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

CIMA E3 - Strategic Management Question Tutorial Sample Questions:

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

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

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

3. ABC is an independent training provider in Country F.
It provides training in business related subjects to a wide range of corporate customers. All of its tutors must possess a nationally accredited training qualification before being allowed to teach and all of its courses follow nationally accredited programmes which are externally monitored. This is considered to be a critical aspect of its business reputation.
ABC has one major competitor, XYZ, within Country F.
XYZ offers similar courses to ABC but its tutors do not have to have an accredited training qualification and its courses do not follow the national accredited programmes. The style and content of courses varies significantly between XYZ's centers.
There are a number of universities which offer nationally accredited courses within Country F.
ABC does not consider these as competitors because typically they attract students wishing to undertake degree courses.
The average university pass rate for nationally accredited programmes is currently higher than ABC's.
Which of the following types of benchmarking would be most useful for ABC?

A) Internal
B) Process
C) Competitor
D) Strategic

4. JJJ is a publically quoted advertising agency. JJJ's competitive advantage is based on the expertise of its staff and its reputation in digital media advertising. JJJ has robust systems to protect its intellectual property. These include patents and copyrights. JJJ has also restricted access for most of its staff to its most sensitive data, such as studies of its customers' profitability.
JJJ's new Managing Director, Z, is concerned that when staff leave JJJ, the company loses whatever tacit knowledge they possess. These losses also impact on JJJ's reported profits. In order to remedy the losses of knowledge and the reduced profits Z wants to introduce a knowledge management strategy.
Which of the following steps support the introduction of a knowledge management strategy? (Choose all that apply.)

A) JJJ should convince staff of the benefits of sharing their tacit knowledge.
B) JJJ should unfreeze current habits and standard operating procedures.
C) JJJ needs to acquire and install appropriate hardware and software.
D) Z should gain the support of the Board of Directors.
E) JJJ should integrate knowledge management and management accounting.
F) Z should set a target for reported profit.

5. HH is an outdoor theatre which is based in the capital city of country N.
Tickets for shows can be booked at the ticket office or online. HH has identified the following critical success factors (CSFs):
An excellent, online ticket booking system
Customer satisfaction
Which of the following would be suitable key performance indicators (KPIs) for HH? (Choose all that apply.)

A) Profit from sales of snacks and drinks.
B) Percentage of ticket bookings aborted before completion.
C) Number of returning customers each year.
D) Customer show ratings, scored out of ten.
E) Number of customer complaints.
F) Employee turnover.

Solutions: