11 D An increase in public expenditure should increase the level of consumer demand and hence the level of economic activity. This would also be achieved by other measures, such as a reduction in taxation or a reduction in interest rates.

12 C Frictional unemployment arises even when there are unfilled vacancies in the economy. It is because there is never a perfect match between the types of job available and their location with the skills of those seeking work and where they live.

13 B Any environmental scan analyses the external factors that affect an organisation, often categorised as political, economic, social and technological factors.

14 B Data protection legislation is formulated to protect the interests of data subjects who are private individuals. Not all data is regulated.

15 B Diversity policies are intended to reduce recruitment and selection policies and processes that enable discrimination to arise on the basis of gender, race, lifestyle and age.

6 C Greater accountability at lower levels will lead to greater empowerment of those taking decisions and hence greater motivation and commitment.

7 C A manager is employed by the organisation and is therefore a constituent part of it. All the others are known as ‘connected’ stakeholders.

8 D The organisation must constantly be aware of the needs of stakeholders with a high level of power and the ability to influence the organisation profoundly. Management decisions must therefore take most account of the needs of this group of stakeholders.

9 D The primary aim of a public oversight board is to eliminate or minimise any actual or potential breaches of legislative requirements and to ensure compliance with regulations applicable to organisations within their terms of reference.

10 B The ageing population trend is caused by decreasing birth rate and a decreasing mortality rate.

Rationale for answers

1 B The span of control is concerned with the number of subordinates reporting directly to one person. The scalar chain concept relates to the number of levels in the management structure.

2 B The basic principle that underlies marketing is that it is a management process that identifies and anticipates customer needs. The other distractors in the question refer to specific activities undertaken by a marketing function.

3 A Successive reports on corporate governance (Cadbury, Higgs, etc.) have highlighted the increasingly prominent role that nonexecutive directors should take in large organisations. This has become an established best practice.

4 B The task culture is appropriate where organisations can accommodate the flexibility required to adjust management and team structures to address the tasks that must be fulfilled. This is very common in large consultancy firms.

5 D A situation analysis is carried out when deciding on strategic objectives. The organisation will have already decided on its mission statement and goals.