Mock Exam 1

The following mock exam should be attempted once all objective test questions from
the different parts of the syllabus have been completed within this exam practice
kit.

This mock exam should be timed to allow no more than 90 minutes maximum time.

Your target to pass this mock exam is to answer at least 42 correctly from the 60
objective test questions available (you must score 70% or more to pass).

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Question 1

Most companies need processes or activities that they must be good within an industry,
or they simply would not be considered by most potential customers. This factor is
more likely to be referred to as?

A. Core competences
B. Threshold resources
C. Unique capabilities
D. Threshold competences

Question 2

The Building Block Model devised by Fitzgerald and Moon sets out a framework for the
design and analysis of performance management systems. The first building
block,
'Dimensions', identifies 6 goals for the business which must be
measured.

Which THREE of the following are correct dimensions within the Fitzgerald and Moon
performance management model?

Market share
Innovation
Customer management
Flexibility
Competitive performance

Question 3

J is an electricity generating company in country Z. J's customers are increasingly

concerned about environmental issues and many customers are willing to change to a
different electricity generating company which generates some of its electricity from
renewable sources (such as wind power).

J has recently employed a new CEO who is a strong supporter of wind based electricity
generation. The new CEO wishes to locate several wind powered generators in remote
countryside in the north of Z. However, gaining planning permission has proved to be
difficult and many proposals have been delayed due to local residents' opposition. On
average, the planning application process within local governments, for a wind powered
generator in Z currently takes 2 years. The national Government of Z is now introducing
new planning laws to force local governments to make decisions more quickly.

Place the appropriate area of Lewin’s Force Field Analysis diagram against each of the
following forces in respect of J’s decision to invest in wind-based electricity generation.

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 Select Restraining force
or Driving force?
New CEO
Planning applications for wind powered generators
J's customers
Local residents in the north of country Z
New planning laws

Restraining force Driving force

Question 4

XYZ’s current shareholders are:

% of number
share of Motive for investing
Shareholders capital investors
A XYZ employees 10 4,993 Part of remuneration
B XYZ directors 60 6 Part of remuneration
C RBZ : private equity fund 27 1 Seeks short-term profit
D Private investors 3 15,000 Many and varied

RBZ seeks short-term profit but is not interested in business decisions that the directors
make, providing that satisfactory financial results are achieved. No private investors take
any active voice or opinion when the board of XYZ make strategic decisions.
Categorise the above stakeholders (A to D) using Mendelow's matrix, according to their
more likely level of power and interest as a shareholder of XYZ?

Level of interest
Low High
Level of power
High Low

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Question 5

A new CEO of F Bank has been appointed to transform its financial performance
since the financial crisis almost forced it into liquidation as well as its existing ‘dirty’
culture within F Bank which has led to recent public scandals such as mis-selling of
pensions and insurance products and involvement with other rivals to ‘fix interest
rates’. Public
confidence in the F brand is at an all time low and profitability even lower due to
its recent fines announced by the industry regulators.

The new CEO through a webcam speech to all F Bank employees announced that urgent
change needs to occur or otherwise management and staff could be at risk of job cuts. He
announced ‘I will not appoint teams or change leaders, but personally handle the
transformational changes required within F Bank, there will be no powerful message, no
slogans’. The new CEO did acknowledge management and staff for the changes made to
date in terms of moving towards a less ‘sales pushy’ culture which he agreed was
the right image for F Bank. For these very important initiatives developed by staff the
CEO announced a small bonus to be paid to all management and staff immediately for
‘all their hard work’ so far. The CEO stated that such an important initiative will become
part of F Banks recruitment, induction, training and development plans in future.

The CEO will be announcing further changes by the end of the month, many staff feel
unhappy about the uncertainty created by this announcement and feel ‘side lined’ and
not listened to by the CEO. According to Kotter’s eight step changes management
model which of the following steps of change leadership has the CEO more likely dealt
with already? Select ALL that apply.

Create a Vision for Change

Communicate the Vision
Remove Obstacles
Create Short-Term Wins
Create Urgency
Form a Powerful Coalition
Anchor the Changes in Corporate Culture

Question 6

Which of the following would be more likely considered ‘indirect’ triggers for change for
‘X’, an organisation which sells clothing within high street stores? Select ALL that apply.

Clothing ranges sold by X are becoming unfashionable with its shoppers

Intense competitive rivalry between X and other high street clothing
retailers Rivals are exploiting website sales of clothing as X does not offer a
website Relaxing of government regulations concerning store opening times
New entrants launching new brands and ranges of clothing
Recession which is dampening high street sales of clothing

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Question 7

Beer and Nohria gave two approaches for managing change which of the
following would be more likely the characteristics of Theory E?

Participative and democratic management style

Reward for achievement based on financial
incentives Creates a culture of readiness for change
Shareholder value is the only legitimate concern
Ignores the feelings and attitudes of staff
Stakeholder or pluralistic approach for driving change
Builds greater staff resistance to change
Consults with staff to develop capabilities

Question 8

LMS is an energy producing company that at present operates solely gas-fired power
stations. A Chartered Global Management Accountant working for LMS was asked to
evaluate whether LMS should invest in a business to generate electricity by
nuclear fission technology.

The CGMA wrote the following response:

'According to Ansoff's matrix this is an example of market development by our company.

Using the SAF framework of Johnson, Scholes and Whittington the investment is Suitable
because we have all the core competences needed for generating electricity by nuclear
fission technology. It will be Acceptable to investors because they have shown a
willingness to invest in energy generation and are accustomed to risk and long payback
investments. It will be Feasible because regulatory authorities will recognise that
LMS has a good safety record.'

Which of the following best describes the response from the CGMA?

A. EXCELLENT: A correct evaluation has been provided based on a sound

understanding of Ansoff's Matrix and SAF analysis, and it has applied
both correctly.
B. GOOD: Appropriate evaluation using SAF and core competences but contains
some misunderstanding about Ansoff's matrix.
C. POOR: Evaluation is based on a flawed assessment of core competences and
incorrect applications of Ansoff's Matrix and SAF analysis.
D. UNACCEPTABLE: The CGMA has shown no understanding of core
competences, nor of the application of Ansoff's Matrix and SAF analysis.

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Question 9

According to the five leadership learning disciplines of Peter Senge, which discipline is
more likely to explain the ability to see complex inter-relationships within situations
and to understand the consequences of intended actions being considered?

A. Shared Vision
B. Mental Models
C. Personal Mastery
D. Team Learning
E. Systems Thinking

Question 10

The table below contains four missing steps from Kotter’s eight step model for managing
change. Complete the table below by placing in order from the earliest stage to the
last stage within the table, from the answers given below the table? You are to use
each answer below the table only once.

Step
1
2 Form a guiding coalition
3
4 Communicate the vision
5
6 Plan for and create short-term wins
7
8 Institutionalize new approaches

A B C D
Empower others Consolidate Establish a sense of Create a vision
to act improvements urgency

Question 11

Complete the following statement relating to the CIMA definition of business

strategy? A including the specification of

required, to achieve a specific .

Use the list below to complete the statement above:

course of action purpose

plan objective
creation control
action resources
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Question 12

SHR operates hotels in many cities of the world. Before the invention of social
media SHR tended to ignore the complaints of individual guests. Today SHR's
management is aware that social media provides a way for individual guests to
record and publish positive and negative comments about their stay at an SHR hotel.

Which of the following statements best describes the impact of social media on
the stakeholder categorisation of SHR's individual customers?

A. Customers have shifted from minimal effort to key players

B. Customers have shifted from keep satisfied to key players
C. Customers have shifted from minimal effort to keep informed
D. Customers have shifted from minimal effort to keep satisfied

Question 13

Kotler outlined four levels of competition, based on the degree of product

substitutability. Which level of competition would more likely categorise two car
manufacturers which both specialise in hand built sports cars?

A. Brand competition
B. Industry competition
C. Market competition
D. Generic competition

Question 14

Four types of information are given below. Complete the table by matching each type of
information to how the balanced scorecard translates objectives into actions
for management and staff? You are to use each answer below the table only once.

$5,000,000
Manage costs and increase capacity
Increase shareholder value
Operating income

A B C D
Initiative Objective Measure Target

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Question 15

Knowledge management strategies require the organisation to set up arrangements

to ensure the Creation, Capture, Storage, Availability (or Dissemination), and Utilisation
of the organisation’s information, knowledge and experience.

Place the tools of knowledge management next to the requirements that they best support.
Knowledge Management Requirement Organisational Tool
Creation of knowledge
Capture of knowledge
Storage of knowledge
Availability (dissemination) of knowledge
Utilisation of knowledge

A B C D E
Creation of Database Staff Intranet & Technological
sharing culture structure development Extranet infrastructure
and training

Question 16

SO retails gaming software for consoles and has a popular website receiving thousands
of hits every day, it allows other organisations including some of its rivals, to provide
their own marketing material on SO’s website free of charge. SO allows other
organisations to do this because it enhances its own website and drives more traffic to
the site which in turn creates more sales for SO. Which ONE of the following is SO
more likely to be using?

A. Mash-ups
B. Competence syndication
C. Web Syndication
D. Software as a service
E. Social Networking

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Question 17

Which of the following would be more likely the merits of outsourcing the
finance function within a group?

Group internal economies of scale

Greater financial flexibility
Better communication because of less remoteness
Management can focus on its core competencies
Less likelihood of any cultural or language issues
Closer to the division when operating as a business partner
Reduces complexity of internal management

Question 18

Kotter and Schlesinger’s contingency approach to change identified a number of change

management strategies along with the contexts within which they could be most
successfully applied.

Match each change strategy with its favourable context by placing the change strategy
beside its most favourable context.

Change strategies Favourable contexts where

there is a lack of information/analysis
initiators lack information to change & others have power to resist
people resist because of adjustment problems
someone or some group will lose out and where that group has
power to resist
other tactics fail or are too expensive
speed is essential & initiators have high power

A
B C
Education &
Facilitation & support Manipulation and co-option
communication
F
D E
Explicit and implicit
Participation & involvement Negotiation & agreement
coercion

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Question 19

Which ONE of the following statements would be more likely true when undertaking
an environmental analysis?

A. Macro environmental factors are more close to the organisation than

micro factors.
B. The organisation has a high degree of influence over factors within its macro
environment.
C. Organisations need to consider both the micro and macro environment before any
business strategies are considered.
D. The organisation has little or no influence over factors within its micro
environment.

Question 20

EAV is a retailer of electrical equipment. Its management sets targets for store
managers to motivate them to achieve results in line with the competitive goals of EAV.

For each critical success factor place one target and one KPI next to each critical success
factor (CSF).

CSF KPI Target

Customer satisfaction
Growth in sales revenue

B
A
5% growth in like-for-like
Increase in sales volume
sales per year
C D
80% of shoppers return Number of customers
within 6 months returning to store

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Question 21

Some organisations may decide to establish an internal group of experts, which is then
referred to internally as a 'think tank'. A think tank is considered by many
organisations to be a useful intuitive forecasting method which places emphasis upon
the knowledge and judgement of a group of experts rather than on statistical forecasting
methods.

Which THREE of the following are features of a think

tank?

Members speculate about the future and are asked to provide subjective
probabilities about their predictions.
Members from all levels of management and expertise meet and propose answers
to an initial single question posed by a session leader.
The removal of positional authority in the group to enable free discussion to
take place.
The independence of members enables unpopular or novel ideas to be discussed.
Its group nature facilitates the sharing of knowledge and encourages a shared view.

Question 22

LETTS CONNECT (LC) is a national estate agency business selling and renting
residential properties. LC uses a standard estate agency software package to manage
customer enquiries and property viewings. LC does not have a customer database
to record customer information and the Board of LC do not view this system as
currently that critical to LC’s operations.

LC has a website on which it advertises all of its properties nationally. The website
helps generate significant sales revenue for LC. However, this website only allows
customers to view basic property details only such as photographs and floor layouts of
properties. The standard estate agency software package and the website are not currently
integrated.

The Board of LC are now considering developing an e-business strategy to enhance LC’s
reputation which would require LC to use its information systems more strategically. The
Board are proposing a range of Web 2.0 technologies to improve its website, which will
include such features as enabling potential home buyers to receive property details whilst
viewing a property and using location-based applications on their mobile phones.

LC also has an email system which allows customers to contact its offices, LC
employees frequently use e-mail to transfer files between offices and share customer
information in order to increase sales opportunities. However with the new e-
business strategy it is likely such practices would reduce amongst staff given the new
system will allow Peer to Peer networking (P2P).
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Using McFarlan's strategic grid categorise each of the IT applications within the
table below, by matching each IT application to the options (A to D) below this table?

Select options A to D
Web 2.0 technologies
Email system
Estate agency software package
Website

A B C D
Strategic Support Factory Turnaround

Question 23
French and Bell view organisational culture metaphorically as an iceberg, with
some aspects of an organisation’s culture visibly above water and the greater part
of it is submerged and invisibly beneath the water surface. Which FOUR of the
following would be categorised as the formal and visible characteristics of culture above
the water surface?

Leadership style
Goals and strategy
Structure
Values
Attitudes and beliefs
Systems and procedures
Norms of behaviour
Products and services
Stories and rituals
Staff and skills

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Question 24

B Company wants to introduce a new system within its organisation, due to the existing
system being old and outdated. However management know that this decision will be
unpopular and lead to significant resistance due to having a heavily unionised and
militant workforce. Kotter and Schlesinger gave six methods for leading change,
match the below four strategies that are being considered by management by selecting
from options A to F below the following table.

Strategy being considered by management Select option A to F

A meeting arranged between management and staff in order to
explain the reasons why the new system is required.
To arrange a meeting and find an acceptable and compromisable
solution which staff can agree to.
To bully and intimidate staff to accept the system by threatening
instant dismissal if staff do not comply with their training.
To inform staff that the new system is necessary or otherwise
their jobs could be under threat.

A B C D E F
Coercion Participation Negotiation Facilitation Communication Manipulation

Question 25

Which THREE of the following would be types of qualitative information collected

for competitor analysis?

Price comparisons
Market share
Financial returns
Efficiency levels
Vision statements
Internal procedures
Product features
Market capitalisation
Size comparisons

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Question 26

ST, UV and WX are listed entities operating in the same business sector. At 31
October
20X6, their P/E ratios were reported as follows:

ST 16⋅2
UV 12⋅7
WX 8⋅4
Which ONE of the following statements about these P/E ratios is
correct?

The P/E ratios suggest that

A. ST is regarded by the market as the riskiest of the three
entities. B. ST has the highest earnings per share of the three
entities.
C. UV represents the safest investment because its P/E lies approximately midway
between the other two.
D. WX’s share price may be relatively lower than that of ST and UV because of an
adverse effect such as a profit warning.
Question 27
According to Johnson et al, which ONE of the following strategies is more
likely effective when managing a ‘keep informed’ stakeholder?

A. Direction
B. Education and Communication
C. Intervention
D. Participation

Question 28
The following table includes a process for undertaking benchmarking but the stages
are not in the right order. Select from letters A to F below the table to complete which
stage belongs to each description within the table?

Stage (select from letter A

Description of stage
to F below)
Create objectives
Select other organisations to benchmark
Monitor improvement for expected benefits
Develop and implement initiatives
Gain senior management support
Compare and evaluate performance

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 A B C D E F
Stage 1 Stage 2 Stage 3 Stage 4 Stage 5 Stage 6

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Question 29

Which of the following statements are correct regarding the critisms of Porter’s generic
strategies model? Select ALL that apply.

A. Lack of empirical evidence to underpin the theory

B. Each strategy chosen within the model is likely to require different
resources, strengths and management styles.
C. Hard to apply to diversified or globalised companies
D. When deciding the basis of competitive strategy, consideration needs to be given
to which strategy best positions the business relative to potential rivals.
E. The term ‘strategic unit’ is not defined in the theory
F. Many businesses are highly profitable by being ‘stuck in the
middle’. G. Difficulty of a business defining its industry

Question 30

Select THREE options.

As compared with the Resource-Based Approach the Positioning Approach to strategy:

is outside-in.
is based on core competences.
ensures the organisation has a good fit with the
environment. focuses around what the organisation does
best.
assumes the future of markets is predictable.

Question 31

Which of the following are more likely the disadvantages of conglomerate

growth? Select ALL that apply.

Regulatory problems concerning competition policy

Lack of product or market knowledge
High risk strategy
Loss of synergy
Management may lose sight of core competences
Taxation complexity and complications

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Question 32

Which THREE of the following statements are normally some of the problems that an
organisation faces when applying Big Data applications?

A. Significant investment and complexity for storage and analysis of ‘unstructured’

data
B. It is unlikely to be able to enhance the value of date from social media sites
C. It lacks the business skills and capabilities to handle Big Data
D. Privacy and legal issues over data handling or information storage
E. Technological trends indicate a huge growth market globally for digital devices

Question 33

Which ONE of the following is correct about real

options?

A. Real options is the contracting of operations and responsibilities of a

specific business function or to a third-party service provider.
B. The technique of real options is more valuable when projects face a high
degree of uncertainty.
C. Real options is a valuable way for projects to be evaluated but different
project opportunities that exist are not measured.
D. When a project in mind conflicts drastically with the way an
organisation conducts itself real options would reject such projects.
E. Real options is about managing the movement of raw materials, work-in-
progress and finished goods from the point of origin to consumption.

Question 34

ABU Builders is a medium sized building company which builds residential houses
within the Northern region of Country A. There are some underlying weaknesses
in some of ABU’s activities which have led to severe cash-flow problems and
under pressure from institutional investors, the existing CEO has been asked to resign
and a new CEO has been appointed. The new CEO has an excellent reputation for
turning companies around.

Key rivals of ABU are forging ahead with new technology such as modern methods of
construction (MMC), which help significantly drive down their costs and improve quality
of house building when such techniques are applied. However the future of MMC is
questionable within the industry given this has always been socially unpopular with
house buyers generally within Country A.

In a difficult economic environment with low economic growth, the Government

of Country A has been ‘guaranteeing’ security for mortgage applications for first
time buyers as a way of helping to recover the house building recession within
Country A. The climate change agenda for ‘zero carbon’ housing development has
also forced the
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Government to increase regulation on house builders to change their internal activities
significantly. Many of ABU’s competitors have adopted new and innovative
approaches to house-building development in order to comply with such carbon
regulations.

The former CEO and existing senior management within ABU have done little regarding
tackling the issue of ‘MMC’ or the new government regulations on change. The new
CEO feels there is an internal tendency to blame external agents and forces at work for
ABU’s problems and that management have been too complacent, lacking the
entrepreneurial spirit to drive ABU forward. He feels this complacency is exacerbated by
the current role culture and inflexible functional structure within ABU.

The new CEO has asked you to provide an analysis of the ‘forces for change’ that need
to be managed as well as the ‘restraining forces’ which exist within ABU (both
internally and externally). Using the below diagram for Lewin’s force field analysis
select all eight options for restraining forces or driving forces for change below this
diagram by placing the answers correctly, you can present your answers in any order?

Ideal position Current state

Restraining Forces Driving Forces

External External
1. 1.
Internal 2.
1. 3.
2. Internal
3. 1.

A B C D
Poor attitude MMC not in line Zero carbon agenda Rivals using MMC
towards innovation with public taste
E F G H
Role culture within Higher number of Complacency of Appointment of new
ABU mortgages management CEO

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Question 35

The table below describes some characteristics about Country X. Complete the table by
selecting the most appropriate diamond factor according to Porters Diamond theory
for each of the characteristics explained below?
Select FOUR of the options from below the table.

