Read : Slide 9-12

CIMA MALAYSIA

REVISION

E3 ENTERPRISE STRATEGY

MOCK EXAM PACK

GAJENDRA LIYANAARACHCHI

Tutor of the Year 2006

PhD ( Reading), MBA (Merit) Colombo, BSc Mgt (Hons) U.S.J, ACMA, ACIM, CGMA
 Content Page

Mock 1 2

Mock 2 26

Mock 3 52

Mock 4 73

Mock 5 117

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 Mock Exam 1

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Q1.
GL is an international designer wear retailer which has retail shops in markets all around
the globe. Which of the following TWO are elements of the business strategy of GL?

(a) How often the inventories should be changed at stores?

(b) Which staff should we hire for the stores?
(c) Should the company open a new store in Canada?
(d) What should be the prices charged at each store?
(e) From which designers are the clothes sourced?

Q2.
P is a local electronic goods supplier. P has identified customer satisfaction as a Critical
Success Factor (CSF) to the business. Which of the following is the most suitable Key
Performance Indicator (KPI) for the particular CSF?

(a) Increase in sales revenue

(b) Number of warranty claims and repairs per year
(c) Decrease in advertising and promotional costs
(d) Number of repeat customers to the store
(e) Satisfaction survey at the point of sale

Q3.
The strategic planning process according to Johnson, Scholes and Whittington approach
includes which of the following in the correct sequence?

(a) Strategic Choice e a d

(b) Strategic Planning
(c) Strategic Evaluation and Choice
(d) Strategic Implementation
(e) Strategic Analysis

Q4.
X is a producer of electronic games to various platforms such as PCs, Xbox, and
PlayStation etc. However in the coming years the company is planning to shift its focus
more towards developing games aimed at mobile platforms such as android and IOS,
given the increasing trend of smartphone usage.

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Which approach to strategic planning is X adapting?
(a) Traditional stakeholder approach
(b) Positioning approach
(c) Resource based approach
(d) Emergent approach

Q5.
Jon Simon started Pie Minister a small local pie shop 10 years ago using his background
in the food and hospitality sector, after working as a chef of a leading hotel chain for over
5 years. Recently opening their 10th local store Jon Simon made the following comment
against the press.

"My advice to anyone starting out is to do something you love, because you are going to
be immersed in it. Aim to be the best you can be and make sure you offer something new
that is better than what your competitors sell."

Which of the following best describes Pie Ministers current approach to strategy?

(a) Rational
(b) Emergent
(c) Freewheeling
(d) Incrementalism

Q6.
The following is a summary about the composition of the board of directors of P PLC

The CEO of the company Mr.Smith heads the board. More than half of the board are
non-executive directors, which are all personal friends of the chairman. All members of
the board are male aged between 45 -55. The remuneration of the board is decided by the
special remuneration committee.

Which of the following is the best assessment of the corporate governance of P PLC?

(a) EXCELLENT: The composition of the board is beyond the expectation of the
corporate goveranace guidelines with greater diversity
(b) GOOD: The composition of the board is par with the corporate goveranace
standareds however the board lacks diversity
(c) POOR: The composition of the board lacks independence and diversity
(d)UNACCEPTABLE: The composition of the board lacks independence, diversity and
unbiasness

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Q7.
WNR manufactures automobiles which are sold at the luxury end of the market, to
discerning customers whose main priority is comfort rather than speed or acceleration.

WNR has a mission that emphasizes its commitment to meeting its Corporate Social
Responsibilities (CSR). It invests considerably into the development of new technology
that will reduce the carbon emissions of its vehicles. This is a further factor which attracts
customers to buy WNRs vehicles.

Despite its differentiated position in the market, WNR suffers from low profit margins
due to high production costs and a general decline in the prices of luxury cars, due to
competition from more efficient foreign producers.

Which THREE of the following would be the most appropriate Critical Success Factors
for WNR?

(a) Development of new technology to reduce carbon emissions

(b) Annual reductions in the production costs of WNR's vehicles
(c) Superior top speed of WNRs automobiles
(d) Superior reputation for CSR compared to foreign competitors
(e) Superior comfort of WNR's vehicles compared to its competitors

Q8.
Shareholders of the P Company have stated their desire to maximize their return through
dividends. Accordingly the management has set the following objective Increase the
expenses on CSR activities to 20% of the revenue generated

State with YES or NO whether the objective fulfills the SMART criteria

8.1 Specific Yes

8.2 Measurable Yes
8.3 Attainable Yes
8.4 Relevant No
8.5 Timed No

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Q9.
SWR is a privately owned waste management company which collects and disposes or
recycles industrial waste from two large manufacturing organizations. These
manufacturing organizations are highly concerned about the methods adapted by SWR
on waste disposal as any inappropriate dumping to the environment will affect the
reputation of these companies.

SWR is expected to adhere to the voluntary guidelines set by the environmental

authorities of the country on waste disposal and the company is expected to send a report
on their activities to the authority annually.

However the company has recently being accused by several environmental activists on
dumping industrial waste into rural waters, however they have not being able to come up
with any significant proof on the matter.

Several concerns have been made by the trade unions regarding the poor working
environments that the workers are being subjected into and are threating to take
industrial action if their grievances are not being solved.

Categorize the following stakeholders into the Mendelows matrix based on their interest
and power.

(a) Customers Keep Informed Key Players

(b) Environmental authorities Environmental Customers
activists
(c) Environmental activists
Minimal Effort Keep Satisfied
(d) Trade unions Environmental Trade Unions
Q10. authorities
P runs a small business in the agricultural sector. Due to the poor weather experienced in
the last three months the revenue of the business has dropped drastically and P is not in a
position to pay the salaries of his employees for this month.

P had promised his employees that he will refrain from pay only 50% of the salaries this
month but will grant them a salary increment of 5% from next month onwards where the
weather conditions are expected to get better and the company is in a position to make
profits.

Which ONE of the Cyert and Marchs stakeholder conflict resolution strategies P
is adapting?

(a) Exercising power

(b) Satisficing
(c) Sequential attention
(d) Side Payments
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Q11.
X was asked to prepare a report by his senior manager justifying the outsourcing of the
cleaning services of the company to F Ltd, which is owned by the brother of the senior
manager. X knowing this fact informed the superiors about the ambiguity of the contract
but prepared the report as requested by the senior manager without mentioning the fact.

Which ONE of the CIMA fundamental ethical principles were violated by X

(a) Integrity
(b) Professional competence and due care
(c) Professional behavior
(d) Objectivity

Q12.
ABC is a telecommunications provider that is based in a country that has very tough laws
against its businesses trying to win orders by the use of bribery of domestic and foreign
government officials and politicians. ABC wishes to be invited to submit a tender for
contracts in X Land, a developing country with an unelected government.

Which of the following is the best way for ABC to ensure it is invited to tender for the
work in X Land?

(a) Appoint a government minister from X Land as a Non-Executive Director of ABC.

(b) Stress to the government of ABC's home country the jobs that winning the contract
could create and lobby them to ask the government of X Land to include ABC in the
tender.
(c) Undertake a promotional campaign amongst the population of X Land that stresses
the good CSR record of ABC.
(d)Fund a programme of inoculations for the children of X Land to protect them from a
widespread and fatal disease.

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Q13.
Italy is considered to be the birth place of the fashion industry. Italian fashion
industry is benefited largely from the fashion crazed Italian community which
drives the businesses to make constant improvements to the fashion trends in
order to satisfy the complex taste for fashion among Italians

According to the above extract from an article about the Italian fashion industry, which
of the following best explain the current situation of the Italian fashion industry?

(a) Importance of new product development to cater existing markets as per the Ansoff
Matrix
(b) Importance of the differentiation strategy to satisfy complex customer needs
according to Porters generic strategy
(c) Importance of demand conditions to create global competitive advantage as per
diamond theory
(d) Importance of customer perspective to analyze the performance of a business
according to the balanced scorecard.

Q14.
JHK has experienced a sales growth of around 1% in the past two years following a rapid
growth in the years before that. Many of JHKs competitors have matched their product
portfolio, resulting in gradually declining the market leader status of the company.

Which of the following strategies JHK could adapt given their current position in the
product life cycle
(a) Introduce new products to the market
(b) Shut down production
(c) Increase the price of the product
(d) Find new markets for the product
(e) Carry out aggressive promotional campaigns

Q15.
The automotive industry relies heavily on their suppliers, where an average automobile
manufacturers supply chain will carry over 500 different suppliers, sometimes even two
or three different listed suppliers to source the same part.

(a) The bargaining power of the suppliers is high due to the higher number of suppliers
(b)The bargaining power of the automobile company is high due to having many
suppliers supplying the same part.
(c)The bargaining power of the automobile companies is low due to over reliance of the
suppliers
(d) The bargaining power of the suppliers is high due to the lower number of automobile
manufacturers
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Q16.
Which TWO of the following statements are true regarding SWOT analysis?

(a) SWOT analysis is a post completion audit

(b) SWOT is an analysis of internal environmental factors
(c) Weaknesses of the organization must be converted into opportunities
(d) Opportunities must be converted into strengths
(e) Strengths can create competitive advantage in the market

Q17.
Which THREE of the following are resources identified in the Ms model?

(a) Management information

(b) Mix
(c) Manpower
(d) Make up
(e) Movement
(f) Management hierarchy

Q18.
H is a small scale bakery product manufacturer which has grabbed the local market
successfully. Many customers have complimented H for their superior taste and quality.
The reason behind the success of H has been its skilled workforce and the guidance of
Mr. X, the owner of H, once an experienced chef in a leading hotel chain now turned an
entrepreneur.

Identify whether the following competencies of H are CORE or THRESHOLD

(a) Taste and quality THRESHOLD

(b) Skilled workforce THRESHOLD
(c) Experience of Mr. X CORE

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Q19.
GGG has stated that it wishes to ensure that it delivers 95% of the goods to customers
within 15 days of them placing the order.

This is an example of
(a) Mission
(b) KPI
(c) CSF
(d) Objective

Q20.
SL sells, installs and maintains office photocopiers. It has noticed that more of its clients
are complaining of more frequent breakdowns in their machines which, due to a
shortage of engineers, are taking a long time to repair. Investigations have revealed that
the cause of this problem is that customers have been sold machines that are too small
for their requirements.

Which ONE of the supporting activities in Porters Value Chain needs to be improved at
SL?

(a) Operations
(b) Technology development
(c) Human resource management
(d) Service
(e) Marketing and sales

Q21.
JJ wishes to link its inbound logistics activities with the outbound logistics operations of
its suppliers in order to maximize the efficiency.

Which of the following concept best explains this?

(a) Value shop

(b) Value driver
(c) Value system
(d) Value linkage

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Q22.
Following is the value chain of SS, a local fashion chain which follows the cost
leadership strategy. Select ONE activity each from either set 1 or 2 that SS is
most likely to follow.

Infrastructur (a) Centralization of functions

e
Technology
HR (b) Deskilled Labour
Procurement
(c) Bulk (d)Promotion
Buying of low price

Inbound Process Outbound Marketing Service

Logistics Logistics and Sales

SET 1 SET 2
(a) Centralization of functions Decentralization of functions
(b) Deskilled labor Client care training for staff
(c) Bulk buying JIT method
(d) No price discounts Promotion of low prices

Q23.
Q is a highly successful super market chain operating in its home country P.
However due to the declining profits in the home market the company is currently
planning for overseas expansion.

Accordingly Q has identified a similar small scale supermarket chains in countries

P and R, and are planning to acquire these super market chains to be run under the
brand of Q.

Which form of overseas expansion strategy best explains Qs proposed expansion

in to P and R?

(a) A Franchising strategy

(b) A Transnational strategy
(c) An Exporting strategy
(d) A Foreign Direct Investment strategy

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Q24.
B manufactures confectionery (i.e. candy and chocolate) for a wide variety of
customer groups. B has been advised that it is 'stuck in the middle' according to
Porter's Generic Strategy model.

Management has decided to adopt a cost focus strategy and become a cost leader
in just a single narrow segment of the broader industry it already serves.

Select THREE statements below that are true in relation to this decision:

(a) B will gain barriers to entry in its niche segment.

(b) B will benefit from economies of scale by increasing its total output of
confectionery.
(c) B will gain higher profits from an exclusive position and higher prices.
(d) B will need to reduce its product range.
(e) B will be more exposed to risk from a decline in this segment.

Q25.
Which of the following best describes a non-market strategy?
(a) The alternative name for the sort of strategies pursued by a Not for Profit
Organization (NPO)
(b) Developing strategy based only on organizational competencies ignoring the
market variables and trends
(c) A strategy that maintains relationships with governments, media, regulators
and society at large to achieve sustainable advantage.
(d) Aggressive strategies by rivals aimed at undermining the business by
depriving it of key resources instead of competing for its customers.

Q26.
Which TWO of the following statements are true?
(a) Big data is the storing of organizational data in digital form.
(b) Big data allows an increasing understanding and segmentation of customers.
(c) Big data is the creation and analysis of a large internal data
warehouse used to store all of an organizations data relating to
customers, staff, operations and products.
(d) Big data can be used to improve the development of the next generation of
products and services for organizations.

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Q27.
AAA is a manufacturer that operates e-procurement as part of its approach to
Supply Chain Management (SCM). It also builds partnerships with its suppliers.

Which THREE of the following are the most likely benefits to AAA of operating
e-procurement?

(a) Reduction in the transaction costs of dealing with its suppliers.

(b) Enables AAA to constantly shop around a range of suppliers to buy its
supplies more cheaply.
(c) Increased production and sales for AAA as a result of suppliers responding
more quickly to demand, leading to fewer stock outs of components.
(d) Reduction of operating risks due to a high reliance on
technology.
(e) Lower inventory holding costs due to a more rapid supply of components
by suppliers.
Q28.
In which TWO of the following situations would you recommend the adoption of
a rational (traditional) approach to strategy formulation?

(a) Where management must react quickly to short term pressures.

(b) Where management has a high degree of confidence in the relevance of the
techniques used within the rational approach.
(c) Where the future can be forecast with reasonable certainty.
(d) Where the organization needs to innovate and to think creatively.
(e) Where opportunities must be taken as soon as they arise for the
organization.

Q29.
The following are limitations pertaining to a particular model.

Too simple because only 4 options are available

The criteria for measurement, the market growth and relative market share
provides a narrow scope
Which ONE of the following models is described above?
(a) Ansoff Matrix
(b) Diamond theory
(c) BCG Matrix
(d) Product Life cycle
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Q30.
A recent gap analysis undertaken by P indicated a gap between the forecasted
position and the ideal position of the business even after taking into account the
planned efficiency savings and strategic initiatives.

This gap can be identified as;

(a) Efficiency gap

(b) Effectiveness gap
(c) Diversification gap
(d) Resource gap (also known as Expansion Gap)

Q31.
AGG designs and manufactures personal electronic devices, including
smartphones, laptop computers and tablets. It is considering using foresight
techniques in its strategic formulation activities. These techniques include scenario
planning, morphological analysis, and visioning.

Identify THREE major benefits of foresight techniques to AGG from the list
below:

(a) It improves management's communication and awareness of complex

issues affecting AGG.
(b) It provides management with clarity on the future of the personal
electronics industry.
(c) It provides some consensus amongst management on what AGG should
research in future.
(d) It will enable AGG's management to calculate the forecast earnings
from new projects.
(e) It helps AGG's management to concentrate on the longer term despite the
high uncertainty.

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Q32.
G Ltd is considering undertaking a forecasting exercise to identify future strategic
alternatives for the business. For this purpose G Ltd has hired a team of industrial
experts and is planning to use the Delphi method in carrying out the forecasting
exercise.

Identify THREE major benefits to G Ltd in using the Delphi method

(a) Lower risk of conformity among the team

(b) A better solution can be arrived at through group discussions
(c) The lack of formal structure allows provides freedom for the team to
express their ideas
(d) Availability of a central authority to evaluate the responses and give
feed back
(e) Subjective ideas are encouraged

Q33.
Arrange in correct order the following steps undertaken in scenario planning

3 (a) Cluster the factors to identify various consistent future scenarios

1 (b) Identify high impact high uncertainty factors
6 (c) Monitor the exact scenario that unfolds
5 (d) Identify possible cause of action for each scenario
7 (e) Revise scenarios
4 (f) Writing the scenario
2 (g) Identify different possible futures

b g a f d c e
Q34.

Which THREE of the following are characteristics of Prisoners Dilemma?

(a) Players cooperate in arriving at their strategies.

(b) Both players have a dominant strategy.
(c) Both players would be better off if neither chose their dominant strategy.
(d) The payoff from a strategy depends on the choice made by the other
player.

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 Q35.
VH is a large house building company. It is considering purchasing a section of
land within a major town. Land is currently owned by the local government, who
wishes VH to build 200 new houses. VH has calculated that the NPV of the
project is negative. However, undertaking the building work would lead to VH
being able to get preferential status for more profitable work with the local
government in the future.

Which ONE of the following real options is included within the house building
project?

(a) Option to abandon

(b) Option to delay
(c) Option to follow on
(d) Option to return

Q36.
Which of the following changes would BOTH lead to a rise in the value of real
option?

Option duration Project Uncertainty

(a) Increase Increase
(b) Increase Decrease
(c) Decrease Increase
(d) Decrease Decrease

Q37.
Myprecious.com is a website that facilitates second hand transactions of valuable
products such as historical artifacts, diamonds and gems, antiques etc. The website
is restricted only for the members, and only transactions above $5000 are
permitted through the website.

Which of the Porters generic strategies best explains the business model of
myprecious.com?

(a) Cost leadership

(b) Differentiation
(c) Cost leadership focus
(d) Differentiation focus

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Q38. Esso is a successful oil company. It has run a price-watch campaign to ensure its
prices are lesser than competitors. It has signed agreements with China recently to
distribute fuel there and is considering the acquisition of a textile company in the
near future.
Which Ansoffs strategies best describe the actions of Esso?
(a) Price-watch campaign -MARKET PENETRATION
(b) Distribution to China -MARKET DEVELOPMENT
(c) Acquisition -DIVERSIFICATION
Q39.
Following data are pertaining to the products sold by YX

Product Market YX Revenue Market share Market growth

Revenue ($ ($ Mn) of largest rate
Mn) competitor
PP 400 40 45% 1%
QQ 60 20 10% 4%
RR 100 5 1% 15%
SS 60 4.8 30% -5%

Categorize each product according to the BCG Matrix. You can classify more than
one product into one category

Star Question Mark

RR

Cash cow Dog

QQ AA
SS

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Q40. Y PLC has grown significantly over the past years and as a result has considerable
cash reserves. The directors are over the debate whether to invest in organic
growth or inorganic growth.
Which of the following THREE statements best compares the organic and
inorganic growth?
(a) Inorganic growth will be more costly than the organic growth due to the
risks undertaken by Y PLC
(b) Inorganic growth will allow Y PLC to avoid barriers of entry
(c) Inorganic growth will allow Y PLC to create barriers of entry
(d) Inorganic growth will be slower due to undervalued assets of the target
company
(e) Inorganic growth is faster due to instant access to the resources of the
target company
Q41.
DD a privately owned train service company is considering the adaptation of the
Balanced Scorecard approach as a performance measure.

Classify the following performance indicators into different perspectives suggested

by the Balanced Scorecard approach.

(a) Average time taken to process a ticket enquire

(b) Investment on free WIFI facilities for the customers on board
(c) Cleanliness levels inside the trains
(d) Revenue growth

Financial perspective -(d) Revenue growth

Customer perspective -c) Cleanliness levels inside the trains
Internal business perspective -(a) Average time taken to process a ticket enquire
Learning and growth perspective -(d) Revenue growth

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Q42. The Building Block Model devised by Fitzgerald and Moon sets out a framework
for the design and analysis of performance management systems. The first building
block, 'Dimensions', identifies 6 goals for the business which must be measured.

Which THREE of the following are correct dimensions within the Fitzgerald and
Moon performance management model?

(a) Market share

(b) Innovation
(c) Customer management
(d) Flexibility
(e) Competitive performance

Q43. Which of the following describes a difference between Shareholder Value Added
(SVA) and Economic Value Added (EVA) measures of business performance?

(a) One uses a cash-based measure of earnings and the other does not.
(b) One applies a cost of capital to the investments used and the other
does not.
(c) One takes future earnings into account the other does not.
(d) One seeks to improve Market Value Added (MVA) and the other does
not.

Q44. The information strategy that is specific to a Strategic Business Unit (SBU) that
facilitates relationships between the SBU and external parties is known as the
(a) Information system strategy
(b) Information management strategy
(c) Information technology strategy
(d) Business information strategy

Q45.
GG is a large supermarket chain. It is considering the purchase of a number of
farms that currently provide GG significant quantity of fresh fruits and vegetables.
GG feels that purchasing these farms will allow them to have better control over
the supply chain
Which of the following type of diversification GG is undertaking?
(a) Forward vertical
(b) Backward vertical
(c) Horizontal
(d) Conglomerate
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Q46.
GG is a large supermarket chain. They recently introduced a system which
facilitates customers to order the products online, which are then delivered to the
doorstep at a reasonable delivery charge. This was the first of such kind in country
P where GG is located.

However GG was surprised to see not many customers have shown interest in
online purchases. A recent market survey suggested that a majority of customers
have preferred online purchases over walking into stores yet the customer
participation remains at lower levels.

According to the McFarlands grid based on strategic impact on current and future
system where can the GGs online ordering system can be classified?
(a) Factory
(b) Support
(c) Strategic
(d) Turnaround

Q47. LMO is an airline operator that provides budget air travel. Passengers are required
to book through its web site. It has recently redesigned its website to take
advantage of Web 2.0 innovations.
LMOs website enables the customer to check the schedules of the flights, and to
book. They are also able to manage their check-in and print off essential
documentation to enable them to board the aircraft. The website contains pages
that contain weather forecasts and local news for each destination, drawn from
electronic feeds from the news websites of outside organizations. Customers are
encouraged to upload photographs from recent trips with LMO and to write
descriptions and allocate grades for the destinations they visited. During the
booking process additional pages appear that enable the customer to book
transport or accommodation at the destination from third party suppliers.
Which of the following uses of Web 2.0 applications is missing from the website
of LMO?
(a) Social media
(b) Mash-ups
(c) Viral advertising
(d) Competence syndication

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Q48. T a leading supermarket chain observed customer buying habits and found a
statistically significant correlation between purchases of beer and purchases of
diapers.
It was later identified that the reason for this was that fathers were stopping off at
T to buy diapers for their babies, and since they could no longer go down to the
pub as often, would buy beer as well. As a result of this finding T placed diapers
next to the beer within their stores, resulting in increased sales of both.
The data mining technique allowed T to formulate this relationship?
(a) Association
(b) Classification
(c) Clustering
(d) Sequencing

Q49. Knowledge management strategies require the organization to set up arrangements

to ensure the Creation, Capture, Storage, Availability (or Dissemination), and
Utilization of the organizations information, knowledge and experience.

Place the tools of knowledge management next to the requirements that they best
support.

(a) Creation of sharing culture

(b) Staff development and training
(c) Intranet & Extranet
(d) Database structure
(e) Technological infrastructure

Knowledge Management Organizational Tool

Requirement
Creation of knowledge
Capture of knowledge
Storage of knowledge
Availability (dissemination)
knowledge
Utilization of knowledge
(a) Creation of sharing culture
(d) Database structure
(e) Technological infrastructure
of (c) Intranet & Extranet
(b) Staff development and training

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Q50.
According to Senge, which THREE of the following are key disciplines of leaning
organizations?

(a) Groupthink
(b) Mental models
(c) Sharing culture
(d) Developing human capital
(e) Shared vision
(f) Team learning

Q51.

Which of the following statements are consistent with concept of transactional

marketing?

(a) Focus on product quality

(b) Emphasis on quality of service
(c) Focus on retention and loyalty
(d) Investment in customer management

Q52.

Which THREE of the following are inputs to the Customer Lifecycle Value (CLV)
calculation?

(a) Retention cost

(b) Market definition
(c) Customer segment
(d) Periodic Revenue
(e) Discount rate

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Q53. SS has been a successful electronic product distributor for over 10 years. The
company is currently focusing on diversification into financial sector. However
given the success that SS brand had achieved over the past decade they have
decided initiate the new venture under the same SS brand.

(a) Brand diversification

(b) Multi branding
(c) Co-branding

(d) Brand extension

(e) New brands

Q54.
H Ltd is a small toy manufacturer established over 20 years ago by Mr.K. At
present Mr. Ks son runs the company and has emphasized that the company
should operate how it has always been done, going by the principals of his father.

Which ONE of the cultural web element best explains the above?

(a) Power structure

(b) Control systems
(c) Stories and myths
(d) Organizational structure

Q55.
W is a manufacturer and retailer of chocolate. W has a marketing information
system (MIS) based on a software package bought several years ago. W's marketing
staff believe that W is being left behind by its competitors, which has been driven
by inadequacies of the current MIS. They wish to move immediately to a new MIS
that would give them the marketing information they need to survive in a highly
competitive market.

W could purchase the industry standard MIS, which would be expensive but is
well proven. Some of W's marketing staff used this MIS in other companies, and
believe it would help W considerably. The software supplier guarantees to have it
operational within three months of purchase. However, R, W's IT Director, has
stated that he and the IT Department would be very resistant to this change. R has
stated that a 'Big Bang' change to W's MIS would be too disruptive.

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 Select the most appropriate action to overcome R's resistance to the immediate
purchase of the new MIS:

(a) Communication and education: R needs to be convinced that the

limitations of the existing software package are a serious constraint
upon W.
(b) Facilitation and support: R must be reassured that his personal position
will not be jeopardized.
(c) Participation and Involvement: the need for change has not come from R,
therefore such a change will require the active participation and involvement of
R and the IT staff.
(d) Manipulation and co-optation: as the change needs to happen immediately
R should be offered incentives to agree to the change

Q56.
According to the Lewins three-stage model, which one of the following activities
would be part of the unfreeze stage?

(a) Explaining the need for change

(b) Creation of new reward schemes
(c) Publicity of success stories
(d) Training of staff in new ways of working

Q57.
F has recently developed a series of electronic book readers, designed and
marketed exclusively by F. The new device enables users to shop for, download,
browse, and read electronic books, newspapers, magazines, blogs, and other digital
media via wireless networking. The introduction of the device was a
transformational change which was forced upon F due to the changing
competitive environment in the book sales market. This development and
introduction of the new device occurred over a period of only one year.

Which of the following forms of organizational change best categorizes the initial
development and introduction of the electronic book reading device by F?

(a) Evolutionary
(b) Revolutionary
(c) Adaptation
(d) Reconstruction
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Q58.
HH a garment manufacturer is struggling with the present economic downturn.
HH is looking for ways to improve their performance.

Which one of the following strategies are consistent with the Theory O approach
to change management?

(a) Laying off extra staff

(b) Improve labor training to improve efficiency
(c) Reduction in product quality
(d) Diversification of the business

Q59.
S has been hired as a change agent of X PLC. Which FOUR of the following roles
would S undertake as a change agent?

(a) Decide on which change strategy to adapt

(b) Document the learning process and share it with the management
(c) Implement the change process
(d) Define the problems and its causes
(e) Suggest solutions and select appropriate courses of action

Q60.
XI is a leading business in the fashion industry which designs products under four
different brand names. However XI has observed a declining demand in most of
its products. As a result they have closed the production of one brand and plans
on selling two other to outside parties.

What approach to decline is XI currently adapting?

(a) Retrenchment
(b) Turnaround
(c) Liquidation
(d) Divestment

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 Mock Exam 2

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Q1. P is a charitable organisation. In recent years, the Board of P has recognised the need
to continually develop the range of services it offers. The Board has always encouraged
collaboration and partnerships with other organisations to develop and enhance the
services it offers and to utilise the expertise and knowledge of other organisations. P's
management has also been highly innovative in the services it provides. It regularly
analyses and keeps up to date with changes in the environment in which it operates. P
operates a sophisticated website to promote its services and keep in touch with its service
users.
Which TWO of the following attributes of P make it a change adept organisation?

A. P continually develops the range of services it offers.

B. The Board of P encourages collaboration and partnerships with other organisations.
C. Ps management has always been highly innovative in the services it provides.
D. P regularly analyses changes in its environment.
E. P operates a sophisticated website to promote its services and keep in touch with its
service users.

Q2. Q is a highly successful supermarket chain operating in its home country P, which is
in Europe. It is the market leader in its home country but in the last 3 years its market
share has fallen due to increased price competition from its two nearest rivals in country
P. As a result, in the last 6 months Q has expanded its operations into other European
countries through the acquisition of an established small chain of supermarkets.
Which form of overseas expansion strategy has Q undertaken through the acquisition of
the small chain of supermarkets in the two other European countries?
A. A Franchising strategy
B. A Transnational strategy
C. An Exporting strategy
D. A Foreign Direct Investment strategy

Q3. SHR operates hotels in many cities of the world. Before the invention of social
media SHR tended to ignore the complaints of individual guests. Today SHR's
management is aware that social media provides a way for individual guests to record and
publish positive and negative comments about their stay at an SHR hotel.
Which of the following statements best describes the impact of social media on the
stakeholder categorisation of SHR's individual customers?
A. Customers have shifted from minimal effort to key players
B. Customers have shifted from keep satisfied to key players
C. Customers have shifted from minimal effort to keep informed
D. Customers have shifted from minimal effort to keep satisfied
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Q4. TUV is a global operator of movie rental shops. Customers visit TUV stores to rent
discs of movies for five nights at a fixed price to take home and watch, then return them.
Developments in Web 2.0 have led to the emergence of "file sharing sites" where movies
are uploaded, without the owner's permission, and then can be viewed or downloaded for
free on personal IT equipment.
TUV is a new business that operates an online service on which films are licensed from
the copyright owner and provided to TUV's members to watch online in return for a low
monthly fee.
Select the MOST likely explanation for the falling profits of TUV from the list below:
A. Falling profits are the effect of increased market entry.
B. Falling profits are the effect of increased power of substitutes.
C. Falling profits are the effect of increased competitive rivalry.
D. Falling profits are the effect of increased buyer power.

Q5. BBA manufactures confectionery (i.e. candy and chocolate) for a wide variety of
customer groups. BBA has been advised that it is 'stuck in the middle' according to
Porter's Generic Strategy model. Management has decided to adopt a cost focus strategy
and become a cost leader in just a single narrow segment of the broader industry it
already serves.
Select THREE statements below that are true in relation to this decision:
A. BBA will gain barriers to entry in its niche segment.
B. BBA will benefit from economies of scale by increasing its total output of
confectionery.
C. BBA will gain higher profits from an exclusive position and higher prices.
D. BBA will need to reduce its product range.
E. BBA will be more exposed to risk from a decline in this segment.

Q6. XYZ sells medicines in a mature market. It is suffering falling sales volumes and
profits. Prices and costs in the market have not changed.
Which THREE of the following are the most likely cause of this?
A. Increased competitive rivalry
B. Market entry by new competitors
C. Increased supplier power
D. Increased buyer power
E. Increased threat from substitutes

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Q7. SMO is a state-owned monopoly provider of postal services in Country H. Under
international trade regulations the Government of H has been instructed to open up its
postal industry to foreign competition within 1 year, which is a very short timescale
indeed. It would also need to stop subsidising SMO at that time.
SMO is heavily subsidised by the Government of H and without these subsidies it would
make significant losses. Deliveries of letters and documents have declined greatly due to
the increased use of e-mail in H. Conversely greater on-line buying has significantly
increased the volumes of parcels delivered by SMO. However operative staff have
refused to change their job roles from letter delivery to parcel delivery, forcing SMO to
employ additional staff to deliver parcels.
The operative staff of SMO are all members of the same trade union, whilst members of
management belong to a separate trade union.
The Government of H has decided that the only way to ensure SMO becomes
competitive is to sell it to private sector investors. But first it needs to make it profitable.
Select the THREE most suitable change strategies for SMO's management to adopt
from the list below:
A. Education and communication: a programme of workplace meetings for management
to win workers support for change by explaining the forces that threaten SMO to staff,
the restructuring and redundancies it plans.
B. Explicit and implicit coercion: policies of forced economies, redundancies and
closures to reduce costs, and the introduction of changes to working practices.
C. Participation and involvement: management and operative staff work together to
identify efficiency gains and new markets to make SMO profitable.
D. Negotiation and agreement: urgent meetings with trade union representatives to
develop a plan to make SMO profitable and to incentivise employees by offering them a
share in the profits of SMO when it is sold.
E. Facilitation and support: announcement of generous financial packages and help with
finding new jobs for staff who are willing to volunteer for redundancy from SMO, and of
training for those willing to change job roles.

Q8. GW is a CEO and wishes to develop her change leadership skills to support strategic
change in her organisation. Inspection of GW's diary shows that she spends her work
time engaged in a range of activities.
Select the THREE activities below that are essential to effective change leadership by a
CEO:
A. Planning and budgeting for the future of the organisation
B. Setting a direction for the organisation
C. Controlling and problem-solving during the implementation of strategy
D. Aligning people by communicating the direction of the strategy
E. Motivating and inspiring staff to pursue the organisation's vision

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Q9. YYZ is a failing retailer of electrical goods. You are part of the team that has been
called in by investors to turn YYZ around. Your priorities are to restore it to profitability
quickly and then, later, to decide a long-term business strategy.
Which of the following sequences of environmental analysis should be used by
management to develop strategies to improve the short-term profitability and long term
strategic direction of YYZ? ST : passing E3 / LT : njoying life in cruise
A. PEST analysis, Competitor analysis, Industry life cycle analysis, Porter's 5 forces
analysis
B. Competitor analysis, Porter's 5 forces analysis, Industry life cycle analysis, and PEST
analysis
C. Porter's 5 forces analysis, PEST analysis, Competitor analysis, Industry life cycle
analysis
D. Industry life cycle analysis, PEST analysis, Porter's 5 forces analysis, Competitor
analysis

Q10. Z operates an estate agency business. An estate agency business arranges the selling,
renting or management of houses and other properties.
Z has a website on which it advertises all of its properties, which allows customers to
view the property details, such as internal photographs and floor layout. Z's website also
uses a range of interactive technologies including geographical location and map facilities
and links to external information sites to show schools located close to properties and
links to local government websites.
Which of the following best describes the range of interactive technologies used by Z
within its website?
A. Competence syndication
B. Mash-up
C. Information sharing
D. Social media

Q11. DRE sells, installs and maintains office photocopiers. It has noticed that more of its
clients are complaining of more frequent breakdowns in their machines which, due to a
shortage of engineers, are taking a long time to repair. Investigations have revealed that
the cause of this problem is that customers have been sold machines that are too small
for their requirements.
Which THREE activities in Porters Value Chain need to be improved at DRE?
A. Operations
B. Technology development
C. Human resource management
D. Service
E. Marketing and sales
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Q12. J is an electricity generating company in country Z. J's customers are increasingly
concerned about environmental issues and many customers are willing to change to a
different electricity generating company which generates some of its electricity from
renewable sources (such as wind power).
J has recently employed a new CEO who is a strong supporter of wind based electricity
generation. The new CEO wishes to locate several wind powered generators in remote
countryside in the north of Z. However, gaining planning permission has proved to be
difficult and many proposals have been delayed due to local residents' opposition. On
average, the planning application process within local governments, for a wind powered
generator in Z currently takes 2 years. The national Government of Z is now introducing
new planning laws to force local governments to make decisions more quickly.
Name the English capital word with the appropriate area of Lewins Force Field Analysis
diagram against each of the following forces in respect of Js decision to invest in wind-
based electricity generation.

Restraining Force Driving force

Restraining Force
1. Planning applications for wind powered generations - __A?___________
2. Js customers Driving Force
- __B ?___________
3. New CEO Driving Force
- __C ?___________
4. New planning laws Driving Force
- __D ?___________
5. Local residents in the north of country Z Restraining Force
- __E ?___________
No customer eg Red Cross
13. Which of the following best describes a non-market strategy?
A. The alternative name for the sort of strategies pursued by a Not for Profit
Organisation (NPO)
B. A strategy that focuses on developing an organisation's core competences and
leveraging them to achieve competitive advantage in new markets.
C. A strategy that maintains relationships with governments, media, regulators and
society at large to achieve sustainable advantage.
D. Aggressive strategies by rivals aimed at undermining the business by depriving it of
key resources instead of competing for its customers.

Q14. AGG designs and manufactures personal electronic devices, including smartphones,
laptop computers and tablets. It is considering using foresight techniques in its strategic
formulation activities. These techniques include scenario planning, morphological
analysis, and visioning.
Identify THREE major benefits of foresight techniques to AGG from the list below:
A. It improves management's communication and awareness of complex issues affecting
AGG.
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B. It provides management with clarity on the future of the personal electronics industry.
C. It provides some consensus amongst management on what AGG should research in
future.
D. It will enable AGG's management to calculate the forecast earnings from new
projects.
E. It helps AGG's management to concentrate on the longer term despite the high
uncertainty.

Q15. CTP is a multinational corporation that develops and sells computer software for
business and personal use. The trend towards using tablets and smartphones for
document creation and transmission, and the growth of Web 2.0, has eroded the
traditional dominance of CTP. Its new CEO believes she has three years to turn CTP
around to meet the competitive challenges of this rapidly changing market.
Which of the following management styles, identified by Reardon and Rowe, would be
the least appropriate to employ at first in bringing about change at CTP:
A. Logical style: focuses on innovation, constantly seeks new information, identifies
obstacles, generates alternatives, and considers benefits and drawbacks.
B. Inspirational style: focuses on surfacing opportunities by developing trust and
encouraging people to expend energy and effort in the change process.
C. Supportive style: provides employees with a sense of involvement and assurance that
they will receive help in adjusting to change.
D. Commanding style: focus on results and directs people in a non-authoritarian way
towards mutually defined goals.

Q16. LMO is an airline operator that provides budget air travel. Passengers are required
to book through its web site. It has recently redesigned its website to take advantage of
Web 2.0 innovations.
LMOs website enables the customer to check the schedules of the flights, and to book.
They are also able to manage their check-in and print off essential documentation to
enable them to board the aircraft. The website contains pages that contain weather
forecasts and local news for each destination, drawn from electronic feeds from the news
websites of outside organisations. Customers are encouraged to upload photographs
from recent trips with LMO and to write descriptions and allocate grades for the
destinations they visited. During the booking process additional pages appear that enable
the customer to book transport or accommodation at the destination from third party
suppliers.
Which of the following uses of Web 2.0 applications is missing from the website of
LMO?
A. Social media
B. Mash-ups
C. Viral advertising
D. Competence syndication
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Q17. Z is a large manufacturing company. At a recent presentation to investment analysts
and financial journalists, Zs CEO gave a very optimistic forecast for Zs future,
suggesting that revenue would double over the next three years and profits and dividends
would increase by 50%. The CEO prepared his forecast in a hurry and had not had it
confirmed by anybody else within Z.
The CEO also did not mention in his presentation that Zs home government was
considering taking legal action against Z for underpayment of excise duties and had made
a claim for large damages. If this claim was to be successful it would materially affect Zs
profit.
The situation above contains a possible conflict with the fundamental principle of
A. Objectivity
B. Integrity
C. Confidentiality
D. Professional competence
E. Professional behaviour
Q18. W is a manufacturer and retailer of chocolate. W has a marketing information
system (MIS) based on a software package bought several years ago. W's marketing staff
believe that W is being left behind by its competitors, which has been driven by
inadequacies of the current MIS. They wish to move immediately to a new MIS that
would give them the marketing information they need to survive in a highly competitive
market.
W could purchase the industry standard MIS, which would be expensive but is well
proven. Some of W's marketing staff used this MIS in other companies, and believe it
would help W considerably. The software supplier guarantees to have it operational
within three months of purchase. However, R, W's IT Director, has stated that he and
the IT Department would be very resistant to this change. R has stated that a 'Big Bang'
change to W's MIS would be too disruptive.
Select the most appropriate action to overcome R's resistance to the immediate purchase
of the new MIS:
A. Communication and education: R needs to be convinced that the limitations of the
B. Facilitation and support: R must be reassured that his personal position will not be
jeopardised.
C. Participation and Involvement: the need for change has not come from R, therefore
such a change will require the active participation and involvement of R and the IT staff.
D. Manipulation and co-optation: as the change needs to happen immediately R should
be offered incentives to agree to the change.

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Q19. EKD is a publically quoted business making automobiles. It seeks to maximise the
wealth of its shareholders.
Which THREE of the following arguments best justify its sustainability plans as being in
the interest of investors?
A. Sustainability can help EKD reduce costs and improve efficiency.
B. Sustainability can help reduce the environmental impact of EKD.
C. Sustainability can help EKD lead the way in shaping society.
D. Sustainability can help EKD to comply with laws and regulations and to avoid fines.
E. Sustainability can help protect the reputation of EKD with key stakeholders.

Q20. The democratic leadership style works best when:

A. The team needs to buy into, or have ownership of, a decision, plan or strategic change.
B. The team needs a new vision because circumstances have changed.
C. The team needs to rebuild trust due to stress or rapid change.
D. There is a crisis situation.

Q21. Most of the components in a B computer are made by other companies while B
focuses on its strengths of marketing and customer support and integration of the
components into the final computer products. When buying a computer from B, the
process includes a B customer service representative, an assembly line and assembly crew,
suppliers for various components and the delivery truck and driver who delivers the
computer to the customers home. However, all of the inventory in the system, regardless
of location and ownership, can be viewed by the customer as a single, seamless
organisation.
The organisation of B is best described as an example of:
A. Outsourcing -Core competence/competative advantange never outsource
B. A virtual organisation -an organization that can be anywhere. eg : Amazon
C. Customer Relationship Management
D. A learning organisation

Q22. Below are two limitations of a particular model of strategic analysis:

More applicable to manufacturing industries than service industries
Requires an extensive re-working of accounting information to support it
Identify which model this describes.
A. Kaplan and Norton's Balanced Scorecard
B. The Boston Consulting Group's Portfolio Matrix
C. Porter's Value Chain Analysis
D. Ansoff's Product Market Growth Matrix

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Q23. An engine manufacturer has recently changed the design of its engines in order to
integrate a Global Positioning System (GPS) locator into its engine control system. Its
immediate customer, a heavy truck manufacturer, does not see the need for this
functionality. However, the final customer, an international distribution company with a
large fleet of trucks, has expressed strong interest in the newly developed GPS locator
system.
Which of the following statements best describes the situation outlined above?
A. Value chain management
B. Upstream supply chain management
C. Downstream supply chain management
D. Pull supply chain management

Q24. NE is the CEO of ZBH, a hospital in a major city. One year ago NE initiated a
radical change programme to "fundamentally rethink the way in which ZBH serves our
customers".
NE set out Three Guiding Principles
1. Patients are not a problem, they are people with problems
2. Bring the expertise to the patient, don't depend on the patient to find the expertise
3. Learn what we need to do, don't just do what we have learned
NE asked each of the departmental managers of ZBH to interpret these guiding
principles within their own departments and to set up working groups to implement
them as appropriate within their own areas of responsibility.
A year after launching the change programme, managers and staff at ZBH have
commented that departmental working groups were initially excited and enthusiastic for
the change, as departmental managers worked hard to encourage participation in the
change programme. However, after a few months, departmental work groups had lots of
ideas but they did not know if they were appropriate and they received no feedback on
their ideas.
NE has also been disappointed with the change. He has complained that little has been
achieved and that he is constantly having to spend time with departmental managers
urging more progress and suggesting ways to apply the Three Guiding Principles.
Which THREE of the following roles of change leadership did NE fail to do properly?
A. Initiate change
B. Communicate a vision
C. Energise teams
D. Support the change process
E. Advocate progress

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Q25. Which TWO of the following statements are true?
A. Big data is the storing of organisational data in digital form.
B. Big data allows an increasing understanding and segmentation of customers.
C. Big data is the creation and analysis of a large internal data warehouse used to store all
of an organisations data relating to customers, staff, operations and products.
D. Big data can be used to improve the development of the next generation of products
and services for organisations.

Q26. K is a manufacturer and installer of domestic kitchens. Until recently, its business
model was based on selling a standard kitchen, brand name 'Value', with a very limited
degree of customer choice, at low profit margins. K manufactures and installs 200 Value
kitchens a year. The average revenue per Value kitchen is $10,000.
In 2012, K launched a new kitchen, brand name 'Lux-Style'. This kitchen is aimed at high
net-worth customers and it offers a very large degree of choice for the customer and the
use of the highest standards of materials and appliances. A 'Lux-Style' kitchen retails for
an average price of $100,000. Currently, K installs an average 15 Lux-Style kitchens each
year.
In the next year, K aims to increase market share in both areas of its business. K's
business is generated from repeat orders, word of mouth recommendations and local
press advertising.
Select TWO critical success factors (CSF's) for K which would assist in it achieving its
business aim:
A. Market share growth
B. Brand performance
C. Quality of manufacturing
D. Customer satisfaction levels

Q27. ABC is a telecommunications provider that is based in a country that has very
tough laws against its businesses trying to win orders by the use of bribery of domestic
and foreign government officials and politicians. ABC wishes to be invited to submit a
tender for contracts in X Land, a developing country with an unelected government.
Which of the following is the best way for ABC to ensure it is invited to tender for the
work in X Land?
A. Appoint a government minister from X Land as a Non-Executive Director of ABC.
B. Stress to the government of ABC's home country the jobs that winning the contract
could create and lobby them to ask the government of X Land to include ABC in the
tender.
C. Undertake a promotional campaign amongst the population of X Land that stresses
the good CSR record of ABC.
D. Fund a programme of inoculations for the children of X Land to protect them from a
widespread and fatal disease.
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Q28. According to research carried out by CIMA in 2010, there are a number of
elements of organisational sustainability which are considered crucial to the successful
embedding of sustainability within an organisation.
CIMAs research identified 3 key areas of organisational sustainability activity. These are
strategy and oversight; execution and alignment; and performance and reporting.
For each of the following elements of sustainability activity, select the most appropriate
area in which they fall:
28.1 Understanding of the key sustainability drivers of an organisation
A. Strategy and oversight
B. Execution and alignment
C. Performance and reporting

28.2 Extensive and effective sustainability training

A. Strategy and oversight
B. Execution and alignment
C. Performance and reporting

28.3 Integration of the key sustainability drivers into the organisation's strategy
A. Strategy and oversight
B. Execution and alignment
C. Performance and reporting

28.4 Champions to promote sustainability and celebrate success

A. Strategy and oversight
B. Execution and alignment
C. Performance and reporting

Q29. JYD is a home cleaning product with 60% of the market. Overall market growth
has fallen to 4% in the past 5 years and is forecast to fall further. The manufacturer of
JYD has used the Boston Consulting Group matrix to decide to reduce investment in the
product.
Which of the following arguments justifies this decision?
A. Mature products may not repay the opportunity cost of additional investment in them
due to low margins and the danger of decline.
B. Products with small relative market shares may be uncompetitive due to their failure to
benefit from economies of scale.
C. A low industry growth rate will increase the current cash flows available from a
product.
D. A new product in a high growth market is risky and a firm cannot support a large
number of them.
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Q30. A CIMA member was asked to describe an ethical problem they encountered at
work and the steps they took to deal with it. They wrote the following account:
'My manager asked me to provide a report to justify a decision to outsource the cleaning of my firm's
offices to a particular contractor. I know, from conversations with him, that my manager has a financial
interest in that contractor. I wrote a report justifying the decision to outsource to the contractor as I was
instructed but, to cover myself, I clipped a note to the hard copy of the report stating that I did not
personally agree with the findings or conclusions of my report because I had not shown professional
competence or due care when constructing it'
Which of the following indicates this member's understanding of events?
A. EXCELLENT: they have defined the ethical principles involved correctly and the
action they took to resolve it was appropriate and effective.
B. GOOD: they recognised and understood the ethical principles involved but the action
they took was not strong enough in the circumstances.
C. POOR: they did not understand the ethical principles involved correctly and the
action they took was not strong enough in the circumstances.
D. VERY POOR: the person who wrote this has failed to recognise that ethical issues are
involved and has made no attempt to address them.

