Reading comprehension test 287

 

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Reading comprehension questions answers for competitive exam

Question 1
Many present-day boards now recognise the need for careful succession planning. The Chief Executive Officer's succession plans are commonly part of his annual performance review, and most boards now devote several meetings a year to the subject. One crucial decision that boards face is whether to select one of their own or an outsider. Unsurprisingly, firms in trouble are much more likely to look for fresh blood. When the business is running smoothly, directors are more than happy to pick an experienced insider, who will continue along the present path. Whereas promising senior executives will often abandon a struggling company, successful firm stand to have a large pool of talented managers to choose from. Occasionally, even a successful company appoints an outsider who can introduce some particular expertise. Many utility companies seek outside Chief Executive Officers to shepherd them through the complexities of deregulation. Many boards do consider outsiders even when the existing Chief Executive Officer is planning a normal retirement.

The passage conveys that an ailing firm can be revived by the appointment of a Chief Executive Officer who is an

A
outside expert
B
experienced insider
C
expert in deregulation
D
experienced shepherd
Management Questions answers
Question 1 Explanation: 
The answer can be derived from the lines: Unsurprisingly, firms in trouble are much more likely to look for fresh blood. When the business is running smoothly, directors are more than happy to pick an experienced insider, who will continue along the present path.
Question 2
Successful companies prefer to promote an inside executive as Chief Executive Officer for reasons of
A
stability of operations
B
higher profits
C
market compulsions
D
diversification
Management Questions answers
Question 2 Explanation: 
The passage says, "When the business is running smoothly, directors are more than happy to pick an experienced insider, who will continue along the present path." Since an inside executive already knows the system, he is preferred.
Question 3
Successful companies sometimes appoint Chief Executive Officers from outside because
A
their existing executives are complacent
B
distance lends enchantment
C
they wish to utilise their expertise
D
they wish to be better placed then their competitors
Management Questions answers
Question 3 Explanation: 
It is a direct question the answer to which can be taken from the following line '..even a successful company appoints an outsider who can introduce some particular expertise..'
Question 4
What is the main issue in this passage?
A
Leadership traits of Chief Executive Officers
B
Compensation package of Chief Executive Officers
C
Discipline to be inculcated by Chief Executive Officers
D
Planning the succession of Chief Executive Officers
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Question 4 Explanation: 
The passage deals with the planning of an organization. None of the options other than option (d) are related to the passage. They are irrelevant and not even mentioned in the passage.
Question 5
Consider the following statements1. Companies are too complacent and do not address the problem of succession of their Chief Executive Officers. 2. Even successful companies do not have enough talent in their ranks to pick incumbent to the post of Chief Executive Officer. Which of the statements given above is/are correct?
A
1 only
B
2 only
C
Neither 1 nor 2
D
Both 1 and 2
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Question 5 Explanation: 
Statement 1 is wrong because '..Many present-day board now recognize the need for careful succession planning. The Chief Executive Officer's succession plans are commonly part of his annual performance review, and most boards now devote several meetings a year to the subject..' Statement 2 is correct '..even a successful company appoints an outsider who can introduce some particular expertise..'
There are 5 questions to complete.

 

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