Characteristics about Country X Factor condition

Challenging and sophisticated home market buyers put
pressure on firms to innovate faster.
University system with Country X provides an abundance of
well educated graduates which provide vital knowledge for
industry innovation.
Suppliers produce inputs that are important for efficiency and
innovation.
Intense rivalry in the home market creates pressure for firms to
innovate.

A B C D E F G
Factor Chance Demand Firm Government Related Infrastructure
conditions events condition strategy, and
s structure supporting
and rivalry industries

Question 36

Which of the following are more likely ‘motivators’ rather than ‘hygiene factors’
when referring to Herzberg’s dual factor motivation theory? Select TWO only.

Staff overtime and bonus payments

Working conditions
HR policies and procedures
Job security
Promotion
Company car benefits for management
Challenging and enjoyable work
Question 37

Which of the following statements are more likely true when referring to the
rational planning process?

Focuses on exploiting product and market opportunities

Helps integrate and coordinate complex organisations
Better for uncertain and rapidly changing environments
Frequent and gradual adjustment to strategy
Extensive use of innovation from tactical and operational level
Helps acheive transformational change
Decision making occurs as a result of political manoeuvres
Copes with the uncertain future by providing long-term plans

Question 38

Which THREE of the following are Rosabeth Moss Kanter’s ‘power skills’ of change
agents?

A. They can work independently, without the power and sanction of the
management hierarchy behind them.
B. They enjoy creative brain storming and problem solving events.
C. They are not willing to stake rewards on results nor gain satisfaction from
their success.
D. They give their people the confidence to achieve their potential.
E. They are able to develop high trust relations with high ethical standards.
F. They should possess self-confidence tempered with humility.

Question 39

Traditional management accounting focuses on providing information to assist

decisions at operational and managerial levels and to monitor performance at these levels.
Strategic management accounting provides additional information.

Which THREE of the following pieces of information would be provided by a strategic

management accounting function but NOT by a traditional management accounting
function.

Investment appraisals
Long term forecasts of market trends
Flexed budgets
Competitor prices and profit margins
Assessments of potential acquisition targets
Question 40

XFM is a charity concerned with heart disease; it is funded from voluntary

donations from private individuals and companies, as well as government grants.
XFM’s statement of aims is ‘to fund world class research into the causes of heart
disease and to develop effective treatments, improving the quality of life for
patients suffering from heart disease’.

Which ONE of the following is this statement more likely to be?

A. A critical success factor

B. A mission statement
C. A vision statement
D. An objective

Question 41

The following is what could be FOUR basic steps to help conduct competitor analysis.

 W Comparative analysis of competitors

 X Gather intelligence on each competitor
 Y Identify current and potential competitors
 Z In-depth research for each competitor

The above four stages would be best undertaken in which ONE of the following order
(earliest to the latest stage)?

A. WXYZ
B. YZWX
C. XZYW
D. YXZW

Question 42
Prem House is a national building company and has recently undertaken a strategic
review of its internal organisation and external environment. A summary of this analysis
conducted is provided below.
Select from
Summary of strategic analysis letter A to D
below
Countrywide coverage and national reputation
Higher than necessary cost base
Culture of management complacency
Housing market in decline
Possible takeover bid
Local market knowledge for procurement of good building plots

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Complete the above table by placing the correct answer within it? (select from letter A to
D below).

A B C D
Strength Weakness Opportunity Threat

Question 43

An engine manufacturer has recently changed the design of its engines in order
to integrate a Global Positioning System (GPS) locator into its engine control system. Its
immediate customer, a heavy truck manufacturer, does not see the need for this
functionality. However, the final customer, an international distribution company with a
large fleet of trucks, has expressed strong interest in the newly developed GPS locator
system.

Which of the following statements best describes the situation outlined

above?

A. Value chain management

B. Upstream supply chain management
C. Downstream supply chain management
D. Pull supply chain management

Question 44

Which of the following would NOT be likely reasons for an individual to resist
change?
Criticism
Consultation
Lack of interest
Pessimism
Anxiety
Irritation
Urgency
Insecurity

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Question 45

Four types of measure are given below for a television manufacturer. Complete the table
below by matching each measure to each of the balanced scorecard perspectives
within the table? You are to use each measure below the table only once.

Balanced scorecard perspective Measure

Customer perspective
Internal perspective
Innovation and learning perspective
Financial perspective

A B C D
Number of industrial Number of warranty Sales revenue New TV models
disputes claims growth launched

Question 46

Which of the following statements are more likely true when referring to the merits
of using top-down approaches for strategy formulation? (Choose 3 of the following
statements).

Avoids short-term behaviour

Supports dynamic and uncertain environments
Less complicated and costly for small businesses
Improves strategic control
Improves stakeholder perceptions
More creative and innovative strategies

Question 47

F Companies mission statement includes that ‘we have a social responsibility towards our
staff, customers and suppliers to maximise their welfare’. Due to F Company under
pressure from its financiers to save costs, it inevitably has to consider ways of saving
overhead and one strategy under consideration is the outsourcing of its Production
departments activities to a third party organisation. The board of F Company are
satisfied that this decision can be implemented effectively and that the outsourcer
they have chosen would be satisfactory, there is also sufficient cash-flow available to
fund this option, which would include redundant packages for some of its production
managers and staff. Some of the board members are concerned that this decision could
have a harmful effect on the quality of F Company’s products and its reputation
within its markets which is a core competence of F Company.

According to Johnson, Scholes and Whittington’s ‘SAF framework’ which of the

following would be more likely true?

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 A. The decision to outsource would be acceptable to some but not all stakeholders of
F Company; it would be feasible but not suitable.
B. The decision to outsource would be acceptable, feasible and suitable.
C. The decision to outsource would be acceptable to some but not all stakeholders of
F Company, but would be feasible and suitable.
D. The decision to outsource would be unacceptable to all stakeholders of F
Company, but would be feasible and suitable.

Question 48

Within company X, often it is the CEO that enforces his own decisions and exercises
superiority when board disagreements exist. When external disagreements exist between
the CEO and shareholders, he will often satisfy any conflict by negotiation and
compromise. Cyert and March proposed four approaches to managing
stakeholder conflict, which two of these approaches is used by the CEO?

A. Satisficing and side payments

B. Satisficing and exercise of power
C. Sequential attention and exercise of power
D. Side payments and sequential attention
Question 49

K is a manufacturer and installer of domestic kitchens. Until recently, its business model
was based on selling a standard kitchen, brand name 'Value', with a very limited
degree of customer choice, at low profit margins. K manufactures and installs 200
Value kitchens a year. The average revenue per Value kitchen is $10,000.

In 2012, K launched a new kitchen, brand name 'Lux-Style'. This kitchen is aimed at
high net-worth customers and it offers a very large degree of choice for the customer
and the use of the highest standards of materials and appliances. A 'Lux-Style' kitchen
retails for an average price of $100,000. Currently, K installs an average 15 Lux-Style
kitchens each year.

In the next year, K aims to increase market share in both areas of its business.
K's business is generated from repeat orders, word of mouth recommendations and
local press advertising.

Select TWO critical success factors (CSF's) for K which would assist in it achieving its
business aim:

Market share growth

Brand performance
Quality of manufacturing
Customer satisfaction levels

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Question 50

AC is a turkey manufacturer which makes a range of frozen ready-made turkey meals.

Which of the following applications of technology could be included within AC’s
strategy to manage its upstream supply chain? Select all that apply.

Data warehousing and mining of supermarkets which retail AC’s frozen products
Electronic data interchange (EDI) with supermarkets that retail AC’s
frozen products
Electronic data interchange (EDI) with national frozen and fresh
turkey wholesalers which sell AC’s frozen products
Web 2.0 tools to develop long-term relationships with consumers of AC’s
frozen products
Enterprise-wide (ERP) systems within AC
E-procurement with poultry farmers which supply raw meats for AC’s turkeys

Question 51

Which FOUR of the following are more likely the critisms of using multi-
dimensional models?

