CAIB 4 - BOOK QUESTIONS Questions with Correct Solutions
Question:
1. What are the similarities between a strategic plan and an action plan?
Answer:
They are both critical steps in the success of a brokerage They both flow from the mission
statement They both use the same process (top down/bottom up)
Question:
2. What are the differences between a strategic plan and an action plan?
Answer:
strategic plans are for three to five years; action plans are for one year strategic plans apply
to the brokerage as a whole; action plans apply to a particular business unit action plans are
much more detailed than strategic plans
Question:
3. Explain the advantages and disadvantages of top-down and bottom-up approaches to
planning.
Answer:
Top-Down Approach o Management is firmly in control o May fail because employees don't
buy into it Bottom-Up Approach o Employees set the plan - buy-in o Management feel that
they are not in control The combination of both approaches, with open communication
throughout the process, is the key to effective and successful planning.
Question:
4. When evaluating an operating affiliation why would the following be an important
consideration?
a) Exclusivity
b) Fees
Answer:
Exclusivity; Many of the organizations with which a brokerage can affiliate are in one way or
another exclusive. Often it is this exclusivity that makes the organization attractive to the
brokerage. It is important that the following questions be asked;
How many other brokerages in the immediate marketing area will be permitted to join? What
is the legal nature of the exclusivity? How tight is the contract in describing the rights of an
affiliated brokerage to a particular territory? What is the reputation of those brokerages
already participating in the program? If the brokerage is seeking prestige and image from the
affiliation, this can be derived only if others participating are up to the standards described
by the sponsoring organization.
, Question:
5. When evaluating an operating affiliation why would the following be an important
consideration?
a) Exclusivity
b) Fees
Answer:
Fees; A major factor in determining whether to affiliate is the cost of the affiliation and
whether the services offered are worth the price being charged. All costs should be known in
advance so that there will be no surprises once the affiliation has been formed.
Question:
6. Some brokerages effectively structure their brokerages as a functional organization.
Discuss why it is a difficult form to implement effectively
Answer:
Employees will find that they have more than one boss, so that in areas of overlapping
authority they may be given conflicting or inconsistent instructions. When a decision is
required that does not firmly belong to any manager, decision-making can be slow.
Employees may be referred by one manager to another without any decision being made.
When there are too many managers giving instructions, employees are frequently distracted
from their primary roles of serving their clients.
Question:
7. The first activity in human resources management is planning. Discuss three areas involved
Answer:
Evaluate its existing ability to generate sales and premium growth, and determine whether
the existing human resources are capable of producing the levels anticipated in the strategic
plan. If they are not, a plan must be established to obtain the necessary human resources and
to revise the organization structure to accommodate the anticipated growth. Estimate human
resource needs as early in the planning process as possible, to permit time for a professional
approach to selecting new employees and to avoid the pitfalls of a crash hiring process. The
human resource plan should include an evaluation of the skills the new employees need to
have, the hiring timetable, and a contingency plan in the event candidates with the required
skills cannot be found in a timely manner. Prepare a position description containing position
qualifications and specifications for each position to be filled. This will enable the brokerage
to determine the kind of experience, knowledge, attitude and behaviors which will be
required of the candidates. Allow for contingencies and be capable of mid-course correction
should the reality of the business conditions diverge from the plan.
Question:
8. Identify and discuss any two ongoing training programs every brokerage needs.
Question:
1. What are the similarities between a strategic plan and an action plan?
Answer:
They are both critical steps in the success of a brokerage They both flow from the mission
statement They both use the same process (top down/bottom up)
Question:
2. What are the differences between a strategic plan and an action plan?
Answer:
strategic plans are for three to five years; action plans are for one year strategic plans apply
to the brokerage as a whole; action plans apply to a particular business unit action plans are
much more detailed than strategic plans
Question:
3. Explain the advantages and disadvantages of top-down and bottom-up approaches to
planning.
Answer:
Top-Down Approach o Management is firmly in control o May fail because employees don't
buy into it Bottom-Up Approach o Employees set the plan - buy-in o Management feel that
they are not in control The combination of both approaches, with open communication
throughout the process, is the key to effective and successful planning.
Question:
4. When evaluating an operating affiliation why would the following be an important
consideration?
a) Exclusivity
b) Fees
Answer:
Exclusivity; Many of the organizations with which a brokerage can affiliate are in one way or
another exclusive. Often it is this exclusivity that makes the organization attractive to the
brokerage. It is important that the following questions be asked;
How many other brokerages in the immediate marketing area will be permitted to join? What
is the legal nature of the exclusivity? How tight is the contract in describing the rights of an
affiliated brokerage to a particular territory? What is the reputation of those brokerages
already participating in the program? If the brokerage is seeking prestige and image from the
affiliation, this can be derived only if others participating are up to the standards described
by the sponsoring organization.
, Question:
5. When evaluating an operating affiliation why would the following be an important
consideration?
a) Exclusivity
b) Fees
Answer:
Fees; A major factor in determining whether to affiliate is the cost of the affiliation and
whether the services offered are worth the price being charged. All costs should be known in
advance so that there will be no surprises once the affiliation has been formed.
Question:
6. Some brokerages effectively structure their brokerages as a functional organization.
Discuss why it is a difficult form to implement effectively
Answer:
Employees will find that they have more than one boss, so that in areas of overlapping
authority they may be given conflicting or inconsistent instructions. When a decision is
required that does not firmly belong to any manager, decision-making can be slow.
Employees may be referred by one manager to another without any decision being made.
When there are too many managers giving instructions, employees are frequently distracted
from their primary roles of serving their clients.
Question:
7. The first activity in human resources management is planning. Discuss three areas involved
Answer:
Evaluate its existing ability to generate sales and premium growth, and determine whether
the existing human resources are capable of producing the levels anticipated in the strategic
plan. If they are not, a plan must be established to obtain the necessary human resources and
to revise the organization structure to accommodate the anticipated growth. Estimate human
resource needs as early in the planning process as possible, to permit time for a professional
approach to selecting new employees and to avoid the pitfalls of a crash hiring process. The
human resource plan should include an evaluation of the skills the new employees need to
have, the hiring timetable, and a contingency plan in the event candidates with the required
skills cannot be found in a timely manner. Prepare a position description containing position
qualifications and specifications for each position to be filled. This will enable the brokerage
to determine the kind of experience, knowledge, attitude and behaviors which will be
required of the candidates. Allow for contingencies and be capable of mid-course correction
should the reality of the business conditions diverge from the plan.
Question:
8. Identify and discuss any two ongoing training programs every brokerage needs.
