1. A garment factory has 400 operatives. Each supervisor can control at most 12 operatives and each production manager at most 5 supervisors. How many production managers are needed?

A) 6
B) 34
C) 8
D) 7

Correct: D complex Span of control

Supervisors = 400 / 12 = 33.3, rounded up to 34 because part of a team still needs a supervisor. Managers = 34 / 5 = 6.8, rounded up to 7. If you chose 6 you rounded down. If you chose 8 you rounded 34/5 = 6.8 up to 7 and then added an extra manager for the leftover team. If you chose 34 you stopped at the number of supervisors.

2. A consultancy forms small teams to solve client problems. Authority comes from expertise rather than position, and teams are dissolved when the task ends. In Handy's classification, this is a:

A) role culture
B) person culture
C) task culture
D) power culture

Correct: C difficult Organisational culture

Handy's task culture is a net of project teams that draw resources from across the firm, with expertise as the source of influence. A role culture relies on rules and defined positions. A power culture centres on one dominant person. A person culture exists for the benefit of its members, as in a partnership of professionals. If you chose role or power you looked at hierarchy or control; if you chose person you confused expert teams with a group of individuals serving themselves.

3. Which TWO are advantages of decentralised decision-making? (Select TWO.)

Multiple response
A) Local managers can respond faster to local conditions
B) Policies are applied consistently across all units
C) Head office controls costs more tightly
D) Managers gain motivation and training for senior roles
E) Bulk purchasing gives economies of scale

Correct: A, D difficult Centralisation and decentralisation

Decentralisation speeds decisions and develops managers. Consistency, tight cost control and bulk purchasing are advantages of centralisation. If you chose B, C or E you picked benefits of central control.

4. Consider forms of business ownership. For each statement, select Yes if it is correct and No if it is not.

Yes/No grid

1. Partners in an ordinary partnership have unlimited, joint and several liability.   Yes

2. A private company may offer its shares to the public.   No

3. A limited company is a legal person separate from its owners.   Yes

4. A sole trader's business is legally separate from the owner.   No

Correct: Y, N, Y, N difficult Legal forms of business

(1) Yes. (2) No: only a public company can offer shares to the public. (3) Yes: separate legal personality is a defining feature. (4) No: a sole trader and the business are the same legal person.

5. Consider organisational structures. For each statement, select Yes if it is correct and No if it is not.

Yes/No grid

1. Tall structures usually have narrower spans of control.   Yes

2. Flat structures usually lengthen the chain of command.   No

3. A functional structure groups activities by specialist area.   Yes

4. A machine bureaucracy relies on standardised work processes.   Yes

Correct: Y, N, Y, Y difficult Structure and span of control

(1) Yes: many layers, few subordinates per manager. (2) No: flat structures shorten the chain. (3) Yes. (4) Yes: Mintzberg's machine bureaucracy depends on standardised processes.

6. A Dhaka fintech start-up works in a fast-changing market. Roles are flexible, specialists contribute across teams and communication runs in all directions. Using the Burns and Stalker classification, how would you describe the structure and its suitability?

A) Mechanistic, and suited to a stable environment where rules provide efficiency
B) Organic, and suited to a stable environment where tasks never change
C) Mechanistic, and suited to a dynamic environment where tasks change often
D) Organic, and suited to a dynamic environment

Correct: D complex Mechanistic and organic structures

Burns and Stalker described mechanistic organisations as stable, efficient and suited to slow-changing environments, and organic organisations as flexible and adaptive, suited to dynamic ones. The features described (flexible roles, lateral communication, shared specialist knowledge) are organic, and they fit a changing market. The other combinations mismatch either the structure with its features or the structure with its environment.

7. Which of the following best distinguishes a joint venture from a strategic alliance?

A) A joint venture is a short-term trading agreement with no capital invested, while an alliance always requires a shared equity holding
B) A joint venture always involves a merger of the partners' legal identities, while an alliance is a purchase of one partner by another
C) A joint venture is limited to firms from the same country, while an alliance is used only for cross-border projects between competitors
D) A joint venture usually creates a separate jointly owned entity, while an alliance is usually a contractual co-operation without a new entity

Correct: D difficult Joint ventures and strategic alliances

In a joint venture the partners usually set up a new entity and invest equity in it, sharing control and profit. A strategic alliance is normally a looser arrangement governed by contract. Neither involves merger of the partners, nationality limits, or the reversed description of capital in the other options.

8. Which TWO of the following are features of a company that an ordinary partnership does not have? (Select TWO.)

Multiple response
A) Separate legal personality from its owners
B) Owners may share the profits
C) Continuity of existence independent of changes in membership
D) Owners may contribute capital
E) Owners can employ staff

Correct: A, C difficult Companies and partnerships

A company is a separate legal person and has perpetual succession, so it continues when shareholders change. A partnership can share profits, receive capital and employ staff. If you chose profit sharing, capital or employment you picked features common to both.

9. Consider matrix, divisional, functional and flat structures. For each statement, select Yes if it is correct and No if it is not.

Yes/No grid

1. A divisional structure groups activities by specialist function such as finance and marketing.   No

2. A matrix structure gives some employees two reporting lines.   Yes

3. A matrix structure can create conflicts of authority between managers.   Yes

4. A functional structure builds specialist expertise but can cause silo behaviour.   Yes

5. A flat structure lengthens the chain of command.   No

Correct: N, Y, Y, Y, N difficult Matrix and divisional structures

(1) No: divisions are by product, market or geography; grouping by specialism is functional. (2) Yes. (3) Yes. (4) Yes. (5) No: flat structures shorten the chain.

10. Consider outsourcing a business function. For each statement, select Yes if it is correct and No if it is not.

Yes/No grid

1. The organisation keeps day-to-day control over how the provider delivers the service.   No

2. Service level agreements become unnecessary once a function is outsourced.   No

3. Outsourcing can allow the organisation to focus on its core activities.   Yes

4. Contractual issues, such as service levels, need to be considered.   Yes

Correct: N, N, Y, Y difficult Outsourcing

(1) No: the provider manages the service at arm's length. (2) No: SLAs become more important. (3) Yes. (4) Yes.

11. A Dhaka group sells garments, packaging and logistics services. Each business has its own managing director, profit target and support staff, while the head office sets strategy and allocates capital. Which structure is this and what is a typical drawback?

A) Matrix structure, with the drawback that every employee reports to two bosses
B) Divisional structure, with the drawback of duplicated functions and possible rivalry between divisions
C) Flat structure, with the drawback that spans of control become too narrow
D) Functional structure, with the drawback that specialists lose contact with others in the same specialism

Correct: B complex Divisional structure

Separate businesses with their own managers and profit targets reflect a divisional structure. Each division needs its own support functions, so costs can be duplicated, and divisions may compete for central resources.

12. A consultancy staffs projects with specialists from audit, tax and IT who also report to their department heads. A consultant receives conflicting instructions from the project manager and the department head. Which structure is this, and what is the key issue?

A) Divisional structure, with weak co-ordination between profit centres
B) Matrix structure, with conflicts of authority from dual reporting lines
C) Simple structure, with all decisions taken by the owner-manager
D) Machine bureaucracy, with excessive standardisation of work

Correct: B complex Matrix structure

Staff with both a functional manager and a project manager work in a matrix. The principal weakness is the dual authority, which can cause conflicting instructions and confusion.

13. Which statement correctly distinguishes a public company from a private company under company law?

A) A public company must have only one shareholder, whereas a private company needs many
B) A public company has unlimited liability for its shareholders, whereas a private company has limited liability
C) A public company may offer its shares to the public, whereas a private company generally cannot
D) A public company does not have to file annual accounts, whereas a private company must

Correct: C difficult Public and private companies

Only public companies may invite the public to subscribe for their shares, which is why private companies restrict transfer of shares. Both types are normally limited companies with separate legal personality.

14. A professional services firm has three owners who want to share profits, avoid personal liability for the firm's debts and have the business continue if one of them retires. Which form best meets these needs?

A) A joint venture without a separate entity
B) An ordinary partnership
C) A private limited company
D) A sole trader business

Correct: C complex Sole trader, partnership and company

A private limited company offers limited liability and perpetual succession through separate legal personality. In an ordinary partnership partners have unlimited liability and the partnership may be dissolved by changes in membership. A sole trader has one owner.

15. A Chattogram bakery brand lets independent owners operate outlets under its name, using its recipes and operating manuals in return for a fee and a percentage of sales. Which arrangement is this and what is a typical advantage to the brand owner?

A) A strategic alliance, which creates a separate jointly owned company
B) Outsourcing, which transfers the brand's recipes to a supplier
C) Licensing of a patent, which requires the licensor to finance every outlet
D) Franchising, which allows rapid expansion using the franchisee's capital

Correct: D complex Franchising

In franchising the franchisor grants the right to use its brand and system for fees. Expansion is faster since franchisees invest in outlets. The other arrangements do not describe this.

16. A firm moves to a hybrid model with staff working from home three days a week. Which of the following is the most significant organisational risk to manage?

A) Weakened supervision, communication and information security outside the office
B) Legal conversion of the firm from a company into a partnership
C) Elimination of the need for any internal controls over data
D) Automatic increases in span of control to more than 30 staff per manager

Correct: A difficult Remote working

Remote working can weaken supervision, communication and control over data. It does not change legal form or remove the need for internal controls.

