CAIB 4 COMPREHENSIVE QUESTIONS AND
COMPLETE SOLUTIONS TEST PAPER
●● 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
●● 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.
●● Why is Top Down planning not suitable for a small organization.
Answer: Stifles innovation, slows decisions, managers need to know too
much,
●● What are the four characteristics of a plan?
Answer: 1) Simplicity
2) Practicability
3) Severability
4) Flexibility
,●● 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.
●● Explain Practicability
Answer: The plan must be realistic
●● 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
●● Explain flexibility
Answer: A good plan must allow for modification as it is implemented.
●● 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.
●● How many components of a strategic plan are there?
Answer: Seven.
, ●● 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.
●● 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.
●● 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.
●● Explain the near environment.
Answer: 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?
Answer: Competitor, market, and client profiling.
COMPLETE SOLUTIONS TEST PAPER
●● 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
●● 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.
●● Why is Top Down planning not suitable for a small organization.
Answer: Stifles innovation, slows decisions, managers need to know too
much,
●● What are the four characteristics of a plan?
Answer: 1) Simplicity
2) Practicability
3) Severability
4) Flexibility
,●● 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.
●● Explain Practicability
Answer: The plan must be realistic
●● 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
●● Explain flexibility
Answer: A good plan must allow for modification as it is implemented.
●● 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.
●● How many components of a strategic plan are there?
Answer: Seven.
, ●● 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.
●● 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.
●● 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.
●● Explain the near environment.
Answer: 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?
Answer: Competitor, market, and client profiling.
