Section B Practice Questions

Which of the following is a characteristic of the informal organisation?

In a large manufacturing firm, employees from different departments meet every Friday for lunch. During these lunches, they often discuss work problems and share solutions that bypass official departmental protocols. What does this represent?

How does the informal organisation typically relate to the formal organisation?

Which of the following is a potential NEGATIVE impact of the informal organisation?

A group of factory workers informally agree among themselves to only produce 50 units a day, even though the machines can easily produce 70, to prevent management from raising their targets. What does this demonstrate?

How should management ideally deal with the informal organisation?

Which organisational structure is characterized by employees having dual reporting lines, typically to both a functional manager and a project manager?

A software company groups its employees into distinct departments: Human Resources, Finance, Software Development, and Sales. What type of structure is this?

What is a primary disadvantage of a divisional structure?

A company decides to close its internal customer support department in the UK and instead hires an independent, third-party company located in India to handle all customer calls. What two concepts does this represent?

If a manager's span of control is significantly widened, what is the most likely effect on the organisational structure?

What is the primary purpose of a 'Shared Services' approach in a large organisation?

According to Anthony's hierarchy, which of the following is a characteristic of decisions made at the strategic level?

A middle manager is preparing a departmental budget for the upcoming financial year to ensure they have enough funds to meet the targets set by the Board. At what level of Anthony's hierarchy is this manager operating?

Which type of information is most critical for a supervisor operating at the operational level?

Which of the following is a primary advantage of a highly centralised organisational structure?

A retail chain allows its individual store managers to decide which products to stock based on local customer preferences, rather than having the head office dictate the inventory. What concept does this illustrate?

What is a significant risk or disadvantage associated with decentralisation?

Which department is primarily responsible for sourcing raw materials at the optimal balance of cost, quality, and delivery time?

A conflict arises in a manufacturing firm. Department X wants to hold high levels of inventory to ensure they never run out of materials and can keep machines running constantly. Department Y wants to hold zero inventory to minimize storage costs and free up cash flow. Which two departments are most likely in conflict here?

What is the primary role of the Research & Development (R&D) department?

Which element of the traditional Marketing Mix (4Ps) involves decisions about distribution channels, such as whether to sell online or through retail stores?

When expanding the Marketing Mix from the 4Ps to the 7Ps for service industries, which of the following is one of the additional three Ps?

Why is it critical that the marketing mix is aligned with the organisation's strategic plan?

Which of the following phrases is most commonly used to summarize the concept of organisational culture?

Why is organisational culture often considered an 'unwritten control mechanism'?

A company has a formal code of conduct stating that 'customer safety is our top priority'. However, employees routinely ignore safety checks to meet aggressive production quotas, and management turns a blind eye. What does this indicate?

Which of the following is generally considered to have the most profound and lasting impact on the initial culture of an organisation?

How does the size of an organisation typically affect its culture?

A hospital has a culture heavily focused on strict hygiene protocols, double-checking patient records, and zero-tolerance for medication errors. Which factor has most likely shaped this specific culture?

According to Charles Handy, which type of culture is characterized by a central figure making all the decisions, with few rules and procedures, typical of a small entrepreneurial business?

In Edgar Schein's model of organisational culture, what term is used to describe the visible, tangible elements of a culture, such as the office layout, dress code, and company logos?

A multinational company is expanding into a new country. They find that the local workforce expects managers to give direct, unquestionable orders and feels uncomfortable if asked to participate in decision-making. According to Hofstede, this country likely has:

Which of Handy's cultural types is most likely to be found in a highly bureaucratic government department where authority is strictly defined by a person's job title and job description?

Which of the following is a primary purpose of forming a business committee?

Why might a company use a committee to make a highly controversial decision, such as significant staff redundancies?

In the context of corporate governance, what specific purpose does an Audit Committee serve?

A company forms a committee specifically to organize the annual corporate summer party. Once the party is over and the budget is reconciled, the committee is disbanded. What type of committee is this?

Which type of committee is a permanent fixture in an organisation, meeting regularly to oversee a continuous, ongoing function (such as Health and Safety)?

The Board of Directors decides that the issue of setting the CEO's bonus is too detailed for the full board to discuss. They assign three board members to look into this specific issue and report back. What is this smaller group called?

Which of the following is a recognized ADVANTAGE of using a committee for decision-making?

What is 'groupthink' in the context of a business committee?

A committee is deadlocked on a decision. Half the members want Strategy A, and half want Strategy B. To move forward, they agree on Strategy C, which incorporates small parts of both but is ultimately weak and ineffective. What disadvantage of committees does this illustrate?

Which of the following is a primary responsibility of the Chair of a committee?

What is the purpose of the 'minutes' taken by the Secretary?

If a committee vote ends in a 50/50 tie, who typically has the authority to break the deadlock?

In the context of corporate governance and agency theory, who are the 'Principals'?

What is the fundamental cause of the 'Agency Problem'?

A company pays $500,000 a year to an independent audit firm to check the financial statements prepared by the directors, ensuring the directors are not hiding losses from the shareholders. What is this $500,000 an example of?

What is the primary role of a Non-Executive Director (NED) on a corporate board?

According to corporate governance best practice, who should ideally sit on the Remuneration Committee?

Why do corporate governance codes strongly recommend splitting the roles of Chairman and Chief Executive Officer (CEO)?

Which of the following best defines Corporate Social Responsibility (CSR)?

Why is CSR considered a 'strategic imperative' for contemporary organisations, rather than just a public relations exercise?

What does the concept of the 'social contract' imply for a business?

According to Carroll's CSR Pyramid, what is the most fundamental responsibility of a business, forming the base of the pyramid?

A company strictly follows all environmental laws regarding waste disposal, but it refuses to donate any money to local charities. According to Carroll's Pyramid, which responsibility is the company fulfilling, and which is it ignoring?

A clothing manufacturer pays its workers the exact minimum wage required by law, but the wage is so low that workers cannot afford basic food. The company argues it is doing nothing wrong. Which level of Carroll's pyramid is the company failing to meet?

When analyzing stakeholders for CSR purposes, into which category would a company's main supplier of raw materials fall?

A company is deciding whether to install expensive filters on its factory smokestacks. The local community (External) desperately wants the filters. The shareholders (Connected) oppose the filters because of the cost. What does this situation illustrate?

Using Mendelow's Matrix, how should a business treat an external stakeholder group (like a government regulator) that has both HIGH power and HIGH interest in the company's environmental policies?

A technology company implements a strict policy to ensure that all customer data is encrypted and never sold to third-party advertisers without explicit consent. Which stakeholder group is this CSR initiative primarily aimed at?

Which of the following is an example of a business fulfilling its social responsibility to its INTERNAL stakeholders?

A supermarket chain decides to only stock bananas from farms that are 'Fair Trade' certified, ensuring the farmers receive a guaranteed minimum price. This is an example of ethical responsibility towards which group?