Q31. AAA is a manufacturer that operates e-procurement as part of its approach to

Supply Chain Management (SCM). It also builds partnerships with its suppliers.
Which THREE of the following are the most likely benefits to AAA of operating e-
procurement?
A. Reduction in the transaction costs of dealing with its suppliers.
B. Enables AAA to constantly shop around a range of suppliers to buy its supplies more
cheaply.
C. Increased production and sales for AAA as a result of suppliers responding more
quickly to demand, leading to fewer stock outs of components.
D. Reduction of operating risks due to a high reliance on technology.
E. Lower inventory holding costs due to a more rapid supply of components by
suppliers.

Q32. BGU: Divisional and group data 20x3

Division Sales Revenue Profit (Loss) Market share

203 $m 203 $m

V 867 126 4%
W 1.796 468 30%
X 42 (17) 18%
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-Market growth : hw many customer has come in this year
-Relattive mk share : market share compare with mk leaders

Y 963 187 52%

Total Group 3,668 764 -

Division Market share of Market growth Market growth

largest rival rate 203 rate 202

V 60% 0% 0%
W 19% 8% 10%
X 22% 38% 23%
Y 48% 18% 25%
Total Group - - -

BGU manufactures and sells a range of consumer foods in its home country. It has four
business divisions. Data for its most recent year, and comparative market growth rates
for the preceding year is available.
Which of the following strategic options should BGU investigate first?
A. Selling Division X to eliminate losses
B. Buying a rival to Division Y, to acquire its market share of 6%
C. Investing in Division W to increase its market share
D. Divesting division V to a rival firm in the same market

Q33. In which TWO of the following situations would you recommend the adoption of a
rational (traditional) approach to strategy formulation?
A. Where management must react quickly to short term pressures.
B. Where management has a high degree of confidence in the relevance of the techniques
used within the rational approach.
C. Where the future can be forecast with reasonable certainty.
D. Where the organisation needs to innovate and to think creatively.
E. Where opportunities must be taken as soon as they arise for the organisation.

Q34. In the movie industry a Film Producer acts a route to gaining finance for the film
by investing and encouraging others to invest. A Film Director is responsible for
delivering the vision of the film by directing and filming the action and for ensuring it is
delivered within budget.
Which of the following statements describes the proper exercise of corporate governance
in the strategic management of the business by the Board of a large publically-quoted
corporation?
A. The role of Non-Executive Directors is to be like Film Producers and the role of
Executive Directors is to be like Film Directors.
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B. The role of all Directors is to be like Film Directors.
C. The role of all Directors is to be like Film Producers.
D. The role of a Company Director combines some of the role of Film Producers with
some of the role of Film Directors.

Q35. Which THREE of the following are drivers of Shareholder Value Added (SVA)?
A. Working capital to sales ratio
B. Fixed assets to sales ratio
C. Operating profit to sales ratio
D. Sector P/E ratio
E. Dividend to net earnings ratio

Q36. PHY is a contractor that develops and sells medical diagnostic equipment such as
scanners and monitors. This equipment helps provide early identification and treatment
of life-threatening conditions and injuries, but can also be used to help non-critical work
such as enhancing appearance through cosmetic surgery.
Which item below raises the least challenge to the business ethics of PHY?
A. The higher prices charged to developing countries for its medical diagnostic
equipment compared to the prices charged to developed economies.
B. Negative impacts on patients from inaccuracies in its medical diagnostic equipment.
C. The use of its equipment by hospitals to enhance appearance as well as to assist in
curing illness and injury.
D. Poor pay and working conditions of employees and suppliers engaged in making
medical diagnostic equipment for PHY.

Q37. F is an international bank, providing a range of banking products to individual

customers. It operates through branches and five years ago, F invested $350 million to
operate branches in Country R. Country R then had a rapidly growing economy and F
considered there were good retail banking opportunities in Country R. SB, which is the
major state-owned bank in Country R has half of the retail banking business and holds a
position of strong dominance. There are also some well-established foreign banks that
have 35% of the market. The rest of the market is held by small regional banks in
Country R.
The bank customers in Country R are individuals who have a number of both local and
foreign banks to choose from. Country R operates a Western style liberal economy,
which permits the free movement of funds so F has access to cash both inside and
outside of Country R. Country R's government encourages foreign investment. However,
the government is also very supportive of SB. Traditionally, there is high customer loyalty
in the banking industry in Country R.
Evaluate the strength of the following three forces present in the retail banking market
within Country R:
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Force
Strength of force
37.1 Competitive rivalry
A. Strong
B. Weak
C. Neutral
D. Insufficient information

37.2 Bargaining power of individual customers

A. Strong
B. Weak
C. Neutral
D. Insufficient information

37.3 Threat of new entrants

A. Strong
B. Weak
C. Neutral
D. Insufficient information

Q38. LMS is an energy producing company that at present operates solely gas-fired
power stations. A Chartered Global Management Accountant working for LMS was
asked to evaluate whether LMS should invest in a business to generate electricity by
nuclear fission technology.
The CGMA wrote the following response:
'According to Ansoff's matrix this is an example of market development by our company. Using the
SAF framework of Johnson, Scholes and Whittington the investment is Suitable because we have all the
core competences needed for generating electricity by nuclear fission technology. It will be Acceptable to
investors because they have shown a willingness to invest in energy generation and are accustomed to risk
and long payback investments. It will be Feasible because regulatory authorities will recognise that LMS
has a good safety record.'
Which of the following best describes the response from the CGMA?
A. EXCELLENT: A correct evaluation has been provided based on a sound
understanding of Ansoff's Matrix and SAF analysis, and it has applied both correctly.
B. GOOD: Appropriate evaluation using SAF and core competences but contains some
misunderstanding about Ansoff's matrix.
C. POOR: Evaluation is based on a flawed assessment of core competences and
incorrect applications of Ansoff's Matrix and SAF analysis.
D. UNACCEPTABLE: The CGMA has shown no understanding of core competences,
nor of the application of Ansoff's Matrix and SAF analysis.

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Q39. V is a small private tuition company. Up to now, all of its tuition has been carried
out in the classroom. Recent market research carried out by V has strongly indicated that
there is an extensive market in online tuition and the senior management team is
considering moving into this area of business. Many of its competitors are already
offering online tuition facilities. V currently operates a website through which its
classroom based students can book onto courses, communicate via email with tutors,
download course literature and make payments. Developing online tuition facilities would
mean that V would need to develop facilities for online delivery of courses and it would
need to use other means of advertising its courses to a wider online audience.
Select TWO forms of Web 2.0 applications which V should use to enable it to deliver
and advertise its online tuition.
A. CRM
B. Webcasts
C. Presentation software such as Microsoft Powerpoint
D. Social media

Q40. Traditional management accounting focuses on providing information to assist

decisions at operational and managerial levels and to monitor performance at these levels.
Strategic management accounting provides additional information.
Which THREE of the following pieces of information would be provided by a strategic
management accounting function but NOT by a traditional management accounting
function.
A. Investment appraisals
B. Long term forecasts of market trends
C. Flexed budgets
D. Competitor prices and profit margins
E. Assessments of potential acquisition targets

Q41. Indicate which of the following statements are benefits or drawbacks of the Ansoff
Matrix by placing them in the correct position.
A- Can generate multiple strategic options Benefit
B- Requires interpretation to make it fit the circumstances of the organisation Drawback
C- Not sufficient on its own to determine strategy Drawback
D- Simple visual presentation of complex ideas Benefit
E- Does not include means of achieving growth Drawback
F- Long established and familiar to management. Benefit

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41.1 Benefits of Ansoff Matrix?
41.2 Drawback of the Ansoff Matrix?
(Denote the English letters).

Q42. EAV is a retailer of electrical equipment. Its management sets targets for store
managers to motivate them to achieve results in line with the competitive goals of EAV.
For each critical success factor place one target and one KPI next to each critical success
factor (CSF).

CSF KPI Target

Customer satisfaction 42.1 ? 42. 2 ?80% of shoppers return
Number of customers
returning to store within 6 months
Growth in sales 42.3 ? 42.4 ?
revenue Increase in sales volume 5% growth in like-for-like
sales per year

A- Increase in sales volume

B- 5% growth in like-for-like sales per year
C- 80% of shoppers return within 6 months
D- Number of customers returning to store

Q43. NKV is a retailer of exclusive and expensive fashion clothing for women. It
employs its own clothing designers and makes the majority of its clothes to order in its
own workshops from precise measurements of the customer taken in-store.
It has a single store in the capital city of a country with high disposable incomes. NKV's
name is known throughout the world as a centre of fashion. Significant numbers of its
customers travel from abroad at least once a year to view and buy unique garments.
Customers generally have personal accounts with NKV and they are invoiced each
month. NKV is seeking to invest in information systems in order to retain and improve
its competitive advantage but it has a restricted budget.
Select the most suitable of the following investments to the management of NKV:
A. Automated warehousing
B. In-store self-service check-outs
C. Computer-aided design
D. e-Procurement

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Q44. Which THREE of the following feature in the McKinsey 7S model of
organisational elements?
A. Stakeholders
B. Systems
C. Skills
D. Symbols
E. Shared values

Q45. Some organisations may decide to establish an internal group of experts, which is
then referred to internally as a 'think tank'. A think tank is considered by many
organisations to be a useful intuitive forecasting method which places emphasis upon the
knowledge and judgement of a group of experts rather than on statistical forecasting
methods.
Which THREE of the following are features of a think tank?
A. Members speculate about the future and are asked to provide subjective probabilities
about their predictions.
B. Members from all levels of management and expertise meet and propose answers to
an initial single question posed by a session leader.
C. The removal of positional authority in the group to enable free discussion to take
place.
D. The independence of members enables unpopular or novel ideas to be discussed.
E. Its group nature facilitates the sharing of knowledge and encourages a shared view.

Q46. CFH is a successful provider of education for pupils aged between 8 and 18 years
of age. Parents of pupils at CFH value its values and its traditional approach to education
which has not changed for over 50 years.
The government regulator has warned that education providers like CFH need to adapt
to external forces such as changing learning habits, new technologies, and the demand for
new subjects. The regulator wishes to see progress at CFH within a year otherwise it will
force changes.
None of CFH's management or staff has a clear vision of its future role, nor a clear idea
of what it needs to do to 'move with the times'. Management and staff are loyal to CFH
and wish to be consulted on the development of CFH.
Which of the following approaches to change should CFH adopt:
A. Identify a Champion of Change from within CFH to lead change.
B. Encourage a member of CFH's management to act as a Change Leader.
C. Appoint a Change Agent to develop CFH.
D. Engage a team of consultants to instruct CFH's management on its future direction.

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Q47. The Building Block Model devised by Fitzgerald and Moon sets out a framework
for the design and analysis of performance management systems. The first building block,
'Dimensions', identifies 6 goals for the business which must be measured.
Which THREE of the following are correct dimensions within the Fitzgerald and Moon
performance management model?
A. Market share
B. Innovation
C. Customer management
D. Flexibility
E. Competitive performance

Q48. UNS manufactures womens uniforms under contract from the armed forces in its
home country. It has several competitors and it receives no more than 20% of the total
orders for womens clothes from the armed forces.
UNS is considering four strategic options. Classify each of the strategic options by
placing them under the appropriate heading in the matrix below.
Market penetration Product development
48.1 ? 48.2 ?
D-Purchase another womens C-Purchase an overseas mens
uniform manufacturer thats sole uniform manufacturer thats sole
business is supplying the armed business is supplying the armed
forces in the home country of UNS forces in UNSs home country
Market development Diversification
48.3 ? 48.3 ?
B-Purchase an overseas mens
A-Tender for contracts to supply
uniform manufacturer that has
womens uniforms to the armed
contracts with the armed forces
forces of another country
of several countries

A- Tender for contracts to supply womens uniforms to the armed forces of another
country
B- Purchase an overseas mens uniform manufacturer that has contracts within the armed
forces of several countries.
C- Purchase an overseas mens uniform manufacturer that sole business is supplying the
armed forces in UNSs home country.
D- Purchase another womens uniform manufacturer thats sole business is supplying the
armed forces in the home country of UNS.
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Q49. F has recently developed a series of electronic book readers, designed and marketed
exclusively by F. The new device enables users to shop for, download, browse, and read
electronic books, newspapers, magazines, blogs, and other digital media via wireless
networking. The introduction of the device was a transformational change which was
forced upon F due to the changing competitive environment in the book sales market.
This development and introduction of the new device occurred over a period of only one
year.
Which of the following forms of organisational change best categorises the initial
development and introduction of the electronic book reading device by F?
A. Evolutionary
B. Revolutionary
C. Adaptation
D. Reconstruction

Q50. JOA is a listed corporation that manufactures heavy machinery. It comprises two
divisions of the same age, with identical equipment, that conduct identical business
activities in different parts of the same country. Both are considering installing a new
machine. Divisional managers receive bonuses calculated as 1% extra salary for every 1%
ROI achieved by their division.
Data for the divisions, and the machine, are as follows:
Division A Division B
Current ROI 18% 7%
Cost of Capital 11% 11%
NPV of proposed machine $104m ($3m)
ROI of proposed machine 15% 12%

Which THREE of the following pieces of advice should be given to the senior
management of JOA?
A. The manager of Division B has an incentive to invest in the new machine which
would be against the interest of shareholders.
B. The use of ROI is encouraging both divisional managers to avoid investing in the new
machine because it doesn't repay in the short term.
C. The manager of Division A has an incentive to invest in the new machine which
would be against the interest of shareholders.
D. The managerial bonus system is rewarding poor performance by the manager of
Division B.
E. ROI is an unsuitable measure for evaluating new investments.

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Q51. The management of JCM believes that the firm is 'stuck in the middle' and wishes
to use Porters Value Chain to understand how to become an overall cost leader in its
industry. It is devising a project plan to do this.
Place the following activities in the correct sequence to conduct a Value Chain Analysis
to achieve overall cost leadership.

D - Create a multi-disciplinary project team

B - Evaluate the minimum benefits that

customers require from JCM and its rivals

E - Identify the activities that deliver customer

benefits and categorise them within
porter's value chain

A - Identify the costs of performing each activity

C - Re-engineer or eliminate non- value adding

activities and reduce costs of value adding
activities

A Identify the costs of performing each activity

B Evaluate the minimum benefits that customers require from JCM and its rivals
C Re-engineer or eliminate non- value adding activities and reduce costs of value-
adding activities
D Create a multi-disciplinary project team
E Identify the activities that deliver customer benefits and categorise them within
porters value chain

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Q52. Which of the following describes a difference between Shareholder Value Added
(SVA) and Economic Value Added (EVA) measures of business performance?
A. One uses a cash-based measure of earnings and the other does not.
B. One applies a cost of capital to the investments used and the other does.
C. One takes future earnings into account the other does not.
D. One seeks to improve Market Value Added (MVA) and the other does not.

Q53. Which TWO of the following are key characteristics of an effective team?
A. An effective team must be led by a democratic team leader.
B. An effective team has a unity of purpose and all team members understand this
purpose.
C. An effective team involves its stakeholders in assessing progress towards goals.
D. An effective team avoids conflict and disagreement between team members.

Q54. The management of KDN wishes to develop a performance management system to

implement its new strategic direction.
Place the following activities in the correct sequence to develop a performance
management system to implement a strategy.

D Establish mission of the organisation

C Set the strategic Objectives of the organization

A Identify the critical success factors of the strategy

E Establish the Key Performance Indicators

B Set the targets for the organisation and its managers

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A Identify the critical success factors of the strategy
B Set the targets for the organisation and its managers
C Set the strategic Objectives of the organization
D Establish mission of the organisation
E Establish the Key Performance Indicators

Q55. H is a charity which has an excellent reputation for working with homeless people
to find food and shelter. H employs over 100 highly experienced staff and also uses 150
skilled volunteers. Its funding mainly comes from business donations and sponsorship
but its public profile is low compared to larger, more publicised charities.
Due to a recent recession, donations to H have fallen in the last 3 years but demand for
its services has grown. A number of volunteers have recently left H, due to the struggles
in coping with the rising level of demand with limited resources. The Board of H is
concerned that this will damage its reputation.
The Government of the country in which H operates is encouraging greater collaboration
between charities.This has resulted a number of highly successful mergers of charities in
the last few years. H has been approached by G, a large, high profile and well-funded
charity, with a proposal to merge. G offers complementary services to those offered by
H, such as training and re-employment assistance.
Which TWO of the following factors would be considered as THREATS to H:
A. H has a low profile in the charity sector
B. H has inadequate resources to cope with rising demand
C. The economic recession, leading to reduced funding
D. Rising demand resulting in H losing staff
E. The merger with G

Q56. WNR manufactures automobiles which are sold at the luxury end of the market, to
discerning customers whose main priority is comfort rather than speed or acceleration.
WNR has a mission that emphasises its commitment to meeting its Corporate Social
Responsibilities (CSR). It invests considerably into the development of new technology
that will reduce the carbon emissions of its vehicles. This is a further factor which attracts
customers to buy WNRs vehicles.
Despite its differentiated position in the market, WNR suffers from low profit margins
due to high production costs and a general decline in the prices of luxury cars, due to
competition from more efficient foreign producers.
Which THREE of the following would be the most appropriate Critical Success Factors
for WNR?
A. Development of new technology to reduce carbon emissions
B. Annual reductions in the production costs of WNR's vehicles
C. Superior top speed of WNRs automobiles
D. Superior reputation for CSR compared to foreign competitors
E. Superior comfort of WNR's vehicles compared to its competitors

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Q57. V is a well established, mid-priced airline business. It is currently considering setting
up a 'no-frills', low fare subsidiary of its business.
Which THREE of the following activities would take place within the strategic analysis
phase of V's strategic planning process?
A. Evaluation of the competitors actions
B. Evaluation of how new staff would be recruited and trained
C. Evaluation of which planes to use
D. Evaluation of forecast passenger volumes
E. Evaluation of public concern for environmental damage

Q58. Knowledge management strategies require the organisation to set up arrangements

to ensure the Creation, Capture, Storage, Availability (or Dissemination), and Utilisation
of the organisations information, knowledge and experience.
Place the tools of knowledge management next to the requirements that they best
support.( Mention the Capital letter)
Knowledge Management Organizational Tool
Requirement
58.1 Creation of knowledge A - Creation of sharing culture
58.2 Capture of knowledge B - Database structure
58.3 Storage of knowledge E - Technological infrasturcture
58.4 Availability (dissemination) of
knowledge D - Intranet and extranet

58.5 Utilisation of knowledge C - Staff development and training

A Creation of sharing culture

B Database structure
C Staff development and training
D Intranet and extranet
E Technological infrasturcture
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Q59. BNM is a state-funded provider of medical services. It uses the Balanced Scorecard
of Kaplan and Norton to monitor and evaluate the performance of its branches and
divisions. It presently collects data on the following four key performance indicators
(KPIs):
1. Average time between patient arrival and attention by a member of medical staff
2. Average cost per patient admission
3. Errors in medical record keeping per 100 admissions
4. Percentage of patients expressing satisfaction with BNM's service
Which of the following perspectives is NOT represented in the key performance
indicators monitored by BNM?
A. Customer
B. Internal business process
C. Financial
D. Learning and growth

Q60. LSN is a clothing design and manufacturing company that sells its products to
major retail chains in many countries of the world.
Following the failure of its expensive investment in new information technology, the
board of LSN was advised by consultants to replace its former Manager of Computing
Services with an Information Technology Director at Board level.
Select the THREE reasons below that best justify making information strategy a senior
management role at LSN rather than something that should be left to technical experts
within the IT department.
A. It is a potential source of competitive advantage for LSN that should be managed
strategically as well as operationally.
B. Creation of a senior role for information will help LSN attract and retain better staff
due to the higher pay and better careers available with LSN.
C. Changes in information strategy can have significant impacts on internal and external
stakeholders that need to be handled strategically.
D. A senior role avoids duplication of expenditure, systems, and data in the divisions of
LSN and improves integration.
E. Information systems expenditure is significant and often requires evaluation against
both strategic initiatives and business operations.

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 Mock Exam 3

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1 Y has recently published the following statement:
Y aims to continually improve shareholder value, by providing the best customer
service in the industry to customers.
Which ONE of the following is the statement most likely to be?
A An objective
B A vision statement
C A non-market strategy statement
D A mission statement

2 Which TWO of the following statements regarding an organisations mission

statements are correct?
A They set out the long-term aspirations of the organisation
B They can be used to help create a desired corporate culture
C They are confidential and only meant to be circulated within the the
organization.
D They may not represent the actual values that employees believe are
important

3 W Farm Ltd, a small farming company, has been delivering milk to a group of
villages in the Yorkshire area for the last 80 years. Recently the owner, E, decided
to create a mission statement for the company.
Which ONE of the following would be most appropriate for this business?
A To increase turnover by 10% per annum for the next five years
B To be the greatest company in the country
C To provide high quality milk for the community every day
D To lobby the government for the rights of milk farmers everywhere

4 Mission statements are usually based upon the organisations current structure and
position. This can then help to formulate the organisations preferred, or ideal,
future. This ideal future is typically communicated by which ONE of the
following?
A Vision statement
B Bottom-up budget
C HRM plans
D Business valuation

5 Which THREE of the following are advantages of an organisation having a

mission statement?
A Provides a basis for control of an organisation
B Helps instil core values to staff
C Is seen as a public-relations exercise
D Improves communication with all stakeholders
E Non-specific, allowing managers to choose whether to adopt it

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6 According to the SMART framework, which ONE of the following is a required
feature of an objective?
A Sustainable
B Strategic
C Specific
D Stakeholder-focused

7 HUH makes household furniture. The market is competitive and customers

choose their furniture supplier by the quality of the manufacturers product.
HUH has set itself the following objective:
To produce perfect quality furniture
Which ONE of the following SMART criteria does HUHs objective meet?
A Attainable
B Timed
C Measurable
D Relevant

8 Yellowburn University, a not for profit higher education organisation, has the
following mission statement:
We aim to deliver excellent tuition in state of the art facilities to help develop
socially responsible students and to contribute to global academic research.
Which TWO of the following would be appropriate objectives to fit in with this
mission?
A To deliver the best possible lessons
B Each member of staff is to write two research papers for publication over
the next two years
C To increase car parking space at the university by 10% in the next 12
months to improve access
D To get 15% of all students to receive first class honours degrees each year
E to ensure 100% attendance from all students for every lecture

9 According to Braithwaite and Drahos, which THREE of the following actors

make up civil society?
A Knowledge based communities
B States
C Mass public
D Organisations formed by firms
E Non-governmental organisations

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10 The following diagram represents Mandelows power interest matrix.

Level of Interests
Low High
A B Low
Minimal Effort Keep Informed
Power
C D High
Keep Satisfied Key Player

Which ONE of the quadrants (A, B, C or D) on the above diagram represents

stakeholders that need to be kept satisfied?
A Quadrant A
B Quadrant B
C Quadrant C
D Quadrant D

11 K plc is a large, multinational company that manufactures and sells motor vehicles.
It has recently undertaken an analysis of its stakeholders using Mandelows Power
and Interest matrix. During this analysis it has identified four stakeholders.
According to Mandelows matrix, which of these four stakeholders should K
adopt a keep informed strategy towards in the following scenario? Select ALL
that apply.
A LPP an international pressure group. LPP is currently lobbying various
national governments in an effort to reduce pollution especially those
from motor vehicles. LPP has arranged a number of high-profile protests in
recent months, which have received a large amount of media attention. K is
about to launch a new model of motor car, which is large and consumes
significant amounts of petrol.
B The government of country H. Around three quarters of K plcs factories
are based in country H. The government has enacted a number of new
pieces of health and safety legislation for factory workers in the last several
years. It undertakes regular unannounced checks of all factories in country
H and has recently heavily fined one of Ks rivals for failing to meet safety
standards.
C K plcs sales staff. Ks sales staffs make up around 25% of the total
workforce. They are not significantly unionised and are relatively unskilled.
They are all based in Ks head office. K is considering reducing the number
of sales staff by around a third as part of a cost cutting exercise.
D F Ltd a customer of K plc. F Ltd runs a small chain of car retailers. They
exclusively sell K plcs two-seater models of motor vehicles. F only
represents around 0.5% of K plcs total sales. K is considering discontinuing
the two-seater range in the near future.

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12 BetWalt, a medium sized online gambling company, is to move all of its operations
from the UK to a different country to reduce its cost base. In respect of this move,
which ONE stakeholder group from the following list would need to be kept
informed?
A Low-skilled employee (not heavily unionied)
B Customers (both UK and abroad)
C UK government (BetWalts move is not against local laws)
D Major institutional investors (with shareholdings of between 25% and
30% each)

13 Pirlo Pasta Ltd is a manufacturer of chilled ready meals for a large supermarket
chain. It recently found that a batch of products had a different type of meat
contained in the meals to that described on the packaging. The company
immediately reported this to the food standard regulator the Central
Government Food Standards Agency (the CHFSA), as this was a breach of
appropriate legislation, which could lead to heavy fines and penalties being levied
on the company.
The managing director of Pirlo identified, while undertaking stakeholder analysis
using Mandelows power-interest matrix that the CGFSA has shifted from one
stakeholder position to another.
Which one of the following options correctly describes the shift in stakeholder
position of the CGFSA?
A Key player to Keep informed
B Keep informed to Key player
C Keep satisfied to Keep informed
D Keep satisfied to Key player

14 RRL is a medium sized company that operates bus services throughout several
major towns and cities. RRL has around 700 employees and around 85% of these
employees are members of the OOB union. OOB is an active union and has
regularly threatened RRL with strike action during disputes over employee pay and
conditions.
Which ONE of the following is the major source of stakeholder power that the
OOB union has over RRL?
A Resource
B Expert
C System
D Positional

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15 R is a national chain of supermarkets. It has recently purchased a large piece of
land in the centre of a small, traditional fishing town with a view to building a large
store. There has been significant resistance to this by local residents, but in
response R has promised to create a sizable amount of free car parking for
residents, as well as investment in local sports and entertainment facilities.
According to Cyert and March, R is adopting which ONE of the following
stakeholder conflict resolution strategies?
A Side payments
B Satisficing
C Exercise of power
D Sequential attention

16 Which ONE of the following groups would an organisation consider when

planning a non-market strategy?
A Major customers
B Government regulators
C Key suppliers
D Large competitors

17 Which THREE of the following are common arguments FOR organisations

adopting a strong approach to corporate social responsibility (CSR)?
A Increased profitability due to cost reductions
B Faster strategic decision-making
C Improved reputation with environmentally conscious customers
D Ability to attract higher calibre staff
E Reduced chance of government intervention in the future

18 V is the Managing Director and part-owner of a chain of gyms. He currently pays

his staff the minimum legal wage set by the national government, as well as
offering them the minimum statutory holiday entitlement.
In recent months, Vs gyms have suffered from significant staff turnover. Several
key employees have moved to rival gyms and taken a large number of Vs
customers with them.
V has decided to adopt a further range of cost cutting exercises in response to this.
He has argued that he needs to maintain the profitability of the gyms for the
benefit of himself and his business partners.
Which ONE of Johnson, Scholes and Whittingtons ethical stances is V adopting?
A Shaper of society
B Long-term shareholder interest
C Short-term shareholder interest
D Multiple stakeholder obligation

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19 X is Operations Director of a Y, a large organisation. X is responsible for a wide
range of decisions, covering the procurement, production, sales and IT functions.
X is considering a supplier selection decision. One of the organisations suppliers
is a small, local company. It has supplied specialist components to Y for many
years, and has always delivered on time and to a high level of quality. A large
multinational has tendered to supply the same components at a much lower price
than that offered by the local supplier. X knows that the local supplier may go out
of business if he decides to buy from the multinational.
X decides to buy from the local supplier, justifying his decision on the grounds
that while the multinational can supply more cheaply, delivery of the components
from the multinational would increase the carbon footprint of Y. This would go
against Ys published mission statement and objectives.
Johnson, Scholes and Whittington propose four ethical stances that can be
adopted by individuals or organisations. Which ONE of the following stances is
being adopted by X?
A Multiple stakeholder obligation
B Short-term shareholder interest
C Long-term shareholder interest
D Shaper of society

20 Which TWO of the following statements regarding Corporate Social

Responsibility (CSR), ethics and sustainability are correct?
A To be successful, the ethical tone within the organisation needs to come
from senior management
B Sustainability refers to a firms obligation to maximise its positive impact on
stakeholders while minimising the negative effects
C Management accountants have a responsibility to promote an ethical
corporate culture
D Sustainability and CSR will lead to cost savings, but only in the long term

21 H operates a successful bakery. He has recently started recycling all waste

generated by his store in response to government legislation. At the request of a
local charity, he has also started donating any leftover food at the end of each day
to a shelter for the homeless.
According to Carroll, which ONE of the following philosophies best describes Hs
actions?
A Accommodation
B Proaction
C Reaction
D Defence

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22 Which THREE of the following are included within Carrolls four-part model of
corporate social responsibility?
A Stakeholder responsibility
B Shareholder responsibility
C Legal responsibility
D Ethical responsibility
E Economic responsibility

23 According to CIMAs report Evolution of corporate sustainability practices, there

are ten elements of organisational sustainability. These are grouped under three
headings.
For each of the following elements, identify which relevant heading they should be
included under by placing them in the appropriate box.
Elements:
Board and senior management commitment
Champions to promote sustainability and celebrate success
Extensive and effective sustainability training
Ensuring sustainability is the responsibility of everyone within the
organisation
Including sustainability targets and objectives in performance appraisal
Place each of the above elements into a box under the appropriate heading below.
Strategy & Execution & alignment Performance &
oversight reporting
Board and senior management Extensive and effective Champions to promote sustainability
commitment sustainability training & celebrate success
Ensuring that sustainability is the Including sustainability targets &
responsibility of everyone in the orgn. objectives in performance appraisal

24 J is a CIMA member, and Financial Controller of X, a large company

manufacturing military equipment.
X is currently experiencing financial difficulties, though this is not public
knowledge. The CEO of X is due to meet the Defence Minister of a foreign
government which is known to be looking for new military equipment that X
would be able to supply. The CEO has asked J to produce a PowerPoint
presentation, summarising the financial position and forecast of X. The CEO has
asked J to include a very optimistic forecast, as this will improve the chances of X
securing the contract from the foreign government.
To do this would be in breach of the fundamental ethical principle (according to
CIMAs code of ethics) of --------------------- 1 -------------------------------.
Which ONE of the following options would correctly fill Gap 1?
A Objectivity
B Integrity
C Confidentiality
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25 H is a CIMA member, and Financial Controller of X plc, a large company
manufacturing furniture.
X plc is currently looking for a new supplier of printed fabrics. Three suppliers are
being considered, one of which is Y Ltd. Y Ltd is owned by Z, an old school
friend of H. Z has asked H to put in a good word for Y Ltd with the
procurement manager of X plc. Z knows that H is good friends with X plcs
procurement manager.
Which ONE of the following options would H be breaching by agreeing to Zs
request?
A Objectivity
B Integrity
C Confidentiality
D Professional competence

26 P is a CIMA member, and Financial Controller of X plc, a large company

manufacturing soap.
X plc is currently looking for a new supplier of packaging materials for its
products. It has started a tendering process to help it pick between four possible
suppliers. One of these potential suppliers is BRG- which is owned by a close
personal friend of P. She has asked P to tell her what prices the other suppliers in
the tender process have quoted X plc.
Which ONE of the following options would P be breaching by agreeing to his
friends request?
A Objectivity
B Integrity
C Confidentiality
D Professional competence
27 Professional accountants may have to follow a number of steps when attempting
to resolve an ethical threat. These steps include:
4A Obtain advice from professional institutes
1B Establish ethical issues involved
3C Follow established internal procedures
2D Refer to relevant fundamental principles
5E Consider withdrawing from the engagement
Place these steps into the correct order, beginning with the earliest, by writing
letters A-E in the correct order.

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28 Which THREE of the following are valid reasons for disclosing commercially
sensitive information to a third party which would NOT breach the ethical
principle of confidentiality?
A It is required due to a professional, ethical dilemma
B It is permitted by law and authorised by the client
C It is required by law
D Failure to disclose could materially disadvantage the third party
E There is a professional duty or right to disclose the information

29 L Ltd is a small company which offers accountancy services to a range of clients. L

is relatively new to the market and is considering undertaking formal
environmental analysis.
Which of the following are purposes of L undertaking environmental analysis?
Select ALL that apply.
A Allows L to assess its competition
B Enables L to identify its resources
C Allows L to gain a deeper understanding of its market
D Enables L to understand its industry
E Helps L to meet its stakeholder needs

30 X is a large logistics(parcel delivery) company. As part of its strategic planning

process, X has identified several factors in its business environment that seem to
be important. Categorise each factor according to PESTEL analysis.
There is increasing pressure on the logistics industry to minimise its carbon
F-Environmental
footprint. This should be classified as ------------------- 1 --------------------.
The government is planning a change to employment law, to prevent drivers
working more than ten hours in any 24 hour period. This should be classified as ---
D-Social
------------------ 2 -----------------.
The use of global positioning systems (GPS) and smart phones are now becoming
an industry threshold competence. This should be classified as E-Technological
---------------- 3 -----
--------------.
The current government is unpopular with voters, and there may be an election
soon. X is unsure of the impact this would have on their business. This should be
A-Political
classified as ---------------------- 4 -------------.
Use the options below to fill in the missing words in gaps 1 to 4.
A Political
B Economic
C Legal
D Social
E Technological
F Environmental

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31 Which TWO of the following statements regarding PEST analysis are correct?
A PEST analysis is becoming more difficult due to increasing volatility in the
global market
B PEST analysis is prone to bias, which can reduce its usefulness
C PEST analysis focuses on analysing the industry that an organisation
operates within
D PEST analysis examines the internal and external issues faced by the
organisation

32 H is a large vehicle manufacturing company in country F, which has recently

decided to undertake environmental analysis.
Which ONE of the following factors would most likely be identified under the
political heading of a PEST analysis?
A New CAD and CAM has recently become available for use in Fs factories
B Recycling is seen as being increasingly important by the residents of
country F
C Increased disposable income of consumers within country F
D Changes in minimum wage legislation within country F

33 Which THREE if the following are forces within Porters five force model?
A Threat of new entrants
B Demand conditions
C Power buyers
D Threat of substitutes
E Political and legal

34 X is a marketing services company providing consultancy to a range of business

clients. As part of its strategic planning process, X has made several changes that
seem to have had an impact on its business environment. Evaluate each factor
according to Porters five force model analysis.
X and its rivals have managed to persuade the Government to require all
marketing services companies to complete a time consuming and bureaucratic
registration process, and to comply with an industry code of conduct. This
B-Threat of new entrants
represents a decrease in ---------------- 1 ------------------.
X has persuaded its entire staff to sign a new contract which prevents them for
working for any rival company for a period of two years, should they resign. This
represents a decrease in ----------------- 2 D-Power of suppliers
-------------.
Use the options below to fill in the missing words in gaps 1 and 2.
A Competitive rivalry
B Threat of new entrants
C Power of customers
D Power of suppliers
E Threat of substitutes
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35 Q is an electrical appliance manufacturer and currently specialises in the
manufacture of domestic vacuum cleaners. Q operates in this market with four
other companies. Each manufactures similar products and sells similar volumes of
vacuum cleaners each year.
Q and its rivals own a large number of patents relating to the manufacture of
vacuum cleaners. Q buys its raw materials through a number of small suppliers, as
do its rivals.
From the information above, which ONE of the following forces from Porters
five forces model would be classified as high?
A Threat of new entrants
B Power of suppliers
C Competitive rivalry
D Threat of substitutes
36 Y offers consumer insurance products, including car and life insurance.
According to Porters five forces model, which ONE of the following would
indicate that the power of buyers in Ys industry is high?
A Ys insurance policies have a number of special features, differentiating
them from those offered by its rivals.
B Y has few rivals in the car and life insurance market
C Ys customers typically use comparison websites to see how much their
insurance would cost from a number of different suppliers
D Ys customers are legally required to have car insurance

37 Z plc is using porters Five Forces model to examine the key aspects of the
organisations industry that may impact upon strategy. It has identified the
following issues.
1 One of Zs customers is considering backwards integration of their supply
chain
2 Z plc and its rivals have secured exclusive agreements with all major
distribution channels for their products
3 Z has managed to achieve significant economies of scale in its
manufacturing process.
For each of the above issues Z has identified, decide which force they relate to and
whether they suggest that the force is high or low by placing the relevant issue
number in the appropriate box below.
Note: each box can be used more than once.
High Low

Power of customers 1

Threat of substitutes

Threat of new entrants 2&3

38 OFG plc is a manufacturer of military hardware. It sells to a number of countries;
although this is heavily regulated by the central government of its home country-
country J. OFG feels that its major competitive advantage over its two major
industry rivals is its strength in research and development. This is important given
the fast changing nature of its market. OFG has recently formed a joint venture
with one of its rivals to develop a new weapons satellite system.
Which TWO of the following options are possible reasons why OFG woild find
the use of Porters Five Forces model of limited use?
A OFG has very few competitive rivals
B OFG operates in a fast moving industry
C Porters Five Forces assumes that rivals do not act collaboratively
D The Five Forces model focuses solely on industry profitability

39 D plc manufactures a range of products, including the TT155. The TT155 was
seen as being extremely innovative on its launch two years ago and has
experienced high sales growth. Its sales growth, while still high, has fallen in recent
months due to a number of rivals launching products similar to the TT155. D has
started investing in advertising (as well as legal action against some rivals for
copying patented design features of the TT155). This has led to the TT155
experiencing relatively low profitability.
Which stage of the product life cycle is the TT155 currently within?
A Growth
B Decline
C Maturity
D Introduction

40 Price cutting and reduced promotion are typical strategies at which stage of the
product life cycle?
A Decline
B Growth
C Introduction
D Maturity

41 Going-rate pricing would be most common at which stage of the product lie cycle?
A Introduction
B Maturity
C Decline
D Growth

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42 L manufactures and sells high quality tents for use by campers. Y manufactures
and sells high quality caravans. L and Y are aware that they are trying to sell to the
same customent segments.
According to competitor analysis theory, what type of competitors are L and Y?
A Generic
B Industry
C Brand
D Form

43 ABC is a manufacturer of portable communications equipment. The equipment is

designed to be used in toxic environments. ABC has identified four main
competitors and whishes to classify them.
Competitor Type of competitor
A firm which makes a similar product, 1 Brand
but for a different market segment
A (for the nuclear industry
A3-Industry
B A firm which creates a similar product Generic
to ABC and tries to sell it to ABCs 2
customers B1-Brand
C A firm which competes for the same 3 Industry
income as ABC (e.g safety equipment)
C2-Generic
D A firm which attempts to meet the 4 Form
same needs as ABC, but with a
different product (e.g flare guns)
D4-Form

Identify which leadership style correlates to each of the CEOs suggestions by

paring the appropriate letter and number (eg: A1, B2 etc.)

CC

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44 YU is undertaking detailed competitor analysis and is developing a series of
competitor response profiles.
One of YUs major rivals is GG. GGs response to YUs previous strategies has
varied significantly. When YU launched a new product last year, GG responded
with an aggressive pricing policy on its own products. However, when YU recently
launched a major advertising campaign, GG did not respond at all. YU has been
unable to see a pattern to GGs actions.
According to competitor analysis theory, which ONE of the following competitor
response styles best fits GG?
A Laid back
B Selective
C Stochastic
D Tiger

45 X is a multinational car manufacturer based in country Y.

As part of its strategic planning process, X is considering further overseas
expansion, and wishes to determine whether being based in country Y gives it a
competitive advantage over domestic car manufacturers in other countries.
Country Y has two main universities, each of which offers a degree program in
automotive engineering. The graduates from this programme are very highly
regarded and are seen as being important to Xs operations.
The graduates produced by the local university are an example of which ONE
factor from Michael Porters Diamond model?
A Factor conditions
B Related and supporting industries
C Demand conditions
D Strategy, structure and rivalry

46 V is a multinational telephone manufacturer, based in country O.

As part of its strategic planning process, V is considering further overseas
expansion, and wishes to determine whether being based in country O gives it a
competitive advantage over domestic car manufacturers in other countries.
When V was formed, fifty years ago, there were eight car manufacturers based in
country O. There are now only two, following a series of acquisitions by V and its
rival, and a number of bankruptcies. V competes aggressively against its rival, both
in terms of price and quality.
This represents an example of which ONE factor from Michael Porters Diamond
model?
A Demand conditions
B Related and supporting industries
C Factor conditions
D Strategy, structure and rivalry

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47 SP Ltd operates a chain of jewellers in country H. It is currently planning to
expand into country G.
Which THREE of the following would be classified as related and supporting
industries for SP Ltd within country G when using Porters five forces model?
A Country G has a large number of existing chains of jewellers.
B Country G has a large number of suppliers of precious metal
C Country G has a large number of unemployed residents
D Country G has a large number of shop fitting businesses and decorators
E Country G has a large number of firms providing security services

48 HGY is a chain of opticians which is considering expanding into country F. It has

decided to analyse the decision using Porters Diamond model.
Consider the following list of issues relating to HGYs proposed expassion as well
as the dimensions of Porters Diamond.

Issue Dimension
A High levels of poor eyesight in country 1 Factor conditions
F A2-Demand Conditions
B HGY has a monopoly in its home 2 Demand conditions
country B3-Strategy, Structure & Rivalry
C Large amount of empty premises in 3 Strategy, Structure and
country F C1-Factor Condition rivalry
D No suppliers of eye testing equipment 4 Related and supporting
in country F D4-Related & Supporting Industries
industries

Identify which issue relates to each dimension by paring the appropriate letter and
number (e.g A1, B2, etc.)

CUSTOMERS, SUPPLIERS AND SUPPLY CHAIN MANAGEMENT

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49 AAA is a specialist car manufacturer, based in G, a country in Europe. AAA
manufactures most of the components of its car in-house. The main exception is
the cars engine, which AAA buys from a major car manufacturer and then sends
them all to a single, highly specialised company (BBB) for modification and
upgrades. While the engine is relatively expensive, it is the work of BBB that
represents the single most significant cost of producing each car. AAA has, on
occasions, paid BBB the equivalent of 25% of the final sales price of a car. The
sales manager has stated BBBs work is one of the cars unique selling points
Based on the above information, evaluate the strength of the bargaining power of
suppliers at AAA. (Select ONE of the following options)
A Strong
B Average
C Weak
D Very weak

50 H bakes and sells bread and other wheat-based baked goods. It is currently
undertaking detailed supply chain management and has identified a number of
partner organisations that form its supply chain.
Which THREE of the following organisations would form part of Hs
downstream supply chain?
A Farmers
B Consumers
C Supermarkets
D Wheat wholesalers
E Small, independent food retailers
51 QII is an electronics manufacturer. It produces circuit boards for many other
retailers and is the largest single user of palladium - a rare metal in the world. QII
purchases its palladium from two specialist companies who process palladium
which they, in turn, have purchased from palladium mines around the world.
Palladium prices are volatile and QII have typically been able to negotiate a low
price for the metal they purchase due to their significant buying power.
QII has recently started an analysis of its supply chain and one of its managers has
suggested that the company monitor the cash flow and profitability of all QIIs
upstream and downstream partners.
Which ONE of the following reasons would best justify the managers suggestion?
A to ensure further supply and demand for QIIs circuit boards
B to ensure high quality of QIIs raw materials
C to maximise QIIs ability to collaborate with customers regarding circuit
board design
D to ensure QII is able to gather as much information about its supply chain
as possible
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52 KKB is a company which operates passenger trains in country G. It has been
granted an exclusive ten year franchise by the government of country G to run
trains in the east of the country. It is considering launching an e-procurement
system for its purchases of diesel (necessary for the running of around 45% of its
trains). There are a number of suppliers of diesel, though KKB has historically
only ordered diesel from one of these (using a manual ordering system). Diesel
prices vary significantly between suppliers and on the open market.
Storage of diesel is expensive, but KKB has been forced to keep a significant
amount in inventory as its current supplier cannot always guarantee prompt
delivery.
Which of the following statements relating to KKBs e-procurement system is
correct? (SELECT ALL THAT APPLY)
A it will increase KKBs competitive advantage in its market
B it will reduce KKBs over reliance on a single supplier
C it will enable KKB to reduce its inventory holding costs
D it will reduce KKBs exposure to technology risks

53 GHO is a company that rents motorbikes and scooters to individuals through a

small chain of stores.
In order to improve customer service levels, The Marketing Director (MD) has
told the Marketing Manager (MM) that she must change the marketing approach
from transactions marketing to relationship marketing. The MM is unsure wha
the MD means, and has asked for your advice.
Place the following characteristics of relationship and transactions marketing into
the correct category in the table below.
Transaction marketing Relationship marketing
Concentrates on profit Service quality is a critical success factor

Motorbike and scooter quality is a Requires detailed knowledge of

critical success factor customer needs

Little emphasis on repeat rental

54 Which three of the following

A. Customer markets
B. Transaction markets
C. Internal markets
D. Public markets
E. Influence markets

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55 VVC is a television broadcaster in country B. Much of its revenue comes from
advertising sponsors who will pay higher fees for their adverts if the number of people
watching VVCs television programmes rises.
VVC has recently been informed of a new mobile application that large numbers of
people in country B are using. Individuals download the application to their mobile
phone and it gives them tailored suggestions as to the best programmes to watch on
television each day.
According to Panes six markets model, which one of VVCs six markets would this new
application classified within?
A. Customer
B. Influence
C. Internal
D. Recruitment

56 ABC has just made a financial loss on trading for the first time in 50 years. ABCs
senior management is therefore currently undertaking a customer review.
The management accountant has discovered the following statistics about three of the
companys largest customers. For each customer he identified the number of times a sales
assistant had to visit the customer, and the number of rush deliveries that ABC had to
provide for each customer. In order to stay competitive, ABC cannot pass on the cost of
either of these activities to its customers.
Customer 1 Customer 2 Customer 3
Number of sales visit made 56 34 258
Sales revenue 58 24 85
Number of rush deliveries made 5 20 163

Which one of the following statements best describes the current issue at AAA?
A. All three customers are earning revenue for ABC, so the company should not
make any changes the way it manages them.
B. ABC should stop undertaking expensive rush deliveries for all customers.
C. ABC needs to increase the selling price to all three customers due to the number
of rush deliveries.
D. Despite customer 3 providing the most revenue, it is not necessarily earning the
highest margin.

57 The analysis of revenue streams and service costs associated with specific
customers or customer groups.
The above statement is the official CIMA definition of which of the following
concepts?
A. Customer Account Profitability (CPA)
B. Customer Relationship Management (CRM)
C. Customer lifetime value (CLV)
D. Customer segmentation
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58 JEP is a small firm which offers private accountancy training and tutoring. It has a
number of different types of client, from individuals up to medium sized
accountancy firms, each of whom requires a differing level of service and
administration. The senior partner of JEP is concerned that the firm is actually
losing money on some of its more demanding customers and has decided to
implement customer account profitability (CPA) analysis for the firms customers.
The senior partner has identified the following steps within CAP;
2 A. Calculate the annual amount of revenue earned from each group of customers.
3 B. Calculate the annual costs of administration and servicing for each group of
customers.
5 C. Eliminate unprofitable groups, or re-engineer them so lower levels of service
are offered.
4 D. Identify the profitable groups and ensure they are retained.
1 E. Break JEPs customers down into groups such as individuals, small firms and
large firms

Put the senior partners list of CAP steps into the correct order, by placing the
letters in the above list into the correct order, from the first to the last step.

59 Which three of the following are inputs to the customer lifetime value (CLV)
calculation?
A. Retention cost
B. Market definition
C. Customer segment
D. Periodic revenue
E. Discount rate

60 WEF is a small business which has undertaken a customer lifetime value (CLV)
analysis. The managing director of WEF has been given the valuation of an
average customer of the business, but is uncertain as to what it means.
Which ONE of the following options best explains the output of WEFs CLV
analysis?
A. The amount it costs WEF to attract customers from rivals
B. The ideal amount of profit that WEF can make from each customer
C. The amount WEF should be willing to spend to acquire customers
D. The customers that are losing WEF money.

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 Mock Exam 4

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1.
Xen is one of the worlds largest online social media companies and is considering
launching a new range of mobile phones in order to tap into the high growth
worldwide smartphone market. Brian Davies is the Managing director of Xen, and is
concerned over the power of suppliers, having read an article which stated that the
majority of mobile phone screens are now manufactured by a small number of
international companies who sell to all smartphone manufacturers.

Which THREE of the following findings would suggest that suppliers power is high?

A. Suppliers ability to reduce quantity supplied.

B. Plenty of substitute products to fulfil production requirements.

C. A historic ability to increase prices with no resulting volume decreases.

D. Providing a critical component.

E. An unorganised supply chain.

2.
Curare plc is a pharmaceutical company that specialises in drugs for the treatment of
several major illnesses. One of Curares products is Yzolit a drug that helps to treat
migraines.

The market for migraine drugs is relatively static and Curare is faced with significant
competition from rival pharmaceutical companies. However, Curare is still maintaining
its position as market leader in most cases even though it is currently slightly more
expensive than its rivals.

Curare believes this is because of its strong reputation as well as the fact that many of its
customers are government funded health services who focus on the effectiveness of the
drug and its quality, rather than its initial cost. Health services often focus on the purity
of the drugs, as lower purity can lead to more side effects for patients.

Many of Curares Yzolit health service customers arrange exclusive contracts for drug
supplies from one company. Curare has yet to negotiate any such contracts for Yzolit.

Curare is considering how to adopt a market penetration strategy (as popularised by

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Ansoff) for Yzolit to boost its returns.

Which TWO of the following would be the most appropriate methods for Curare to
adopt when considering a market penetration strategy for Yzolit?
A. Improved processing of Yzolit to reduce impurities.

B. Improved packaging on Yzolit products.

C. Price cuts on Yzolit to stimulate demand.

D. Lobbying for exclusive Yzolit contracts with health services

3.
C plc is considering moving from an antagonistic to a partnership relationship with its
major suppliers.

Which of the following statements regarding antagonistic and partnership relationships

are correct?

Select ALL that apply.

A. Antagonism focuses on selecting the suppliers that charge the lowest prices

B. A partnership approach may lead to long-term sole sourcing arrangements with key
suppliers

C. Partnership with suppliers may allow C to understand how to increase the value it
offers to its customers

D. Partnership arrangements can lead to increase the power of Cs suppliers

E. Antagonism will ensure that C can access the skills and knowledge of its key suppliers

4.
OOP sells perfume and body care products. It sells a range of products, which it has
already analysed on the Boston Consulting Group (BCG) matrix.

Using the lists below, match each of the products on OOPs BCG matrix to its most
likely position within the product life cycle.

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4.1 SIDI is a perfume which has very recently been released by OOP. It has been
classified as a problem child. OOP believes it will be worth further investment due to the
strong growth in the perfume market.

A. Growth
B. Introduction
C. Maturity
D. Decline

4.2 TAG is a bath foam which has been sold by OOP for many years. It is a cash cow,
and dominates a very slow growing segment of the market.
A. Growth
B. Introduction
C. Maturity
D. Decline

4.3 AI is a specialised face mask sold by OOP. The face mask market has fallen in recent
years and AI has been classified as a dog.
A. Growth
B. Introduction
C. Maturity
D. Decline

4.4 N is a moisturiser which has posted strong sales rises in previous years. The
moisturiser market is growing quickly and OOP has classified this productas a star.

A. Growth
B. Introduction
C. Maturity
D. Decline
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5.
P is a large conglomerate that offers a range of travel services, including airline, train
travel and taxi services in country H. P has adopted a divisional structure, with each
separate travel service being run as a separate strategic business unit. In spite of this, Ps
divisions do co-operate and share information about customers in order to provide an
integrated travel service, regularly offering special discounts to customers who book
journeys that involve travelling with more than one of Ps divisions for example by
train and by taxi.

Ps train division has recently undertaken detailed customer account profitability (CAP)
analysis. P runs trains across country H, in particular between country Hs three large
international airports. Management segmented their customers by geographical area and
by ticket type (i.e. standard class or first class passengers), based on information from the
companys sophisticated ticketing system.

To Ps surprise first class passengers were found to not be profitable even when
considering the fact that many first class passengers make repeat journeys on Ps trains.
While they were charged higher ticket prices than standard class, they were offered a
number of additional services, as well as having more leg room, which meant fewer
passengers in the first class carriages.

P does not feel that it can raise ticket prices as there are many rival train operators who
charge similar amounts to P for first class travel.

Ps train division management team has therefore suggested that the division discontinue
offering first class and instead convert these train carriages to standard class. Which
ONE of the following criticisms of customer account profitability (CAP) is MOST
applicable to the train divisions decision?

A. CAP does not take account of non-production costs when analysing segmental
profitability, which may cause inaccurate decision making

B. The train division is unlikely to have been able to accurately segment the market,
leading to inaccurate decisions being made by management

C. CAP may overlook combinations of products bought by consumers, meaning that the
train divisions decision could damage P as a whole
D. CAP often does not take account of the life cycle value of the customer, restricting
the analysis to the current revenue and costs of the segment

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6.
FA manufactures footballs and other sports goods in a number of factories in country Y.
FA sells its products through a chain of stores in country H. Country H is affluent, with a
great deal of employee legislation, while country Y is relatively poor with low wage rates
and little regulation.

This means that FA is able to produce its goods cheaply, but retail them for a relatively
high price.

However, in recent months, the media in country H have reported on the poor working
conditions of FAs factories in country Y highlighting the poor pay, long hours and lax
health and safety conditions. This has led to significant outcry by country Hs consumers
and government (though FA has broken no laws in country H).

FAs managers have created a list of possible responses to this problem in country Y.

Using the lists below, match each possible strategy to the most appropriate corporate
social philosophy as described by Carroll.

6.1 FA improves health and safety and employee welfare, bringing working conditions up
to those enjoyed by workers in country H.

A. Defence
B. Accommodation
C. Reaction
D. Proaction

6.2 FA undertakes to minimise health and safety problems in its factories, but argues that
pay and work hours are fair for country Y.

A. Defence
B. Accommodation
C. Reaction
D. Proaction
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6.3 FA agrees to deal with any health and safety issues, as well as ensuring that factory
workers have reduced shifts and better pay, as suggested by its stakeholders in country H.

A. Defence
B. Accommodation
C. Reaction
D. Proaction

6.4FA releases a statement to the media, pointing out that it is not breaking any laws in
either country and that it is not required to change its current approach.

A. Defence
B. Accommodation
C. Reaction
D. Proaction

7.
NT is a major retailer in country S. While its primary business is fashion (for men and
women), it also sells home furnishings and food through an extensive chain of large
stores across country S.

NTs mission statement is to offer quality products and services that our customers
value. It has used this to create a number of critical success factors (CSFs) in particular
these focus on customer feedback, number of product returns and service quality. These
have then been translated into a number of key performance indicators which allow it to
precisely measure whether the critical success factors are being met.

NT sells its products at a premium to many other retailers due to its service levels
(supported by high numbers of staff) and perceived product quality.

While this strategy has worked well in the past, NT has suffered from two years of
declining sales and profitability. This is partly due to a recession in country S which saw a
decline in consumer disposable income. However, in spite of a recovery in the market,
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NT has found that many customers have changed their shopping habits and now
purchase cheap, more disposable clothing from discount retailers who offer customers
little or no service.

Which ONE of the following statements relating to NT is correct?

A. NTs core competences have become threshold

B. NTs critical success factors are outdated

C. NTs stated critical success factors do not match its overall mission

D. NTs competences no longer match its stated critical success factors

8.
PR designs advertising campaigns for large companies across Europe. As the European
economy recovers from a series of recessions, PR has identified that market spending on
advertising is rising. In order to take advantage of this, PR has started to offer extensive
discounts to new customers across Europe.

PRs main rival in Europe, RP, has reacted to PRs initiative by offering free initial
campaigns for new customers. However, this offer is only being made in RPs core
European markets of France, Germany and the UK. In other European countries RP has
not responded to PRs discounts.

Which ONE of the following best describes RPs response to PRs special offers?

A. Stochastic

B. Laid back

C. Tiger

D. Selective

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9.
JZ operates a fast-food restaurant in country B. Its slogan is fast service, good food, low
prices. The company has been operating for two years, and only operates three stores in
the capital city. JZ sells similar food to many of its rivals, but at a substantially lower price
due tight cost control within its supply chain.
Customer reviews have been largely positive of JZs food and service, though this has
been in decline in recent months as increased demand for JZs food have led to long
queues at all its three stores. Few customers eat in each restaurant, with the majority
taking their food away. JZs owner has suggested that the business is a victim of its own
success at the moment and is worried that service delays will damage JZs reputation.

JZs owner wishes to identify a number of critical success factors that the business can
build a set of targets around.

Which TWO of the following would be the MOST suitable critical success factors (CSFs)
for JZ?
A. High numbers of staff serving customers in the restaurants.
B. Highest quality ingredients sourced from suppliers.
C. Attractive restaurant surroundings for diners.
D. Competitive selling prices.
E. Rapid handling of customer complaints.

10.
The Government of country F is aware that a significant part of their national economy
is based on the strength of the car manufacturing industry which employs around 7%
of the population.

The current car manufacturing facilities are housed in extremely large, highly automated
factories and use low-skilled staff to assemble prefabricated components into the finished
product. The finished cars are then exported globally by subcontracted haulage
companies, as well as being sold locally through independent dealerships.

As such, the Government is considering how to ensure that the car manufacturing
industry continues to be successful within country F.

Which THREE of the following would the Government be most likely to classify as
related and supporting industries as part of a Porters Diamond analysis of the car
manufacturing industry within country F?

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A. Country Fs road network and travel infrastructure.

B. Independent dealerships in country F.

C. Haulage companies in country F.

D. Country Fs electricity suppliers.

E. Country Fs higher education system.

11.
ARR Ltd mines and processes various metals including mercury which is primarily used
in thermometer and battery production. ARR is considering the launch of a derived
demand approach within its operations.

Which ONE of the following options best matches a derived demand approach?

A. ARR gathers together a panel of experts and employees from all levels of the business
to generate ideas relating to possible future changes to the motor vehicle industry.

B. ARR attempts to estimate its projected sales of metal by forecasting global production
of thermometers and batteries.

C. ARR identifies several key high-impact, high-uncertainty events in its future and
attempts to convert them into a coherent vision of the future of its industry.

D. ARR gathers a panel of experts and interrogates them about their future thoughts about
the industry using a series of questionnaires. The panel never meets.

12.
YF is a large travel agency, which currently sells package holidays to
customers through a chain of stores which spans several countries. YF is
currently considering entering the market in country B, where it currently
has no presence.

Country B is dominated by three major travel agents. Each offer similar

holidays to each other at similar prices. YFs current operations sell similar

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holidays to these agencies (although not currently within country B).

The three travel agents account for 97% of all holidays booked in country B.
The size of the holiday market in country B has been estimated at $4bn each
year.

YF feels that it will be unable to compete with the existing agencies if it

cannot find a way to stand out. To do this, it has undertaken high level
market research within country B. This research has identified that the
current agencies do not specifically cater to the needs of the over 60s, with
the majority of their holidays currently targeted at families or younger
couples.

The over 60s holiday market represents 2% of the overall holiday market
size in country B, and has done so for many years. YF feels that if it can
offer products tailored to this demographic, it could dominate this market
segment almost immediately. It expects the segment size will grow by 5%
per annum for the foreseeable future as more over 60s take foreign holidays
once they are made aware of YFs tailored products.

YF expects to invest around $40m immediately in setup costs to enter

country Bs markets, including advertising. It aims to achieve a margin of
around 12% each year and expects the investment to pay itself off within 5
years to be supportable. Most of YFs rival agencies in country B expect
payback within three years.

Which ONE of the following statements is the MOST SIGNIFICANT

concern that YF may have about the proposed focus strategy in country B?

A. The niche lacks sufficient size to support YF.

B. The niche has insufficient growth potential and predictability

C. YF lacks the skills needed to sufficiently service the niche

D. The niche is still of considerable interest to industry competitors

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13.
A local hospital in a town in the north of country J has a special unit (only one of two in
the country) for children born with food allergies. Due to changes implemented from the
central government, the chief executive of the hospital has recently announced the unit is
to close in the next six months and relocate to a more central town in the country J. In a
stakeholder analysis using Mendelows matrix, where would the patients or parents be
located.
A. Low Interest, Low power
B. Low Interest, High power
C. High Interest, Low power
D. High Interest, High power

14.
Y is a supermarket chain. It is considering the acquisition of a rival supermarket chain, P,
which has recently been put up on the market by its owners. Y has a number of stores in
the north of the country, while P has more stores in the south of the country.

Which THREE of the following would be potential advantages to Y of acquiring P,

rather than undertaking a process of organic growth?

A. It would lock rivals out from taking over Ps operations.

B. It could give Y rapid access to economies of scale.

C. It could minimise disruption to Ys corporate culture.

D. It enables the initial cost of the investment to be staggered.

E. It will give Y access to new markets.

15.
Which THREE of the following are drawbacks of using the PEST framework as an
analysis tool?
A. The PEST analysis may be prone to bias.
B. PEST analysis only examines the internal environment of the organisation.
C. PEST only examines global, rather than industry-specific issues.
D. PEST analysis may suffer from bounded rationality.
E. PEST analysis may rapidly become outdated in fast-changing industries.

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16.
F is CIMA qualified and currently acts as the Finance Director of VVV a management
training organisation. She has been asked by the Board of Directors to produce an
analysis of the predicted changes in the management training market over the next two
years.

F has based a significant part of her analysis on some work undertaken by a junior
management accountant. F is aware that the junior has little experience of the
management training industry and has regularly made mistakes in work they have
undertaken. However, F has not had time to check the findings of the junior before
writing her analysis for the Board.

Which ONE of the following CIMA fundamental ethical principles has F primarily
breached?

A. Objectivity
B. Integrity
C. Professional competence
D. Confidentiality

17.
T manufactures and sells optical equipment, such as binoculars and telescopes. Ts
Chairman has stated that the company has an excellent product portfolio, producing a
range of complementary products.

T is currently undertaking a resource audit, using the Ms model.

Which ONE of the following categories within the Ms model would the Chairmans
statement best fit within?

A. Methods
B. Management
C. Materials
D. Markets

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18.
PRT is a company that sells computers and other electronic goods through a chain of
stores across country U.

PRT is cash rich, but has been hit by falling sales and rising costs in the past few years.
This has partly been down to a recent recession which has reduced consumer disposable
income, but also a shift by many consumers towards online shopping, where the same
items can be purchased for a lower price. There are a number of large, established online
retailers that are now competing with PRT. PRT does allow customers to buy online
through its website, but these goods are priced at the same level as they are in its stores.

PRT has an excellent reputation with consumers. PRT staff are highly skilled (though not
heavily unionised) on all aspects of information technology and information systems and
give excellent customer service and care. A significant minority of consumers (especially
older shoppers) value this service and are willing to pay more to receive it.

PRTs managers have decided to adopt a new strategy which will involve the gradual
closure of PRTs stores and a move to a wholly online business. Management feels that
this is the only way to arrest the decline of the business.

Based solely on the above information, which ONE of the following best describes the
projects suitability, acceptability and feasibility (as per Johnson and Scholes)?

A. It is acceptable and suitable, but not feasible.

B. It is suitable, but not acceptable or feasible.

C. It is feasible, but not suitable or acceptable.

D. It is not feasible, acceptable or suitable.

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19.
Which of the following statements relating to scenario planning are correct?

Select ALL that apply.

A. It is often costly and inaccurate.
B. It encourages communication within the organisation.
C. It can help management to identify key areas of uncertainty for the organisation.
D. It encourages independent thinking by management.

20.
Which ONE of the following is an IT system which can be used by a business as part of
its upstream AND downstream supply chain management?
A. Electronic Data Interchange (EDI).
B. E-procurement.
C. E-sourcing.
D. Customer Account Profitability (CAP).

21.
JAG is a car manufacturing company which has the following, well publicised, mission
statement:

To delight our customers with excellent, luxurious products.

JAG has a strong reputation in the market for good quality both in its production values
and its customer service offering, with management setting a variety of targets for JAGs
staff based on customer satisfaction and quality. However, sales have been falling in
recent years as customers in JAGs markets have moved towards cheaper cars with lower
running costs.

Based on the above information, which ONE of the following can be identified as a
problem with JAGs mission statement?

A. It does not represent the actual values of the organisation.

B. It is ignored by management and staff.
C. It has become outdated.
D. It is too vague to be useful.

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22.
RS has a stated mission to provide good quality, reliable bus transport to the residents of
country P.

One of its objectives is:

Reduce customer unhappiness by 4%.

Which TWO of the attributes of an objective does this fulfil?

A. Specific
B. Timed
C. Measurable
D. Relevant

23.
PLM is a small company that retails fruit and vegetables through a chain of stores across
country F.

Which THREE of the following would be classified as business level strategies by PLM?
A. Decision on PLMs pricing of fruit and vegetables.
B. Decisions on the opening of stores in new towns or cities in country F.
C. Decisions on which types of fruit and vegetables to stock in PLMs stores nationwide.
D. Decisions on where to site new stores in a town or city to maximise sales.
E. Decisions on how many units of each type of fruit and vegetables should be stocked in
each of PLMs stores.

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24.
Using the following lists, match the definitions to the strategic planning model.

24.1 Adjustment of the organisations strategies for real-world, unexpected

events.

A. Rational model
B. Freewheeling opportunism
C. Logical incrementalism
D. Emergent model

24.2 Organisations should simply react to events as they arise.

A. Rational model
B. Freewheeling opportunism
C. Logical incrementalism
D. Emergent model

24.3 Formal, step-by-step development of the organisations strategy.

A. Rational model
B. Freewheeling opportunism
C. Logical incrementalism
D. Emergent model

24.4 Strategies should be small-scale extensions of the organisations

successful
Past practices.

A. Rational model
B. Freewheeling opportunism
C. Logical incrementalism
D. Emergent model

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25.
Which TWO of the following statements relating to the objectives of not for profit
organisations (NFPs) are correct?

A. Value for money refers to the concepts of economy, effectiveness and ethics.

B. Effectiveness examines the link between outputs and inputs within the NFP.

C. NFPs will often find it more difficult to measure their objectives than businesses.

D. NFPs will typically still have to develop financial objectives.

26.
Which ONE of the following is consistent with the role of a typical strategic management
accountant?

A. Their main focus is on producing the financial statements.

B. The information they provide to management is usually historic.

C. The information they provide to management typically focuses on internal issues.

D. They provide information with a stronger external focus than those of traditional
management accountants.

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27.
PEK is a small company which sells frozen yoghurt through a chain of
small rented stores across a single city in country H.

PEKs two owner/managers wish to expand the business into new

cities and have prepared a SWOT analysis for the companys current
operations as a starting point for their strategic analysis.Using the
following lists, match the points that PEKs owners have identified to
their position on the companys SWOT.

27.1 Weakness
A. Increasing business rates charged on PEKs stores
B. Motivated, highly skilled management team
C. Lack of available cash for expansion
D. Falling rental costs in cities across country H

27.2 Opportunity
A. Increasing business rates charged on PEKs stores
B. Motivated, highly skilled management team
C. Lack of available cash for expansion
D. Falling rental costs in cities across country H

27.3 Strength
A. Increasing business rates charged on PEKs stores
B. Motivated, highly skilled management team
C. Lack of available cash for expansion
D. Falling rental costs in cities across country H

27.4 Threat
A. Increasing business rates charged on PEKs stores
B. Motivated, highly skilled management team
C. Lack of available cash for expansion
D. Falling rental costs in cities across country H

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28.
BB is a large passenger airline which flies between cities all across the world.

BB is aware that it is exposed to the price of oil and diesel, which fluctuate significantly on
the open market. BB is concerned that an unexpected rise could lead to the company
becoming unprofitable.

Unfortunately, BB has a relatively small treasury department and lacks the skills to
undertake hedging to reduce its risk. In spite of this, BB wishes to consider ways of
entering hedging contracts for oil and diesel.

Which ONE of the following options best describes BB s proposed hedging strategy?

A. Threat focusing on weakness.

B. Opportunity focusing on weakness.

C. Threat focusing on strength.

D. Opportunity focusing on strength.

29.
JC is a small business selling bespoke sofas over the internet.

While the company makes a large number of sales, repeat business is low. James, the new
manager of the business, feels that this is due to inefficiency in both the manufacturing
and customer service process. However, as James is new to the business, he is struggling
to understand where the failures in the business processes are.

Which TWO of the following are benefits to James of undertaking a Porters Value Chain
analysis of JC?
A. It will help James to understand the processes involved in JCs operations
B. It will help James to understand the wider industry that JC operates within and how
this affects JCs internal operations
C. It will help James to identify the organisations resources and help him to identify JCs
competences
D. It will help James to identify the activities that add value to the end customer
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30.
FDD is a charity which helps to protect forests and woodlands across country H. FDD
primarily raises money by advertising in local newspapers and passing out fliers, asking for
unwanted items of furniture that the public is willing to donate.

If a member of the public wishes to donate, they telephone or email FDD, who arranges a
time for a volunteer to visit the individuals home and pick up the item. The furniture is
then transferred to the nearest FDD store where it is cleaned and repaired (as necessary)
by volunteers. It is then sold on to the public at a fairly low price, to reflect the second
hand nature of the goods.

One of FDDs managers has recently undertaken Value Chain analysis of FDDs
operations and noted a number of problems.

Using the lists below, match each problem to its corresponding primary activity within
FDDs value chain.

30.1 Problems finding shop staff mean that FDDs stores sometimes close unexpectedly,
which has started to upset potential customers.
A. inbound logistics
B. Outbound logistics
C. Operations
D. Marketing and sales

30.2 Volunteers are often inexperienced at furniture maintenance, meaning that the
quality of their repairs is poor.
A. inbound logistics
B. Outbound logistics
C. Operations
D. Marketing and sales
30.3 FDD fails to fully explain its charitable activities in many of its fliers, leading to a
reduction in the number of donors.
A. inbound logistics
B. Outbound logistics
C. Operations
D. Marketing and sales

30.4 The collection of furniture from members of the public is poorly organised, leading
to unnecessary trips being made by volunteers.
A. inbound logistics
B. Outbound logistics
C. Operations
D. Marketing and sales
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31.
G currently operates a successful online music store. This allows customers to download
individual music tracks for a small charge. Gs site currently has over 2 million songs
available for download from all over the world. Gs site is the market leader for music
downloads over the internet, with an 85% share.

In recent years, however, the size of the market for music downloads has shrunk as
customers have started switching to streaming services. These allow consumers to listen
to music tracks over the internet without downloading them. The streaming service is
free, but users have to periodically listen to advertisements, which earn the streaming
company revenue.

G is currently in negotiations with music copyright holders to launch its own streaming
service using its extensive back catalogue.

Which ONE of the following best describes the effect of Gs proposed music streaming

launch on a Porters Five Forces analysis of its current industry?

A. Reduced threat of substitutes.

B. Reduced power of customers.

C. Reduced power of suppliers.

D. Reduced competitive rivalry.

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32.
IO manufactures models and toys, using a specialised blown plastic manufacturing
system. IO is concerned that it is not as efficient as it could be during this manufacturing
process.

It has identified another company, PHO, which uses the same processes to manufacture
components for the interior of motor vehicles and aircraft. PHO is significantly larger and
better resourced than IO, and has significantly lower wastage figures.

IO wishes to approach the management of PHO and discuss the possibility of

undertaking a joint benchmarking exercise.

Which of the following options correctly identify the potential problems with the type of
benchmarking that IO wishes to undertake?

Select ALL that apply.

A. IOs managers may be demotivated if they are benchmarked against a better resourced
organisation, such as PHO.
B. It may be difficult for IO to decide what should be considered best practice within the
blown plastic manufacturing process.

C. IO may find it hard to convince PHO to undertake a benchmarking process as PHO

D. PHO may be unwilling to share information with IO as it will likely see them as a
competitor.
E. IOs proposed benchmarking will be unlikely to identify significant differences between
PHOs manufacturing and its own processes
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33.
UY is a large company that owns a number of farms across Europe. It is currently
considering the launch of a Big Data system to help it decide on key farming issues, such
as the best times to plant or fertilise crops.

To do this, it intends to gather large amounts of information about weather, soil, pest
problems and other issues from all of its farms, and store this on a large central database.

Match each of the following statements relating to UYs proposed big data to the
appropriate factor from Gartners V model.

33.1 UYs proposals would involve taking over 100,000 readings from its farms every day.
A. Veracity
B. Velocity
C. Variety
D. Volume

33.2 Sensors will have to be checked and recalibrated regularly to avoid inaccurate
readings corrupting the results.
A. Veracity
B. Velocity
C. Variety
D. Volume

33.3 Information on weather and soil moisture levels is expected to change rapidly,
requiring regular updates to the system.
A. Veracity
B. Velocity
C. Variety
D. Volume

33.4 UY will need to take readings from a wide range of sources to get accurate
information on weather, soil, pests, sunshine and temperature (among others).
A. Veracity
B. Velocity
C. Variety
D. Volume

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34.
P runs a business which makes and sells textbooks for accountancy and other professional
qualifications.

Using the lists below, match each performance measure to the appropriate perspective of
the Balanced Scorecard model.

Note each performance measure can only be used once.

34.1 Internal business

A. Operating profit margins.
B. Number of errors found in the printing of Ps books.
C. Number of new book titles launched by P in the year.
D. Sales volume growth of Ps entire book range.

34.2 Customer
A. Operating profit margins.
B. Number of errors found in the printing of Ps books.
C. Number of new book titles launched by P in the year.
D. Sales volume growth of Ps entire book range.

34.3 Financial
A. Operating profit margins.
B. Number of errors found in the printing of Ps books.
C. Number of new book titles launched by P in the year.
D. Sales volume growth of Ps entire book range.

34.4 Learning and innovation

A. Operating profit margins.
B. Number of errors found in the printing of Ps books.
C. Number of new book titles launched by P in the year.
D. Sales volume growth of Ps entire book range.

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35.
PA is an insurance company.

One of its most popular products is life insurance, where PA pays out a lump sum to a
customers estate if they die unexpectedly. PA has to gather a great deal of information
about customers when designing a life insurance policy for them and the company has
recently decided to use this information to undertake data mining.

PA's first result from data mining was to build a profile of its customers. It discovered
that the majority of people who took life insurance policies were parents and aged
between 45 and 55 years old.

Which ONE of the following best describes the data mining result described above?

A. Sequence

B. Classification

C. Association

D. Forecast

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36.
GAB is a conglomerate company that owns businesses in many different market segments
in country V, including mobile telecommunications, electronics retailers, television
manufacturing and television broadcasting. Most of these businesses have been purchased
by GAB as going concerns and are run as autonomous units, with their own information
systems and technology.

GAB has recently become aware that it holds significant amounts of customer
information in each of its business units. It feels that if this information were integrated
into a central data warehouse then it would be able to use the information to better
understand its customers and advertise to them.

Which TWO of the following statements correctly identify the most important problems
that GAB will face when attempting to create an integrated data warehouse?

A. There is unlikely to be sufficient volume of information stored by the divisions to

make the creation of a central data warehouse financially viable.

B. There may be inconsistencies with the way that data is stored in the different business
units, making it difficult to create a central database.

C. As each business unit operates in a different market, there is likely to be little or no

value to a central data warehouse of information being created.

D. IT systems used in each business unit are likely to be incompatible, increasing the cost
and time taken to create a central data warehouse.

37.
Yasmine has recently designed a new bonus scheme which requires her staff to offer
strong customer service as the sole requirement.

Which TWO of the following statements regarding this performance appraisal measure
are correct?

A. It will be hard to measure and monitor the measure

B. It is subjective, making it difficult to fairly assess staff performance
C. It emphasizes the need for a broad spectrum of management issues within
performance measurement
D. It is likely be distorted by the effects of inflation

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38.
STA is a small company that makes and sells iron gates and decorative iron mouldings. It
is a small player in a fairly niche market and has struggled to grow quickly in a mature
market.

STA has set its staff a wide range of performance targets for its small staff, who currently
undertake much of the production, selling and fitting of the ironwork produced by the
company.

STA sets its staff targets in a large number of key areas, such as sales, production quality,
customer service and satisfaction levels, and cost control, amongst others.

STAs senior manager has recently decided to remove the sales targets from its
performance measurement mix, as it feels that, while new sales are important, staff need
time to ensure the quality of service offered to customers is strong to make sure that they
return for future purchases.

Which TWO of the following statements regarding STAs performance measurement mix
are most appropriate to the information given above?

A. STAs staff may feel that the company no longer sees making new sales as a priority.

B. STAs staff may feel overloaded by indicators and therefore be unsure what to
prioritise.

C. STAs measurement mix appears to include an insufficient number of financial

measures, reducing its usefulness.

D. STAs staff may feel they are not sufficiently challenged by the companys measures.

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39.
GFG runs a chain of sandwich stores in country H. It currently makes all of its
sandwiches on site each morning (including freshly baking the bread for the
sandwiches).
GFG currently has a manual tilling system in each store. This means that staff members
have to manually input the code of each item being purchased by the customer. At peak
times this is leading to long queues at GFGs stores, in particular due to the relatively
high number of mistakes made by staff. GFG is aware that many customers are
therefore avoiding shopping at GFG as they do not wish to wait for long periods in
queues.

GFG is considering the launch of a new till system which features a barcode scanner.
This will enable staff members to simply scan each item purchased. The system will then
automatically log the correct item and calculate the customers total bill.

Which of the primary activities of GFGs value chain is the new till system designed to
improve?
A. Inbound logistics
B. Service
C. Operations
D. Outbound logistics

40.
JOO is a school based in a town in country G.

The trustees of the school are concerned about the poor level of data management within
JOO, as all student records are currently paper-based. This leads to significant delays in
updating student information, which JOO is concerned could lead to health and safety
risks for students (if, for example parental contact details were not updated).

Which THREE of the following would be classified as information management

strategies for JOO within Earls Three Levels model?
A. Decisions on which software to use for a new information system for student records.
B. Decisions on whether to use information systems within JOO to improve the handling
of student records.
C. Decisions on which employees will be able to access and input student details onto the
new system.
D. Decisions on whether to hire an IT manager for JOO to control the new system.
E. Decisions on how to monitor the performance of the new system within JOO

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41.
P owns and runs a small business which offers financial advice to customers. For a fee,
Ps staff will help a customer decide where to invest their money to maximise their returns
and, in many cases, minimise their income tax liabilities.

P is aware that some of his financial advisers get much better feedback from customers
than others and seem to have more skill and understanding of the financial markets and
the possible investments (and implications of these investments). As such, he wants to
ensure that the more able financial advisers share their knowledge with the less capable
advisers.

As such, P created a detailed spreadsheet which would allow the advisers to list out each
investment as well as the relative features, benefits and drawbacks of each. He has linked
this system to an intranet to enable each adviser to access and amend the database.

However, P has had significant resistance from advisers. One adviser stated, Why should
I give away my top investment tips to everyone else? Our bonuses are based on whether
we get more income for the firm than anyone else, so why should I lose out?

Which ONE of the following stages involved in implementing a knowledge management

strategy has P failed to implement?

A. Creating a sharing culture.

B. Creating the database structure.

C. Gaining top management support.

D. Creating the technological infrastructure.

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42.
Parkin is a small business that makes cakes, biscuits and other sweet baked goods.

Parkin has identified a number of systems within its operations and wishes to categorise
them using McFarlans grid.

1. Parkins payroll system This is a fairly simple system that calculates staff pay
based on the number of hours they work.
2. Parkins EDI system This links Parkins systems to those of its major
customers. It allows for electronic ordering by customers and is a major selling
point to Parkins customers. Parkin feels that this will continue to be valued by
customers for the foreseeable future.
3. Parkins automated production systems Parkin has an automated assembly
line which reduces its baking costs and wastage. This currently gives Parkin a cost
advantage over its rivals. However, Parking is aware that many rivals are developing
similar systems.
4. Parkins website Parkin currently has a small website which provides
information about the company. Parkin believes this could be expanded to offer a
range of products to consumers. Parkin suspects this could be a significant growth
area for the business..

Using the lists below, match the information system with its category on McFarlans grid.

42.1 Payroll system

A. Strategic

B. Support

C. Turnaround

D. Factory

42.2 EDI system

A. Strategic

B. Support

C. Turnaround

D. Factory

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42.3 Automated production system

A. Strategic

B. Support

C. Turnaround

D. Factory

42.4 Website

A. Strategic

B. Support

C. Turnaround

D. Factory

43.
Y plc is a large, listed national provider of internet access (such as broadband) in country
H.

Y has publically announced that it wishes to add another 30,000 customers in the coming
year and increase its market share to 45%.

Which ONE of the following correctly identifies the level of Ys performance pyramid (as
popularised by Lynch and Cross) that this public announcement has focused upon?

A. Corporate vision.

B. Business operating systems.

C. Departments and work centres.

E. Business unit.

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 44.
GGE plc has calculated the following ratios for its operations over the last
two years.
20X1 20X0
Gross profit margin 11.2% 12.4%
Operating profit margin 3.5% 3.5%
Return on capital employed 15.1% 14.2%

Which ONE of the following statements can be correctly made based on the
above performance measures?

A. GGEs sales have fallen between 20X0 and 20X1.

B. GGE has kept strong control over its non-production overheads in 20X1.

C. GGE will find it more difficult to raise finance as the return to investors has fallen.

D. GGE has seen a rise in its gearing in the year.

45.
Percival sells frozen vegetables such as peas, carrots and sweetcorn to supermarkets in
country H.

He currently has a small head office staff, including two members of staff who are
responsible for finding new customers and growing sales.

Percival has set these staff members stretch targets for the coming year, after reading
about the benefits of these in a magazine article.
Which TWO of the following statements are correct regarding stretch targets for
Percival?
A. Stretch targets should be set just above the maximum that Percivals employees can
achieve, to encourage them to work as hard as possible.
B. Percivals staff will be demotivated by the stretch targets, if they perceive them as being
unachievable.
C. Stretch targets may encourage Percivals staff to take more risks when looking for new
sources of sales.
D. Percivals staff will not require further rewards, if they have achieved their stretch
targets.
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46.
AC plc is a listed company and uses shareholder value analysis (SVA) as part of its
performance measurement mix. It is planning on implementing one of four possible
actions.

Which ONE of the following actions would be MOST consistent with AC attempting to
maximise its SVA?

A. Reduction in ACs gearing. (ACs debt is currently lower cost than its equity.)

B. Increasing the number of days taken to pay suppliers. (AC does not expect this to have
any effect on the cost of materials.)

C. Closure of several of ACs products classified as dogs on the Boston Consulting

Group matrix. (These are currently only generating low positive cash flows.)

D. A switch from the purchase of assets using finance leases to outright purchase of
assets. (Finance leases are obtainable on very cheap rates of interest.)

47.
BGG is a company that provides professional training courses for surveyors. BGGs
training division operates through a number of offices in cities across country F. It utilises
both employed staff (who are in short supply) and freelancers. A freelancer tutor is paid
roughly $250 per day for their time.

BGG also operates several other divisions, including a publishing division. All of BGGs
divisions are based in country F and are allowed total autonomy over their own decision-
making.

The publishing division writes material for the training division (as well as for the open
market) and is staffed by employees who previously worked as tutors within BGGs
training division.

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As well as writing material, these employees still undertake a limited amount of work for
the training division. The publishing division recharges employee time to the training
division at a rate of $300 per day.

All of BGGs managers (regardless of division) are targeted on the profits they make
within their division.

Which ONE of the following statements regarding BGGs transfer pricing system is
correct based on the above information?

A. BGGs transfer price should only be set at the marginal cost to avoid quality
implications.

B. BGGs transfer prices can be restructured to minimise the groups overall tax liability.

C. BGGs transfer pricing system is flawed, as training division managers have no control
over the use of publishing employees.

D. BGGs transfer pricing policy could lead to managers making decisions that will reduce
the companys overall profits.

48.
Ganges runs a popular website which sells shoes. It is visited by thousands of customers
every day.

In order to maximise its returns, Ganges is considering allowing selected other retailers to
sell through its sites in exchange for a share of the profits they make. In particular,
Ganges is examining proposals from accessory and handbag retailers that it thinks will be
a good fit with its existing product range.

Which aspect of Web 2.0 is Ganges considering implementing?

A. Software as a Service (SaaS).

B. Competence syndication.

C. Mashup.

D. Global network effects.

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49.
GoGo Travel is in the process of moving its head office to a purpose built head office in
a city 150 miles from its current headquarters.

Which THREE of the following options would GoGo Travel be most likely to gain from
enlisting the help of a third-party change agent when managing the move?

A. Identify restraining forces or resistance to the proposed move and the reasons for this.

B. Make decisions relating to how to manage the change process and deal with resistance,
such as training of staff, or offering relocation expenses.

C. Suggest various options for how to deal with resistance to GoGos management, and
support their decision-making process.

D. Help the company by leading the implementation of change, supported by senior

management of GoGo.

E. Eliminate the risk of failure of the proposed relocation of GoGos head office by
offering an external, independent perspective.

50.
FL is considering undergoing a major restructuring of its operations which will lead to
hundreds of redundancies of staff who are not deemed to be needed by the organisation.
The company is currently very profitable and is concerned about the ethical implications
of its proposals.
Which TWO of the following statements relating to FLs ethical position are correct?

A. It is unethical for FL to make employees redundant when the company is profitable.

B. It is unethical for the company to use a manipulation and co-optation approach to
managing staff.
C. FL needs to ensure that there is a fair process in place to identify which employees to
make redundant.
D. It is allowable for chartered management accountants to distort information as part of
the unfreezing stage of the change process.

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51.
S plc is a major manufacturer of household goods, which it currently sells to a number of
key wholesalers in country H. The growth in Ss market has been slowing considerably for
the last five years. This has led to S making a number of its factory workers redundant
which has had a detrimental effect on the local community of Marketville, the town where
Ss factory is based. There has been significant uncertainty over the future of many of the
remaining factory jobs.

The Board of Directors have taken the strategic decision to sell directly to retailers (rather
than wholesalers) across country H, which they believe will protect existing factory jobs,
as well as potentially enabling S to re-hire some employees. S has set up a project team to
handle the change. The project team has advised the board to communicate the change to
their principal stakeholders.
Using the lists below, match each of Ss principal stakeholders to the most effective
method of communication that should be used for each one.

51.1 Independent retailers

A. Advertisements in Marketville newspapers
B. Trade magazine articles
C. Face-to-face meetings
D. Posters within Ss factory

51.2 Wholesalers
A. Advertisements in Marketville newspapers
B. Trade magazine articles
C. Face-to-face meetings
D. Posters within Ss factory

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51.3 Local community
A. Advertisements in Marketville newspapers
B. Trade magazine articles
C. Face-to-face meetings
D. Posters within Ss factory

51.4 Current employees

A. Advertisements in Marketville newspapers
B. Trade magazine articles
C. Face-to-face meetings
D. Posters within Ss factory

52.
E is a charity which raises funds to support elderly people. It has a number of outreach
programmes, where volunteers agree to regularly visit elderly people who live alone.

In recent months, E has announced that it is struggling to raise sufficient money through
donations in order to continue its operations. This is due to a television news article that
showed one E volunteer stealing from their elderly hosts. While there is no evidence that
this was anything other than an isolated incident, it has caused serious damage to Es
reputation.

The embarrassment of this has led to E appointing a new Chairman, who has instituted a
review of operations. The Chairman has suggested that the current approach to volunteers
was too informal. He has suggested that they should be thoroughly vetted by police
before being accepted, as well as undergoing formal training and given guidance on
acceptable behaviour. Volunteers who deviate from these guidelines would be
immediately suspended.

The Chairman has also suggested that all volunteers have to wear uniforms with the E
logo on them, to make them more easily identifiable when making visits.

The senior management of E have expressed concern over the proposals, with one
manager stating that, If we disrupt the corporate culture of E too much, we will see
significant resistance from volunteers. In the end, they may simply refuse to work with
us.

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Which ONE of the following statements best explains the likely level of resistance E will
face due to changes in its corporate culture (as described by the Cultural Web model)?

A. No resistance the proposals will not disrupt Es culture.

B. Some resistance the proposals will only affect the control systems element of Es
culture.

C. Significant resistance the proposals affect control systems and symbols within Es
culture.

D. Major resistance the proposals affect control systems, symbols and stories within
Es culture.

53.
LLF is currently experiencing a period of decline. It currently sells low-cost radios
through various retailers. The radios have few features but are cheap to buy for
consumers due to their cheap materials.

LLF is aware that radio sales are falling due to the increase in the number of people
listening to online music streams. The market is therefore shifting more towards
consumers who want high-quality radios that look attractive to display in their homes.

Therefore, LLF is planning to launch a new range of designer radios, which will feature
a wide range of features and, exceptionally in the radio market, it will have a lifetime
warranty.

Which ONE of the following refers to the approach LLF is taking to deal with decline?

A. Divestment

B. Retrenchment

C. Turnaround

D. Liquidation

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54.
YR is planning to launch a major new IT system which will partially automate production.

Which TWO of the following statements regarding change are correct?

A. The type of change (its speed and scope) may be perceived differently by different
stakeholders.

B. New entrants to the companys market could act as a powerful internal trigger for
change.

C. Revolutionary change tends to be forced on the company by external changes.

D. Adaptation is a relatively slow, major change to the organisational paradigm.

55.
F is currently in the process of creating a new quality control system which is designed to
monitor staff performance and provide feedback on any areas for improvement.

F is expecting significant resistance from his staff as they are highly skilled and used to
working fairly autonomously. He is aware that they feel that the new system will be used
to monitor and criticise their performance, which could lead to a reduction in their
bonuses.

Fs staff are key to his business and would be difficult to replace. They have a good
understanding of how the new quality control system will work. While F feels the new
system is valuable, he is not in a hurry to implement it and is willing to wait until a
solution which is acceptable to his employees can be found.

Which ONE of the following change leadership styles, as outlined by Kotter and
Schlesinger, would be most appropriate for F to adopt?

A. Education and communication.

B. Negotiation and agreement.

C. Manipulation and co-optation.

D. Coercion.

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56.
P is currently implementing a major change to its organisational structure.

It is currently training its employees about the new roles that are being implemented
under the revised business structure.

According to Lewins three-stage model of change, which stage of change is P currently

undertaking?
A. Refreezing
B. Change
C. Unfreezing
D. Paradigm shift

57.
TT is a firm of accountants based in a single town Emville. TT is run by four partners
and it is considering making a number of changes to improve its corporate culture.

Using the lists below, match each change being proposed by TT to the element of culture
it will primarily affect, as identified by the McKinsey 7S model.

57.1 TT wishes to reduce the number of levels of management within the firm to reduce
bureaucracy.
A. Shared values
B. Style
C. Structure
D. Skills

57.2 TT wishes to train up all key employees in the use of the latest accountancy software.
A. Shared values
B. Style
C. Structure
D. Skills

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57.3 TT is considering creating a new mission statement: We focus on quality and great
customer service.
A. Shared values
B. Style
C. Structure
D. Skills

57.4 TTs partners wish to focus on a more participative approach to managing employees
as they feel this will improve motivation.

A. Shared values
B. Style
C. Structure
D. Skills

58.
Tama is involved with change within her organisation.

Her role has been described as:

A skilled member of staff, who offers practical advice and support on an ongoing basis.

Which ONE of the following does this role most closely suggest that Tama is fulfilling?

A. Mentor
B. Change leader
C. Coach
D. Change agent

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59.
Using the lists below, match the statements to the appropriate change management
theory.

59.1 Leaders need (amongst other things) to be able to challenge the prevailing
organisational wisdom in order to successfully manage change.
A. Peters Thriving on Chaos
B. Kanters Change-adept organizations
C. Beer and Nohria theory E and O
D. Kanters Change leadership model

59.2 Excellent firms dont believe in excellence, only in constant improvement and
change.
A. Peters Thriving on Chaos
B. Kanters Change-adept organizations
C. Beer and Nohria theory E and O
D. Kanters Change leadership model

59.3 The change process is managed through a series of eight major stages.
A. Peters Thriving on Chaos
B. Kanters Change-adept organizations
C. Beer and Nohria theory E and O
D. Kanters Change leadership model

59.4 Every organizational change either involves strategies that focus on shareholder
value, or strategies that focus on cultural adjustment and employee capabilities.
A. Peters Thriving on Chaos
B. Kanters Change-adept organizations
C. Beer and Nohria theory E and O
D. Kanters Change leadership model

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60.

DAB is a restaurant chain that targets 20-30 year old customers. DABs meals are made
from organic, local produce, which the company feels gives it an advantage over its rivals.

In recent years, DABs management has seen a slow-down in the companys takings due to
increased competition and fairly stagnant growth in the restaurant market.

Therefore, DABs management has taken the decision to move away from local, organic
produce due to the high costs involved. This will involve changing the advertising of DAB,
as well as the procurement processes and the culture of the business.

DABs management does not feel that there is an urgent need for the business to adopt the
new changes rapidly and has suggested that the company gradually implement the new
processes to avoid significant staff resistance.

Which ONE of the following best describes the type of change being describes in DAB?
A. Revolution

B. Evolution

C. Adaptation

D. Reconstruction

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 Mock Exam 5

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Question 01

Kritendo, a new player to the gaming console industry, came in with a limited capacity of
10% of the market and a discounted price. Whether it makes any money depends on how
the YBox, the incumbent responds. YBox is in its opinion of recapturing its lost market
by coming down to match the Kritendos price or it could give up 10% share. For the
YBox, giving up 10% share is usually better than sacrificing its profit margin by letting
Kritendo to be satisfied.

If Kritendo tries to take away too much of the market, the YBox will choose to give up
its profit margin in order to regain share. Only when the Kritendo limits its capacity do
the YBox stand pat and the Kritendo make money.

By staying small, the Kritendo turns the YBoxs larger size to its own benefit. To pull off
this strategy, the Kritendos commitment to limit its capacity must be both clear and
credible. The Kritendo may be tempted to expand, but it must realize that if it does, it
will give the YBox an incentive to retaliate. Rules determine how the game is played by
limiting the possible reactions to any action. To analyze the effect of a rule, you have to
look forward and reason backward.

What concept of game theory sufficiently describes the above reaction of YBox in related
to the newcomer, Kritendo?

A.Deterrence; where each player stacking each other aggressively

B. Cooperation; where each player recognizes its contribution in the industry

C. Changing the rules of the game; where a player will change the structure of the
industry

D. Judo economics; an approach to competition that emphasizes skill, rather than size or
strength

Question 02
The electronics industry in Country J is the largest consumer electronics industry though
the share of these companies in Country J gradually declined by competition from
Country S and Country T. Country J still has a number of companies that produce
television, camcorders, audio and video players, etc.

The invention of the pocket transistor radio placed the company at the forefront of
electronics development, both in Country J and worldwide. As other companies were

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formed to compete in this area, the consumer electronics industry became major
exporters that invested overseas.

The companies international success came from continually pushing miniaturization and
driving down manufacturing costs.

Country J's foreign direct investment in the consumer electronics industry was motivated
by protectionism and labor costs. After three years of voluntary export restraints, seven
firms in Country J located plants in the Country U. The Firms in Country J continued
production of the most technologically-advanced products especially in Country J but
also Country U, while shifting production of less-advanced products to developing
countries in Southeast Asia.

The Porters Diamond is a model that helps analyze and improve a nation's role in a
globally competitive field.

Select THREE statements below that are true in relation to the factor endowment in
Porters Diamond Theory

A. Country J is a country which lacks arable land and mineral deposits

B. Country J has large pool of engineers which is vital for a consumer electronics industry
C. Country J has high priced land and so its factory space is at a premium
D. Country Js innovation takes places at innovating traditional inventory technique
E. Country Js knowledgeable buyers of electronic supplements made that industry to
innovate and grow tremendously

Question 03

In the current recessionary environment, the client, a leading multinational ITO and BPO
service provider, needed to assess its relative cost and price competitiveness in the IT
application development and maintenance (IT-ADM) space. To do so, it engaged Everest
Group to benchmark it against its competitors on a comprehensive set of parameters.
Everest Group helped the client refine, standardize and expand various components of
the benchmarking initiative, and delivered fully analyzed results in less than one month.

Everest Groups collaborative, detailed, multi-pronged, and substantiated approach

ensured the benchmarking deliverables were highly relevant to the service providers
situation and well accepted by stakeholders. The analysis enabled the client to identify
areas in which its pricing was potentially misaligned with its competitors. It also provided
an understanding of how the clients project staffing strategy compared with its peers on
aspects including span of control and leverage of offshore locations.

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Which of the following best describes an advantage and a limitation of conducting
competitor analysis and cost of competition respectively?
A. Enable the organization to understand the position of the market, Problems in
obtaining accurate information, Loss of business
B. It will improve the quality of decision, It leads to lack of focus on the customer
preference, Decrease in Research and Development expenditure
C. Past knowledge is obsolete for the organization, Reduction in profit, It will facilitate
learning from others and market

D. It will enable the organization to survive in the future by understanding the direction
of the market, Knowledge of competitors can be directly applied to the organization,
Reduction in industry life cycle

Question 04

A SWOT analysis (alternatively SWOT matrix) is a structured planning method used to

evaluate the strengths, weaknesses, opportunities and threats involved in a project or in a
business venture.

A start-up small consultancy business, Z carried out a SWOT analysis. After the
comprehensive analysis it decided as follows:

The consultancy therefore decided to specialize in rapid response, good value services to
local businesses. Marketing would be in selected local publications, to get the greatest
possible market presence for a set advertising budget. The consultancy should keep up-
to-date with changes in technology where possible.

Place the appropriate area SWOT Analysis diagram against each of the following
statements of facts of Z, as a consultancy business.

Strength/Weakness/Opportunity/Threat
Z has no market presence or reputation
Weakness
Competitors may be slow to adopt new
technologies
Opportunity
Cash flow of Z will be unreliable in the
early stages
Weakness
Z has little overhead, so can offer good
value to its customers
Strength

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 Ability to respond very quickly and no
need for higher management approval Strength

Question 05

Two reasons for mergers and acquisitions are

A. To increase managerial staff and to minimize economies of scale
B. To reduce tax obligations and increase managerial staff
C. To create seasonal trends in sales and to make better use of a new sales force.
D. To provide improved capacity utilization and to gain new technology

Question 06

The sporting goods market encompasses a customer base with diverse sports and
recreational interests. Many retailers will have an assortment of choices to meet these
needs. For example, a store may carry shoes for runners, basketball players, golfers,
soccer players, and baseball players. Sports and outdoor equipment includes balls, bats,
gloves, shin guards, golf clubs, camping gear and fishing poles.
Diversification has led outdoor stores to include outdoor apparel, GPS devices, and
cameras along with the more traditional fishing poles, rifles, and tents.
On average, the highest levels of profitability are shown by:
A. Firms focused on just one or two products
B. Firms with a moderately diverse range of related products and businesses
C. Firms with a very diverse range of related products and businesses
D. Firms with a diverse range of unrelated products and businesses

Question 07

A Retrenchment Strategy, as a corporate Directional Strategy, imposes a great deal of

pressure to improve performance. In an attempt to eliminate the weaknesses that
negatively affect company performance; a Retrenchment Strategy deploys several
business strategies.

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Select the truest statement regarding how a Retrenchment Strategy eliminates the
weaknesses that negatively affect company performance.
A. Contraction is the initial effort to quickly stop the bleeding with a general across
the board cutback in size and costs.
B. A company with weak competitive position may be able to engage in a full-blown
turnaround strategy
C. Company finds itself in the best possible situation with a privileged competitive
position in an industry with many prospects, management has only a many alternatives
D. When the industry is attractive and the company too strong, management may not
choose to convert as many saleable assets as possible to cash

Question 08
Michael Porter, an authority on competitive strategy, contends that a corporation is most
concerned with the intensity of competition within its industry. The level of this intensity
is determined by basic competitive forces. He contends that the collective strength of
these forces determines the ultimate profit potential in the industry, where profit
potential is measured in terms of long-run return on invested capital.

Which TWO of the following statements best justify Competitive pressure from
Substitute Products in Porters Five Forces model?

A. Firms in one industry are quite often in close competition with firms in another
industry because their respective products are good substitutes.
B. Inability to match the technology and specialized know-how of firms already in the
industry.
C. The availability of substitutes inevitably invites customers to compare quality features,
performance, ease of use, and other attributes as well as price.
D. Suppliers also tend to have less bargaining over price and other terms of sale when the
company they are supplying is a major customer.
E. Buyers are well informed about sellers products, prices and costs, the more
information buyers have, the better bargaining position they are in.

Question 09

The democratic leadership style works best when:

A. The team needs to buy into, or have ownership of, a decision, plan or strategic change.
B. The team needs a new vision because circumstances have changed.
C. The team needs to rebuild trust due to stress or rapid change.
D. There is a crisis situation.

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Question 10
Y is an organization that acquires knowledge and innovates fast enough to survive and
thrive in a rapidly changing environment. It has following values;

(1) Create a culture that encourages and supports continuous employee learning,
critical thinking, and risk taking with new ideas
(2) Allow mistakes, and value employee contributions
(3) Learn from experience and experiment, and
(4) Disseminate the new knowledge throughout the organization for incorporation
into day-to-day activities.
The organization of Y is best described as an example of:
A. Outsourcing
B. A virtual Organization
C. Customer Relationship Management
D. A learning organization

Question 11
Below are two limitations of a particular model of strategic analysis:

o The model incorrectly assumes that capital is rationed and has to be

allocated among the SBUs.
o The analysis is highly sensitive to how the market is defined
o Market growth is an inadequate description of overall industry
attractiveness

Identify which model this describes.

A. Kaplan and Norton's Balanced Scorecard
B. The Boston Consulting Group's Portfolio Matrix
C. Porter's Value Chain Analysis
D. Ansoff's Product Market Growth Matrix

Question 12
Lenkada is a global operator of movie rental shops. Customers visit Lenkada stores to
rent discs of movies for five nights at a fixed price to take home and watch, then return
them.

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Developments in Web 2.0 have led to the emergence of "file sharing sites" where movies
are uploaded, without the owner's permission, and then can be viewed or downloaded for
free on personal IT equipment.

Lenkada is a new business that operates an online service on which films are licensed
from the copyright owner and provided to TUV's members to watch online in return for
a low monthly fee.

Select the MOST likely explanation for the falling profits of Lenkada from the list below:
A. Falling profits are the effect of increased market entry.
B. Falling profits are the effect of increased power of substitutes.
C. F alling profits are the effect of increased competitive rivalry.
D. Falling profits are the effect of increased buyer power.

Question 13
Which of the following describes a difference between Shareholder Value Added (SVA)
and Economic Value Added (EVA) measures of business performance?
A. One uses a cash-based measure of earnings and the other does not.
B. One applies a cost of capital to the investments used and the other does.
C. One takes future earnings into account the other does not.
D. One seeks to improve Market Value Added (MVA) and the other does not.

Question 14

Push business models can incorporate many smart things to gain some of the advantages
that apply to demand pull models and also to manage uncertainty in customer demand.

Which THREE of the following are key advantages of Push supply chain strategy?

A. Eliminating non-value adding time, to reduce lead-times and dependency on

forecasting

B. Application of independent planning to have more certainty with respect to customer

demand

C. Segmenting those parts of the business for which demand pull can be created from
those for which it cannot, and creating separate supply chain channels and even different
business units to manage them

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D. Moving the business to cost push by buying incremental requirements of finished
product through an associated supply and trading business unit

E. Blending processes in production and applications of principles of postponement

Question 15

Velvo is a well established, mid-priced airline business. It is currently considering setting

up a 'no-frills', low fare subsidiary of its business.

Which THREE of the following activities would take place within the strategic analysis
phase of Velvo's strategic planning process?
A. Evaluation of the competitors actions
B. Evaluation of how new staff would be recruited and trained
C. Evaluation of which planes to use
D. Evaluation of forecast passenger volumes
E. Evaluation of public concern for environmental damage

Question 16
Which TWO of the following statements are true?
A. Big data is the storing of organizational data in digital form.
B. Big data allows an increasing understanding and segmentation of customers.
C. Big data is the creation and analysis of a large internal data warehouse used to store all
of an organizations data relating to customers, staff, operations and products.
D. Big data can be used to improve the development of the next generation of products
and services for organizations.

Question 17
Kialog is a retailer of electrical equipment. Its management sets targets for store
managers to motivate them to achieve results in line with the competitive goals of Kialog.

For each given example place the appropriate concept in Ansoffs matrix

Nutbury India is pushing for chocolates A?

to be used as small gifts instead of more
traditional sweets used during Diwali
Penetration
festival.

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 MD introduced salads in their outlets in B?
order to retain its existing customers,
many of whom were becoming more Product Development
health conscious.
Z Touch was a replica of ZPhone except C?
that it couldn't make calls. Market Development
L Mobile company also entered into the D?
music business that was completely new Diversification
for the company.

Product Development

Diversification

Penetration

Market Development

Question 18
NANDITHA is a retailer of exclusive and expensive fashion clothing for women. It
employs its own clothing designers and makes the majority of its clothes to order in its
own workshops from precise measurements of the customer taken in-store.

It has a single store in the capital city of a country with high disposable incomes.
NANDITHA's name is known throughout the world as a centre of fashion. Significant
numbers of its customers travel from abroad at least once a year to view and buy unique
garments.

Customers generally have personal accounts with NANDITHA and they are invoiced
each month. NANDITHA is seeking to invest in information systems in order to retain
and improve its competitive advantage but it has a restricted budget.

Select the most suitable of the following investments to the management of

NANDITHA:
A. Automated warehousing
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B. In-store self-service check-outs
C. Computer-aided design
D. e-Procurement

Question 19

Which THREE of the following feature in the McKinsey 7S model of organizational

elements?
A. Stakeholders
B. Systems
C. Skills
D. Symbols
E. Shared values

Question 20

The traditional product life cycle curve is broken up into four key stages. Products first
go through the Introduction stage, before passing into the Growth stage. Next comes
Maturity until eventually the product will enter the Decline stage.

Place the appropriate stage in Product Life Cycle in front of the given scenarios:

Product Stage in Product Life Cycle

3D Televisions
3D may have been around for a few
decades, but only after considerable Introduction Stage
investment from broadcasters and A?
technology companies are 3D TVs
available for the home

Blue Ray Players

With advanced technology delivering the
very best viewing experience, Blue Ray Growth Stage
B?
equipment is currently enjoying the steady
increase in sales

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 DVD Players
Introduced a number of years ago, Maturity Stage
manufacturers that make DVDs, and the C?
equipment needed to play them, have
established a strong market share.
Video Recorders
While it is still possible to purchase VCRs
this is a product that is definitely in the Decline Stage
Decline Stage, as its become easier and D?
cheaper for consumers to switch to the
other, more modern formats.

Stage in Product Life Cycle

Introduction stage
Growth Stage
Maturity Stage
Decline Stage

Question 21 and Question 22 are based on the following scenario

SIRISENA was formed in 1990 and it manufactures and sells top quality chocolate. All
of SIRISENAs products are manufactured in its factory in the European Country. The
products are distributed through a multi-channel network comprising of SIRISENAs
own stores and online business and retail partners.

Business structure
SIRISENA has a simple business structure. It has a head office (which includes its
corporate treasury function) and two divisions: Direct Customer Sales (DCS), and
Manufacturing and Commercial (MC).

Mission, Aim and Objectives

SIRISENAs mission statement, agreed by the Board of Directors last year is:
To delight customers by providing various products in numerous markets.
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SIRISENAs overall aim is to increase shareholder value by improving profit margins
through increased sales and reduced costs. SIRISENAs two strategic objectives are given
below:

1. Engage with the widest range of customers through the development of

SIRISENAs markets and products through a wide variety of sales channels.

2. Enhance the customer experience through strong and effective customer

relationship management.

Board of Directors has determined the following financial objectives for SIRISENA:

1. That it should operate on a sound financial basis in order to increase profit and
shareholder value
2. That it should pay a regular and consistent dividend each year.

Question 21

Which THREE of the following can be considered as the benefits of using Balanced
Scorecard to manage SIRISENAs strategic performance?

A. It will highlight the importance of customer focus and business processes on

SIRISENAs overall performance
B. The customer perspective of the BSC highlights the link between meeting customer
requirements and achieved financial success, which is in line with the SIRISENAs
strategic objective of critical importance of customer towards the continued development
and growth of the business.
C. The value of introducing additional measures will be increased if the directors of
SIRISENA continued to focus primarily on financial measures
D. BSC identifies the need to translate strategy into operational objectives, which will be
necessary in order for SIRISENA to measure how well it is performing against those
targets
E. SIRISENA will select performance measures for the scorecard because they are easy
to measure, rather than because they are the ones which give the best indication of how
well is performing against the CSFs.

Question 22

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For each of the non financial perspectives of SIRISENAs Balanced Scorecard place
respective and most relevant Key Performance Indicator (KPI)

Non financial perspective Key Performance Indicator

Customer perspective The percentage of repeat customers through
SIRISENA's various revenue channels could be recorded

Internal Business Perspective
Innovation and Learning Perspective
Wastage levels; SIRISENA can reduce the level of wastage
either through over ordering or through having to scrap
finished confectionery products with lower standards
Proportion of staff who have received food, health
and safety training

Key Performance Indicator

The percentage of repeat customers
through SIRISENAs various revenue
channels could be recorded

Wastage levels; SIRISENA can reduce

the level of wastage either through over
ordering or through having to scrap
finished confectionery products with
lower standards

Proportion of staff who have received

food, health and safety training

Question 23
The following details have been provided regarding the market growth and the relative
market share of the confectionery industry and Company TANDOS

Market growth (%)

Average
Annual rate of
2013 2014 2015
growth (2013
2015)
Owned stores -2.0% -2.3% -2.8% -2.4%
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 Sales to
supermarkets
0.3% 0.3% 0.3% 0.3%
(Branded
confectionery)
Sales to
supermarkets (Own 11.8% 13.0% 13.5% 12.8%
label confectionery)
Online confectionery
10.0% 11.0% 10.5% 10.5%
sales

Relative market share

Market Ys
Ys Market Share of relative
Share largest market
competitors share
Owned stores 29.2% 26.0% 1.12
Sales to
supermarkets
15.4% 40.0% 0.39
(Branded
confectionery)
Sales to
supermarkets (Own 24.4% 20.0% 1.22
label confectionery)
Online confectionery
4.1% 11.0% 0.37
sales

Based on BCG matrix and above details identify and place the four elements in
TANDOSs product portfolio

Online confectionery sales

Sales to supermarkets
(Own label confectionery)

TANDOS's Owned stores`

Sales to supermarkets
(Branded confectionery)

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Question 24

Identify the most appropriate market model for each of the given scenarios.

Description Market Model

1. This market contains buyer, intermediates, final
customers and retailers and ultimately creating
brand loyal customers is the main goal. Customer Market
2. This includes stakeholders and third parties who
have bought the product must give feedback to
Influence Market
their friends, relatives and neighbors.
3. This form of marketing is when the customer buy
something after being referred by our friends and
relatives and main priority should be Customer Referral Market
Satisfaction.
4. The organization need to develop a strategic
alliance with the suppliers who are connected Supplier Market
stakeholders.
5. This market helps an organization to keep the best
people who can add values to the organization and Employee/
they should be talented, experienced, skilled and Recruitment Market
royal.
6. This kind of market applies to the customers and
employees within the organization in order to have
proper harmony among the employee and
Internal Market
suppliers and customers.

Market Model
Customer Market
Influence Market
Referral Market
Supplier Market
Employee/Recruitment
Market
Internal Market

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Question 25

What are stages 2, 3 and 4 of the outline strategy process?

A. Generate options; select strategy; implement strategy

B. Strategy selection; strategy implementation; strategic control
C. Deliberate strategy; emergent strategy; realized strategy
D. Appraisal of strengths and weaknesses; choice of strategic direction; strategy
implementation

Question 26
26.1 How do we succeed in this business?
A. P Business Strategy
B. Q
C. R
26.2 What business should we be in?
A. P
B. Q Corporate Strategy P Business strategy
C. R Q Corporate strategy
26.3 How does this unit contribute? R Functional strategy
A. P
B. Q
C. R Functional Strategy
26.4 Which terms refer to which strategic questions?
A. P
B. Q
C. R

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Question 27
Question 27
Name the types of response to environmental uncertainty set out by Miles and Snow.
27.1 Limited product range in narrowly defined market.
A. P
B. Q Defender
C. R
D. S
E. T
27.2 Develops new products and searches for new markets.
A. P Prospector
B. Q
C. R
D. S
E. T
27.3 Seeks efficiency and copies best of competitors.
A. P
B. Q
C. R
D. S
E. T Analyzer
27.4 Changes only when environmental pressure is strong.
A. P
B. Q
C. R Reactor
D. S
E. T

27.5 Operates entrepreneurially,

without explicit strategy. A Prospector
A. P B Defender
B. Q C Reactor
C. R D Not in Miles and Snow typology
D. S Not in Miles & E Analyzer
E. T Snow Typology

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Question 28

The marketing strategy emphasises price as the key to good value; operations runs with
tight cost control; development focuses on cost reduction.
Which of Porter's competitive strategies is illustrated here?
A. Divisionalization
B. Cost leadership
C. Cost focus
D. Differentiation
E. Differentiation focus

Question 29
Company Mangala, a leading restaurant chain entered into an agreement with Company
Chamal which Company Chamal provides a portion of the capital required by initially
investing in the equipment, signs, seating, and decor of their restaurant businesses, and by
reinvesting in the business over time.
The company Mangala owns the land and building or secures long-term leases for both
company-operated and conventional franchised restaurant sites. In certain circumstances,
the company Mangala participates in reinvestment for conventional franchised
restaurants. The arrangement typically lasts 20 years.
Which form of overseas expansion strategy has Mangala undertaken through the
acquisition of the small chain of supermarkets in the two other European countries?
A. A Transnational strategy
B. A Franchising strategy
C. An Exporting strategy
D. A Foreign Direct Investment strategy

Question 30
KP operates an estate agency business which arranges selling, renting or management of
houses and other properties, in a northern European country; M. KP has been in
business for the last 30 years and has 10 offices located throughout the country M. it
specializes in marketing and selling high value, exclusive residential properties. KP has
seen the number of its property sales decline steadily in the last 5 years which is due to
current economic downturn.
KP has standard estate agency software package to manage its buyers enquiries, property
viewings, marketing and to automatically match buyer enquiry details against its database
of properties. AAP does not have a customer database to record customer information.
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KP has a website which only allows customers to view the basic property details such as
internal photographs and floor layout. AAP has an email system which allows customers
to contact its offices and it is the main form of internal communication in AAP. The
estate agency software package and website are not linked.
McFarlands strategic grid can be used to identify an organizations current and future
dependence on information systems. Place the most suitable type of information system
inside the proper classification in McFarlands strategic grid.

SUPPORT : TURNAROUND :
Strategic

Low
systems
Impact

current

Current Property Database Mobile phone applications.

Generic Estate Agency software Customer Databases Basic Website
of

FACTORY : STRATEGIC :
High Improved property database with e-Business Website advertising and
consistent information on properties sales Web 2.0 developments
Low High
Strategic Impact of future IT systems
Support Turnaround
Current Property
Mobile phone applications.
Low Database
Customer Databases
Generic Estate Agency
Basic Website
software
Factory Strategic
Improved property e-Business Website
High database with consistent advertising and sales
information on properties Web 2.0 developments
Question 31 Low High
Ranil is an established company in public ownership comprising the following divisions;
construction and building, engineering and machinery, real estate. Although the company
has traded profitably, its earnings have been subject to wide variations and some of the
shareholders are concerned about the Boards policy of conglomerate diversification.

Which of the following best describes the conglomerate diversification of Ranil?

A. Ranil enters (through acquisition or merger) an entirely different market that has little
or no synergy with its core business or technology.
B. Ranil enlarges the production portfolio by adding new products with the aim of fully
utilizing the potential of the existing technologies and marketing system.
C. Ranil involves production of unrelated but definitely profitable goods. It is often tied
to large investments where there may also be high returns.

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D. Ranil acquires or develops new products or offering new services that could appeal to
the companys current customer groups

Question 32
Foresight has been described as the art and science of anticipating the future. The idea
that an organization can anticipate changes in its operating environment and prepare for
the future has been suggested by a number of authors and organizations. There are a
number of techniques which can be used to improve the foresight that an organization.

Select the MOST appropriate statement which describes the technique of Opportunity
Mapping in foresight
A. The issues should be analyzed in terms of their impact on the organization and their
probability of occurrence
B. Through a process of environmental analysis, identification of major uncertainties,
identification of
drivers and casual factors and then combining them into internally consistent and
plausible stories, an organization builds a number of alternative futures for its industry
C. A qualitative and experience based analysis aimed at identifying gaps in the current
environment in order to reveal new business alternatives.
D. A carefully selected group of experts is asked about insights about a particular future
trend.

Question 33
Zumba is a multinational company which buys agricultural products for use in its
manufacturing process. Zumba sbusiness is an important part of Agrilands economy.
Zumba has made efforts to improve both the production techniques of the farmers and
the living conditions of farm workers and their families.

The farmers co-operatives have freedom to trade with anyone but have chosen to deal
exclusively with Zumba. Zumba has enjoyed harmonious relationships within Agriland
but this now seems threatened by a number of factors.

The Government of Agriland has been under the control of the same political party for
the previous 15 years. Recently there have been allegations of corruption made against
the Government and its popularity has decreased: some analysts think it might lose the
next general election. The main opposition party is very nationalistic and opposed to free
trade. It has stated that if it is elected it will nationalise all foreign owned businesses
without compensation.

At a recent meeting between the President of Agriland and Zumba, the President said
there was a common interest in preventing the main opposition party from winning the
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next general election. The President suggested a number of strategies which could be
followed:

1. ZZM could give a substantial donation to the Presidents party for its election
funds.
2. ZZM could agree to an extra tax on its Agriland operations. This could be used to
increase the national minimum wage for farm workers.
3. ZZM could open an agricultural processes factory within Agriland to assist
economic development.
The President stated his strategies were not mutually exclusive. He added that if Zumba
was not able to help him, then he would seriously consider nationalising Zumbas
operations without any compensation.

Complete the given stakeholder analysis with appropriate stakeholders of Zumba and
most suitable action regarding the each stakeholder category
Power & Interest Stakeholder Action
High Power/ High President of Agriland
Manage closely
Interest Government
High Power/ Low
Zumba's shareholders Keep satisfied
Interest
Low Power/ High Main opposition party
Interest Farm worker's union Keep Informed

Stakeholder Action
President of Agriland Manage closely
Government
ZZMs shareholders Keep satisfied

Main opposition party Keep Informed

Farm workers union

Question 34

Match the appropriate description for each perspective in Balanced Scorecard model
developed by Kaplan and Norton (1992, 1996)
Description Perspective of BSC
To succeed financially how should we
appear to our shareholders? Financial

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To achieve our vision how should we
appear to our customers? Customer
To achieve our vision, how will we
sustain our ability to change and Learning and Growth
improve?
To satisfy our shareholders and
customers, what business processes must Internal Business Process
be excel at?

Perspective of BSC

Financial

Customer

Learning and Growth

Internal Business Process

Question 35

Which one of the following represents an organisational support activity in the idea
expressed by Michael Porter in his value chain?

A. Marketing and Sales

B. Procurement
C. Outbound logistics
D. Services

Question 36
Laaya, an international hotel group with a very strong brand image has recently taken
over Illton, an educational. The CEO of Laaya was recently quoted as saying Our
success is built on happy customers: we give them what they want. Illton offers degrees
both at Bachelor and Masters Levels and courses aimed at professional qualifications.
Illton has always concentrated on the quality of its courses and learning materials. In
recent years, Illton has experienced an increasing rate of employee turnover.

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RCH has developed a set of Critical Success Factors. Laayas rationale for the take-over
of Illton was the belief that it could export its customer focus and control system, based
on Critical Success Factors, to Illton.
Place appropriate TWO KPIs for each given CSF
CSF KPI 1 KPI 2
Customer Satisfaction Student Satisfaction Rate of repeat business
Employee attitudes Rate of staff turnover Rate of staff absence
Product Quality Market share Accreditations
Brand Image Brand recognition Brand reputation

KPI 1
Student Satisfaction
Rate of staff turnover
Market share
Brand recognition
KPI 2
Rate of repeat business
Rate of staff absence
Accreditations
Brand reputation

Question 37
Bamuna is an international bank with retail banking operations which are geared primarily
towards individual customers and is provided through branches as well as the Internet. R
liberalised its economy in 1993 which means it now allows the free flow of capital into
and out of the country. The largest state-owned bank, SB, has half of Rs retail banking
business and has a strong position of dominance.

One banking analyst has recently commented that "Rs government has chosen to
energise the banking sector through SB. It is less keen on foreign competition. There are
a number of foreign banks which have been established in R for over 15 years and these
are all profitable. They have 35% of R's retail banking market. Since the beginning of
2011, Bamuna has identified two foreign banks which entered R at the same time as
Bamuna, but which have withdrawn from R. One of the foreign banks has stated its
reason for withdrawal as being 'Our operations in R have reduced group profitability.'

Porters Five Forces model attempts to describe an industry or market in terms of its
competitiveness and resultant attractiveness. Identify the strength of force of the retail
banking market within country R

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 Force Strength of force
Competitive rivalry within retail banking Strong
Bargaining power of customers Weak
Bargaining power of suppliers No Judgement Given
Threat of new entrants Weak
Threat of substitute products Weak

Question 38
Pamela, electricity generating company and it generates its electricity using only fossil
fuels. Since 2010 the customers have been more concern on renewable sources of energy.
Pamelas organizational structure is hierarchical, and management style is bureaucratic.
Many of Pamelas employees belong to trade unions.
In 2011, Zs Government announced plans for incentive payments to be awarded to
those electricity generating companies investing in projects to generate renewable energy.
The electricity generators are all now required by law to provide a proportion of their
electricity generation from renewable sources or pay a penalty fee to the Government.
After the retirement of the previous CEO, his successor, the new CEO is a strong
supporter of wind based electricity generation. The new technology needed to operate
and manage wind powered electricity generation will require extensive investment and
training in new techniques and skills. PPPs engineers have threatened strike action in
order to gain large pay increases to compensate for the new working arrangements.
Select (from the drop down menu) the appropriate area of Lewins Force Field Analysis
diagram against each of the following forces in respect of change in Pamela.
Force Restraining Force or Driving Force
Bureaucratic culture and structure Restraining Force
New CEO, strong leadership and
commitment for change Driving Force
PPP customer concern for the
environment and renewable energy Driving Force
Training and new skills development Driving Force
Unions and strike action Restraining Force
Local residents concern for the local area Restraining Force

Question 39
Which of the following best describes a non-market strategy?

A. The alternative name for the sort of strategies pursued by a Not For Profit
Organization (NPO)
B. A strategy that focuses on developing an organizations core competences and
leveraging them to achieve competitive advantage in new markets.
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C. A strategy that maintains relationships with governments, media, regulators and
society at large to achieve sustainable advantage.
D. Aggressive strategies by rivals aimed at undermining the business by depriving it of
key resources instead of competing for its customers.

Question 40
MyConnect is the name given to an IT project currently being undertaken in Country Q
to connect all of the medical centers and hospitals to a national information system
network for the health service. Qs central Government has placed a contract with the
main large national telecommunications company (Thissa), for T to project manage and
implement the MyConnect information system. Thiss is contracted by the central
Government of Q to provide all hardware and software systems support, training and
maintenance for all medical centres and hospitals. No tendering process was undertaken.

The Government has set the following objectives for the project team:
To establish the technical requirements for each hospital and medical centre;
To ensure that local users have access to technical guidance and training;
To achieve a target of 80% of medical centres and 90% of hospitals connected to
the MyConnect information system and fully operational by July 2014;
To track and monitor the use of the MC information system by medical centres
and hospitals;
To track and monitor costs in order to stay within the budget set.

Select THREE performance measures which could be used to assess whether the project
objectives, as set by the Government of Q, are being met.
A. Access and usage times of the system compared to original project plan for access and
usage rates
B. User satisfaction rates. This could be provided by regular questionnaires and feedback
to the project team by the users and potentially the patients themselves.
C. N umber of training days per member of staff
D. Number of staff trained per hospital/ medical centre

Question 41

C is a private hospital which provides a range of surgical and medical services. It uses the
Balanced Scorecard of Kaplan and Norton to monitor and evaluate the. It presently
collects data on the following four performance measures:

1. Patient satisfaction in the quality of care received within 95 percentile

2. Number of complaints made relating to finance department reports

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 3. Number of enquiries from the public or local doctors per treatment
4. Average time of stay per patient per treatment

Which of the following perspectives is NOT represented in the key performance

indicators monitored by BNM?
A. Customer
B. Internal business process
C. Financial
D. Learning and growth

Question 42
Knowledge management strategies require the organization to set up arrangements to
ensure the Creation, Capture, Storage, Availability (or Dissemination), and Utilization of
the organizations information, knowledge and experience.
Place the tools of knowledge management next to the requirements that they best
support.
Knowledge Management
Organisation Tool
Requirement
Creation of Knowledge Creation of sharing culture
Capture of Knowledge Database structure
Storage of Knowledge Technological infrastructure
Availability (dissemination) of knowledge Internet and Extranet
Utilisation of knowledge Staff development and training

Creation of sharing culture

Database structure
Technological infrastructure
Internet and Extranet
Staff development and training

Question 43

Rammi is a well established, mid-priced airline business. It is currently considering setting

up a 'no-frills', low fare subsidiary of its business.

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Which THREE of the following activities would NOT take place within the strategic
analysis phase of Rammi's strategic planning process?

A. Evaluation of the competitors actions

B. Evaluation of how new staff would be recruited and trained
C. Evaluation of which planes to use
D. Evaluation of forecast passenger volumes
E. Evaluation of public concern for environmental damage

Question 44
Donash is a university in Country A which is a European country. It employs 350
academic staff and 420 other staff. It has 8,000 full-time students. Following a visit from
government appointed auditors it was criticised for the following reasons:

The university operated at a deficit; its expenditure exceeded its income.

It could not accurately produce a head-count of the number of students enrolled.
Internal control of cash receipts was defective and in several areas there were
discrepancies.
The level of student complaints was very high and increasing.
It had a large number of debtors, mainly ex-students, and was not doing anything
to collect outstanding amounts.

Following this visit, Donash replaced its Vice-Chancellor (as its CEO). The majority of
Donashs funding comes from central government which has instructed the new Vice-
Chancellor to prepare a new Strategic Plan for the period 2011-2016. The new Strategic
Plan will be required to address the criticisms identified in the audits.

Place the appropriate controls that the university could use to assist in the
improvement of the areas criticised in the recent audit.
Area criticized Control actions
The university should issue an identity card for each student and
Inaccurate head-count of the number of each student should be registered on a central database which is
students on roll. continually up-dated.

Internal control of cash receipts was Limit the amount of cash balances held
defective and in several areas there had within the university.
been discrepancies.
Donashs expenditure exceeded its Review all areas of expenditure, institute a cost reduction
programme, consider increasing prices wherever possible and
income. reduce investment in working capital
Donashs level of student complaints was Review the complaints procedures and address any systematic
cause of complaints, for example, examination regulations
very high and increasing.

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Donash had a large amount of debtors, Establish a target level of debtors and institute actions to
mainly ex-students, and was not doing reduce the outstanding level of debtors

anything to collect outstanding amounts

The university should issue an identity Review the complaints procedures and
card for each student and each student address any systematic cause of
should be registered on a central database complaints, for example, examination
which is continually up-dated. regulations.

Limit the amount of cash balances held Establish a target level of debtors and
within the university. institute actions to reduce the outstanding
level of debtors.
Review all areas of expenditure, institute a
cost reduction programme, consider
increasing prices wherever possible and
reduce investment in working capital.

Question 45

TikTok is a privately owned company which manufactures industrial chemicals. The

manufacturing process produces large quantities of waste and is very noisy and smelly.

TikTok sources some of its raw materials from economically underdeveloped

countries.
TikTok has an ethnically diverse workforce.
TikTok has always tried to stay within its country's laws.

However, recently there have been a number of accidents which TikTok 's safety
manager thinks were due to operator error. TikTok would like to be listed on a stock
exchange as this would provide access to capital which would assist TikTok 's plans for
expansion. TikTok does not have a policy for Corporate Social Responsibility (CSR).
However, TikTok 's auditors have advised TikTok that a CSR policy would be required if
it is to be listed.
Recommend the contents of a suitable CSR policy for TikTok dealing with its
manufacturing process, procurement policy, labour force and compliance with the law.
In its formulation of a CSR policy, TikTok should include sections dealing with the
following matters:
Required section Description
Waste This demonstrate the end result of byproduct of energy use by TikTok

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 This may contribute to environmental degradation in the area surrounding
Noise TikTok's premises and also its employees.
The CSR policy should state TikTok's desire for equitable trading relationships
Raw material procurement with its suppliers and might include the aspiration to be a 'Fair Trade' partner.
Compliance CSR implies that companies will exceed their legal responsibilities if necessary.
TikTok's CSR policy should include a statement about how it deals with equality
Workforce of treatment for its workforce

This demonstrate the end result of

byproduct of energy use by TikTok Waste
This may contribute to environmental
degradation in the area surrounding
TikToks premises and also its employees.
Noise

The CSR policy should state TikToks

desire for equitable trading relationships
with its suppliers and might include the Raw Material Procurement
aspiration to be a Fair Trade partner.

CSR implies that companies will exceed

their legal responsibilities if necessary. Compliance
TikToks CSR policy should include a
statement about how it deals with equality Workforce
of treatment for its workforce.

Question 46
The management of Cheeta wishes to develop a performance management system to
implement its new strategic direction.
Place the following activities in the correct sequence in the blank spaces to develop a
performance management system to implement a strategy.

Set strategic objectived of the organisation

Eshablishe the Key Performance indicators

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Set the targets for the organisation & its managers
Question 47

Which TWO of the following are NOT key characteristics of an effective team?

A. An effective team must be led by a democratic team leader.

B. An effective team has a unity of purpose and all team members understand this
purpose.
C. An effective team involves its stakeholders in assessing progress towards goals.
D. An effective team avoids conflict and disagreement between team members.

Question 48
Which of the following describes a difference between Market Value Added (MVA) and
Economic Value Added (EVA) measures of business performance?

A. Unlike the MVA, EVA calculates units within the company instead of the entire
company.
B. MVA offers a summary of how well the company has maximized shareholder value
since its inception, but EVA measures the performance of a company over a period.
C. EVA almost equals to the accounting profit, but MVA the difference between the
current total market value of a company and the capital contributed by investors
D. MVA is not a performance metric like EVA, but instead is a wealth metric; measuring
the level of value a company has accumulated over time.

Question 49
Flemingo has recently developed a series of electronic book readers, designed and
marketed exclusively by Flemingo. The new device enables users to shop for, download,
browse, and read electronic books, newspapers, magazines, blogs, and other digital media
via wireless networking. The introduction of the device was a transformational change
which was forced upon Flemingo due to the changing competitive environment in the
book sales market. This development and introduction of the new device occurred over a
period of only one year.
Which of the following forms of organizational change best categorizes the initial
development and introduction of the electronic book reading device by Flemingo?

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A. Evolutionary
B. Revolutionary
C. Adaptation
D. Reconstruction
Question 50

Fitzgerald and Moon have developed an approach to performance measurement in

business services that is based on the three building blocks of 6 dimensions,3 standards
and 3 rewards.

Which THREE of the following are correct dimensions within the Fitzgerald and Moon
performance management model?
A. Controllability
B. Financial Performance
C. Ownership
D. Resource Utilization
E. Competitive performance

Question 51
Some organizations may decide to establish an internal group of experts, which is then
referred to internally as a 'think tank'. A think tank is considered by many organizations
to be a useful intuitive forecasting method which places emphasis upon the knowledge
and judgment of a group of experts rather than on statistical forecasting methods.

Which THREE of the following are features of a think tank?

A. M embers speculate about the future and are asked to provide subjective probabilities
about their predictions.
B. Members from all levels of management and expertise meet and propose answers to
an initial single question posed by a session leader.
C. The removal of positional authority in the group to enable free discussion to take
place.
D. The independence of members enables unpopular or novel ideas to be discussed.
E. Its group nature facilitates the sharing of knowledge and encourages a shared view.

Question 52
Which THREE of the following feature in the McKinsey 7S model of hard elements?
A. Stakeholders
B. Systems
C. Strategy
D. Symbols
E. Systems

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Question 53
Brandticks is a retailer of exclusive and expensive fashion clothing for women. It employs
its own clothing designers and makes the majority of its clothes to order in its own
workshops from precise measurements of the customer taken in-store.
It has a single store in the capital city of a country with high disposable incomes.
Brandticks 's name is known throughout the world as a centre of fashion. Significant
numbers of its customers travel from abroad at least once a year to view and buy unique
garments.
Customers generally have personal accounts with Brandticks and they are invoiced each
month. Brandticks is seeking to invest in information systems in order to retain and
improve its competitive advantage but it has a restricted budget.

Select the most suitable of the following investments to the management of Brandticks:
A. Automated warehousing
B. In-store self-service check-outs
C. Computer-aided design
D. E-Procurement

Question 54
95% customer retention rate Regnis is a retailer of electrical equipment. Its
source of CSF : INDUSTRY management sets targets for store managers to
motivate them to achieve results in line with the
90% of customer queries answered competitive goals of Regnis.
in 1 hour STRATEGY For each critical success factor place the source of
3 reps per 100 customers STRATEGY CSF and one Primary measure and a target next to
Lower cost of capital by 2% ENVIRONMENTAL
each critical success factor (CSF).
Increase employee retention rate to
95% / annum
TEMPORAL

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Question 55

Indicate (Select from drop down menu) which of the following statements are benefits or
drawbacks of the Ansoff Matrix by placing them in the correct position.

Benefit/Drawback of the Ansoff

Statements
Matrix
It provides an explicit framework to deal
with changing industries where an 'ad
hoc' management style no longer suffices Benefit
and coordination is required

The matrix stressed that a firm's product

and market portfolio must be
coordinated, but provided no insight on Drawback
trimming products and markets

The matrix can be used to guide business

unit strategies. The model does not help
plan for the implementation phase of a Drawback
chosen strategy

It provides an excellent platform for

communicating a growth strategy to
stakeholders
Benefit

The matrix stressed that as competition

changes over time, so must strategy.
Ansoff measured progress by the rate of Benefit
turnover

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Question 56
Traditional management accounting focuses on providing information to assist decisions
at operational and managerial levels and to monitor performance at these levels. Strategic
management accounting provides additional information.

Which THREE of the following pieces of information would be provided by a strategic

management accounting function but NOT by a traditional management accounting
function?

A. Variance analysis
B. Life cycle cost analysis
C. Flexed budgets
D. Resource consumption accounting
E. Activity-based costing

Question 57

Insight is a small private tuition company. Up to now, all of its tuition has been carried
out in the classroom. Recent market research carried out by Insight has strongly indicated
that there is an extensive market in online tuition and the senior management team is
considering moving into this area of business. Many of its competitors are already
offering online tuition facilities.

Insight currently operates a website through which its classroom based students can book
onto courses, communicate via email with tutors, download course literature and make
payments. Developing online tuition facilities would mean that V would need to develop
facilities for online delivery of courses and it would need to use other means of
advertising its courses to a wider online audience.

Web 2.0 can be described in three parts. Place the appropriate concept in front of the
most suitable description.

Description Concept in Web 2.0

The experience brought from desktop to
browser whether it is from a graphical point Rich Internet application (RIA)
of view or usability point of view

A key piece in Web 2.0, which defines how

Web 2.0 applications expose their Web-oriented architecture
functionality so that other applications can
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 leverage and integrate the functionality
providing a set of much richer applications.
Examples are feeds, RSS, Web Services,
mash-ups.

This concept defines how Web 2.0 tends to

interact much more with the end user and Social Web
make the end-user an integral part.

Rich Internet application (RIA)

Web-oriented architecture
(WOA)
Social Web

Question 58
As shareholder value is difficult to influence directly by any manager, it is usually broken
down in components, so called value drivers. A widely used model comprises 7 drivers of
shareholder value, giving some guidance to managers:
Which THREE of the following are drivers of Shareholder Value Added (SVA)?

A. C ompetitive Advantage Period

B. Investment in Working Capital
C. Incremental Capital Expenditure
D. Sector P/E ratio
E. Dividend to net earnings ratio

Question 59
BGU: Divisional and group data 20x3

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BGU manufactures and sells a range of consumer foods in its home country. It has four
business divisions. Data for its most recent year, and comparative market growth rates
for the preceding year is available.
Which of the following strategic options should BGU investigate first?
A. Selling Division X to eliminate losses
B. Buying a rival to Division Y, to acquire its market share of 6%
C. Investing in Division W to increase its market share
D. Divesting division V to a rival firm in the same market

Question 60
The financial controller has been asked to sign off the year-end accounts for the
company that he has recently joined.
The accounts include a clause that is incorrect. Having investigated the matter he
recognized that this is a genuine oversight and not a deliberate attempt to mislead. The
managing director does not want to produce new accounts, because of resource
implications, but he does not feel it appropriate that he signs off something that has an
error in it.
After a proper consultation it may be possible to add a note about the incorrect clause.
However, it would be advisable first to consult with the auditors for their guidance on
how best to proceed. If the accounts do not represent the facts accurately and
completely in all material respects he should not sign them, nor should they, but it is
likely that there is a way to resolve the issue.

What is the most appropriate ethical breach in the above ethical dilemma?
A. Objectivity and integrity
B. Conflict of interest
C. Professionalism
D. Confidentiality

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