Acca paper F1 fia diploma in Accounting and Business Accountant in Business (AB/fab) exam kit

S EC T I O N 3
K APLA N PUBLISH ING
125 
14 A 
If H wants to manage each product separately, it will need to adopt either a matrix or 
divisional approach, as these would allow the creation of separate divisions for each 
product. However, H wishes to keep its administrative costs as low as possible. As the 
matrix structure has high admin costs due to high numbers of managers, A should adopt a 
divisional approach. 
15 A 
The junior accountants actually undertake the main work of the firm, suggesting that they 
are part of P’s operating core. Note that if P was in a different industry (such as 
construction) accountants would be likely classified as part of the technostructure, as in this 
type of organisation they would provide technical support and aid standardisation. 
16 D 
The granting of authority over each geographic area to geographic bosses results in a 
potential loss of control over key operating decisions. This weakness is also present in the 
Product/Division/Department structure. 
17 C 
Both statements are correct. 
18 D 
Centralisation involves most decisions being made centrally within the organisation (i.e. at 
head office level). This means less training for more junior/local staff as well as better goal 
congruence as all decisions within the organisation are made by the same, senior group of 
managers. Options (ii) and (iii) are advantages of decentralisation. 
19 
A – VIRTUAL 
Virtual organisations exist as a network of contracts with third party suppliers and will 
outsource all major functions. Hollow organisations only outsource non-core functions. 
20 D 
The description best matches a modular structure, where some parts of a product are 
manufactured by external companies rather than by the manufacturer itself.