CAIB 4 Exam Questions and Answers
100% Pass
What are the two approaches to planning? Explain each - ✔✔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.
What are the advantages and disadvantages of top down planning? - ✔✔Advantages:
Management feels in control and in charge of decision making.
Disadvantages: hard to get buy-in from employees
What are the advantages and disadvantages of bottom up planning? - ✔✔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.
Why is Top Down planning not suitable for a small organization. - ✔✔Stifles
innovation, slows decisions, managers need to know too much,
What are the four characteristics of a plan? - ✔✔1) Simplicity
2) Practicability
3) Severability
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,4) Flexibility
Explain Simplicity (2 points) - ✔✔The plan should be explainable in simple terms.
The plan should be implemented without extensive training while employees continue
their day to day operations.
Explain Practicability - ✔✔The plan must be realistic
Explain severability (2 points) - ✔✔The parts of a plan must be separate and
identifiable.
Each business unit must see how to apply it to their area
Explain flexibility - ✔✔A good plan must allow for modification as it is implemented.
Explain the difference between a strategic plan and an action plan - ✔✔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.
How many components of a strategic plan are there? - ✔✔Seven.
What are the first three components of a strategic plan? - ✔✔a) Scanning the external
environment.
b) Scanning the Internal Environment
c) Matching strengths and weaknesses to opportunities and threats.
Explain "scanning the external environment" and its two sub categories. - ✔✔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.
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, Explain the distant environment. - ✔✔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.
Explain the near environment. - ✔✔Factors over which a brokerage does have control.
Example: Clients and prospects, market segment targeted, direct competitors.
What are the three types of profiling within Near environment scans? - ✔✔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.
Explain SWOT and the needed actions given the four scenarios - ✔✔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
Recite the vision statement - ✔✔Protection of assets by protecting what is near and dear
to our clients
Recite the value statement - ✔✔We seek and encourage innovative solutions to
problems that deliver results for our clients.
COPYRIGHT © 2025 BY SOPHIA BENNETT, ALL RIGHTS RESERVED 3
100% Pass
What are the two approaches to planning? Explain each - ✔✔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.
What are the advantages and disadvantages of top down planning? - ✔✔Advantages:
Management feels in control and in charge of decision making.
Disadvantages: hard to get buy-in from employees
What are the advantages and disadvantages of bottom up planning? - ✔✔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.
Why is Top Down planning not suitable for a small organization. - ✔✔Stifles
innovation, slows decisions, managers need to know too much,
What are the four characteristics of a plan? - ✔✔1) Simplicity
2) Practicability
3) Severability
COPYRIGHT © 2025 BY SOPHIA BENNETT, ALL RIGHTS RESERVED 1
,4) Flexibility
Explain Simplicity (2 points) - ✔✔The plan should be explainable in simple terms.
The plan should be implemented without extensive training while employees continue
their day to day operations.
Explain Practicability - ✔✔The plan must be realistic
Explain severability (2 points) - ✔✔The parts of a plan must be separate and
identifiable.
Each business unit must see how to apply it to their area
Explain flexibility - ✔✔A good plan must allow for modification as it is implemented.
Explain the difference between a strategic plan and an action plan - ✔✔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.
How many components of a strategic plan are there? - ✔✔Seven.
What are the first three components of a strategic plan? - ✔✔a) Scanning the external
environment.
b) Scanning the Internal Environment
c) Matching strengths and weaknesses to opportunities and threats.
Explain "scanning the external environment" and its two sub categories. - ✔✔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.
COPYRIGHT © 2025 BY SOPHIA BENNETT, ALL RIGHTS RESERVED 2
, Explain the distant environment. - ✔✔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.
Explain the near environment. - ✔✔Factors over which a brokerage does have control.
Example: Clients and prospects, market segment targeted, direct competitors.
What are the three types of profiling within Near environment scans? - ✔✔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.
Explain SWOT and the needed actions given the four scenarios - ✔✔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
Recite the vision statement - ✔✔Protection of assets by protecting what is near and dear
to our clients
Recite the value statement - ✔✔We seek and encourage innovative solutions to
problems that deliver results for our clients.
COPYRIGHT © 2025 BY SOPHIA BENNETT, ALL RIGHTS RESERVED 3
