Certified Internal Auditor (CIA) Part 3: Business Knowledge for Internal Auditing — Question 66

An organization uses the management-by-objectives method, whereby employee performance is based on defined goals. Which of the following statements is true regarding this approach?

Answer options

• A. It is particularly helpful to management when the organization is facing rapid change.
• B. It is a more successful approach when adopted by mechanistic organizations.
• C. It is more successful when goal-setting is performed not only by management, but by all team members, including lower-level staff.
• D. It is particularly successful in environments that are prone to having poor employer-employee relations.

Correct answer: C

Explanation

The correct answer is C because involving all team members in goal-setting fosters collaboration and commitment, enhancing overall performance. Option A is incorrect as management-by-objectives is more structured and might struggle during rapid changes. Option B is not accurate since mechanistic organizations may not benefit as much from collaborative goal-setting. Option D is also wrong as poor employer-employee relations can hinder the effectiveness of this approach.