Practice Test: IB Business And Management- Business Organisation & Environment #1.3

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Practice Test: IB Business And Management- Business Organisation & Environment #1.3 - Quiz


Questions and Answers
  • 1. 

    Select the odd one out from each of the options below:

    • A.

      Tactical objectives

    • B.

      Operational objectives

    • C.

      Strategic objectives

    • D.

      Secondary objectives

    Correct Answer
    C. Strategic objectives
    Explanation
    Others are all short-term objectives (and mean the same thing!)

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  • 2. 

    Select the odd one out from each of the options below:

    • A.

      Growth

    • B.

      Sales maximisation

    • C.

      Survival

    • D.

      Acquisition

    Correct Answer
    D. Acquisition
    Explanation
    Acquisition is a growth strategy, the others are business objectives

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  • 3. 

    Select the odd one out from each of the options below:

    • A.

      To control

    • B.

      To select

    • C.

      To direct

    • D.

      To motivate

    Correct Answer
    B. To select
    Explanation
    Others are functions of organisational objectives

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  • 4. 

    Select the odd one out from each of the options below:

    • A.

      To improve quality of customer service

    • B.

      To become the world's market leader

    • C.

      To reduce absenteeism and labour turnover

    • D.

      To improve productive efficiency

    Correct Answer
    B. To become the world's market leader
    Explanation
    the only corporate aim, the others are objectives

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  • 5. 

    If a business behaves ethically, its profits will fall in the short run:

    • A.

      True

    • B.

      False

    Correct Answer
    B. False
    Explanation
    The statement "If a business behaves ethically, its profits will fall in the short run" is false. Behaving ethically can actually have long-term benefits for a business. Ethical behavior can enhance a company's reputation, build trust with customers, attract and retain talented employees, and foster positive relationships with stakeholders. All of these factors can contribute to long-term profitability and sustainability. While there may be some short-term costs associated with implementing ethical practices, the overall impact on profits is likely to be positive in the long run.

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  • 6. 

    A business that adopts an ethical approach will tend to improve its profits in the long run.

    • A.

      True

    • B.

      False

    Correct Answer
    B. False
    Explanation
    Adopting an ethical approach may not directly lead to improved profits in the long run. While ethical practices can enhance a business's reputation and attract loyal customers, they may also involve additional costs or sacrifices that can temporarily impact profits. However, in the long term, ethical behavior can contribute to sustainable growth, customer trust, and brand loyalty, which can ultimately lead to improved profitability. Therefore, the statement that adopting an ethical approach will tend to improve profits in the long run is false.

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  • 7. 

    Strategic objectives refer to the general organisational objectives of a business that encompass its long-term goals.

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    Strategic objectives are indeed the general goals and targets that a business aims to achieve in the long-term. These objectives are designed to guide the overall direction and decision-making process of the organization. They provide a framework for setting priorities, allocating resources, and measuring performance. By aligning the actions and efforts of the company with its strategic objectives, a business can increase its chances of success and achieve sustainable growth. Therefore, the statement that strategic objectives encompass the long-term goals of a business is true.

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  • 8. 

    A business that has an ethical policy in the workplace is said to have an ethical stance.

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    A business that has an ethical policy in the workplace demonstrates a commitment to conducting its operations in a morally responsible manner. This means that the company has established guidelines and principles that promote fairness, integrity, and respect for employees, customers, and the community. By having an ethical policy, the business shows its stance on ethical behavior and its dedication to upholding these values. Therefore, the statement is true.

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  • 9. 

    The amount of recycling a firm undertakes is likely to be reported in the firm's social audit.

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    The statement is likely to be true because a firm's social audit typically includes an evaluation of the firm's environmental impact and sustainability practices. Recycling is an important aspect of sustainable business practices, as it helps reduce waste and conserve resources. Therefore, it is reasonable to assume that the amount of recycling a firm undertakes would be reported in its social audit as a measure of its commitment to environmental responsibility.

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  • 10. 

    All businesses in the private sector aim to make a profit whereas those operating in the public sector aim primarily to provide a service to the general public.

    • A.

      True

    • B.

      False

    Correct Answer
    B. False
    Explanation
    The statement is false because while it is true that businesses in the private sector aim to make a profit, it is not accurate to say that all businesses in the public sector aim primarily to provide a service to the general public. Some businesses in the public sector, such as state-owned enterprises, may also have profit-making objectives. Additionally, there are nonprofit organizations in the public sector that focus on providing services without the aim of making a profit. Therefore, the statement oversimplifies the objectives of businesses in the public sector.

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  • 11. 

    For most businesses, the objectives of shareholders are more important than those of other stakeholders.

    • A.

      True

    • B.

      False

    Correct Answer
    B. False
    Explanation
    The statement is false because in most businesses, the objectives of shareholders are not necessarily more important than those of other stakeholders. While shareholders play a crucial role in the success of a business, it is also important to consider the interests and objectives of other stakeholders such as employees, customers, suppliers, and the local community. A business that prioritizes the needs and objectives of all stakeholders is more likely to achieve long-term sustainability and success.

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  • 12. 

    Being socially responsible is the same as being environmentally responsible.

    • A.

      True

    • B.

      False

    Correct Answer
    B. False
    Explanation
    Being socially responsible and being environmentally responsible are not the same thing. While both involve taking actions that benefit society or the environment, they focus on different aspects. Social responsibility refers to actions that benefit the well-being and welfare of people, such as promoting equality, supporting community development, or ensuring fair labor practices. On the other hand, environmental responsibility focuses on actions that benefit the natural environment, such as conserving resources, reducing pollution, or promoting sustainable practices. Therefore, being socially responsible does not automatically mean being environmentally responsible, and vice versa.

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  • 13. 

    Ethical corporate responsibility considers the welfare of the workforce.

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    Ethical corporate responsibility refers to the moral obligation of a company to consider the well-being and interests of its employees. This includes ensuring fair wages, providing a safe working environment, offering opportunities for growth and development, and promoting work-life balance. By prioritizing the welfare of the workforce, companies demonstrate their commitment to ethical business practices and create a positive work culture that fosters employee satisfaction and loyalty. Therefore, the statement "Ethical corporate responsibility considers the welfare of the workforce" is true.

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  • 14. 

    The overall purpose of an organization can often be seen from its mission statement.

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    The mission statement of an organization is a concise statement that outlines its overall purpose, goals, and values. It serves as a guiding principle for the organization and helps to communicate its purpose to stakeholders, employees, and the public. Therefore, it is true that the overall purpose of an organization can often be seen from its mission statement.

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  • 15. 

    The declaration of the future identity of a business is known as its:

    • A.

      Business objectives

    • B.

      Corporate identity

    • C.

      Mission statement

    • D.

      Vision statement

    Correct Answer
    D. Vision statement
    Explanation
    A vision statement is a declaration that outlines the future identity and direction of a business. It serves as a guiding principle for the organization and helps to define its goals and aspirations. Unlike business objectives, which are specific and measurable targets, a vision statement is more abstract and focuses on the long-term vision of the company. It is different from a mission statement, which explains the purpose and reason for the existence of the business. A vision statement helps to inspire and motivate employees and stakeholders, providing a clear sense of direction for the organization.

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  • 16. 

    What is the concept used to describe what an organization is in business for and what it intends to achieve?

    • A.

      Business plan

    • B.

      Business objectives

    • C.

      Mission statement

    • D.

      Vision statement

    Correct Answer
    C. Mission statement
    Explanation
    A mission statement is a concise statement that describes the purpose and goals of an organization. It defines what the organization is in business for and what it intends to achieve. It outlines the core values, target audience, and primary activities of the organization. A mission statement helps guide the decision-making process and provides a sense of direction for the organization. It is often used as a communication tool to inform stakeholders about the organization's purpose and values.

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  • 17. 

    Objectives are:

    • A.

      What a business wants to achieve

    • B.

      The purpose for a firm's existence

    • C.

      Qualitative statements of a firm's direction

    • D.

      The major goals of an organisation

    Correct Answer
    A. What a business wants to achieve
    Explanation
    The given answer, "What a business wants to achieve," accurately describes the objectives of a business. Objectives refer to the specific goals and targets that a business aims to accomplish. They outline what the business wants to achieve in terms of growth, profitability, market share, customer satisfaction, and other key areas. By setting clear objectives, a business can align its efforts and resources towards achieving these goals, which ultimately contributes to the success and sustainability of the organization.

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  • 18. 

    Possible objectives of public sector organizations are least likely to include:

    • A.

      To provide a service to the community

    • B.

      To survive

    • C.

      To break even as soon as possible

    • D.

      To maximise levels of profits

    Correct Answer
    D. To maximise levels of profits
    Explanation
    Public sector organizations are typically not driven by the objective of maximizing profits. Unlike private sector organizations, public sector organizations are primarily focused on serving the community and providing essential services. Their main goal is to meet the needs of the public rather than generating profits. Therefore, maximizing levels of profits is least likely to be an objective of public sector organizations.

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  • 19. 

    Advantages of setting ethical objectives do not include:

    • A.

      Avoiding bad publicity

    • B.

      An obligation to provide shareholder dividends

    • C.

      A possible unique selling point of the firm

    • D.

      Impact on staff morale

    Correct Answer
    B. An obligation to provide shareholder dividends
    Explanation
    Setting ethical objectives does not include an obligation to provide shareholder dividends. Ethical objectives are focused on promoting ethical behavior and making socially responsible decisions, rather than solely prioritizing financial returns for shareholders. While ethical behavior can have positive impacts on a company's reputation, unique selling points, and staff morale, it is not directly tied to the obligation of providing shareholder dividends.

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  • 20. 

    Businesses do not always consider acting in an ethical way. Which of the following does not explain why this may be the case?

    • A.

      Ethical objectives can conflict with profit objectives

    • B.

      There may not be any government constraints

    • C.

      Compliance costs are low

    • D.

      Ethics might not be important to the firm

    Correct Answer
    C. Compliance costs are low
    Explanation
    Compliance costs being low does not explain why businesses may not always consider acting in an ethical way. The cost of compliance with ethical standards is not the determining factor for businesses to act unethically. Other factors such as conflicting ethical and profit objectives, absence of government constraints, and the firm's perception of the importance of ethics can play a more significant role in businesses' decisions regarding ethical behavior.

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  • 21. 

    A social audit does not include the firm's:

    • A.

      Financial performance

    • B.

      Use of recycled materials

    • C.

      Treatment of the workforce

    • D.

      Waste disposal processes

    Correct Answer
    B. Use of recycled materials
    Explanation
    A social audit is a process that evaluates a company's social and ethical performance. It focuses on assessing various aspects such as the treatment of the workforce, waste disposal processes, and financial performance. However, the use of recycled materials is not typically included in a social audit. This is because the use of recycled materials is more related to environmental sustainability rather than social and ethical considerations. Therefore, it is not a direct factor that is evaluated in a social audit.

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  • 22. 

    Which of the following is not an example of ethical policies adopted by a business?

    • A.

      Fringe benefits offered to all members of staff

    • B.

      Sponsoring charity events in the community

    • C.

      Fair trade terms with business in less economically developed countries

    • D.

      The safe disposal of waste materials

    Correct Answer
    A. Fringe benefits offered to all members of staff
    Explanation
    Fringe benefits offered to all members of staff is not an example of ethical policies adopted by a business because ethical policies typically focus on actions that benefit the wider community or stakeholders, rather than just the employees. While offering fringe benefits may be a positive practice, it is not directly related to ethical considerations such as fair trade, community involvement, or environmental sustainability.

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  • 23. 

    Many businesses strive to be the market leader. Which of the following methods is least likely to achieve this objective?

    • A.

      Maintain customer satisfaction

    • B.

      Competitive prices

    • C.

      Maintain product quality

    • D.

      Have high labor turnover

    Correct Answer
    D. Have high labor turnover
    Explanation
    Having high labor turnover is least likely to achieve the objective of being a market leader. High labor turnover refers to a high rate of employee attrition or staff leaving the company. This can lead to a lack of continuity, decreased productivity, and increased costs associated with hiring and training new employees. In contrast, maintaining customer satisfaction, competitive prices, and product quality are all strategies that can help a business become a market leader by attracting and retaining customers, maintaining a competitive edge, and building a strong reputation.

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  • 24. 

    A code of practice is not likely to include details concerning:

    • A.

      Social responsibilities

    • B.

      Expectations of employees in the workplace

    • C.

      Ethical marketing

    • D.

      Statutory employment rights

    Correct Answer
    D. Statutory employment rights
    Explanation
    A code of practice typically focuses on providing guidelines and recommendations for ethical behavior and best practices in a particular industry or profession. It is not likely to include details concerning statutory employment rights because these rights are already defined and protected by laws and regulations. Statutory employment rights include things like minimum wage, working hours, leave entitlements, and protection against discrimination, which are already established and enforced by the government. Therefore, a code of practice would not need to include these details as they are already covered by the law.

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  • 25. 

    Objectives do not include:

    • A.

      Provide a focus for the workforce

    • B.

      Help to assess the performance of a business

    • C.

      Suggest how goals should be achieved

    • D.

      Inform strategic planning

    Correct Answer
    C. Suggest how goals should be achieved
  • 26. 

    What details may not be included in a social audit?

    • A.

      Ethical marketing practices

    • B.

      Treatment of employees

    • C.

      Defect rates

    • D.

      Accident rates

    Correct Answer
    C. Defect rates
    Explanation
    A social audit is a process that evaluates an organization's social and environmental performance. It focuses on assessing the company's impact on society and its stakeholders. In this context, defect rates refer to the number of faulty products or services produced by the company. While defect rates are essential for evaluating product quality, they are not directly related to the social impact of the organization. Social audits primarily examine aspects such as ethical marketing practices, treatment of employees, and accident rates, which have a more significant social and ethical dimension.

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  • 27. 

    The process by which a business reviews and evaluates the effects of its activities on all of its stakeholders is known as:

    • A.

      An ethical code of practice

    • B.

      Social corporate responsibility

    • C.

      Social auditing

    • D.

      Environmental auditing

    Correct Answer
    C. Social auditing
    Explanation
    Social auditing refers to the process of reviewing and evaluating the impact and effects of a business's activities on all of its stakeholders. It involves assessing the social, environmental, and economic consequences of business operations and ensuring that they align with ethical standards and social responsibility. Social auditing helps businesses identify areas where they can improve their practices and make positive contributions to society. It is a proactive approach that promotes transparency, accountability, and sustainable business practices.

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  • 28. 

    Unethical business practices do not include:

    • A.

      Setting higher prices to raise profit margins

    • B.

      The production of demerit goods such as alcohol and tobacco

    • C.

      Lending money to companies that make weapons of war

    • D.

      Deliberately using offensive tactics to market a firm's products

    Correct Answer
    A. Setting higher prices to raise profit margins
    Explanation
    Unethical business practices involve actions that are dishonest, unfair, or harmful to stakeholders. Setting higher prices to raise profit margins may be considered a normal business practice as long as it is done within legal and ethical boundaries. It is a common strategy used by businesses to cover their costs and generate profits. However, the other options mentioned in the question involve practices that are generally considered unethical. The production of demerit goods like alcohol and tobacco can harm public health, lending money to companies that make weapons of war can contribute to violence and conflict, and deliberately using offensive tactics for marketing can manipulate and deceive consumers.

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  • 29. 

    What does the 'R' in SMART objectives stand for?

    • A.

      Realistic

    • B.

      Rational

    • C.

      Reasonable

    • D.

      Righteous

    Correct Answer
    A. Realistic
    Explanation
    The 'R' in SMART objectives stands for realistic. This means that the objective should be achievable and feasible within the given constraints and resources. It emphasizes the importance of setting goals that are practical and attainable, taking into consideration the available time, resources, and capabilities. A realistic objective ensures that it is within reach and can be accomplished, increasing the chances of success.

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  • 30. 

    What does the 'S' in SMART objectives stand for?

    • A.

      Selective

    • B.

      Select

    • C.

      Specific

    • D.

      Support

    Correct Answer
    C. Specific
    Explanation
    The 'S' in SMART objectives stands for Specific. This means that objectives should be clear and well-defined, focusing on a specific outcome or result. By setting specific objectives, it becomes easier to measure progress and determine whether the objective has been achieved. This helps in providing clarity and direction to individuals or teams working towards the objective, increasing the chances of success.

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  • 31. 

    What does the 'M' in SMART objectives stand for?

    • A.

      Measurable

    • B.

      Metric

    • C.

      Maintain

    • D.

      Manageable

    Correct Answer
    A. Measurable
    Explanation
    The 'M' in SMART objectives stands for "Measurable." This means that the objective should have clear criteria for measuring progress and success. It implies that the objective should be quantifiable, allowing for the tracking and evaluation of progress towards achieving the goal. A measurable objective allows for the establishment of benchmarks and the ability to determine whether the objective has been achieved or not.

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  • 32. 

    What does the 'A' in SMART objectives stand for?

    • A.

      Ascertain

    • B.

      Ability

    • C.

      Available

    • D.

      Achievable

    Correct Answer
    D. Achievable
    Explanation
    The 'A' in SMART objectives stands for "Achievable." This means that the objective should be realistic and attainable within the given constraints. It implies that the goal should be challenging enough to motivate individuals, but not so difficult that it becomes impossible to achieve. By setting achievable objectives, individuals can maintain their focus and motivation, leading to successful outcomes.

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  • 33. 

    What does the 'T' in SMART objectives stand for?

    • A.

      Trending

    • B.

      Tracking

    • C.

      Time specific

    • D.

      Total cost

    Correct Answer
    C. Time specific
    Explanation
    The 'T' in SMART objectives stands for time specific. This means that objectives should have a specific time frame or deadline attached to them. This helps to provide clarity and focus, ensuring that objectives are achievable within a certain timeframe. By setting a specific time frame, it becomes easier to track progress and measure success.

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  • 34. 

    ____________:  A document detailing a company's rules and guidelines on staff behaviour that must be followed by all employees.

    Correct Answer
    Code of conduct
    ethical code
    Explanation
    A code of conduct or ethical code is a document that outlines the rules and guidelines for staff behavior within a company. It serves as a set of principles and standards that all employees must adhere to. This document helps to establish expectations for professional behavior, integrity, and ethical decision-making. It ensures that employees understand the company's values and promotes a positive work environment.

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  • 35. 

    _____________: Assess the impact of a business on the environment (independent is best).

    Correct Answer
    Environmental audit
    Explanation
    An environmental audit is a process used to evaluate and assess the impact of a business on the environment. It involves a systematic review of the company's operations, practices, and policies to identify areas where environmental improvements can be made. This audit helps in identifying any potential environmental risks or non-compliance with environmental regulations. It provides valuable information for businesses to develop strategies and implement measures to minimize their environmental impact, promote sustainability, and ensure compliance with environmental laws and regulations.

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  • 36. 

    ______________: An independent report on the impact a business has on society. This can cover pollution levels, health and safety record, sources of supplies, customer satisfaction and contribution to the community.

    Correct Answer
    Social audit
    Explanation
    A social audit is an independent report that evaluates the impact a business has on society. This report assesses various aspects such as pollution levels, health and safety record, sources of supplies, customer satisfaction, and contribution to the community. It provides a comprehensive analysis of a business's social responsibility and helps identify areas for improvement.

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  • 37. 

    ___________ Objectives: Short-term or medium-term goals or targets which must be achieved for an organization to attain its corporate objectives.

    Correct Answer
    Tactical
    Operational
    Explanation
    Tactical and operational objectives are both types of goals that an organization needs to achieve in order to reach its overall corporate objectives. Tactical objectives are short-term or medium-term goals that help guide the organization towards its strategic goals. These objectives focus on specific departments or functions within the organization and are typically set by middle management. On the other hand, operational objectives are more detailed and specific actions that need to be taken to accomplish the tactical objectives. They are often set by frontline managers and employees and are focused on day-to-day activities.

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  • 38. 

    __________ Objectives: Important, broadly defined targets that a business much reach to achieve its overall aim.

    Correct Answer
    Strategic
    Corporate
    Explanation
    Strategic and corporate objectives are both important and broadly defined targets that a business must reach in order to achieve its overall aim. Strategic objectives refer to the specific goals and actions that a business takes to fulfill its strategic plan and gain a competitive advantage in the market. On the other hand, corporate objectives are the overall goals and targets that a business sets at the corporate level to guide its operations and decision-making processes. Both types of objectives are crucial for the success and growth of a business.

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  • 39. 

    ____________: A statement of the business's core aims, phrased in a way to motivate employees and to stimulate interest by outside groups.

    Correct Answer
    Mission statement
    Explanation
    A mission statement is a concise and powerful statement that outlines the fundamental purpose and goals of a business. It serves as a guiding principle for employees, motivating them and aligning their efforts towards a common objective. Additionally, a well-crafted mission statement can also generate interest and attract external stakeholders, such as customers, investors, and partners, by clearly communicating the organization's values and aspirations.

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  • 40. 

    ___________: A statement of what the organization would like to achieve or accomplish in the long term.

    Correct Answer
    Vision statement
    Explanation
    A vision statement is a statement that outlines the long-term goals and aspirations of an organization. It provides a clear picture of what the organization aims to achieve in the future. It serves as a guide for decision-making and helps align the efforts of employees towards a common purpose. A vision statement is important as it inspires and motivates employees, stakeholders, and customers, and helps create a sense of direction for the organization. It is a powerful tool for strategic planning and sets the foundation for the organization's overall strategy and objectives.

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  • 41. 

    The 'A'  in S.M.__.R.T. objectives

    Correct Answer
    Achievable
    Explanation
    The 'A' in SMART objectives stands for "Achievable". This means that the objective should be realistic and attainable within the given resources, time frame, and constraints. It emphasizes the importance of setting goals that are challenging yet feasible, ensuring that they can be accomplished with the available means and capabilities. By setting achievable objectives, individuals and organizations can maintain motivation, focus, and a sense of progress while working towards their goals.

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  • 42. 

    The 'M'  in S.__.A.R.T. objectives

    Correct Answer
    Measurable
    Explanation
    The 'M' in S.M.A.R.T. objectives stands for "Measurable". This means that the objective should be quantifiable and have a clear way of tracking progress and determining success. By setting measurable objectives, it becomes easier to evaluate performance, make adjustments, and stay on track towards achieving the goal.

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