A. There is often conflict between measures selected

B. The selection of measures is subjective
C. Measures may not cover all aspects of organisational performance
D. Focuses on future not existing performance
E. Often no clear correlation with shareholder value
F. Empirical evidence suggests they are ineffective for increasing performance
G. Increases costs of controlling the organisation

Question 52

Which of the following statements is true regarding a value shop? Select ALL that apply.

A. The value shop is an alternative representation of value chain analysis.

B. The value shop model has the same primary activities as the value chain but the
support activities are described differently.
C. A value shop is anything that can be added to a product or service that will
increase its value to consumers and help differentiate a product.
D. A value shop creates value by mobilising resources and deploying them for to
solve specific problems.
E. A value shop is based on a process view of an organisation.

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Question 53

Four types of information are given below. Complete the table by matching each type of
information to how the balanced scorecard translates objectives into actions
for management and staff? You are to use each answer below the table only once.

To replace all PC’s every two years

To modernise and upgrade IT systems
Regular policies introduced to identify old equipment
Personal computers replaced every 2 years

A B C D
Initiative Objective Measure Target

Question 54

According to Kurt Lewin’s three stage approach as a process for managing change, which
FOUR of the following activities would be most likely related to the unfreezing stage?

Creating a sense of urgency

Confronting misconceptions
Reward given to ‘conformists’
Announcement of change
New objectives and timescales
Strong leadership or role models to reaffirm values
Consultation
Participation and involvement

Question 55

DRE sells, installs and maintains office photocopiers. It has noticed that more of
its clients are complaining of more frequent breakdowns in their machines which, due to
a shortage of engineers, are taking a long time to repair. Investigations have revealed
that the cause of this problem is that customers have been sold machines that are too
small for their requirements.

Which THREE activities in Porters Value Chain need to be improved at DRE?

Operations
Technology development
Human resource management
Service
Marketing and sales

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Question 56

Which of the following are NOT likely to be reasons for a firm to apply Porter’s
5- forces?

Whether it should expand capacity or not

To study factors about its country which are supportive to its industry
Whether it should or should not sell up and exit the industry
To determine whether to enter an industry or not
Whether it should reinvest within the industry
To identify what competitive strategies are needed
To identify the role of government for industry support

Question 57

Apply Neely’s 4Cs in performance measurement by matching the correct

descriptions used within the table below by selecting options A to D below this table?

Select options
A to D
Focuses on key goals that are viewed as essential
Enhance performance through correlating staff reward with key goals
Reports performance as feedback to staff
Understands the question ‘where are we now’

A B C D
Check Communicate Confirm Compel

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Question 58

HKG Company is a manufacturer and retailer of luxury products including watches,

jewellery and handbags. It has recently undertaken a corporate appraisal as part of its
annual planning cycle.

From the external and internal analysis it has identified a number of factors which
will have implications for its future strategy direction.

For each factor indicate if it is an opportunity, threat, strength or weakness, by

placing each factor into the correct position in the table.
A B C D

Excellent product Political risk in Over reliance on Global economic

design county where HKG external providers recovery
exports to of quality raw
materials

Strength Weakness

Opportunity Threat

Question 59

Which THREE of the following statements would more likely describe the merits of a
‘democratic’ or ‘consultative’ management style?

Supports environments where sub-ordinates are the experts

Consensus by sub-ordinates for decisions made can lower
resistance Selling decisions may gain more commitment from sub-
ordinates Greater involvement job enrichment for sub-ordinates
Speed and efficiency of decision making by a manager
Knowledge and experience from sub-ordinates can improve ideas
Good in times of urgency or crisis, where a quick decision needs to be made

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Question 60

Goold and Campbell identified three ‘styles of strategic management’. Match the correct
description used within the table below for each style, by selecting options A to C below
this table? ALL options must be selected.

Select options
A to C
Senior management work closely with individual business unit
managers to develop strategic plans for business units.
Senior management decentralise the development of strategic plans to
business unit managers.
Senior management provide little strategic direction to and rarely
review strategic plans of business units.

A B C
Strategic control Strategic planning Financial control

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