CAIB 4
Exam Questions with
Correct Answers
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 two approaches to planning? Explain each
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 top down 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. - ✔✔- What are the advantages
and disadvantages of bottom up planning?
Stifles innovation, slows decisions, managers need to know too much, - ✔✔-
Why is Top Down planning not suitable for a small organization.
1) Simplicity
2) Practicability
3) Severability
4) Flexibility - ✔✔- What are the four characteristics of a plan?
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 Simplicity (2 points)
The plan must be realistic - ✔✔- Explain Practicability
The parts of a plan must be separate and identifiable.
, Each business unit must see how to apply it to their area - ✔✔- Explain
severability (2 points)
A good plan must allow for modification as it is implemented. - ✔✔- Explain
flexibility
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. - ✔✔- Explain the difference
between a strategic plan and an action plan
Seven. - ✔✔- How many components of a strategic plan are there?
a) Scanning the external environment.
b) Scanning the Internal Environment
c) Matching strengths and weaknesses to opportunities and threats. - ✔✔-
What are the first three components of a strategic plan?
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. - ✔✔- Explain
"scanning the external environment" and its two sub categories.
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 distant environment.
Factors over which a brokerage does have control. Example: Clients and
prospects, market segment targeted, direct competitors. - ✔✔- Explain the
near environment.
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. - ✔✔- What are the three types of profiling within Near
environment scans?
If there is a weakness where there is a threat - Immediate Attention
Exam Questions with
Correct Answers
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 two approaches to planning? Explain each
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 top down 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. - ✔✔- What are the advantages
and disadvantages of bottom up planning?
Stifles innovation, slows decisions, managers need to know too much, - ✔✔-
Why is Top Down planning not suitable for a small organization.
1) Simplicity
2) Practicability
3) Severability
4) Flexibility - ✔✔- What are the four characteristics of a plan?
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 Simplicity (2 points)
The plan must be realistic - ✔✔- Explain Practicability
The parts of a plan must be separate and identifiable.
, Each business unit must see how to apply it to their area - ✔✔- Explain
severability (2 points)
A good plan must allow for modification as it is implemented. - ✔✔- Explain
flexibility
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. - ✔✔- Explain the difference
between a strategic plan and an action plan
Seven. - ✔✔- How many components of a strategic plan are there?
a) Scanning the external environment.
b) Scanning the Internal Environment
c) Matching strengths and weaknesses to opportunities and threats. - ✔✔-
What are the first three components of a strategic plan?
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. - ✔✔- Explain
"scanning the external environment" and its two sub categories.
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 distant environment.
Factors over which a brokerage does have control. Example: Clients and
prospects, market segment targeted, direct competitors. - ✔✔- Explain the
near environment.
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. - ✔✔- What are the three types of profiling within Near
environment scans?
If there is a weakness where there is a threat - Immediate Attention