17. Which THREE are features of a limited company? (Select THREE.)

Multiple response
A) Unlimited personal liability of shareholders
B) Separate legal personality
C) Management always carried out personally by the shareholders
D) Perpetual succession
E) Profits taxed only in the hands of the shareholders as they arise
F) Liability of members limited to the amount unpaid on their shares

Correct: B, D, F difficult Features of a company

A company is a separate legal person, members' liability is limited and the company continues despite changes in membership. Shareholders do not have unlimited liability and management is usually delegated to directors.

18. Which TWO are advantages of a functional structure? (Select TWO.)

Multiple response
A) Development of specialist expertise
B) Clear accountability for the profit of each product line
C) Fast responses to differences between local markets
D) Avoidance of any silo behaviour
E) Economies of scale within each function

Correct: A, E difficult Advantages of functional structures

Functional structures develop expertise and provide economies of scale. Product profit accountability and local responsiveness favour divisional structures, and silos are a typical weakness of functional structures.

19. Which TWO are typical reasons for forming a strategic alliance? (Select TWO.)

Multiple response
A) To share the cost and risk of a project
B) To merge the legal identities of the partners
C) To transfer ownership of one partner to the other
D) To avoid any need to co-operate with another firm
E) To gain access to a partner's market knowledge

Correct: A, E difficult Strategic alliances

Alliances allow sharing of costs, risks and market knowledge without a merger or takeover.

20. Consider span of control. For each statement, select Yes if it is correct and No if it is not.

Yes/No grid

1. Complex work generally supports a narrower span.   Yes

2. The span of control has no link to the amount of supervision needed.   No

3. A wider span usually means more management levels.   No

4. Highly capable, trained staff may allow wider spans.   Yes

Correct: Y, N, N, Y difficult Span of control

(1) Yes. (2) No: closer supervision is generally associated with narrow spans. (3) No: a wider span means fewer levels. (4) Yes.

21. Consider Mintzberg's organisational configurations. For each statement, select Yes if it is correct and No if it is not.

Yes/No grid

1. A machine bureaucracy relies on standardised work processes.   Yes

2. A divisionalised form is made up of semi-autonomous units.   Yes

3. A professional bureaucracy relies mainly on tight central supervision by a technostructure.   No

4. A simple structure is typical of a large, complex organisation.   No

Correct: Y, Y, N, N difficult Mintzberg's configurations

(1) Yes. (2) Yes. (3) No: it relies on the standardised skills of trained professionals. (4) No: simple structures are typical of small, young firms.

22. Consider an ordinary partnership. For each statement, select Yes if it is correct and No if it is not.

Yes/No grid

1. Partners generally share profits in the agreed ratio.   Yes

2. A partnership has perpetual succession.   No

3. Partners normally have joint and several liability.   Yes

4. An ordinary partnership is a legal person separate from its partners.   No

Correct: Y, N, Y, N difficult Partnerships

(1) Yes. (2) No: changes in membership may dissolve it. (3) Yes. (4) No: unlike a company, an ordinary partnership has no separate legal personality.

23. Consider joint ventures. For each statement, select Yes if it is correct and No if it is not.

Yes/No grid

1. Partners in a joint venture share control, risk and returns.   Yes

2. A joint venture often creates a separate entity owned by the partners.   Yes

3. A joint venture is available only to partners that come from the same country.   No

4. A joint venture requires one partner to be absorbed by the other.   No

Correct: Y, Y, N, N difficult Joint ventures

(1) Yes. (2) Yes. (3) No: joint ventures are often used to enter foreign markets. (4) No: no merger is required.

24. Consider Handy's cultures. For each statement, select Yes if it is correct and No if it is not.

Yes/No grid

1. A role culture is based on personal power and informal influence.   No

2. A task culture forms teams around problems and uses expertise.   Yes

3. A person culture exists mainly to satisfy the aims of the organisation's owner.   No

4. A power culture depends on a central figure.   Yes

Correct: N, Y, N, Y difficult Organisational culture

(1) No: a role culture rests on rules and defined responsibilities. (2) Yes. (3) No: a person culture exists for the benefit of its members. (4) Yes.

25. Consider centralisation and decentralisation. For each statement, select Yes if it is correct and No if it is not.

Yes/No grid

1. Decentralisation always lowers control risk.   No

2. Decentralisation tends to speed up local decision-making.   Yes

3. Centralisation increases responsiveness to local conditions.   No

4. Centralisation promotes consistent policies.   Yes

Correct: N, Y, N, Y difficult Centralisation

(1) No: control risk may increase. (2) Yes. (3) No: centralisation can reduce local responsiveness. (4) Yes.