Association of Chartered Certified Accountants (ACCA) Certification Practice Test

When is a Psychologically close manager (PDM) deemed more effective?

1. In a highly unfavourable situation

2. In a situation where it is not highly favourable or unfavourable

3. In a highly favourable situation

4. In an overly competitive environment

The correct answer is: In a situation where it is not highly favourable or unfavourable

A Psychologically Close Manager (PDM) is considered more effective in situations that are neither highly favourable nor highly unfavourable. This context allows the PDM to utilize their interpersonal skills effectively to motivate and engage their team members, fostering strong relationships that can enhance productivity and morale. In scenarios that are not extreme, a PDM can balance their approach by applying empathy and understanding. They can navigate the challenges and dynamics of the team better, encouraging collaboration and support among team members. This is particularly valuable when the environment is stable enough to allow for relationship-building but still presents enough challenges to require attentive management. When the situation becomes highly favourable, a different management style may be more effective, as there can be less need for intensive relationship management and more focus on maximizing results. Additionally, in highly unfavourable situations, a PDM's efforts may not be able to overcome the significant challenges that require more directive leadership. Similarly, in an overly competitive environment, the emphasis might shift toward performance and competition, where a PDM's approach might not resonate as effectively compared to other management styles more suited to that context.