self-directed work team.
Correct Answer
[b]
Explanation
A task force is the temporary grouping of personnel and resources for the
accomplishment of a specific objective. In that respect, task forces are similar to
project teams. However, where project teams have more defined boundaries, task
forces have a mission to tackle more long-term strategic issues. Task force members
still have their normal day-to-day job responsibilities; their task force responsibilities
are above and beyond their regular jobs.
67.
The design of a new corporate citizenship philosophy represents which of the
following HR roles?
a) Tactical
b) Administrative
c) Strategic
d) Operational
Correct Answer
[c]
Explanation
The strategic role of HR is characterized by a global, long-term, and forward-thinking
focus. Development of an organizational philosophy is a strategic activity that involves
building partnerships with senior management and community leaders and
contributing to the company's ability to meet its corporate objectives.
69.
Examples of the incubator corporate culture are most likely to be found in:
a) the United Kingdom.
b) France.
c) Germany.
d) Sweden.
Correct Answer
[d]
Explanation
The incubator corporate culture is most likely to be found in Sweden and in areas such
as the Silicon Valley in the United States. It values innovation above all and de-
emphasizes structure and hierarchy.
70.
What is the best strategy to minimize the negative impact of losing a key employee?
a) Organizational branding
b) Total compensation
c) Management training
d) Succession planning
Correct Answer
[d]
Explanation
Succession planning is a talent management strategy to help identify and foster the
development of high-potential employees. The plans are created to anticipate
managerial staffing requirements and to develop employees to satisfy those needs.
Having identified succession will minimize the negative impact of a key manager
departing the organization.
86.
What is the difference between a strategic alliance and a joint venture?
a) A strategic alliance is an informal agreement; a joint venture is a contractual agreement.
b) A strategic alliance does not involve equity; in a joint venture both partners contribute equity.
c) A strategic alliance takes longer to create; joint ventures generally happen quickly.
d) Strategic alliances create a new economic entity; joint ventures create synergy based on each
partner's strengths.
Correct Answer
[b]

Explanation
A strategic alliance is a formal agreement between two or more companies to
collaborate and contribute resources, but not equity.
Strategic alliances create synergy based on the partner's strengths and technical
capabilities. A joint venture is an agreement between two or more parties to create a
new economic entity. Both partners contribute equity and share in revenues, expenses
and control.
87.
The role of the HR professional has evolved from
a) administrative to operational.
b) strategic to operational.
c) operational to administrative.
d) operational to strategic.
Correct Answer
[d]
Explanation
HR professionals today balance three major roles: strategic, operational, and
administrative. Increasingly, administrative roles are subordinated in order to focus on
those that directly contribute to the bottom line and are strategic in nature.
93.
The process by which an organization creates the product or service it offers to the
customer is known as (the):
a) strategic planning process.
b) M&A process.
c) due diligence.
d) value chain.
Your Answer
[ ] Incorrect
Correct Answer
[d]
Explanation
The process by which an organization creates the product or service it offers to the
customer is known as the value chain. It is described as a chain because the value
chain represents the sequential and simultaneous contributions of a number of internal
and external participants and each participant adds an element of value that enhances
the organization's value.
94.
Which of the following is NOT an advantage of a merger or an acquisition?
a) Forms a workforce sharing a common culture and value
b) Grows market share relatively quickly
c) Reduces operating costs
d) Consolidates an industry by eliminating competitors
Correct Answer
[a]
Explanation
Cultural mismatches, both geographical and organizational, are an issue in mergers
and acquisitions. The majority of failures result from these mismatches.
96.
What budgeting method is based on how much it costs to perform different
enterprise activities and funding may be allocated based on the strategic significance
of the activities?
a) Formula
b) Activity-based
c) Zero-based
d) Incremental
Correct Answer
[b]
Explanation
Activity-based budgeting recognizes the interrelationships among various activities
required to create value in an organization. Budgeting is based on how much it costs
to perform different enterprise activities. Funding may be allocated based on the
strategic significance of the activities.
99.
In a merger, what is the FIRST thing an HR manager should do?
a) Conduct an organizational assessment to identify redundant positions in the new organization.
b) Meet with the new CEO to clearly define the vision, mission, values, and culture that the
organization wants to adopt going forward.
c) Offer change management education and tools to all leaders and their team members.
d) Develop a detailed communication plan to become the operating framework of the organization
for the next 12 to 18 months.
Correct Answer
[b]
Explanation
From an HR perspective, the first step is to define the vision, mission, values, and
culture that the organization wants to adopt since the cultures of two organizations are
often very different. Identifying redundant positions, offering change management
education, and developing a detailed communications plan all follow the first step of
defining the vision, mission, values, and culture of the new organization.

105.
Which of the following is a key responsibility of the operations function within an
organization?
a) Ensuring that the product is priced profitably
b) Communicating the benefits of the product to customers
c) Determining the ability of the company to meet product demand
d) Deciding which features and benefits will appeal to customers
Correct Answer
[c]
Explanation
Operations departments are concerned with their ability to produce top-quality product
that meets the demands of the marketplace. The operations department sets detailed
time estimates that allow them to determine their capacity (ability to produce product).
Based on forecasts, they develop a schedule that allows them to operate at capacity.
106.
Which of the following takes both an internal and external snapshot of the
organization?
a) SWOT analysis
b) Human resources inventory
c) Human resource audit
d) Environmental scan
Correct Answer
[a]
Explanation
The SWOT analysis looks at the organization's internal strengths and weaknesses
and external opportunities and threats. The environmental scan looks only at external
conditions, while the human resources inventory and the audit are internally focused.
107.
Which of the following is NOT one of the management functions shared by all
managers?
a) Directing
b) Personalizing
c) Organizing
d) Controlling
Correct Answer
[b]
Explanation
According to Henri Fayol, managers share five common functions: planning,
organizing, coordinating, directing, and controlling. Although personalizing
management may be an effective motivation technique, it is not necessary shared by
all managers. Planning involves schemes, programs, or methods worked out
beforehand for the accomplishment of an objective, given assumptions about the
future (ie forecasting, setting goals). Organizing arranges systematically a structure
for harmonious or united action to meet a goal. Coordinating unites all activities that
take place within the organization so that elements are given proper resources and
the means to accomplish goals. Directing involves engaging in activities that ensure
effective operations (ie leadership, motivation of employees). Controlling ensures that
everything is carried out according to plan by continual evaluation of activities during
the plan's implementation.
119.
A company is experiencing problems with back orders despite the fact that it has
moved to larger facilities and doubled its workforce. Which phase of its
organizational evolution is the company experiencing?
a) Introduction
b) Decline
c) Growth
d) Maturity
Correct Answer
[c]
Explanation
The growth phase is characterized by change and expansion in terms of facilities,
marketing, and people. These resources are needed to keep up with the demand for
products or services. This phase is often accompanied by backlogs and scheduling
problems while the organization adjusts to increased demands.
125.
What is the PRIMARY benefit of appointing a chief ethics officer?
a) Other managers and officers do not have to handle ethical issues.
b) Allows for consistent communication of organizational standards of conduct.
c) Eliminates the need for employee training on ethical standards and issues.
d) Replaces the general counsel in legal matters that concern ethical issues.
Correct Answer
[b]
Explanation
Appointing a chief ethics officer allows for consistent communication of
organizational standards of conduct.
129.
HR managers monitor their budgets month to month in various ways. Which of the
tasks listed below is NOT a viable task for monitoring an HR budget?
a) Proactively identify unusual situations that influence the current budget and may change next
year's budget.
b) Investigate variances for possible miscommunication, currency fluctuations and judgment errors.
c) Gain insight and perspective about variances and new situations with managers and executives.
d) Eliminate budget items that cannot be substantiated with monetary values.
Correct Answer
[d]
Explanation
To effectively manage the HR budget, HR leaders must understand individual budget
items, align expenses to the organization's strategic goals, monitor budget variances
carefully and share budget trends with executives.

SPHRi, Module 1 Business Leadership Bank No.2

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Module 1: Business Leadership

modi_sa@ymail.com SPHRI, module 1 question bank No.2

modi_sa@ymail.com SPHRI, module 1 question bank No.2

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modi_sa@ymail.com SPHRI, module 1 question bank No.2

Module 1: Business Leadership

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modi_sa@ymail.com SPHRI, module 1 question bank No.2

modi_sa@ymail.com SPHRI, module 1 question bank No.2

modi_sa@ymail.com SPHRI, module 1 question bank No.2

modi_sa@ymail.com SPHRI, module 1 question bank No.2

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