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CAIB 4 - Book Practice Questions & Answers.
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CAIB 4 - Book Practice Questions & Answers.
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CAIB 4 - Book Practice Questions & AnswersWhat are the similarities between a strategic plan and an action plan? - ANS-They are
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both critical steps in the success of a brokerage
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They both flow from the mission statement
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They both use the same process (top down/bottom up)
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What are the differences between a strategic plan and an action plan? - ANS-strategic
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plans are for three to five years;
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action plans are for one year
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strategic plans apply to the brokerage as a whole; action plans apply to a particular
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business unit
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action plans are much more detailed than strategic plans
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Explain the advantages and disadvantages of top-down and bottom-up approaches to
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planning. - ANS-Top-Down Approach
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o Management is firmly in control
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o May fail because employees don't buy into it
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Bottom-Up Approach n
o Employees set the plan - buy-in
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o Management feel that they are not in control
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The combination of both approaches, with open communication throughout the process,
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is the key to effective and successful planning.
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When evaluating an operating affiliation why would the following be an important
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consideration?
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a) Exclusivity
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b) Fees - ANS-Exclusivity;
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Many of the organizations with which a brokerage can affiliate are in one way or another
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exclusive. Often it is this exclusivity that makes the organization attractive to the
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brokerage.
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It is important that the following questions be asked;
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How many other brokerages in the immediate marketing area will be permitted to join?
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What is the legal nature of the exclusivity?
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, How tight is the contract in describing the rights of an affiliated brokerage to a particular
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territory?
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What is the reputation of those brokerages already participating in the program?
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If the brokerage is seeking prestige and image from the affiliation, this can be derived
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nonly if others participating are up to the standards described by the sponsoring
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norganization.
When evaluating an operating affiliation why would the following be an important
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consideration?
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a) Exclusivity
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b) Fees - ANS-Fees;
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A major factor in determining whether to affiliate is the cost of the affiliation and whether
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the services offered are worth the price being charged.
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All costs should be known in advance so that there will be no surprises once the
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affiliation has been formed.
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Some brokerages effectively structure their brokerages as a functional organization.
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Discuss why it is a difficult form to implement effectively - ANS-Employees will find that
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they have more than one boss, so that in areas of overlapping authority they may be
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given conflicting or inconsistent instructions.
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When a decision is required that does not firmly belong to any manager, decision-
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making can be slow. Employees may be referred by one manager to another without
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any decision being made.
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When there are too many managers giving instructions, employees are frequently
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distracted from their primary roles of serving their clients.
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The first activity in human resources management is planning. Discuss three areas
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involved - ANS-Evaluate its existing ability to generate sales and premium growth, and
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determine whether the existing human resources are capable of producing the levels
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anticipated in the strategic plan. If they are not, a plan must be established to obtain the
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necessary human resources and to revise the organization structure to accommodate
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the anticipated growth.
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Estimate human resource needs as early in the planning process as possible, to permit
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time for a professional approach to selecting new employees and to avoid the pitfalls of
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a crash hiring process. The human resource plan should include an evaluation of the
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skills the new employees need to have, the hiring timetable, and a contingency plan in
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the event candidates with the required skills cannot be found in a timely manner.
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Prepare a position description containing position qualifications and specifications for
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each position to be filled. This will enable the brokerage to determine the kind of
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experience, knowledge, attitude and behaviors which will be required of the candidates.
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