CAIB 4 Exam 105 Questions and Answers with Complete Solutions.

CAIB 4 Exam 105 Questions and Answers with Complete
Solutions



What are the two approaches to planning? Explain each - ANS-1) Top Down Planning -
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Management provides the mission, strategies, and objectives for the brokerage
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2) Bottom Up Planning - Management provides the mission and broad strategies.
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Leaves the objectives, goals and activities to business units.
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What are the advantages and disadvantages of top down planning? - ANS-Advantages:
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Management feels in control and in charge of decision making.
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Disadvantages: hard to get buy-in from employees n n n n n n




What are the advantages and disadvantages of bottom up planning? - ANS-
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Advantages: business units have ownership and buy in.
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Disadvantages: Management feels less in control, there may be resistance to changes
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made to the plan by management.
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Why is Top Down planning not suitable for a small organization. - ANS-Stifles
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innovation, slows decisions, managers need to know too much,
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What are the four characteristics of a plan? - ANS-1) Simplicity
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2) Practicability
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3) Severability
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4) Flexibility
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Explain Simplicity (2 points) - ANS-The plan should be explainable in simple terms.
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The plan should be implemented without extensive training while employees continue
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their day to day operations.
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Explain Practicability - ANS-The plan must be realistic
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Explain severability (2 points) - ANS-The parts of a plan must be separate and
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identifiable.
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Each business unit must see how to apply it to their area
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Explain flexibility - ANS-A good plan must allow for modification as it is implemented.
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Explain the difference between a strategic plan and an action plan - ANS-Strategic
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plans are broad and cover 3-5 years.
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, Action plans give specific activities to support SP. They apply to a particular unit and
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cover 1-3 years, typically one year.
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How many components of a strategic plan are there? - ANS-Seven.
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What are the first three components of a strategic plan? - ANS-a) Scanning the external
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environment.
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b) Scanning the Internal Environment
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c) Matching strengths and weaknesses to opportunities and threats.
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Explain "scanning the external environment" and its two sub categories. - ANS-
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Scanning the external environment looks at the competitive environment and attempts
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to identify opportunities and threats.
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They look at the distant environment and near environments.
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Explain the distant environment. - ANS-Factors that are critical to the survival of the
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brokerage, but over which it has no control. Example: Hard and soft markets. Changes
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to laws. Technology.
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Explain the near environment. - ANS-Factors over which a brokerage does have
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control. Example: Clients and prospects, market segment targeted, direct competitors.
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What are the three types of profiling within Near environment scans? - ANS-Competitor,
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market, and client profiling.
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Competitor: Size, financial condition, and location of head office.
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Market: Total market, market segments where they compete, and the market portion
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that they serve.
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Client: Find a clear understanding of the nature and characteristics of a brokerage's
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clients.
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Explain SWOT and the needed actions given the four scenarios - ANS-If there is a
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nweakness where there is a threat - Immediate Attention
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If there is a weakness where there is an opportunity - Resources should be allocated to
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ncapitalize later. n


If there is a strength where they is a threat - No action needed
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If there is a strength where there is an opportunity - it should be immediately capitalized
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non

Recite the vision statement - ANS-Protection of assets by protecting what is near and
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dear to our clients
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Recite the value statement - ANS-We seek and encourage innovative solutions to
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problems that deliver results for our clients.
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