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

2. GV is a manufacturer and retailer of high quality suede gloves. GV makes all of its sales in country F, and is extremely profitable. After many successful years trading, GV has accumulated significant cash reserves and would like to grow the business organically.
After some investigation work, GV has discovered an opportunity to sell leather shoes in country P.
Which of the following strategic directions is GV taking if it pursues this opportunity, according to Ansoff's product / market matrix?

A) Market penetration
B) Market development
C) Product development
D) Related diversification

3. Which THREE of the following frameworks are used solely to evaluate the external environment of an organization? (Choose three.)

A) Kaplan and Norton's Balanced Scorecard
B) SWOT analysis
C) PEST Analysis
D) Porter's Five Forces Model
E) Porter's Value Chain
F) Porter's Diamond

4. SSS University wishes to introduce a new Car Park Management Strategy (CPMS). The aim of this strategy is to reduce the use of private cars and to encourage sustainable transport, such as cycling and public transport, by staff and students. SSS has decided to reduce the number of car parking spaces and introduce parking charges.
The Management Accountant has decided to use the Balanced Scorecard to help prepare a performance management system to assess the performance of the new CPMS.
Which of the following is an example of the Innovation and Learning perspective of a Balanced Scorecard for SSS?

A) Number of days of training for car park attendants.
B) Reduction in complaints from customers.
C) Easy access to car parking spaces.
D) Speed of processing the payment for parking charges.

5. A direct external change trigger is:

A) The introduction of new environmental protection policies by the government.
B) A general increase in the use of the Internet by society.
C) A powerful competitor forcing an organization to cut its prices.
D) An economic recession in an organization's home country.

Solutions: