Deck 2: The Operating Environment

Question 1

Which of the following statements is true of boards of public sector organisations?

A) Boards of government enterprises are predominantly profit-driven.
B) Boards of government enterprises have final decision-making power.
C) Boards of government enterprises are responsible to the organisation's shareholders.
D) Boards of government enterprises have the power to fire CEOs and appoint new directors.
E) Boards of government enterprises are responsible to a range of different stakeholders, and major decisions concerning their personnel and direction are ultimately made by government.

Answer 1

E

Question 2

What does a SWOT analysis examine?

A) The strengths and threats that exist in an organisation's internal environment
B) The strengths and opportunities that exist in an organisation's internal environment
C) The opportunities and threats that exist in an organisation's external environment, and the strengths and weaknesses that exist in its internal environment
D) The opportunities and threats that exist in an organisation's internal environment, and the strengths and weaknesses that exist in its external environment
E) The strengths and opportunities that exist in an organisation's external environment, and the weaknesses and threats that exist in its external environment

Answer 2

C

Question 3

To be able to determine the success of a strategic goal, the goal must be:

A) agreed upon.
B) positive.
C) challenging.
D) measurable.
E) All of these responses are correct.

Answer 3

D

Question 4

The term 'conscious capitalism' refers to a business approach in which the main focus is placed on:

A) maximising returns to shareholders.
B) benefiting employees.
C) consumers and customers.
D) protecting the environment.
E) benefiting all stakeholders.

Question 5

Good governance in an organisation is mainly the responsibility of senior management.

Question 6

An organisation contributing to a community's welfare planting as many trees as are needed to offset its carbon footprint is an example of a:

A) customer loyalty program.
B) trading partnership.
C) supply chain.
D) sustainable operations strategy.
E) customer charter.

Question 7

The statement, 'To excel at securing and enhancing the financial wellbeing of people, businesses and communities' is an example of:

A) a vision statement.
B) a statement of organisational values.
C) an organisational strategy.
D) a customer charter.
E) a business plan.

Question 8

Which of the following groups would be considered to be stakeholders of organisations in the private sector?

A) Customers
B) Employees
C) Suppliers
D) Owners of private-sector business
E) All of these responses are correct.

Question 9

Which of the following business types can issue shares?

A) Public companies and partnerships
B) Proprietary limited companies and sole traders
C) Sole traders and partnerships
D) Proprietary limited companies and public companies
E) Public companies and not-for-profit organisations

Question 10

If the director of a company engaged the services of an organisation of which he or she was a part-owner, and therefore stood to make financial gains from the arrangement, it would be:

A) illegal.
B) only permissible if agreed to by a majority vote of shareholders at the company's annual general meeting (AGM).
C) a conflict of interest.
D) a breach of the director's employment contract.
E) all of the above.

Question 11

Of which level of management is a chief executive officer (CEO) a part?

A) Top-level
B) Senior
C) Middle
D) First-line or front-line
E) Non-management employees

Question 12

A strategy consists of an action with measurable results, and is used as an immediate reaction to new factors in the operational environment.

Question 13

An organisation's values define the organisation, in the sense that they influence its:

A) culture.
B) profits.
C) structure.
D) strategic direction.
E) All of these responses are correct.

Question 14

The weekly allocation of tasks and duties to each of a section's employees would most likely to be the responsibility of:

A) the chief executive officer (CEO).
B) the board of directors.
C) a first-line or front-line manager.
D) a middle manager.
E) a human resources (HR) manager.

Question 15

Which of the following organisations is part of the public sector?

A) BHP Billiton
B) The Salvation Army
C) The Department of Defence
D) A McDonald's franchise
E) Optus

Question 16

Which of the following performance measurements would not be a common key performance indicator (KPI) for a business operating in the private sector?

A) Profit
B) Market share
C) Productivity
D) Sales revenue
E) Reduction in poverty in the areas in which they provide their product or service

Question 17

Which of the following is true in regards to a vision statement?

A) It should specifically set out what the organisation wishes to achieve.
B) The goals it sets should be modest and easily attainable.
C) It should challenge and motivate an organisation's employees, but also be realistic.
D) It should only be made available in full to senior management, with a simplified version then provided to staff members who are lower in the organisational hierarchy.
E) It should contain strategies for achieving organisational goals.

Question 18

When a partnership or sole trader business fails, the partners or sole trader, respectively, are fully responsible for all of the business' liabilities, or debts.

Question 19

Which of the following lists organisational plans in order from broadest to most specific?

A) Operational; business; strategic; individual performance
B) Business; strategic; operational; individual performance
C) Individual performance; strategic; operational; business
D) Strategic; business; operational; individual performance
E) Strategic; business; individual performance; operational

Question 20

One way a not-for-profit organisation providing drug counselling services could directly measure the success of its operations would be to consider:

A) the number of people attending court for drug-related offenses.
B) the number of people being admitted to hospital for drug-related illnesses.
C) the number of people to whom it provided drug counselling services in a given period.
D) the amount of money spent on providing drug counselling services as a proportion of the total amount spent on all of its community support programs.
E) the amount of funding received for the program in the current year compared with the funding received for the program in previous years.

Question 21

To which of the following functions would an organisation's board members normally assign the lowest priority in terms of their own direct involvement?

A) Strategy creation
B) Strategic governance
C) Strategic facilitation
D) Implementation governance
E) Each of the above would be assigned an equal priority.

Question 22

Which of the following describes the correct order of actions to follow when developing a strategy?

A) Agree on values, mission and vision; conduct a SWOT analysis; perform a gap analysis; implement the strategy
B) Perform a gap analysis; agree on values, mission and vision; conduct a SWOT analysis; implement the strategy
C) Agree on values, mission and vision; perform a gap analysis; conduct a SWOT analysis; implement the strategy
D) Agree on values, mission and vision; implement the strategy; perform a gap analysis; conduct a SWOT analysis
E) Implement the strategy; agree on values, mission and vision; conduct a SWOT analysis; perform a gap analysis

Question 23

Which of the following questions is not one that would be asked when creating an organisational strategy?

A) 'Where are we now?'
B) 'Where do we want to be?'
C) 'How will we get there?'
D) 'How many staff members will be required to maintain the operation of the factory over the upcoming Christmas period?'
E) 'Should we aim for inorganic growth, through acquisitions or mergers, or organic growth?'

Question 24

Which of the following is not a standard purpose or function of a business plan?

A) To identify the organisation's strategic plan or objectives
B) To provide a detailed breakdown of how the organisation's strategy is to be achieved
C) To provide a marketing plan to support the achievement of the organisation's strategic objectives
D) To provide an operational plan to support the achievement of the organisation's strategic objectives
E) To provide a financial plan to support the achievement of the organisation's strategic objectives

Question 25

A new competitor producing and selling an identical product would most likely be considered by an organisation already producing that product to be:

A) an opportunity.
B) a strength.
C) a threat.
D) a weakness.
E) None of these responses are correct.

Question 26

Which of the following statements would not be considered to be a value of an organisation?

A) 'We care about our customers.'
B) 'We conduct all business dealings with integrity.'
C) 'We are accountable to all our stakeholders.'
D) 'We will be the largest producer in the world by 2020.'
E) 'We place trust ahead of profit.'

Question 27

Which of the following is an example of a strategic goal?

A) Implement a uniform accounting system by December 2020 to promote consistency across the organisation in financial record-keeping.
B) Raise employee retention from 43 per cent to 78 per cent by April 2018.
C) Increase the use of robotics in the organisation's three factories so that this contributes 35 per cent of total production by January 2019.
D) Improve responses to critical incidents by raising to 90 per cent the number of employees who hold first aid qualifications.
E) All of these responses are correct.

Question 28

Strategic goals must be clearly stated and easily laid out, because they form the basis for developing detailed business and operational plans.

Question 29

A paper manufacturer expanding the range of its production capability to include making compatible A4 folders and plastic sheets is an example of:

A) vertical integration.
B) horizontal integration.
C) organic growth.
D) inorganic growth.
E) both horizontal integration and organic growth.

Question 30

Why do vertically integrated organisations own and often manage their upstream (or backward) suppliers?

A) In order to create raw materials of a consistent quality
B) In order to create a secure supply of raw materials
C) To set up forward (or downstream) subsidiaries to distribute and market their products or services
D) To use products or services themselves
E) All of these responses are correct.