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CIMA E3 - Strategic Management Question Tutorial Sample Questions:

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

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

2. Plush is a medium-sized hotel which recently opened on the outskirts of a city which is popular with tourists. It has a sophisticated website which allows customers to pre-book rooms and additional items, such as meals in its restaurant and tickets for popular tourist attractions in the city.
Plush has listed its website on a popular hotel price comparison website, which allows customers to compare prices and facilities of hotels in the same area and this has resulted in over 60% of Plush's customer bookings so far.
Since listing on the price comparison website, the Sales Manager of Plush has noticed that the prices offered by its nearest competitors have reduced dramatically and their range of special offers have also increased.
Which TWO of Porter's Five Forces have been most affected by the use of the price comparison website by the hotels in the same area as Plush? (Choose two.)

A) Bargaining power of customers.
B) Threat of substitutes.
C) Threat of new entrants.
D) Bargaining power of suppliers.
E) Competitive rivalry.

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

4. BCA is a long established international airline. Which of the following represent Threats to BCA's business?
(Choose all that apply.)

A) A sudden increase in international terrorism.
B) A substantial rise in the price of oil.
C) A higher level of private car ownership.
D) Greater popularity of long-haul holidays.
E) A shortage of trained pilots in BCA.

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

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