ACCA AK Business & Technology 2 — Questions and Answers
Question 1: Centralisation of authority in an organisation means:
- Decision-making power is delegated to lower-level managers
- All significant decisions are made at or near the top of the hierarchy (Correct answer)
- Each division operates as an independent unit
- Employees set their own performance targets
Correct answer: All significant decisions are made at or near the top of the hierarchy
Centralisation concentrates decision-making authority at the top of the organisation, ensuring consistency but potentially slowing response times.
Question 2: Which of the following is an example of a non-financial performance indicator?
- Return on capital employed
- Gross profit margin
- Customer satisfaction score (Correct answer)
- Earnings per share
Correct answer: Customer satisfaction score
Customer satisfaction score measures performance in non-monetary terms; the others are all financial ratios derived from accounting data.
Question 3: The concept of 'span of control' refers to:
- The range of products a manager is responsible for
- The number of subordinates directly reporting to a manager (Correct answer)
- The geographic area covered by a manager
- The budget allocated to a department
Correct answer: The number of subordinates directly reporting to a manager
Span of control is the number of employees directly supervised by one manager. Wide spans suit flat structures; narrow spans suit tall structures.
Question 4: Which stakeholder group would typically be most concerned with an organisation's ability to repay its debts?
- Shareholders
- Employees
- Lenders/creditors (Correct answer)
- Customers
Correct answer: Lenders/creditors
Lenders and creditors are primarily concerned with the organisation's ability to service and repay debt, making liquidity and solvency key interests.
Question 5: According to Mendelow's matrix, stakeholders with HIGH power and HIGH interest should be:
- Kept informed
- Kept satisfied
- Managed closely (Correct answer)
- Monitored
Correct answer: Managed closely
Mendelow's matrix places high-power, high-interest stakeholders in the 'key players' quadrant, requiring close management and active engagement.
Question 6: Which of the following best describes 'outsourcing'?
- Relocating a business function to another country
- Contracting an external provider to perform a business activity previously done in-house (Correct answer)
- Acquiring another company to gain its capabilities
- Merging two departments within the same organisation
Correct answer: Contracting an external provider to perform a business activity previously done in-house
Outsourcing means contracting an outside organisation to carry out a function or service that was previously performed internally.
ACCA AK Business & Technology 2
Centralisation of authority in an organisation means: