CAIB 4 Questions with Correct Solutions
Question:
1. What are the two approaches to planning? Explain each
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?
Answer:
Advantages: Management feels in control and in charge of decision making. Disadvantages:
hard to get buy-in from employees
Question:
3. What are the advantages and disadvantages of bottom up planning?
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.
Answer:
Stifles innovation, slows decisions, managers need to know too much,
Question:
5. What are the four characteristics of a plan?
Answer:
1) Simplicity
2) Practicability
3) Severability
4) Flexibility
Question:
6. Explain Simplicity (2 points)
,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
Answer:
The plan must be realistic
Question:
8. Explain severability (2 points)
Answer:
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
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
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?
Answer:
Seven.
Question:
12. What are the first three components of a strategic plan?
Answer:
a) Scanning the external environment.
b) Scanning the Internal Environment
c) Matching strengths and weaknesses to opportunities and threats.
, Question:
13. Explain "scanning the external environment" and its two sub categories.
Answer:
Scanning the external environment looks at the competitive environment and attempts to
identify opportunities and threats. They look at the distant environment and near
environments.
Question:
14. Explain the distant environment.
Answer:
Factors that are critical to the survival of the brokerage, but over which it has no control.
Example: Hard and soft markets. Changes to laws. Technology.
Question:
15. Explain the near environment.
Answer:
Factors over which a brokerage does have control. Example: Clients and prospects, market
segment targeted, direct competitors.
Question:
16. What are the three types of profiling within Near environment scans?
Answer:
Competitor, market, and client profiling. Competitor: Size, financial condition, and location of
head office. Market: Total market, market segments where they compete, and the market
portion that they serve. Client: Find a clear understanding of the nature and characteristics of
a brokerage's clients.
Question:
17. Explain SWOT and the needed actions given the four scenarios
Answer:
If there is a weakness where there is a threat - Immediate Attention If there is a weakness
where there is an opportunity - Resources should be allocated to capitalize later. If there is a
strength where they is a threat - No action needed If there is a strength where there is an
opportunity - it should be immediately capitalized on
Question:
18. Recite the vision statement
Answer:
Protection of assets by protecting what is near and dear to our clients
Question:
1. What are the two approaches to planning? Explain each
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?
Answer:
Advantages: Management feels in control and in charge of decision making. Disadvantages:
hard to get buy-in from employees
Question:
3. What are the advantages and disadvantages of bottom up planning?
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.
Answer:
Stifles innovation, slows decisions, managers need to know too much,
Question:
5. What are the four characteristics of a plan?
Answer:
1) Simplicity
2) Practicability
3) Severability
4) Flexibility
Question:
6. Explain Simplicity (2 points)
,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
Answer:
The plan must be realistic
Question:
8. Explain severability (2 points)
Answer:
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
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
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?
Answer:
Seven.
Question:
12. What are the first three components of a strategic plan?
Answer:
a) Scanning the external environment.
b) Scanning the Internal Environment
c) Matching strengths and weaknesses to opportunities and threats.
, Question:
13. Explain "scanning the external environment" and its two sub categories.
Answer:
Scanning the external environment looks at the competitive environment and attempts to
identify opportunities and threats. They look at the distant environment and near
environments.
Question:
14. Explain the distant environment.
Answer:
Factors that are critical to the survival of the brokerage, but over which it has no control.
Example: Hard and soft markets. Changes to laws. Technology.
Question:
15. Explain the near environment.
Answer:
Factors over which a brokerage does have control. Example: Clients and prospects, market
segment targeted, direct competitors.
Question:
16. What are the three types of profiling within Near environment scans?
Answer:
Competitor, market, and client profiling. Competitor: Size, financial condition, and location of
head office. Market: Total market, market segments where they compete, and the market
portion that they serve. Client: Find a clear understanding of the nature and characteristics of
a brokerage's clients.
Question:
17. Explain SWOT and the needed actions given the four scenarios
Answer:
If there is a weakness where there is a threat - Immediate Attention If there is a weakness
where there is an opportunity - Resources should be allocated to capitalize later. If there is a
strength where they is a threat - No action needed If there is a strength where there is an
opportunity - it should be immediately capitalized on
Question:
18. Recite the vision statement
Answer:
Protection of assets by protecting what is near and dear to our clients
