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CIMA E3 - Strategic Management Question Tutorial Sample Questions:

1. Z is a medium-sized UK based accounting practice. Z operates a graduate training scheme. The trainees are given an induction and then placed on a three-year training programme designed to help develop professional skills and experience.
The training programme has been in existence for many years. However, there is no clear consensus amongst the partners of Z about what the trainees should be able to do on completion of the programme and therefore what the training programme should emphasize. This lack of clarity is affecting the morale and commitment of the trainees and significant numbers are failing the programme or leaving to join a rival firm.
Z's HR Department recognizes the need for committed and well motivated accountants to meet the increased expectations of clients and the competition from rival firms. The HR Department has identified changes to the training programme that can be implemented gradually through a series of initiatives.
Which TWO of the following statements regarding the change required in Z are correct? (Choose two.)

A) The need to manage the competitive position is an example of an 'external direct trigger' for change.
B) Understanding which day-to-day behaviors to reinforce within the training programme, is about 'routines and rituals' according to the Cultural Web.
C) The change would be classified as a 'revolutionary change' according to Balogum and Hope Hailey.
D) The plans to combat competition would be considered as a 'structure' factor according to the McKinsey 7 S model.
E) The skills, abilities and competences of the organization's employee's are a 'hard' factor according to the McKinsey 7 S model.

2. RRR is a medium sized company, which has built family homes in Country D' for twenty years. The Board of RRR wishes to expand company operations and start building homes in the neighboring country. The Board of RRR wishes to undertake a position audit to help in this decision.
Which of the following strategic analysis tools would be used in a position audit for RRR?

A) PEST
B) Gap Analysis
C) Five Forces
D) SWOT

3. QWE is a private company belonging to a famous former sports professional. It operates gyms and fitness clubs across its home country. Each gym or fitness club is treated as a profit center and the manager of each center is paid bonuses based on its financial performance.
QWE introduced multidimensional performance measures into its management control systems 3 years ago.
These measure competitiveness, financial performance, capacity utilization, innovation and the flexibility of its centers to cope with changing demands.
The managers of QWE's centers have been leaving at a very high rate over the last 2 years. They have claimed that the measures are too open to interpretation and when they think they are improving their center's performance they are told they are doing the wrong things. They also complain that the managers in the centers near big cities find it much easier to reach their targets than the managers of other centers.
According to Fitzgerald and Moon's Building Block model, where does the problem lie?

A) Standards and Rewards
B) Dimensions and Rewards
C) Dimensions and Standards
D) Standards, Dimensions and Rewards

4. HHH is a manufacturer which has a bonus scheme for its production workers related to the speed of output.
HHH's products are very specialized and are made in a dangerous production environment. HHH's production workers usually work alone but sometimes, if there are problems in the production environment (for example, machinery breakdowns), they have to work in teams. When the production workers are working in teams they do not receive any bonus.
HHH's senior management is proposing to amend the current bonus scheme to encourage increased productivity. Under the current bonus scheme, production workers receive extra pay when they achieve 45% of their individual target: The target level is low because of the dangerous production environment and the need to occasionally work in teams.
Under the proposed bonus scheme, production workers will not receive any extra pay until they have achieved
90% of their individual target. Workers who achieve 90% or above of their individual target will be paid a 30% higher bonus.
Which THREE of the following problems is HHH most likely to encounter with the introduction of the proposed bonus scheme? (Choose three.)

A) The extra production output will lead to an increase in inventory.
B) Production workers will not be motivated by the proposed level of bonus.
C) Production workers could consider the new target as unachievable.
D) There could be a rise in the level of workplace accidents.
E) The proposed bonus scheme conflicts with health and safety legislation.

5. Which of the following would be correct considerations when evaluating the Feasibility of a strategy? (Choose all that apply.)

A) Will there be sufficient time to implement the strategy?
B) Will customers object to the strategy?
C) Will the strategy exploit the core competencies of the business?
D) Will the strategy maintain competitive advantage?
E) Will the business be able to deal with the responses of its competitors to the strategy?

Solutions: