# SPHR Practice Questions for Leadership and Strategy

Eight SPHR practice questions on COSO, negotiation, Porter, ISO 31000, Galbraith, evidence-based management, Bridges and NPV, with every option explained.

Source: https://whatsdsapq.top/sphr-practice-questions/ · based on the channel [PrepSolution](https://www.youtube.com/channel/UCb3e6Ia0AJZSRdAqYuRpOvQ) · Video: [SPHR Practice Questions | Master Leadership and Strategy | Pass the Exam First Time](https://www.youtube.com/watch?v=hxE7eirgdLM) · 2026-11-04

![SPHR Practice Questions for Leadership and Strategy](https://whatsdsapq.top/sphr-practice-questions/sphr-practice-questions.webp)

## Key takeaways

- The SPHR Leadership and Strategy functional area is tested with scenario questions, not definitions; each practice item has one best answer and three plausible distractors.
- COSO internal control has five components: control environment, risk assessment, control activities, information and communication, and monitoring.
- Principled negotiation separates interests from positions; the classic example is two people arguing over an orange who both want the peel and the juice.
- ISO 31000 treats risk assessment as three steps: risk identification, risk analysis and risk evaluation, with communication and consultation throughout.
- Galbraith's Star Model has five points: strategy, structure, processes, rewards and people practices, all aligned to strategy.
- In capital budgeting, NPV is the decision rule; WACC is the discount rate used to compute it, not a competing criterion.

SPHR practice questions work best when they mirror the exam's scenario style: a short business situation, four plausible options and one best answer. The eight items below cover the Leadership and Strategy functional area — COSO internal control, principled negotiation, Porter's threat of substitutes, ISO 31000 risk assessment, the Galbraith Star Model, evidence-based management, Bridges' transition model and NPV versus WACC. Each item comes with the reasoning behind every option, so you learn the rule, not just the letter. A free set of [SPHR study materials](https://prepsolution.com/free-study-materials/sphr?utm_source=youtube&utm_medium=video&utm_campaign=sphr_longform&utm_content=sphr_long_v3) is a good place to start before you attempt a timed mock.

## What SPHR practice questions on Leadership and Strategy actually test

The Leadership and Strategy area asks you to make decisions as a senior HR leader, not to recall definitions. That means questions are written as business scenarios: a merger, a budget cut, a resistant department, a new competitor. The correct answer is the one that best fits the situation and the organization's strategy, and the three distractors are usually true statements applied in the wrong context. Two habits separate passing candidates from repeat test-takers. First, read the last line of the stem before the scenario, so you know what is being asked. Second, eliminate options that are technically accurate but answer a different question. In a five-second-per-item drill, that means committing to a rule for each topic and applying it quickly.

## COSO internal control: five components, one framework

COSO's Internal Control — Integrated Framework organizes internal control into five components, and SPHR items often ask which component a given activity belongs to. The five are: control environment (tone at the top, ethics, governance), risk assessment (identifying and analyzing risks to objectives), control activities (policies and procedures that mitigate risk), information and communication (relevant, timely information flowing up, down and across), and monitoring (ongoing and separate evaluations of whether controls work). A common trap is confusing risk assessment with control activities: assessing a risk is not the same as doing something about it. Another trap is treating the control environment as a single policy document; it is the overall culture and governance structure. If a scenario describes a whistleblower hotline, that is information and communication; if it describes segregation of duties, that is a control activity; if it describes an internal audit review, that is monitoring.

## Interests versus positions in principled negotiation

Principled negotiation, associated with Fisher and Ury's Getting to Yes, separates the people from the problem, focuses on interests rather than positions, invents options for mutual gain, and insists on objective criteria. A position is what a party says it wants; an interest is why it wants it. The classic illustration is two people arguing over an orange: one wants the peel for baking, the other wants the juice. Splitting the orange satisfies neither; asking why reveals a solution where both get everything. In an SPHR scenario, the winning answer almost always involves asking questions to uncover underlying interests, expanding the pie before dividing it, or using an objective standard such as market data. Options that push for compromise on the stated positions, or that escalate to arbitration before interests are explored, are usually wrong.

## Porter's threat of substitutes and the five forces

Michael Porter's five forces model analyzes industry attractiveness through rivalry among existing competitors, threat of new entrants, threat of substitutes, bargaining power of suppliers and bargaining power of buyers. The threat of substitutes is the one candidates most often confuse with new entrants. A substitute is a different product or service that meets the same need — video conferencing substituting for business travel, for example — while a new entrant is a new competitor selling the same kind of product. High substitute threat caps the prices an industry can charge. When a question asks which force is most affected by a technological shift that changes how customers solve a problem, the answer is substitutes. When it asks about low capital requirements attracting new companies, the answer is threat of new entrants.

## ISO 31000 risk assessment in three steps

ISO 31000 defines risk assessment as three sequential steps: risk identification, risk analysis and risk evaluation. Identification asks what could happen and why; analysis assesses likelihood and consequences; evaluation compares the result against risk criteria to decide whether action is needed. The standard places communication and consultation alongside every step, and treats monitoring and review as continuous. A frequent exam trap is offering "risk treatment" as part of risk assessment — treatment comes after evaluation, not inside it. Another trap is collapsing analysis and evaluation into one step. If a scenario describes ranking risks against tolerance thresholds, that is evaluation; if it describes estimating probability and impact, that is analysis.

## The Galbraith Star Model and evidence-based management

Galbraith's Star Model aligns five design points around strategy: structure, processes, rewards and people practices. Strategy sits at the center and determines the other four; misalignment between any point and strategy is the source of organizational dysfunction. In a scenario about a new strategy failing because incentive plans still reward old behaviors, the answer is a rewards misalignment. Evidence-based management applies the same discipline to decisions: it combines the best available research evidence, organizational data, professional expertise and stakeholder values. The wrong answers typically rely on a single source — a popular book, a consultant's opinion, or last year's data alone — rather than integrating multiple sources. When a question asks how to decide between two HR interventions, the best answer usually involves piloting, measuring outcomes and consulting credible research.

## Bridges' neutral zone and NPV versus WACC

William Bridges' transition model describes three phases: ending, losing and letting go; the neutral zone; and the new beginning. The neutral zone is the uncomfortable middle period when the old way is gone but the new way is not yet established. Productivity dips, conflict rises and ambiguity is high. The leader's job there is to protect people, clarify short-term priorities and create temporary structures — not to rush the ending or declare the new beginning prematurely. On the finance side, net present value is the capital budgeting decision rule: discount expected future cash flows at the appropriate rate and accept projects with a positive NPV. WACC is the weighted average cost of capital, the discount rate used in that calculation. It is not a competing criterion, and an option that says "choose the project with the lowest WACC" is a distractor.

## Building your own eight strategy cards and where to practice

A memory card per rule is the fastest way to hold these concepts under time pressure. Write the rule on the front and one trap on the back: COSO — five components, assessment is not activity; negotiation — interests before positions; Porter — substitute meets the same need; ISO 31000 — identify, analyze, evaluate, treatment comes later; Galbraith — five points aligned to strategy; evidence-based management — four sources combined; Bridges — neutral zone is the middle, not the end; NPV — the decision rule, WACC the discount rate. Review the cards daily for a week, then test yourself with timed sets. The full question bank contains 1,500+ strategic questions, 33 animated video lessons, the HRCI Essentials Book and 500+ Rapid Recall flashcards, with 3, 6 or 12 months of access.

## All the links from this breakdown

- [Free SPHR study materials](https://prepsolution.com/free-study-materials/sphr?utm_source=youtube&utm_medium=video&utm_campaign=sphr_longform&utm_content=sphr_long_v3)
- [SPHR Complete System](https://prepsolution.com/exam/sphr?utm_source=youtube&utm_medium=video&utm_campaign=sphr_longform&utm_content=sphr_long_v3)
- [Free SPHR practice quiz](https://prepsolution.com/free-practice/sphr?utm_source=youtube&utm_medium=video&utm_campaign=sphr_longform&utm_content=sphr_long_v3)
- [Pass Guarantee terms](https://prepsolution.com/pass-guarantee?utm_source=youtube&utm_medium=video&utm_campaign=sphr_longform&utm_content=sphr_long_v3)
- [PrepSolution website](https://prepsolution.com/?utm_source=youtube&utm_medium=video&utm_campaign=sphr_longform&utm_content=sphr_long_v3)

## Final takeaways on SPHR Leadership and Strategy practice

Eight questions, eight rules, and one habit: explain to yourself why each wrong option fails. That is what turns practice into exam performance. The Leadership and Strategy area rewards candidates who can map a scenario to a framework and then eliminate distractors that are true but irrelevant. PrepSolution, the channel behind this breakdown, structures each item so that every option is explained, which is the part most candidates skip. If you want a structured start, download the [free SPHR study materials](https://prepsolution.com/free-study-materials/sphr?utm_source=youtube&utm_medium=video&utm_campaign=sphr_longform&utm_content=sphr_long_v3) and work through one topic card per day. Track your score out of eight each round; steady improvement across rounds is the best signal that you are ready to book the exam.

## Questions & answers

**How many SPHR practice questions should I answer before the exam?**

There is no official number, but a practical target is 1,500 or more strategic questions across all functional areas, including at least three full-length timed mocks. The value comes from reviewing every option, not from the raw count. Ten questions fully analyzed beat fifty answered and forgotten.

**What is the difference between NPV and WACC on the SPHR exam?**

NPV is the capital budgeting decision rule: discount expected future cash flows and accept projects with a positive net present value. WACC is the weighted average cost of capital, the discount rate used inside that calculation. An answer choice that treats WACC as a separate selection criterion is a distractor.

**Is the neutral zone in Bridges' transition model a stage to shorten?**

No. The neutral zone is the middle phase between the ending and the new beginning, when the old way is gone but the new way is not established. Leaders should protect people, set short-term priorities and create temporary structures there rather than rushing through it.

**Where can I find free SPHR practice questions?**

PrepSolution offers a free SPHR practice quiz and a free study materials pack that includes question sets and review resources. Use them to identify weak topics first, then move to timed mocks once your accuracy per topic is stable.