Certified Internal Auditor (CIA) Part 3: Business Knowledge for Internal Auditing — Question 46

Which of the following statements is true regarding the "management-by-objectives" method?

Answer options

• A. Management by objectives is most helpful in organizations that have rapid changes.
• B. Management by objectives is most helpful in mechanistic organizations with rigidly defined tasks.
• C. Management by objectives helps organizations to keep employees motivated.
• D. Management by objectives helps organizations to distinguish clearly strategic goals from operational goals.

Correct answer: D

Explanation

The correct answer, D, is accurate because management-by-objectives focuses on aligning individual performance with strategic organizational goals. Options A and B misrepresent the effectiveness of this method in dynamic or rigid environments, while option C, while partially true, does not capture the primary purpose of management-by-objectives.