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CIMA CIMAPRO15-E03-X1-ENG Exam Syllabus Topics:

CIMA E3 - Strategic Management Question Tutorial Sample Questions:

1. TUV had an employee turnover rate of 25% among new recruits and was becoming short of skilled workers.
The Board of TUV realized there was something dramatically wrong and called in consultants to assess the problem. The consultants recommended transformational change in that TUV should redesign the entire production system, change the placement of all equipment and the flow of work, redefine every job and give all workers new assignments.
Which type of change did the consultants recommend for TUV?

A) Adaptation
B) Reconstruction
C) Revolution
D) Evolution

2. YZ operates a national mobile phone (cell phone) network in one country. It is considering upgrading its network to 4th Generation (4G) by providing an improved bandwidth that will enable its customers faster access to the Internet.
This investment will cost S29 million which YZ's institutional investors have agreed to provide by subscribing to a rights issue. This is due to management having informed institutional investors that a rival is already offering
4G and that this is taking customers away from YZ because its network is now regarded as too slow. YZ's remaining customers have shown a willingness to pay extra for 4G and overall the investment will have a positive net present value.
Which of the following statements are correct? (Choose all that apply.)

A) It is essential given the strategic threats to YZ.
B) YZ will gain a first mover advantage.
C) There is stakeholder approval for the investment.
D) It provides a market development opportunity for YZ.
E) There are sufficient investment funds available

3. PQR is a charity which has an excellent reputation within its home country. PQR employs over 300 highly experienced staff and has 200 skilled volunteers. PQR's funding mainly comes from donations from the public but its public profile is low compared to larger, more publicized charities.
Due to a recent recession, public donations to PQR have fallen in the last five years, but demand for its services continues to grow.
The government of the country in which PQR operates is encouraging greater collaboration between charities and there have been several recent successful mergers within the charity sector. PQR has recently been approached by a high profile and well funded charity, DDD, with a merger proposal. DDD offers complementary services to those offered by PQR.
Which TWO of the following factors would most likely be considered as an "opportunity" for PQR? (Choose two.)

A) Donations from the public
B) Merging with DDD
C) Highly experienced staff
D) The excellent reputation of DDD
E) Growing demand for its services

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

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

5. SDC is a medium sized IT systems development company. SDC employs highly qualified and experienced systems development experts. It invests heavily in staff training and development and as a result, staff are highly motivated and staff turnover is low. SDC has a strong culture of team work and innovation, which the senior managers believe is the basis of SDC's success. The senior managers, who are also the founders of SDC, are highly experienced and have a strong vision for the business.
Which THREE of the following factors would be the main focus of a resource audit for SDC? (Choose three.)

A) Management
B) Machinery
C) Manpower
D) Make-up
E) Markets
F) Money

Solutions: