CIMA Lecturers Conference 2008 - Specimen Examination Paper E2
Enterprise Management Pillar
E2 Enterprise Management
Specimen Examination Paper
Instructions to candidates
You are allowed three hours to answer this question paper. You are allowed 20 minutes reading time before the examination begins during which you should read the question paper and, if you wish, highlight and/or make notes on the question paper. However, you are not allowed, under any circumstances, to open the answer book and start writing or use your calculator during this reading time. You are strongly advised to carefully read all the question requirements before attempting the question concerned (that is, all parts and/or subquestions). The requirements for the questions in Sections B are contained in a dotted box. ALL answers must be written in the answer book. Answers or notes written on the question paper will not be submitted for marking. Answer ALL FIVE compulsory questions in Section A on pages 2 to 5. Answer the TWO compulsory questions in Section B on pages 6 and 7. The list of verbs as published in the syllabus is given for reference on the inside back cover of this question paper. Write your candidate number, the paper number and the examination subject title in the spaces provided on the front of the examination answer book. Also write your contact ID and name in the space provided in the right hand margin and seal to close. Tick the appropriate boxes on the front of the answer book to indicate which questions you have answered.
The Chartered Institute of Management Accountants 2008
E2 Enterprise Management
CIMA Lecturers Conference 2008 - Specimen Examination Paper E2
SECTION A 50 MARKS [the indicative time for answering this section is 90 minutes] ANSWER ALL FIVE QUESTIONS IN THIS SECTION
Question One
R Company, a manufacturer and retailer of fashion clothes, has invested in a new technology system to improve the logistics of the movement of clothes between its warehouses and chain of 250 retail stores. Ensuring that the stores have the right supply of clothes is a critical success factor for the company. However, the warehousing stock control and logistics project set up to develop and deliver the new system has experienced numerous problems. The project ended up being well over budget and was also late in delivering the system. Now, only three months after the new system has been installed, it is clear that the project has not delivered its objectives. Instead, the company is facing a crisis with many store managers complaining that they are not receiving the correct stock. Even worse, some stores are out of stock of key ranges, whereas the warehouses are full of clothing. A meeting between the project team and project sponsor has ended up with everyone blaming each other, saying it was not their responsibility. It is clear that they did not use a project management methodology and did not have adequate control systems in place so that the problems that they now have could have been identified and rectified earlier in the project lifecycle.
Required
Demonstrate to R Company how a project management methodology could have helped to prevent the failures of the warehousing, stock control and logistics project. (Total for Question One = 10 marks)
Enterprise Management
Specimen Exam Paper
Question Two
T is the CEO of S Company, a manufacturer of hair and body care products. Over the years the company has been market leader in its field. It has achieved this through being at the forefront of product innovation. S Company has invested heavily in research and development, which has enabled it to be the first in the market to introduce new variants of the product range. However, this has meant that the cost of operations has spiralled, leading to an increase in the price of the companys products. Up until last year, the company has been very successful in increasing its market share. However, the most recent performance indicators show that sales are down. It would seem that supermarket own brand products are stealing market share and T is worried about the future ability of the company to meet its objectives for continued growth. T has decided to undertake a strategic review, the first stage of which will involve conducting an appraisal of its external and internal environments.
Required:
Explain what would be involved in undertaking an appraisal of S Companys external and internal environment, and how the information could be used to help T in his review. (Total for Question Two = 10 marks)
Question Three
V plc operates in the leisure and entertainment industry. It has a range of different ventures worldwide including fitness centres, casinos, cinemas and sports bars, each of which operates as separate businesses.
Required:
Distinguish between the different levels at which strategy should exist in V plc. (Total for Question Three = 10 marks)
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Specimen Exam Paper
Enterprise Management
CIMA Lecturers Conference 2008 - Specimen Examination Paper E2
Question Four
G, the senior partner of L, a medium sized accountancy firm, has worked for L for over twenty years and has a sound knowledge and understanding of the different activities of the firms business. Over the years, G has become known for his fairness in how he manages staff. He is also well liked and respected for his enthusiastic approach. He always has time to encourage and mentor younger members of staff. The firm has recently invested in new technology which will improve the effectiveness of its office systems, but will mean the roles and responsibilities of the support staff will change. G has taken on the difficult role of leading the project to introduce the technology and new working practices. He knows that the project will be met with resistance from some members of staff and he will need to draw on various sources of power to ensure the changes are successfully implemented.
Required:
Describe the different sources of power that G has and which will help him in introducing the changes (Total for Question Four = 10 marks)
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Enterprise Management
Specimen Exam Paper
Question Five
R has taken on the responsibility for organising the annual conference for the local Society of Management Accountants. Remembering the project management techniques she came across when studying for her professional qualification, R has decided that critical path analysis may be helpful in planning the conference. As a start, R has drawn up a list of the activities she must complete in preparation for the conference, identified the dependency between the different activities and the time she thinks each activity will take. Activity Dependency Time (Weeks) 3 6 4 2 8 4 2
Determine conference theme Research alternative venues Identify and book guest speakers Book venue Print conference papers Print and send out invitations Confirm final arrangements with venue and deliver documents
A B C D E F G
A B C D E,F
Required:
(a)
Explain how critical path analysis could be a useful technique for R in planning the conference. (6 marks) Using the information from the scenario, identify the critical path and duration of the conference project. (4 marks) (Total for Question Five = 10 marks)
(b)
Total for Section A = 50 marks
End of Section A
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Specimen Exam Paper
Enterprise Management
CIMA Lecturers Conference 2008 - Specimen Examination Paper E2
SECTION B 50 MARKS [the indicative time for answering this section is 90 minutes] ANSWER BOTH QUESTIONS FROM THIS SECTION 25 MARKS EACH
Question Six
B Local Council is responsible for providing public services, serving the local community. A new Chief Executive has recently been appointed with the explicit brief of improving the performance of the Council which is currently in the spotlight for being inefficient and not focused enough on the needs of the local residents. Over the last three months, the Chief Executive has undertaken a review and is not impressed with what he has found. He has identified a number of weaknesses and problem areas which need to be remedied. The culture of the Local Council needs to change radically to become a more performance oriented one. The initial findings from the review suggest that the B Local Council is typified by a very bureaucratic culture, where power is determined by position and status. The managers in the Council defend their territory and are unwilling to share information and cooperate with other departments. Staff are only allowed to undertake the specific activities included in their job description. Many say they have had no training and that opportunities for career progression are limited. They receive no feedback on their performance but work under close supervision in what appears to be a them and us culture between management and staff. The review also identifies that morale is low. Staff feel they are not encouraged to participate in decision making and any ideas they do have are stifled as a result of the chain of command. A significant number of staff have told the new Chief Executive that if they could get another job they would leave the Council. Discussions with the HR manager reveal that both absenteeism and turnover are high, despite competitive salaries and other excellent working conditions and benefits, such as free car parking, a subsidised canteen and sports facilities. The Chief Executive has identified a number of significant changes that need to be made to improve the performance of B Local Council. He is surprised that there is currently no staff performance appraisal in place and is keen that an effective system should be designed and implemented.
Required: (a)
Analyse the problems in B Local Council and discuss what the Chief Executive could do to improve performance. You should include reference to appropriate theories to support your analysis (13 marks) Explain the key issues that should be considered in the design and implementation of an effective staff performance appraisal system for B Local Council. (12 marks) (Total for Question Six = 25 marks)
(b)
Enterprise Management
Specimen Exam Paper
Question Seven
The PAX Company is a successful supermarket chain. It has a strong reputation for innovation with its successful launch of internet shopping and clothes ranges. PAX Companys ability to provide value for money through the efficient use of operations, its use of the latest technology and its strong customer focus has enabled it to gain the largest share of the market in Country S. Following detailed analysis, the senior management of PAX Company has concluded that the market in Country S has reached saturation point and that the only opportunity for significant growth is to develop activities in new markets abroad. Acting partly on the advice of the central government's Overseas Advisory Board, and using its own research team, PAXs Board has made the strategic decision to enter into a new market in Country Y. The location selected for the first supermarket is in the suburbs of a growing city where groceries, clothing and the other non-food products that PAX intends to supply are currently provided by a large number of small shops. This is a major new project for PAX Company, and as such requires strong project management skills. D has been appointed as project manager and is already facing significant challenges in terms of the reactions to the project from different stakeholders. The land on which the supermarket will be built has been purchased and following a series of negotiations with state and local government officials, planning permission has been granted. However, there have been strong protests from a number of groups including the Citys Civic Society, local residents and shopkeepers who are located near to the proposed development. The Civic Society is concerned about the detrimental impact on the local environment. Residents are concerned about the potential increase in traffic and the danger it poses to the children at the local school. The shopkeepers are fearful about the impact of the new supermarket on their future business prospects. The media including television, radio and newspaper have publicised the fears of the local residents and shopkeepers and these two groups, together with the Citys Civic Society have formed a coalition to attempt to prevent the development.
Required: (a)
Explain how the project team should manage the different stakeholders who threaten the future of PAX Companys project to open a supermarket in Country Y. (13 marks) Discuss the Resource Based approach to strategic management, making reference to the resources and competences that appear to give PAX Company competitive advantage. (12 marks) (Total for Question Seven = 25 marks)
(b)
(Total for Section B = 50 marks)
End of Question Paper
Specimen Exam Paper 7 Enterprise Management
CIMA Lecturers Conference 2008 - Specimen Examination Paper E2
LIST OF VERBS USED IN THE QUESTION REQUIREMENTS
A list of the learning objectives and verbs that appear in the syllabus and in the question requirements for each question in this paper. It is important that you answer the question according to the definition of the verb. LEARNING OBJECTIVE
1 KNOWLEDGE What you are expected to know.
VERBS USED
List State Define
DEFINITION
Make a list of Express, fully or clearly, the details of/facts of Give the exact meaning of
2 COMPREHENSION What you are expected to understand.
Describe Distinguish Explain Identify Illustrate
Communicate the key features Highlight the differences between Make clear or intelligible/state the meaning or purpose of Recognise, establish or select after consideration Use an example to describe or explain something
3 APPLICATION How you are expected to apply your knowledge.
Apply Calculate Demonstrate Prepare Reconcile Solve Tabulate
Put to practical use Ascertain or reckon mathematically Prove with certainty or to exhibit by practical means Make or get ready for use Make or prove consistent/compatible Find an answer to Arrange in a table
4 ANALYSIS How you are expected to analyse the detail of what you have learned.
Analyse Categorise Compare and contrast Construct Discuss Interpret Prioritise Produce
Examine in detail the structure of Place into a defined class or division Show the similarities and/or differences between Build up or compile Examine in detail by argument Translate into intelligible or familiar terms Place in order of priority or sequence for action Create or bring into existence
5 EVALUATION How you are expected to use your learning to evaluate, make decisions or recommendations.
Advise Evaluate Recommend
Counsel, inform or notify Appraise or assess the value of Propose a course of action
Enterprise Management
Specimen Exam Paper