Cima E3 Certs4u

E3
E3 Strategic Management
Version 6.0
QUESTION NO: 1
XYZ operates a national chain of restaurants.
Which THREE of the following are external environmental drivers for XYZ?
A. Appointment of a new Marketing Director

B. Recession in XYZ's country
C. Reduced personal income of its customers due to increased personal taxation
D. A direct competitor to XYZ closes down
E. Launch of a new improved menu by XYZ
Answer: B, C, D
QUESTION NO: 2
Which of the following of Porter's Five Forces would affect the power of suppliers?
A. Economies of scale
B. A lack of differentiation
C. Similar sized competitors
D. A lack of substitutes
Answer: D
QUESTION NO: 3
Which TWO of the following are economic factors?
A. Change of government
B. Interest rates
C. Obsolescence
D. Exchange rates
E. Demographic change
Answer: B, D
QUESTION NO: 4
LMN is a medium sized Organization which has faced a number of challenges due to the recent
economic recession. In the last 3 years, its profits have fallen each year and it has made 10% of
its staff redundant during the same period. LMN has a hierarchical structure with formal lines of
communication. All of the key business decisions are made by a small senior management team,
as the senior managers believe that they have the most experience to make these decisions.
LMN has recently hired an external change agent to review its activities and to make
recommendations on what it must do to ensure its survival. Having spent several weeks talking
to staff and observing the activities and management processes of LMN, the external change
agent has made the following recommendations:
1. Reduce the management levels within LMN, as this is limiting its ability to respond
effectively to customer demands.
2. Allow some of its staff to take part in the decision making process, as much experience and
expertise is being overlooked when making key business decisions.
Which TWO of the following elements of the Cultural Web will be most affected by the change
agent's recommendations?
A. Organizational structure
B. Symbols
C. Routines and rituals
D. Power structures
Answer: A, D
QUESTION NO: 5
Which THREE of the following frameworks are used solely to evaluate the external environment
of an Organization?
A. PEST Analysis
B. Porter's Five Forces Model
C. Porter's Diamond
D. Porter's Value Chain
E. Kaplan and Norton's Balanced Scorecard
Answer: A, B, C
QUESTION NO: 6
UUU is a long established international airline. Which of the following represent Threats
to UUU's business?
Select ALL that apply.
A. A sudden increase in international terrorism.

B. A shortage of trained pilots in UUU.
C. A substantial rise in the price of oil.
D. A higher level of private car ownership.
E. Greater popularity of long-haul holidays.
Answer: A, C
QUESTION NO: 7
BBB is a manufacturer of convenience meals. Which of the following could be Weaknesses for
BBB?
A. Government health warnings about food ingredients.

B. A shortage of production capacity.
C. Outdated materials requirement planning processes.
D. A reduction in BBB's Marketing budget.
E. A rise in consumer demand for fresh food.
Answer: B, C, D
QUESTION NO: 8
In Johnson, Scholes and Whittington's model of rational strategy which of the following stages
appear?
A. Analysis
B. Choice
C. Feasibility
D. Implementation
E. Sustainability
Answer: A, B, D
QUESTION NO: 9
Which of the following did Johnson, Scholes and Whittington identify as success criteria for the
evaluation of strategic options?
A. Suitability
B. Affordability
C. Feasibility
D. Acceptability
E. Durability
Answer: A, C, D
QUESTION NO: 10
EF manufactures and sells cars in Country X. Which of the following would improve
its profitability?
A. Withdrawal of one of EF's major competitors from selling cars to motorists in Country X.
B. Introduction of legislation in Country X requiring improvements to the pay and conditions of
the workers in car factories.
C. Adoption of free trade principles by the government of Country X, resulting in the removal of
tariffs on imported cars.
D. An increase in the sales tax levied by the government of Country X on the sale of new cars.
Answer: A
QUESTION NO: 11
Organizations have a variety of stakeholders, each with differing interests and requirements. This
can lead to stakeholder conflict. This can be further complicated when individuals are members
of more than one stakeholder group and when members of one group do not share the same
principal interest.
Company FF has decided that it needs to undertake a stakeholder analysis in order to manage its
stakeholders more effectively.
Which of the following statements are valid when undertaking stakeholder analysis?
A. Establishes stakeholder interests and claims on the Organization.

B. The analysis enables priorities to be set to minimize power clashes.
C. Considers how to prevent stakeholder trouble before it starts.
D. Determines the degree of power that each group holds.
E. The analysis only focuses on quantitative matters.
Answer: A, B, D
QUESTION NO: 12
Which THREE principles are explicitly named in the CIMA Ethical Code for Management
Accountants Part A?
A. Objectivity
B. Professional Competence and Due Care
C. Integrity
D. Privacy of Information
E. Correct Personal Behavior
Answer: A, B, C
QUESTION NO: 13
D is a Project Manager. D has just left a meeting with the Executive Team of his Organization. D
is delighted that the Executive Team has given support to D's proposal to implement a
knowledge management system in the Organization.
What should be the next activity that D undertakes in this project?
A. Create a technological infrastructure of hardware and software.

B. Create database structures to store and reference knowledge.
C. Gain the commitment of senior management to the project.
D. Populate the knowledge management system with knowledge.
Answer: A
QUESTION NO: 14
Company MM is wanting to build an out of town shopping complex. This will be located near a
busy road which is surrounded by housing estates. MM has yet to obtain planning permission. It
recognizes that unless it takes action, the local residents will object to MM's plans. As the
Publicity Manager you have been asked to take over responsibility for Stakeholder Management.
Which of the following Stakeholder Management statements is NOT correct?
A. Organizations will have a variety of stakeholders each with differing attitudes to risk which
can cause conflict.
B. Pressure groups have an interest in matters of public policy, but do not want to control the
workings of government.
C. Stakeholder management is made more complicated for an Organization when individuals
belong to more than one stakeholder group.
D. In measuring the satisfaction of stakeholder interests, Organizations should only focus on
quantitative matters.
Answer: D
QUESTION NO: 15
According to Johnson, Scholes and Whittington, Suitability is an important consideration when
evaluating potential alternative investment strategies.
Which of the following is a Suitability consideration?
A. There are limited raw materials available.

B. Finances are available.
C. Current markets are not saturated.
D. Staff will be resistant to change.
Answer: C
QUESTION NO: 16
Which of the following is NOT a use of the Value Chain?
A. Give managers a deeper understanding of precisely what their Organization does.
B. Implement changes to protect key processes.
C. Identify the key processes within the business that add value to the end customer.
D. Identify the non-value added processes.
Answer: B
QUESTION NO: 17
GGG is currently undertaking a process of intuitive forecasting. A team of ten people has
been selected from all levels of management and from a range of functional departments, to take
part in the process. An initial single question of 'How do we improve future customer satisfaction
levels for GGG?' has been posed and all members of the team have been asked to present a
suggestion. No one is allowed to criticise another person's ideas. This process should give GGG
a forum for the expression and discussion of a wide range of ideas.
Which of the following intuitive forecasting techniques is GGG undertaking?
A. The Delphi technique

B. A think tank
C. Brainstorming
D. Visioning
Answer: C
QUESTION NO: 18
CCC has been given permission by the local government authority to build 500 houses and this
will be a very profitable project for CCC. An animal charity is opposed to the building of the
houses as fields where animals live will be built on. Some people living nearest to the area of the
proposed building are in favour because it will stimulate the local economy. Other people living
near the area of the proposed development are opposed to it because their view will be spoiled.
Which of the following activities should CCC undertake to resolve the stakeholders' competing
objectives?
A. CCC should focus on its stakeholders' needs in turn.

B. CCC should give the animal charity the money to establish a wildlife sanctuary.
C. CCC should conduct discussions with its stakeholders and reach an acceptable compromise.
D. CCC should conduct a PESTLE analysis.
Answer: C
QUESTION NO: 19
FFF manufactures and sells three consumer products. The Marketing Manager has enough funds
to commission an advertising campaign for only ONE of the three products.
The Marketing Manager's criterion for allocating funds for an advertising campaign is that the
product should be a "Star" according to the BCG matrix.
Which product should receive the investment?
A. Product A
B. Product B
C. Product C
D. None of the three products meet the criterion.
Answer: B
QUESTION NO: 20
GGG is a manufacturer of four different components produced in four separate facilities. The
Production Director has sufficient funds to modernise one of the facilities. GGG's decision rule
in these circumstances is that investment is permissible in either a 'Cash Cow' or a 'Star' but not a
'Dog' or a 'Problem Child?'. Which facility should be modernised?
A. Facility A produces a component with a relative market share of 1:5. Its current market
growth rate is 4.5%.
B. Facility B produces a component with a relative market share of 1:4. Its current market
growth rate is 9%.
C. Facility C produces a component with a relative market share of 3:1. Its current market
growth rate is 11%.
D. Facility D produces a component with a relative market share of 1:6. Its current market
growth rate is 10%.
Answer: C
QUESTION NO: 21
HHH intends to introduce a Balanced Scorecard to assist with its strategic policy formation and
achievement of strategic plans. Which TWO of the following stakeholders are addressed by a
Balanced Scorecard perspective?
A. Shareholders
B. National government
C. Local government
D. Managers
E. Local residents
F. Customers
Answer: A, F
QUESTION NO: 22
Which of the following is NOT included in the Information Systems Strategy (ISS) of Earl's
three levels of information strategy?
A. Division / SBU / Function based

B. Business-focused
C. Management-focused
D. Demand-orientation
Answer: C
QUESTION NO: 23
Company GGG wants to gain competitive advantage and has decided to use data mining.
Which of the following would NOT result from data mining?
A. Classification
B. Description
C. Forecasting
D. Sequences
Answer: B
QUESTION NO: 24
VWX is a successful airline with a proven record in successfully exploiting the resources it
obtains. Which of the following might create an additional Core Competence for VWX?
A. Unique rights to operate from the most popular airport serving a capital city.
B. Sufficient aircraft to operate a good timetable.
C. A market with more passengers than the existing airlines can satisfy.
D. The airline operations that operate below the level of middle management.
Answer: A
QUESTION NO: 25
FFF is considering developing a new website that will allow it to advertise and sell its high
quality jewellery products online. The Board of FFF has identified that the cost of developing
and managing a website would be relatively low. It is predicted that FFF will sell only a small
percentage of its products through the website, as most customers like the personal experience of
shopping in store.
However, research undertaken by the Marketing Director indicates that the website could be
used very successfully by FFF for online marketing and customer communication. Therefore, the
Marketing Director has suggested that FFF should develop an IT/ IS strategy to ensure a strategic
focus for its website development. However, most of FFF's Board members, who are the main
shareholders of the business, believe that developing an IT/IS strategy is unnecessary in order to
develop and manage its website.
Which of the following arguments could be made by the Marketing Director to the Board of FFF
to persuade it that an IT/ IS strategy would be appropriate in relation to the current website
development?
A. IT/ IS is expected by FFF's key stakeholders and should therefore have a strategic focus.
B. IT/ IS forms the basis of FFF's competitive advantage and therefore requires a strategic focus.
C. IT/ IS is fast moving and FFF can take advantage of new technologies as they become
available, if managed strategically.
D. IT/ IS is very expensive and without a strategic focus there is a risk of costly mistakes.
Answer: C
QUESTION NO: 26
Company PP is a large UK retail company.
In the past it has focused primarily on using financial performance measures. However, PP then
realised that this was leading to short-term decision-making on investment in easily valued assets
and under investment in assets such as employee skills and customer satisfaction, where short-
term returns are more difficult to measure.
It has therefore adopted the Balanced Scorecard approach. PP is now considering enhancing it's
approach by using Kaplan and Norton's Strategic Mapping model, as this will enable it to
establish its priorities and manage stakeholder expectations.
Which of the following statements would be regarded as improvements by using Strategic

Mapping.
A. It will help to identify and prioritise how external processes would support PP's strategies.
B. It will help PP establish the overriding objective of the Organization.
C. It will help PP to identify and clarify customer-orientated strategies that support the overall
business strategy.
D. It will help inform which strategies, in each of the Balanced Scorecard perspectives, support
improved performance.
E. It will help PP to evaluate the operational and financial performance of the business.
Answer: B, C, D
QUESTION NO: 27
A resource audit identifies the resources that are available to an Organization and seeks to start
the process of identifying competencies. By assessing the results from a resource audit,
a company can evaluate how well its resources have been utilised and the efficiency and
effectiveness of the Organization's systems.
The Ms model is used to help managers undertake a resource audit.
Which THREE categories will be included in a resource audit?
A. Management
B. Motor vehicles
C. Make-up
D. Money
E. Market research
Answer: A, C, D
QUESTION NO: 28
Using Earl's 'Three levels of IT strategy' framework, which one of the following activities would
occur as part of an Information Systems (IS) strategy?
A. Design of key performance measures for an information system.

B. Employing an IT Director to control the Organization's information system.
C. Selection of the hardware for a new Information system.
D. Evaluation of an SBU's information system to ensure that it continues to meet customer
needs.
Answer: D
QUESTION NO: 29
Kotter and Schlesinger identified six change styles. Which of the following situations would be
better managed by a Negotiation and Agreement style?
A. Where the proposed change will disadvantage a powerful group of employees.

B. Where management prefers to force through the change quickly and against the interests of
the staff.
C. Where management requires the detailed technical knowledge of the staff affected to design
the change.
D. Where staff are positive about the benefits from the change but do not understand what
management requires them to do.
Answer: A
QUESTION NO: 30
MMM is a multi-national company that manufactures and sells consumer durables. MMM has
recently experienced severe trading losses and its Marketing Director has decided to revise the
Marketing Strategy paying due regard to MMM's key external drivers. Which THREE of the
following are key external drivers for MMM?
A. A change in consumer age profiles in a country where MMM sells 5% of its output.
B. A modification to MMM's production processes designed to save fuel.
C. A change in MMM's domestic advertising agency.
D. A growth in Protectionist trade policies in Africa and Asia.
E. An upward trend in commodity prices.
F. A decline in the value of the Euro and the U.S. dollar.
Answer: D, E, F
QUESTION NO: 31
Johnson, Scholes and Whittington suggest that Acceptability is an important consideration when
evaluating potential alternative investment strategies.
Which of the following statements relate to Acceptability?
A. It considers the current position of the Organization.

B. It considers expected performance outcomes.
C. It considers cultural changes required.
D. It considers the extent to which risk versus return meets expectations of shareholders.
E. Acceptability should be assessed first before feasibility or suitability.
Answer: B, D
QUESTION NO: 32
Which of the following uses apply to Porter's Value Chain?
A. Gives managers a deeper understanding of precisely what their Organization does.

B. Helps assess the markets that the company currently operates in.
C. Identifies key processes that add value to the end customer.
D. Assesses improvements to management information.
E. Prioritises operations that transform the various outputs into the final product.
Answer: A, C
QUESTION NO: 33
Kaplan and Norton's model of the Balanced Scorecard contains a number of perspectives.
Which of the following are perspectives within Kaplan and Norton's model?
A. Financial
B. Learning and growth
C. Customer
D. Procurement
E. Infrastructure
Answer: A, B, C
QUESTION NO: 34
NNN is a logistics firm that contracts with online retailers (clients) to deliver parcels
containing customers' purchases, to customers' home addresses. NNN holds inventory of the
most frequently ordered products at its warehouses.
According to industry research, most clients require the contractors to deliver the customers their
purchases soon after they place their order. They are not concerned with the environmental
impact of the logistics process. They require very competitive delivery prices from their
contractors.
Customer research reveals that households dislike being asked to stay at home for an entire day
because logistics firms are unwilling to commit themselves to a precise delivery time. This
problem has led to a small number of cases of customers arriving at the warehouses of logistics
firms demanding to take their purchases away with them. Most households do not consider the
environmental policies or performance of the firms they buy from.
The logistics industry is very competitive and NNN wants to protect its existing contracts and to
win more. It needs to focus its resources on the 'things that must go right' in order for it to
succeed.
Which THREE of the following are Critical Success Factors (CSFs) for NNN?
A. Business processes that deliver to households at the promised time + or - 15 minutes.

B. A shorter average time between receipt of an instruction from its client and delivery to the
customer.
C. Warehouses in areas of lowest feasible operating cost.
D. A car park and waiting room for customers at each warehouse.
E. A comprehensive policy on emissions and Corporate Social Responsibility (CSR).
Answer: A, B, C
QUESTION NO: 35
Which of the following is NOT an external driver that leads management to adopt greater
sustainability in the activities of its business?
A. Scientific research demonstrating the adverse impacts of global warming.

B. Increased taxation of the emissions and waste created in industry supply chains.
C. Customers' concerns, following widespread adverse publicity, over the very low pay of
factory labour in manufacturing.
D. Investor pressure for higher dividends.
Answer: D
QUESTION NO: 36
PPP is a company that designs and markets attractive handsets, tablets, and laptop PCs globally.
Its brand is one of the top ten global brands. PPP uses external companies to manufacture its
products.
The recently appointed CEO of PPP presented the company's strategy to a meeting of investors
and journalists.
The CEO referred to public concerns about its past ways of doing business. He stated that PPP
was actively seeking to address concerns about exploitation of workers in the factories of its
suppliers. He said that PPP is also establishing a system to recycle or refurbish its products to
avoid hazardous materials leaking into the environment and to give recycled products free of
charge to people in poorer countries who cannot afford to buy them.
One investor asked the CEO to confirm whether this strategy would improve the profits of PPP
in the present financial year. The CEO replied that it would not but that the strategy was essential
to protect the future of the PPP brand. The investor was unhappy with this response from the
CEO of PPP.
Which of the following statements reflects BOTH the CEO's and investor's stances on Corporate
Social Responsibility (CSR) expressed at the meeting?
A. The CEO is taking a long-term shareholder interest stance. The investor is taking a short-term
shareholder interest stance.
B. The CEO is taking a multiple stakeholder stance. The investor is taking a longer-term
shareholder interest stance.
C. The CEO is taking multiple stakeholder obligation stance. The investor is taking a multiple
stakeholder obligation stance.
D. The CEO is taking a shaper of society stance. The investor is taking a longer-term shareholder
interest stance.
Answer: A
QUESTION NO: 37
LMN sells fashion clothing at competitive prices through its own retail stores. The clothes are
manufactured for LMN by contractors in other countries.
In the past 4 years LMN has progressively lost market share to rival shops and online stores. This
has been the consequence of poor designs, poor quality, and poor customer service.
In the past 3 years LMN tried to respond to this declining market share in several ways:
• Used e-sourcing to increase the number of suppliers LMN uses in order to obtain a larger
choice of designs.
• Used e-procurement to buy in greater quantities to reduce cost per item.
• Warned each supplier that LMN will use a different supplier unless prices are reduced and
better designs provided.
• Closed its own design studio to save costs, relying instead on its suppliers for designs.
• Reallocated budgets away from funding for customer research towards increased advertising.
• Avoided costs of product returns by making it difficult for customers to return items for a
refund.
• Cancelled investment in a Customer Relationship Management system (CRM) to use the
funds to finance its rising inventories.
You have been asked to suggest ways to improve the supply chain of LMN. This requires you to
make a presentation to the Board of LMN.
Which THREE of the following techniques would improve the supply chain of LMN?
A. Pull not push

B. Partnership not antagonism
C. Customer relationships not transactions
D. Websites not shops
E. Make not outsource
Answer: A, B, C
QUESTION NO: 38
JKL is a bank with a large number of personal customers.
A member of staff has reported their loss of a portable electronic storage device to his line
manager.
The portable electronic storage device contains customer account details, including secure
information such as personal login details to access personal accounts. JKL has a clear policy
that forbids staff from downloading customer data on to portable electronic storage devices.
It would be difficult for a member of the public to access the information on the device.
Which of the following would you advise JKL to do?
A. Notify all customers of the loss and advise them to monitor their accounts for unusual
transactions.
B. Wait for customers to query unusual transactions and refund any money they have lost.
C. Let the staff member explain why they downloaded data before deciding on their dismissal.
D. Retain the staff member and monitor them secretly to establish whether they are engaged in a
fraud.
Answer: A
QUESTION NO: 39
Johnson, Scholes and Whittington developed the SAF framework to explain the factors that
should be considered before pursuing a strategic option.
JJJ is a listed company that is considering launching a new product into its market.
Which of the following considerations affects the Acceptability of this new product launch?
A. The potential impact of the launch of the new product on the profitability of JJJ.
B. The availability of funds within JJJ for launching the new product.
C. The amount of production capacity JJJ will require to make the new product.
D. Whether the product is consistent with the strengths of JJJ.
Answer: A
QUESTION NO: 40
Your management team is considering using Porter's Value Chain to assist it in developing a new
competitive strategy for the business.
Which THREE of the following statements would inform your management team about Porter's
Value Chain?
A. It can help understanding of the linkages between business activities.

B. It can help identify the processes that add customer value.
C. It can help identify the processes that add costs.
D. It can help assess competitive pressures in the market.
E. It can easily import data from existing management accounts.
Answer: A, B, C
QUESTION NO: 41
University researchers want the government of Country Y to invest in the creation of a database
of information about the lives of people who have lived in the country during the past 300 years.
Population information is based on official registers of data about individual people. This data
will include the person's name, the dates they were born, the names of their parents, the names of
partners if they decide to marry, the names and dates of birth of their children and, finally, the
person's date of death and cause of death. In the past this information was recorded on paper by
hand, but today there are an increasing number of computerised databases that record this
information. This will include data about the 58 million people alive in Country Y at the
moment.
Additional data may come from government questionnaires that are circulated once every 10
years and completed by every household in Country Y all on the same day of that year.
The system is intended to help the researchers analyse demographic change but it will also be
useful to people who want to identify who their ancestors were and the links between families.
What THREE obstacles will the University researchers face in developing and implementing this
system?
A. This is a very large and expensive project for which the benefits will not be clear until it has
been implemented.
B. The data will be in many different forms and will be very hard to standardise and put into
digital form.
C. There may be resistance from members of the population to sharing this data and making it
public.
D. No database systems have been developed yet that are able to store, cross reference, search
and report on this much data.
E. The individual data does not provide a comprehensive picture of the factors the researchers
are interested in.
Answer: A, B, C
QUESTION NO: 42
LLL is considering entering Country B to sell its zero emissions car.
LLL has invested heavily in fuel cell technology for its car. It does not rely on any polluting
fuels for its energy. This means that LLL's car is the only true zero emissions car.
Research conducted in Country B for LLL has revealed the following:

• Country B's Government is concerned that all forms of pollution have risen to
dangerous levels.
• Despite being worried about pollution the Government of Country B has not yet adopted
taxation policies to encourage the use of low pollution cars.
• Drivers choosing a car continue to rank the speed and appearance of a car very much higher
than its impact on environmental pollution.
• About 2% of motorists own an electric or hybrid powered car.
• A high rate of sales tax levied on the price of new cars in Country B encourages motorists
to continue to drive older, more polluting, cars.
LLL recognises that it needs to plan its strategy for Country B over the long-term.
Which THREE of the following strategies would you advise LLL to use to build its long-term
sales in Country B?
A. Meet relevant members of the government of Country B to present the value of including
emissions from electricity generating stations in their calculation of vehicle pollution to help
reduce pollution.
B. Sponsor environmental groups in Country B to launch a campaign to take older cars off the
road by calling on government to reduce the sales tax on new cars according to its emissions.
C. Try to win the affection of motorists by donating funds to campaigns that resist attempts by
the government to impose taxes on cars, according to the pollution they generate.
D. Approach government lawyers in Country B and offer to engage them as paid consultants in
exchange for their help in drafting taxation legislation that favours zero emission cars.
E. Provide schools and colleges with pre-prepared lesson resources that teach the science behind
fuel cell technology and why it leads to zero emissions.
Answer: A, B, E
QUESTION NO: 43
Your manager is undertaking a strategic review of XYZ's activities and has asked you to explain
how a Force Field analysis would assist in the review process.
Which of the following statements would be most appropriate?
A. As part of XYZ's strategic review, identify forces facilitating the need for proposed change.
B. Identify influential senior managers who will drive through changes in XYZ's strategic
direction.
C. Provide a framework for identifying forces for and against the proposed changes within XYZ.
D. Identify forces facing XYZ's activities that may create barriers and resistance to change.
Answer: C
QUESTION NO: 44
Which of the following statements would encourage an Organization to use Scenario Planning?
A. Uncertainty in the industry is high, relative to management's ability to predict or adjust to

change.
B. Competitor's are increasingly using Scenario Planning as part of their strategy formulation
process.
C. The Organization has not previously experienced any major surprises or expensive strategic
mistakes.
D. The Organization has achieved all of its objectives and operates within a stable external
environment.
E. The Organization often experiences 'group-think', leading to a narrow view of the future.
Answer: A, B, E
QUESTION NO: 45
Which of the following is NOT one of the main principles contained within the UK Corporate
Governance Code?
A. Remuneration
B. Leadership
C. Disclosure
D. Accountability
Answer: C
QUESTION NO: 46
Which of the following structures would you recommend for the Board of Directors of a UK
public company in order to fulfill its legal responsibilities?
A. The Board of Directors should have a minimum of six directors with the Board's tasks divided
amongst them. The Board should also have a Chairman or Chairwoman who may serve as the
Chief Executive if time permits.
B. The Board should have no more than six members with clearly defined executive and non-
executive responsibilities. To make the role more efficient Chairman or Chairwoman of the
Board should also be the Chief Executive.
C. There should be no restriction placed on the minimum or maximum number of Directors. The
Directors' roles should be shared but the Chairman or Chairwoman should not act also as the
Chief Executive.
D. The Chairman or Chairwoman should not have an executive role within the company. There
should be at least two directors to carry out the Board's roles.
Answer: D
QUESTION NO: 47
Which of the following is an example of a value adding activity within the outbound
logistics aspect of an Organization's value chain?
A. Refunds offered to customers if they are dissatisfied with a purchase.

B. Promotions and discounts offered to loyal customers.
C. Delivery of customers' purchases directly to their homes.
D. Regular training provided to staff in customer care.
Answer: C
QUESTION NO: 48
TTT, a manufacturer of computer monitors, is conducting a strategic analysis. Which THREE of
the following should be classified as Threats?
A. An increase in the rate of inflation

B. A serious fire in its main factory
C. Its main competitor going out of business
D. Consumers' increased preference for tablet computers
E. A 20% increase in corporate taxation
F. A design fault means TTT must compensate customers
Answer: A, D, E
QUESTION NO: 49
You are a Management Accountant working for an Organization that includes commitments to
'sustainability' in its mission statement.
Which THREE of the following are contributions that a Management Accountant can make
to the achievement of this part of the Organization's mission statement?
A. Integrated reporting of the triple bottom line of Profits, People and Planet.
B. Measures of Organization's use of non-renewable resources and environmental emissions.
C. Project evaluations that include the externalities as well as the cash costs.
D. Ensuring the Organization adopts the lowest cost technologies and suppliers.
E. Providing financial information with all non-recurring expenditures and incomes removed.
Answer: A, B, C
QUESTION NO: 50
You are a Management Accountant working for a logistics firm that wants to build collaborative
relationships with each of its key clients.
Which of the following changes to the management accounting function would you recommend
to help the development of collaborative partnerships with a client?
A. Open book management accounting in which the client can see the profits your firm makes
from the relationship.
B. Relocation of some management accounting staff from your Organization into the offices of
the key clients.
C. Management accounting staff from your Organization should be made available to the key
clients to facilitate joint problem-solving.
D. Recruitment of management accounting staff from the key clients to improve shared
understanding.
E. Close monitoring of service level agreements to ensure your Organization provides the
minimum service specified.
Answer: A, B, C
QUESTION NO: 51
AB is a global car manufacturer. Management has agreed to spend $20 million on researching a
new type of engine that uses liquid hydrogen to power the car. It believes it is important for AB
to take a first step in developing this radical and uncertain new technology.
The $20 million will finance the research only and the program will last two years. Providing the
research is successful, after two years it would cost a further $40 million to develop a car to sell.
This development would take a further three years. Management is concerned that the
international car market may not be willing to buy hydrogen powered cars for at least six years
from now.
Which of the following options would NOT be available to AB after two years?
A. To invest a further $40 million in developing a car for sale.

B. To ignore the research findings and not commercialise any innovations.
C. To delay investment in building a hydrogen car until the market demand becomes clearer.
D. To seek to recover the $20 million it has spent because the research has yielded no
commercial benefit.
Answer: D
QUESTION NO: 52
BBB operates a national mobile phone (cell phone) network in one country. It is considering
investing in upgrading its network to 4th Generation (4G) by providing an improved bandwidth
that will enable its customers faster access to the Internet.
The investment will cost $29 million which BBB's institutional investors have agreed to provide
by subscribing to a rights issue. This is because management has informed institutional
investors that a rival is already offering 4G and that this is taking customers away from BBB
because BBB's network is now regarded as too slow. BBB'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?
A. BBB will gain a first mover advantage.

B. It provides a market development opportunity for BBB.
C. There is stakeholder approval for the investment.
D. It is essential given the strategic threats to BBB.
E. There are sufficient investment funds available.
Answer: C, D, E
QUESTION NO: 53
CIMA has described the two roles of enterprise governance as 'preventing failure' and 'ensuring
success'. CIMA sees 'preventing failure' as being related to having proper risk management and
corporate governance procedures in place. CIMA sees 'ensuring success' as being concerned with
the practise of strategic management.
Which THREE of the following responsibilities of senior management are essential to 'ensuring
success' for the Organization?
A. Providing leadership and direction to the Organization.

B. Maintaining awareness and responsiveness to abrupt change in the Organization's
environment.
C. Demonstrating competence in the execution of new initiatives.
D. Avoiding the dominance of the executive team by particular personalities.
E. Ensuring conformance with the codes of corporate governance.
Answer: A, B, C
QUESTION NO: 54
LLL is a global passenger airline that needs to invest in a new fleet of aircraft to operate on its
routes. There are several types of aircraft to choose between. The new aircraft will have an
operating life of 25 years with LLL and therefore management is keen to make the correct
decision.
There are several uncertainties that make it difficult for LLL to make this investment decision.
Aircraft engine technologies are changing and some manufacturers are developing engines that
propel aircraft at much higher speeds, whilst others are developing slower engines that minimise
emissions. Concern over global warming is leading governments in some countries to impose
heavy taxation on airlines that operate aircraft that have high emissions. The demand for air
travel is also changing due to changing income levels between emerging and mature economies
as well as the increased use of telecommunications to replace face to face meetings.
Which THREE of the following techniques would you recommend to help LLL make
this investment decision?
A. Scenario planning
B. Morphological analysis
C. Cross impact analysis
D. Porters 5 Forces
E. Brainstorming
Answer: A, B, C
QUESTION NO: 55
VWX manufactures and sells a wide range of products. All these products utilise lenses and
digital imaging technologies. VWX is considering how to manage its product portfolio.
Management is concerned about two product ranges in particular: cameras and home projectors.
VWX's cameras are Single Lens Reflex (SLR) cameras featuring interchangeable lenses and
provide detailed, high quality images of objects both at very close range and at considerable
distances. VWX has the largest share of the camera market but the market sales are falling as
people increasingly use their mobile phone handsets to take and share photographs.
VWX has a small share of the home projector market. As a consequence the range is loss
making. The home projectors are used to show photographs or films on large wall-sized formats.
There is a growing trend for customers to buy home projectors to connect to mobile phones,
tablets and games consoles to project the content into a larger image and in order to share it.
Which THREE of the following product management strategies should VWX adopt?
A. Cancel or postpone further investment spending on developing new SLR cameras.

B. Use marketing expenditure to try to make the camera brand to appeal to professional
photographers.
C. Invest in promotional campaigns to encourage people to view and share content using a VWX
home projector.
D. Invest in promotional campaigns intended to convince the general public of the superiority of
SLR camera pictures over the images from mobile phone handsets.
E. Cut promotional expenditure on home projectors to seek to restore the profitability of the
range.
Answer: A, B, C
QUESTION NO: 56
JJJ is a frozen food delivery business in Country Q. Competition is high and JJJ prices its
delivery services very competitively. JJJ has doubled its market share to 35% in the last five
years.
In order to continue to improve its competitive position in Country Q, JJJ has invested in 100
new delivery vans. These vans have been designed to increase the speed and efficiency in
loading and unloading the frozen food products. JJJ has to meet tight delivery deadlines to its
customers or penalties for late delivery are charged to JJJ by its customers. Drivers of the vans
undertake regular training.
Which of the following would be the most appropriate critical success factor within the
'Customer' perspective of a Balanced Scorecard for JJJ?
A. Price competitiveness
B. Penalties for late deliveries
C. Punctuality
D. Levels of staff training
Answer: C
QUESTION NO: 57
Rosabeth Kanter suggested that Organizations which managed change successfully ('change
adept' Organizations) share three key attributes.
Which THREE of the following are the key attributes of change adept Organizations, suggested
by Kanter?
A. Openness to collaborate
B. Tuning into the environment
C. Building coalitions
D. Imagination to innovate
E. Professionalism to perform
Answer: A, D, E
QUESTION NO: 58
The following definition has been provided by the Chartered Institute of Personnel and
Development (CIPD):
'An activity which targets high performance and improvement at work and usually focuses on
specific skills and goals, although it may also have an impact on an individual's personal
attributes (such as social interaction or confidence). The process typically lasts for a relatively
short period.'
Which of the following activities does the above definition describe?
A. Work based training

B. Coaching
C. Mentoring
D. Leadership Development
Answer: B
QUESTION NO: 59
A large sporting event is due to take place in Country P next year and a project team has been set
up to market the event. The project team recognises that a focus upon effective relationships
with a range of key customer markets is critical to the success of the event. These key
relationships need to be developed with the spectators, the broadcasting companies televising the
event, the agents who are selling the tickets for the event and the key human resource providers
such as the security companies involved in ensuring the overall security of the event.
Which of the following would be the correct classification of the broadcasting companies
televising the sporting event, using Payne's 'six markets model' classifications?
A. Influence market
B. Recruitment market
C. Referral market
D. Customer market
Answer: A
QUESTION NO: 60
ZZZ recently hired a new Chief Executive, Q, to lead it through a period of major change. Q
immediately set up a change management team which consisted of several senior managers and
directors from across the Organization. Together, they formulated an overall goal for change and
then spent several weeks presenting the need for change to all of the staff through a series of
staff meetings. At these meetings Q involved staff and built their ideas into the final change
strategy.
Q also set a series of interim goals to encourage ongoing performance throughout the change
process. When the Organization reached these goals, she widely publicised these achievements
to help motivate staff.
However, after six months, ZZZ had failed to reach most of the interim goals that had been set.
Most of the members of the change management team had not maintained a significant interest
in the change process and many of the staff felt that there had been a lack of communication and
reward following the initial few weeks of the change process.
Kotter suggested that there were eight steps required to successfully lead change.
Which TWO of the following of these eight steps did Q fail to achieve?
A. Develop a change vision

B. Empower broad based action
C. Incorporate change into the culture
D. Generate short term wins
E. Never letting up
Answer: C, E
QUESTION NO: 61
CCC is a charity which has an excellent reputation within its home country. CCC employs over
300 highly experienced staff and also has 200 skilled volunteers. Its funding mainly comes from
donations from the public but its public profile is low compared to larger, more publicised
charities.
Due to the recent recession, public donations to CCC have fallen in the last five years, but
demand for its services continues to grow.
The government of the country in which CCC operates is encouraging greater collaboration
between charities and there have been several recent successful mergers within the charity sector.
CCC has recently been approached by a high profile and well funded charity, PPP, with a
proposal to merge. PPP offers complementary services to those offered by CCC.
Which TWO of the following factors would most likely be considered as an 'opportunity' for
CCC?
A. The excellent reputation of CCC

B. Growing demand for its services
C. Merging with PPP.
D. Highly experienced staff
E. Donations from the public
Answer: B, C
QUESTION NO: 62
AAA manufactures and sells a range of travel suitcases. One model, the 'Executive' has seen
sales growth of around 3% for the last two years, following strong growth since its introduction
eight years ago. This slow down in the 'Executive' sales growth is largely due to AAA's
competitors offering products in direct competition with the 'Executive'. AAA has therefore had
to reduce its price to match those of its major competitors. AAA has also recently upgraded the
features of the 'Executive' model to include a variety of different colours and materials. It has
also launched a marketing campaign to promote the benefits of the 'Executive' model against
its competitors products.
Which stage of the product life cycle has the 'Executive' model of suitcases reached?
A. Introduction
B. Growth
C. Maturity
D. Decline
Answer: C
QUESTION NO: 63
Which of the following is NOT a key attribute of a successful stretch target?
A. Set at a level which is easily achievable.

B. Set at a level which motivates staff to perform at their highest level.
C. Staff must understand the reason for the stretch target set.
D. Encourages ethically responsible behaviour to achieve the stretch target.
Answer: A
QUESTION NO: 64
DEF is a medium sized business which manufactures children's clothing. In the last 5 years
demand has steadily increased and DEF is struggling to meet this demand within its current
manufacturing capacity. DEF's current manufacturing machinery was installed over 10 years ago
and now requires updating, if DEF is to survive in the marketplace.
DEF has established that the latest manufacturing technology would cost $2 million. This would
be funded by the shareholders. It would payback within 2 years and would allow DEF to double
output from its current level within this 2 year period. It will also improve product consistency
and quality. However, it will result in the loss of 20% of DEF's manufacturing staff, most of
whom are low paid and low skilled.
DEF is currently reviewing this proposed investment strategy, in terms of whether it meets the
criteria of Suitability, Acceptability and Feasibility.
Which of the following correctly identifies the criteria which are met, in regard to DEF's
proposed investment strategy?
A. Suitable and Acceptable

B. Suitable and Feasible
C. Acceptable and Feasible
D. Suitable, Acceptable and Feasible
Answer: D
QUESTION NO: 65
CCC is a small business which manufactures and sells bicycles. Its most popular product is the
standard road bike, brand named the 'Easy Rider'. CCC offers customers a limited degree of
choice in terms of product specification for the Easy Rider bicycle. CCC manufactures and sells
1,000 Easy Rider bicycles each year. The average retail price of an Easy Rider bicycle is $500.
As a result of the recent rise in popularity of cycling in its home country, last year CCC launched
a new bicycle, brand named the 'Pro Rider'. This bicycle is aimed at the more serious cyclists
who take part in competitions and road races. CCC offers Pro Rider customers a wide choice of
specifications and accessories and uses the highest quality of materials in its manufacturing
process. A Pro Rider bicycle retails for an average price of $6,000. In its first year, CCC sold
150 Pro Rider bicycles.
CCC's business is generated mainly from word of mouth recommendations, repeat business and
from customer visits to its small chain of shops. It aims to increase its market share
for both brands within the next 5 years. Competition is high, with a number of large national
bicycle manufacturers in the market.
Which TWO of the following are critical success factors (CSF's) for CCC?
A. Brand awareness
B. Market share growth
C. Repeat business levels
D. Manufacturing excellence
Answer: A, D
QUESTION NO: 66
Which of the following is a direct external change trigger?
A. A powerful competitor forcing an Organization to cut its prices.

B. A general increase in the use of the Internet by society.
C. The introduction of new environmental protection policies by the government.
D. An economic recession in an Organization's home country.
Answer: A
QUESTION NO: 67
JKL Plc manufactures and sells a range of consumer electronic products. it is organised into four
strategic business units (SBU's), each responsible for a specific business segment.
Which business segment would benefit most from a Build strategy?
A. Personal Computer
B. Tablet
C. Smartphone
D. Personal Music Player
Answer: C
QUESTION NO: 68
Which THREE of the following are valid reasons to follow a Corporate Social Responsibility
strategy?
A. A good Corporate Social Responsibility policy can attract customers.

B. A good Corporate Social Responsibility policy is likely to attract a higher calibre of staff.
C. A good Corporate Social Responsibility policy is likely to reduce administration costs.
D. A good Corporate Social Responsibility policy can help an Organization recruit employees to
meet a diverse skills requirement.
E. A good Corporate Social Responsibility policy will increase the company's market value.
Answer: A, B, D
QUESTION NO: 69
Company GG is considering its future strategy on delivering a long-term competitive advantage.
The Finance Director has recommended that the Board includes in the strategy a separate section
on sustainability.
Which of the following is NOT a correct sustainability statement?
A. The creation of wealth should be integrated with long-term sustainable development.

B. An advantage of sustainable development is the reduction of costs though efficiency.
C. When establishing sustainability only financial key performance indicators should
be considered.
D. Resources are used at a rate that allows them to be replaced.
Answer: C
QUESTION NO: 70
Which THREE of the following statements are correct in relation to the use of the Performance
Pyramid?
A. One of the aspects of the pyramid is Stakeholders.

B. It derives from the idea that an Organization operates at different levels.
C. The productivity aspect refers to the management of output at the business operating systems
level of the Organization.
D. It highlights the links running between the company's corporate vision and its functional
objectives.
E. The pyramid includes a specific cost aspect which considers the cost figures in the
management accounts.
Answer: B, C, D
QUESTION NO: 71
The Management Accountant in company PP has been asked by the Finance Director to produce
a paper on "Game Theory" for the next Board meeting.
Which of the following is a valid statement?
A. Game Theory treats strategy as an interaction between the Organization and its customers.
B. Game Theory suggests that Organizations should not interact with the external environment.
C. Game Theory studies the strategic interactions among rational players.
D. The information culture would be a key consideration to study as part of the Game Theory.
Answer: C
QUESTION NO: 72
A leading supermarket chain is undertaking environmental scanning as it is concerned that it is
becoming uncompetitive and profits have started to fall. The Board is concerned that when the
next Annual General Meeting is held, it will need to have a viable strategy to present
to its shareholders, in order to prevent shareholders' protests.
In the past the company has been reluctant to offer an Internet shopping service. However, it
now believes that by offering this service and also introducing customer relationship marketing
(CRM) this will produce a strategy that will help it to improve its competitiveness.
Which of the following statements apply to CRM?
A. CRM utilises marketing resources to retain, rather than simply attract new customers.
B. The company must be prepared to take customers' needs into account and be able to meet
these needs.
C. In mature markets, existing customers provide the most likely source of future earnings.
D. CRM is about marketing to customers to obtain their loyalty, so customer research is not
needed.
E. The CRM process needs to include increasing the range of products that will be offered to
customers.
Answer: A, B, C
QUESTION NO: 73
Company AA has decided that it needs to improve its strategic decision-making process and is
considering implementing Scenario Planning.
The Management Accountant has been requested to investigate this further and also to consider
how the company can use scenarios to formulate a competitive strategy.
Which of the following statements are CORRECT?
A. A company taking a flexible scenario approach plays a 'wait and see' game. It is a safe
strategy but sacrifices first mover advantages.
B. When undertaking Scenario Planning the company will need to identify the key areas of
certainty and their drivers.
C. Scenario Planning forces management to look externally at the wider business environment
rather than focusing internally.
D. A company which designs a strategy based on the scenario most attractive to the firm is using
a 'hedge' approach.
E. Scenario Planning helps a company to identify and cope with the key uncertainties to which it
will be exposed.
Answer: A, C, E
QUESTION NO: 74
The Board of a supermarket chain has decided that to compete more effectively against its
competitors, it needs to change its strategy and pursue a differentiation-focus strategy. The
Board's aim is to pursue differentiation to attract customers who have a higher disposable income
and want to buy luxury food and other goods.
Which statements are valid for this differentiation-focus strategy?
A. Using this strategy, the company will have the opportunity to promote goods that have
previously underperformed.
B. Brand loyalty underpinning this strategy may fail if the cost differential between the price the
company charges and that charged by its other competitors is too great.
C. The company will have to ensure that the food and other goods it supplies are of the best
quality.
D. In a differentiation-focus strategy, there is no need to exploit other activities in the value chain
if they are not visible to the customer.
E. If this strategy is adopted, the company should aim to offer better value than its competitors.
Answer: A, B, C
QUESTION NO: 75
An insurer, JJJ, uses its Internet capabilities to promote and sell car and home insurance
products. Although JJJ is supported by an 'in-house' call centre located in its home country, it has
decided to outsource this activity to an overseas call centre.
There are a number of benefits to the company by undertaking this strategy, including that it can
charge more competitive premiums to its customers and also increase its profits. However this
change will mean that 75 call centre staff in the home country will be made redundant.
You have been appointed as the Change Leader and have been asked to prepare a report that
includes details on how this change can be communicated.
Which THREE of the following statements are valid regarding JJJ's proposed changes and the
related staff communications?
A. When undertaking change, communication is of great importance.

B. The Change Leader should keep staff informed but should only communicate information
when all the detail has been finalised.
C. It is important that the Change Leader selects a communication channel which is appropriate
to the message being delivered and its target audience.
D. Momentum for change can be created by putting simple but highly visible improvements in
place.
E. A disadvantage of adaptive change is that it increases the level of resistance that a company
can encounter when trying to implement change.
Answer: A, C, D
QUESTION NO: 76
Which of the following is NOT a fundamental principle specified in CIMA's Code of Ethics?
A. Integrity
B. Objectivity
C. Confidentiality
D. Sustainability
Answer: D
QUESTION NO: 77
DDD has just issued a profit forecast in connection with a proposed take-over of a business. The
take-over is strongly opposed by the target company. DDD's Management Accountant played a
large part in helping DDD's Finance Director prepare the profit forecast. However, the
Management Accountant believes that the profit forecast is overly optimistic and is based on
some false assumptions. As a result the Management Accountant thinks the profit forecast is
misleading. Select THREE of the actions below which are consistent with CIMA's Code of
Ethics.
A. The Management Accountant should follow established internal procedures.

B. The Management Accountant should obtain advice from his professional body/bodies.
C. The Management Accountant should resign from his job.
D. The Management Accountant should maintain a discreet silence.
E. The Management Accountant should anonymously inform the media of his concerns.
F. The Management Accountant should publicly accuse the Finance Director of issuing a
misleading profit forecast.
Answer: A, B, C
QUESTION NO: 78
'Big Data' is defined as 'Data sets so large and complex that it becomes difficult to process using
traditional data processing applications'. Which of the following is NOT a stage in the use of Big
Data?
A. Capture
B. Storage
C. Analysis
D. Sharing
Answer: D
QUESTION NO: 79
CCC is a local authority based in Country M. A local authority (LA) is a public sector
Organization which has administrative responsibilities within a geographical area and is
responsible for the provision of a range of public services within its area including schools,
leisure, policing and housing.
The majority of CCC's income comes from central Government funding. In the last four years,
the global economic downturn has resulted in the central Government of Country M having to
drastically cut its funding to all LAs. Six months ago, CCC appointed a new Chief
Executive who, since his arrival, has attempted to make a number of changes to the
Organizational culture and structure of CCC. He has stated that these changes are essential if
CCC is to continue to operate effectively within the current economic environment. The
Government of Country M has recently announced that all LA's must reduce their overall
expenditure from current levels by 15% within the next year.
Which of the following types of change is CCC experiencing?
A. Evolution
B. Revolution
C. Adaptation
D. Reconstruction
Answer: B
QUESTION NO: 80
T is a management consultant. He was recently contracted by company XYZ to act as an
external Change Agent in a program of change being undertaken. T's first task was to assist XYZ
in clearly defining the outcomes of the change program and ensure that these were achievable. T
also set up a number of change teams and led several workshops and team building exercises.
Many of XYZ's staff were resistant to the change program. Therefore, T had to ensure that he
created an appropriate vision for the change and was able to resolve any conflict which occurred
during the change program.
Which THREE of the following are the key skills of a Change Agent demonstrated by T?
A. Goal Setting
B. Negotiation skills
C. Independence
D. Role Setting
E. Managing up
Answer: A, B, D
QUESTION NO: 81
PQR is a software design company. The Board of PQR has always openly encouraged
partnerships with a wide range of designers and other Organizations in its industry,
to continually develop and enhance the services it offers and to utilise the expertise and
knowledge of a range of individuals and Organizations. PQR's staff have also been highly
creative and innovative in the design services they provide. PQR regularly analyses and keeps
up to date with changes in the environment in which it operates. PQR operates a sophisticated
website to promote its services and keep in touch with its service users.
Which TWO of the following attributes of a change adept Organization, as defined by Kanter,
has PQR demonstrated?
A. Environmental awareness
B. Openness to collaborate
C. Sophisticated systems
D. Imagination to innovate
E. Continual service development
Answer: B, D
QUESTION NO: 82
Which of the following statements are consistent with an effective strategic approach to supply
chain management within a manufacturing Organization?
A. Identifying new opportunities for close liaison with an Organization's key suppliers and key
customers, supported through the effective use of IT.
B. Anticipating and responding to the increasing legal, consumer and ethical demands being
made on an Organization's supply chain.
C. Effective supply chain management plays an important role in contributing to the
Organization's overall success.
D. A senior member of the management team has oversight and responsibility for supply chain
activities within the business.
E. Recognising product liability is easily transferred from the manufacturer to the retailer.
F. Industry consolidation has no impact on an Organization's position within its supply chain.
Answer: A, B, C, D
QUESTION NO: 83
A fresh-food packaging manufacturer has recently changed the design of its packaging in order
to reduce the amount of non-recyclable material. Its immediate customer, a large fresh-food
wholesaler, does not see the need for this re-design as it believes that it will adversely affect the
storage of the fresh food. However, the final customer, a large supermaket chain, has expressed
strong interest in the new packaging design, as the supermarket chain has strict Corporate Social
Responsibility targets to achieve.
Which of the following statements most appropriately describes the situation outlined above,
from the perspective of the fresh-food packaging manufacturer?
A. Value Chain management

B. Upstream supply chain management
C. Downstream supply chain management
D. Pull supply chain management
Answer: C
QUESTION NO: 84
A grocery store has analysed its recent sales and identified that customers who purchased fresh
strawberries also purchased ice cream at the same time in 65% of transactions.
Which of the following best describes the results identified in the analysis carried out by the
grocery store?
A. Sequencing
B. Association
C. Clustering
D. Classification
Answer: B
QUESTION NO: 85
As a CIMA qualified Management Accountant working within a manufacturing company, you
are subject to both CIMA's Code of Ethics and your company's Code of Business Conduct.
Which of the following statements are TRUE?

A. Where there is a difference between CIMA's Code of Ethics and the company's Code of
Business Conduct, CIMA's Code of Ethics takes priority.
B. Both CIMA's Code of Ethics and the company's Code of Business Conduct include references
to Confidentiality. Disclosure on public interest grounds is therefore prohibited.
C. Both CIMA's Code of Ethics and the company's Code of Business Conduct must be based on
a set of basic principles.
D. Where there is a difference between CIMA's Code of Ethics and the company's Code of
Business Conduct, the company's Code of Business Conduct takes priority.
E. As a CIMA qualified Management Accountant you must follow CIMA's Code of Ethics.
F. A company's Code of Business Conduct can be rules based.
Answer: E, F
QUESTION NO: 86
BBB is a global manufacturer of organic fertilizers, used by farmers all over the world to
improve resistance to disease and to increase crop yield. BBB uses data from past crop yield
results, international weather prediction data and predictive models relating to population growth
and movement statistics to identify and predict the fertilizers it will need to produce for its
customers many years in advance.
Which of the following best describes the activities outlined above?
A. Big Data analysis

B. Data Mining
C. Knowledge Management
D. Data Warehousing
Answer: A
QUESTION NO: 87
Which THREE of the following are classified as business operating systems measures within the
Performance Pyramid?
A. Flexibility
B. Customer satisfaction
C. Quality
D. Productivity
E. Cycle time
Answer: A, B, D
QUESTION NO: 88
LLL is a travel company which has experienced rapid organic growth. It has three divisions and
each division is led by a Divisional Director. Each Divisional Director is responsible for their
own divisions' investment in Information Technology (IT). However, as LLL has grown, so has
its information requirements.
Recently, LLL appointed an IT Manager. She discovered that within LLL's divisions,
there are very different standards for IT, resulting in different hardware and software used in
the three divisions. Also, the divisions do not use common software packages which
causes difficulties in transferring information within LLL. LLL does not have a central IT
department.
Which of the following activities would be the primary focus of an Information Systems (IS)
Strategy for LLL?
A. Identification of the information needs of LLL's customers and key stakeholders.

B. Identification of management responsibilities and processes within LLL.
C. Identification of what information is needed by LLL to enable it to achieve its overall
business strategy.
D. Identification of the hardware and software required to manage all of the information within
LLL.
Answer: C
QUESTION NO: 89
HHH is about to undergo a period of significant change. HHH intends to draw upon the model
suggested by Beer and Nohria, concerning 'Theory E' and 'Theory O'. In which
circumstances should HHH use 'Theory O' strategies?
A. Change which will involve cultural adjustments.

B. Change where there is a desire to involve employees in the process.
C. Change which involves feedback and reflection.
D. Change where shareholder value is the main consideration.
E. Change which will involve downsizing and restructuring.
F. Change which will involve key stakeholders.
Answer: A, B, C
QUESTION NO: 90
Company RR operates in the finance sector. It is experiencing increasing delays in approving
loan applications, due to customers not promptly returning their signed copy of the application
forms back to RR.
RR is now wanting to introduce e-signatures which allow customers to sign the document on
their computer and return it back to RR through the Internet. This change will help to simplify
the process and ensure that customers obtain their loans quicker.
To achieve this change, RR has established a project and has appointed you as the Project Leader
to lead the change.
Select the THREE valid statements in respect of leading change.
A. Managing change is a process of facilitating internal and external conflict resolution.

B. A Change Agent is an individual or group that helps to bring strategic change to an
Organization.
C. Transactional leaders focus on systems and controls and tend to seek improvement rather than
change.
D. A change leader using the Change Approach will focus on procedures, control measures and
monitoring performance.
E. An Affiliative leadership style is one where the change leader consistently asks the team for
more.
Answer: A, B, C
QUESTION NO: 91
JJJ is about to undergo a period of rapid and far-reaching change. JJJ's Chief Executive has heard
about work published by Beer and Nohria, 'Theory E' and 'Theory O', which identified reasons
for business change initiatives failing. Select THREE of the following circumstances where it
would be appropriate to use a 'Theory E' approach.
A. Shareholder value is the main concern.
B. The Chief Executive is going to use a 'Top-down' approach.
C. The change will be large and knowledge-driven.
D. The change will be small and process-driven.
E. The change is emergent and participative.
F. The change is a response to new legislation.
Answer: A, B, C
QUESTION NO: 92
McKinsey's '7-S' model can provide companies with a useful insight into some of the issues
experienced as part of a change initiative within a company.
Which THREE of the following are identified as SOFT elements within McKinsey's '7-S' model?
A. Strategy
B. Style
C. Sentiment
D. Staff
E. Skills
F. Sustainability
Answer: B, D, E
QUESTION NO: 93
As a qualified Management Accountant you have been asked by a non-financial manager to
explain the CEO's recent comments, featured in the CEO's regular update to investors and
analysts.
The CEO's update suggested the company, an established property development business, was
about to pursue an exciting strategy. The strategy is to focus on conglomerate diversification, to
be achieved through a number of pre-identified acquisitions, with the aim of significantly
increasing shareholder value.
Which of the following statements is consistent with the concept of conglomerate

diversification?
A. A strategy involving business expansion within a company's present industry. For this
company, an example would be the acquisition of another property development business.
B. A structure involving a collection of unrelated businesses. For this company, acquisitions may
include a variety of companies such as financial services and food retailing, all sharing
operational relationships such as finance, sales and marketing.
C. A portfolio of unrelated businesses such as financial services, food retailing and property
development, all sharing identity and risk, including group logo, corporate uniforms and risk
management systems.
D. A portfolio of businesses involved in unrelated activities such as financial services, food
retailing and property development, sharing nothing but a parent company.
Answer: D
QUESTION NO: 94
A company runs a distribution warehouse. Its information systems constantly monitors
inventory levels, with automatic re-order processing occuring with suppliers
when inventory items reach a specified level. It operates a robotics system which automatically
picks inventory from its location in the warehouse and delivers it to the pick-up area. The
company also has a large database of customer information which it uses to analyse buying
behaviour and sales trends so that it can provide customers with relevant and targeted marketing
information.
Which THREE of the following activities of the Value Chain have been affected by the use of
IT/ IS?
A. Inbound Logistics
B. Operations
C. Outbound logistics
D. Sales and Marketing
E. Services
Answer: A, B, D
QUESTION NO: 95
F is an entrepreneur who runs a chain of health food shops in Country M. There are no other
similar health food shops operating in Country M and the chain has rapidly grown over the
last three years. F wishes to continue to grow his chain of shops but is aware that he lacks the
funds to enable him to grow at the pace which the market is demanding. He is also concerned
that continued rapid growth will result in him losing control over the strong brand reputation and
identity that he has built up for the chain of shops.
Which of the following would be the most feasible strategy for F to adopt to continue to grow his
business?
A. Acquisition
B. Joint venture
C. Franchising
D. Licensing
Answer: C
QUESTION NO: 96
Coaching and Mentoring essentially involves a conversation where learning takes place through
asking the right questions rather than providing answers. Consequently, Coaching and
Mentoring can lead to both personal and professional transformation.
There have been many attempts to distinguish between Coaching and Mentoring, but it is widely
acknowledged that the same skills and models are often used in both.
You have been asked to prepare a short briefing note on the Coaching and Mentoring of the
Executive Management Team within your company. Which of the following statements highlight
the similarities between Coaching and Mentoring?
A. Both require the ability to generate trust, support and commitment.

B. Both extend the learning curve.
C. Both provide support without removing responsibility.
D. Both do not require Organizational know-how or awareness.
E. Both encourage the individual to stay within their comfort zone.
F. Both can function as a career guide to review career goals.
Answer: A, C, F
QUESTION NO: 97
Which THREE statements about scenario planning are correct?
A. It tells management what will happen so they are able to plan for it.
B. It tells management what needs to be done to make the Organization successful in the future.
C. It encourages creative thinking by the participants.
D. It alerts management to the possibility of fundamental change in the environment.
E. It encourages management to communicate their personal knowledge of trends.
Answer: C, D, E
QUESTION NO: 98
PPP is a state owned national railway operator. It has many divisions, each focusing on specific
areas of the country.
PPP's mission statement is 'to provide a safe, punctual and reliable public transport service at
lowest cost to its passengers and the government'.
Which THREE of the following divisional performance measures should PPP adopt?
A. Return on investment (ROI)

B. Level of carbon emissions
C. Percentage of trains arriving within 2 minutes of scheduled time
D. Cost per passenger mile
E. Number of accidents or near misses each month
Answer: C, D, E
QUESTION NO: 99
Organizations require resources to undertake a strategy and these can include physical, human,
financial and intangible resources. However, alone they will not ensure Organizational success.
For that, resources must be combined together to create competences.
The competences which form the basis of competitive advantage are things that an Organization
is able to do and are very difficult for competitors to copy.
Which of the following describes this?
A. Threshold competences
B. Strategic competences
C. Core competences
D. Basic competences
Answer: C
QUESTION NO: 100

SSS is a large department store. It operates a chain of stores throughout Country Z. It offers a
wide range of products, from cosmetics through to home furnishings.
SSS's Value Chain is presented below.
Which of the following generic strategies is being undertaken by SSS?
A. Cost Leadership
B. Differentiation
C. Differentiation Focus
D. Stuck in the middle
Answer: B
QUESTION NO: 101

EFG is a private hospital. It specialises in state-of-the-art laser surgery, an area which has
developed rapidly in the last 10 years. Most of the staff of EFG are used to change, as
developments in technology, new surgical techniques and customer demands have changed
rapidly during this time. However, in the last three years the economic recession has had a
significant impact upon EFG, with the numbers of private customers reducing and its profits
falling sharply.
The Board of Directors has recently announced that it is to restructure the Organization and
rationalise some of the services it offers. A small number of staff will be made redundant and
those remaining will have to take on extra responsibilities with no extra pay. Also, the current
generous overtime payments are to be drastically cut. Many staff have expressed concern at the
impact that these changes will have on them.
The Board of Directors has clearly communicated the economic reasons for change to the staff
through several meetings and are operating an open door policy, whereby staff can discuss the
changes with their line managers at any time.
Which of the following, according to Kotter and Schlesinger, is the MOST likely reason for
resistance among EFG's staff?
A. Parochial self interest

B. Misunderstanding
C. Low tolerance to change
D. Different assessments of the situation
Answer: A
QUESTION NO: 102

'Change-adept' Organizations are those that manage change successfully. Moss-Kanter identified
skills required by Organizational leaders which are necessary to lead 'change-adept'
Organizations.
Your Organization is undergoing significant change and the appointment of a new CEO is
imminent. You have been asked to recommend the key skills for assessing the shortlist of CEO
candidates against.
Which of the following statements are suitable for use as the selection criteria for the new CEO,
consistent with the ideas expressed by Moss-Kanter?
A. Able to communicate a compelling aspiration.

B. Able to take heroic action.
C. Able to challenge the prevailing Organizational wisdom.
D. Able to break up coalitions.
E. Able to tune into the environment.
Answer: A, C, E
QUESTION NO: 103

YYY is a profit-seeking provider of television channels. It broadcasts to some 55 countries using
satellite and cable technologies. It also commissions and produces about 30% of the programs it
broadcasts, to give it a unique competitive advantage against other broadcasters.
Web 2.0 provides new opportunities for YYY and it has developed a strong social media
component to its programming schedules to increase audience engagement.
Keeping YYY's divisions working together is crucial to its success as a business.
Which of the following methods of divisional Performance Measurement would you recommend
to YYY?
A. Kaplan and Norton's Balanced Scorecard

B. Lynch and Cross's Performance Pyramid
C. Stern Stewart's Economic Value Added (EVA)
D. Rappaport's Shareholder Value Analysis (SVA)
Answer: A
QUESTION NO: 104
The Financial Director (FD) of your company has heard it said that 80% of profits come from
20% of customers. The FD has accused the sales team of wasting time on serving customers who
are not valuable to the business.
The FD has instructed you to take a random sample of 100 customers and to calculate the total
contribution the company earned from each customer in the past year. The FD intends to instruct
the sales team to stop selling to the bottom 25% of these customers in order to improve
profitability.
Which THREE of the following factors should the FD consider when he interprets your results?
A. It will ignore many customer attributable costs that differ widely from customer to customer.
B. This would not consider the future potential of the customer.
C. This doesn't take into account the value of the customer in referring new customers to us.
D. This would not consider the total contribution from the combination of products which the
customer buys.
E. It is ethically wrong to stop supplying unprofitable customers.
Answer: A, B, C
QUESTION NO: 105

TTT is a partnership that designs a specialist type of construction project for clients. It does not
build the construction projects itself. TTT has eight partners who are skilled architects. Each
partner works independently on their own projects. The partners rarely meet except to agree how
to share out TTT's very significant profits.
The partners are disappointed that TTT is not growing as fast as it has in the past. Each partner is
fully employed on their own projects and none has the time to recruit new architects to TTT.
They are frustrated at the lack of leadership in TTT, although none of the partners are willing to
take on a more senior role.
Which THREE of the following does TTT need to address?
A. Manpower
B. Management
C. Make-up
D. Money
E. Materials
Answer: A, B, C
QUESTION NO: 106

BCD is a manufacturer of electronic components. Based on research of its external environment
BCD has chosen 'Customer Satisfaction' as one of its Critical Success Factors. In order to
operationalise this Critical Success Factor, BCD's management must associate and select a
number of relevant Key Performance Indicators.
Which THREE of the following Key Performance Indicators would be suitable to use in respect
of Customer Satisfaction?
A. Number of products returned by customers.

B. The % of customers who recommend BCD's products.
C. Improvement in product quality.
D. Amount of money spent on advertising.
E. Number of new customer accounts opened in the period.
F. Number of employees leaving in the period.
Answer: A, B, E
QUESTION NO: 107

RRR is a state-funded hospital serving a major city. It is under political pressure to reduce the
waiting times of patients requiring surgical operations who need to stay at the hospital for several
nights. The doctors blame a lack of bed spaces and are calling for more investment in extra beds.
You have been conducting some research into the problem and have discovered the following
problems affecting the utilisation of the existing beds at RRR:
•
many patients stay extra nights due to lack of communication with the health professionals neede
d to monitor the patients at home
•
beds are left empty each day when patients miss their admission date but there are no processes t
o inform other patients to offer them the space
•
patients are admitted on days when there are no spaces available on the special equipment neede
d to treat their particular condition
Which THREE linkages between Primary Activities in the Value Chain of RRR need to
be improved to provide extra bed spaces at RRR?
A. Between outbound logistics and service.

B. Between inbound logistics and marketing and sales.
C. Between inbound logistics and operations.
D. Between inbound logistics and outbound logistics.
E. Between inbound logistics and technology development.
Answer: A, B, C
QUESTION NO: 108

XYZ is a manufacturer of garden tools. It has defined 'Excellence of Manufacture' as a Critical
Success Factor. Which THREE of the following would be appropriate to use as Key
Performance Indicators in respect of this Critical Success Factor?.
A. % of raw materials input which is scrapped.

B. Tonnage of raw materials usage.
C. Raw materials identified as essential.
D. Number of finished products rejected at final inspection.
E. Average age of products.
F. Amount of money budgeted for production process improvements.
Answer: A, D, F
QUESTION NO: 109

Which of the following correctly defines Information Systems (IS) strategy?
A. Identifying the information needs of the Organization and aligning development to them.
B. The roles and structure of information specialists in the Organization and their relationship
with users.
C. Decisions on the hardware, software and communications solutions used in the Organization.
D. The planning, organising, investment and control of information applications in the
Organization.
Answer: A
QUESTION NO: 110
JJJ is a private company belonging to a famous former athlete. It operates gyms and fitness clubs
across its home country. Each gym or fitness club is treated as a profit centre and the manager of
each centre is paid bonuses based on its financial performance.
Three years ago it introduced multidimensional performance measures into its management
control systems. These measure capacity utilisation, financial performance, competitiveness,
innovation, and the flexibility of its centres to cope with changing demands.
The managers of its centres have been leaving at a very high rate over the last two years. They
have claimed that the measures are too open to interpretation and when they think they are
improving the centre's performance they are told they are doing the wrong thing. They also
complain that the managers in the centres near big cities find it much easier to reach their targets
than the managers of other centres.
Using Fitzgerald and Moon's Building Block model, where does the problem lie?
A. Standards and Rewards

B. Dimensions and Rewards
C. Dimensions and Standards
D. Standards, Dimensions and Rewards
Answer: A
QUESTION NO: 111

ZZZ is a retailing Organization that is suffering falling market share and falling profits.
ZZZ has a new Chief Executive Officer (CEO) who is urgently setting up a strategic
performance evaluation system. This will involve identifying Critical Success Factors (CSFs)
and then monitoring Key Performance Indicators (KPIs).
Advise the CEO which of the following statements is suitable for the role that a Chartered Global
Management Accountant should undertake.
A. Identify CSFs, develop KPIs, and report on ZZZ's performance against them.
B. Help strategic management to clarify CSFs then develop KPIs, and report on ZZZ's
performance against them.
C. Develop KPIs from a range of external data and report on ZZZ's performance against them.
D. Act as a change leader in developing the strategic performance evaluation system.
Answer: B
QUESTION NO: 112

Mayo defined knowledge management as the management of the information, knowledge and
experience available to an Organization. Which THREE of the following are steps in the
development and implementation of a knowledge management strategy?
A. Gaining top management support.

B. Creating the technological infrastructure.
C. Populating the databases.
D. Appointing a change agent.
E. Establishing a knowledge management budget.
Answer: A, B, C
QUESTION NO: 113

In order to implement a knowledge management strategy, an Organization must acquire suitable
hardware and software so that knowledge can be stored and communicated. Which of the
following would be appropriate systems to use in a knowledge management strategy?
A. Local area network

B. Groupware
C. Intranet
D. Internet
E. Ledgers and journals
F. Social media
Answer: A, B, C
QUESTION NO: 114

Which of the following is NOT a common barrier to group-based collaboration within
Organizations?
A. Time
B. Trust
C. Territory
D. Teams
Answer: D
QUESTION NO: 115

Management Accountants increasingly play a key role in strategic planning.
Which of the following statements is NOT a role for Management Accountants involved in the
strategy development process?
A. Assist the Board in determining risk appetite.

B. Consider and raise awareness of the ethical impact of proposed strategic decisions.
C. Integration of financial and non-financial information.
D. Writing the Annual Report.
Answer: D
QUESTION NO: 116

Mission statements set out the purpose of an Organization to a range of stakeholders who have
an interest in what the Organization does. As an employee, you have been asked to assess the
effectiveness of your Organization's mission statement.
Which of the following would NOT help the effectiveness of a mission statement?
A. Mission statements should be specific enough to impact Organizational behaviour.

B. Mission statements should communicate the Organization's distinctive advantages.
C. Mission statements should be flexible, realistic and attainable.
D. Mission statements should be aspirational and capture the imagination of stakeholders.
Answer: D
QUESTION NO: 117

To lead change successfully, Kotter and Schlesinger recommends that an Organization should
change its strategy according to the situation. Effective change leadership therefore involves
determining the optimal speed of change.
Which of the following statements would justify proceeding slowly with a change initiative?
A. Where resistance will be intense and extensive.

B. Where resistance will be low and more localised.
C. Where information and commitment from others is unnecessary.
D. Where you have more Organizational power than those who may resist the change.
Answer: A
QUESTION NO: 118

As a recently qualified accountant, you have been given responsibility for delivering an
ambitious project to centralise and computerise the accounts function within a geographically
dispersed, medium-sized business. In addition, the reporting timetable requires the project to be
delivered within a very short timescale with limited resources. You have decided to put together
a team to deal with these proposed changes.
Which THREE of the following statements regarding effective Teams and Change are correct?
A. Individuals must become more than they were when working alone and must develop new
commitments and behaviours.
B. Teams that cross departmental boundaries can develop new performance criteria.
C. Teams that cross departmental boundaries can destroy shared values.
D. Teams should continue after their purpose has been served.
E. Teams play minor roles in institutional change.
F. Teams enhance learning and address change directly through creating recommendations and
new ideas.
Answer: A, B, F
QUESTION NO: 119

TTT is a software design company which has grown successfully over the last 8 years. It has
been highly innovative and often collaborates with a number of external partners to produce high
quality, innovative software for a wide range of customers.
TTT's owner, K, has been a driving force behind its success. He spends a great deal of time
analysing what is happening in the marketplace and trying to predict what customers need from
TTT, through a network of industry contacts. He has a strong vision for TTT and communicates
this, with conviction, to his staff in regular face to face meetings. He recognises and rewards his
staff when new developments are undertaken and completed successfully and believes that if
staff feel appreciated, then they will be more motivated to succeed.
Which THREE of the following skills for a leader in a change adept Organization does K
demonstrate?
A. Tuning into the environment

B. Building coalitions
C. Communicating a compelling aspiration
D. Learning to persevere
E. Making everyone a hero
Answer: A, C, E
QUESTION NO: 120

Porter suggests that competitive advantage arises from the implementation of a 'generic strategy'.
Which THREE of the following are NOT generic strategies?
A. Cost leadership
B. Focus
C. Differentiation
D. Diversification
E. Market development
F. Market penetration
Answer: D, E, F
QUESTION NO: 121

The Boston Consulting Group developed a matrix to assist managers in identifying the cash flow
requirements of different businesses. The matrix suggests a number of appropriate strategies.
Select ALL the strategies that apply to the Boston Consulting Group's matrix.
A. Hold
B. Build
C. Divest
D. Defer
E. Re-appraise
F. Diversify
Answer: A, B, C
QUESTION NO: 122

In 1989 Earl developed a framework to analyse the linkages between information systems,
information technology and information management. Which of the following is NOT a
characteristic of Information Systems strategy?
A. Aligning strategy development with business needs and seeking strategic advantage.
B. Business-led and demand-orientated; developing new strategic choices.
C. Formed with key objectives of using the information resource and generating new businesses.
D. Organization-based, relationships-orientated and management focused.
Answer: D
QUESTION NO: 123

MMM is a large national bank. MMM has developed a vision statement which states that it aims
to:
• Provide superior returns to our shareholders
• Offer customers the best financial products on the market
• Continuously train and develop our staff
• Continually improve our business processes by utilising the latest information technology
Which of the following would be an appropriate performance measure within a Balanced

Scorecard for MMM?
A. Reduction in staff numbers to increase profit levels.

B. Undertake customer satisfaction surveys.
C. Number of training days per member of staff.
D. Ensure that all IT equipment used is not more than two years old.
Answer: C
QUESTION NO: 124
XYZ is a local tourist attraction. XYZ has a website on which it advertises all of its forthcoming
events. XYZ's customers can also use the website to book tickets for these events and can also
contact XYZ by email. XYZ's website also uses a range of interactive technologies including
geographical location and map facilities and links to external information sites such as the local
tourism board and local hotel listings.
Which of the following best describes the range of interactive technologies used by XYZ within
its website?
A. Social media
B. Information Sharing
C. Mash-up
D. Competence syndication
Answer: C
QUESTION NO: 125

MM is a business which sells entertainment products. MM now wants to move to a position
where it uses e-business as a fundamental part of its business strategy.
Which of the following benefits would result from MM's use of e-business? Select ALL that
apply.
A. Cost reductions because of lower overheads and cheaper procurement.

B. Increased online revenues.
C. Better control information through monitoring website activity.
D. An increased use of tacit knowledge.
E. A reduction in labour turnover and higher morale.
F. Better control of information.
Answer: A, B, C
QUESTION NO: 126

An IT project is currently being undertaken by VVV, a large university. The project is to design
and install a secure information system network for all academic staff and administrative staff in
the university. The Executive Board of VVV has insisted that the key objective of the project
team is to track and monitor how the information system is being used by the academic staff and
the administrative staff once it is implemented.
Which of the following would be an appropriate performance measure for the key objective set
by VVV's Executive Board?
A. Overall usage time of the system compared to plan.

B. Number of staff trained in the use of the new system.
C. Percentage of staff usage of the system split between academic staff usage and administrative
staff usage.
D. User satisfaction levels.
Answer: C
QUESTION NO: 127

BCD is an independent training provider in Country P. It provides training to a wide range of
corporate customers in business related subjects. All of its tutors must possess a nationally
accredited training qualification before they are allowed to teach. Also, all of its courses follow
nationally accredited programs and are externally monitored. This is considered to be a critical
aspect of its business reputation.
BCD has one major competitor, JKL, within Country P. JKL offers similar courses to
BCD but its tutors do not have to have an accredited training qualification. In addition its courses
do not follow the national accredited programs and the content and style of courses varies
significantly between JKL centres.
There are a number of universities which offer nationally accredited courses within Country P.
BCD does not consider these as competitors, as they typically attract students wishing to
undertake degree courses. The average university pass rate for nationally accredited programs
is currently higher than BCD's
Which of the following types of benchmarking would be most useful for BCD?
A. Process
B. Internal
C. Competitor
D. Strategic
Answer: A
QUESTION NO: 128
RRR is a large insurance company specialising in home and property insurance. It uses a highly
sophisticated information system which it uses to process its insurance claims efficiently and
effectively. It also holds a vast database of customer information and records. RRR's staff are
very highly trained and considered to be the leading specialists in the industry.
Which category of intellectual capital is NOT present in the description of RRR above?
A. Human capiltal
B. Innovation capital
C. Customer capital
D. Organizational capital
Answer: B
QUESTION NO: 129

The concept of Triple Bottom Line (TBL) reporting expands traditional accountancy
reporting systems to consider social and environmental performance, rather than simply financial
performance.
Which THREE of the following does the TBL concept suggest should be measured in order to
encourage greater business social responsibility?
A. Productivity
B. Profit
C. People
D. Planet
E. Privacy
Answer: B, C, D
QUESTION NO: 130

Company LL is a well established, reputable company which specialises in providing insurance
call centre services to the insurance industry. It has recently won a large contract to provide its
services to a multi-national insurer. LL's staff are highly trained in insurance matters and
many have worked for LL for many years.
LL undertakes long-term resource planning activities and has identified that during the winter
months, when there will be more customers ringing up to make insurance claims, it will
potentially need to employ more staff. The Board has decided that rather than recruit its own
staff, it will use an employment agency to supply manpower resources as required.
The people supplied will be employed on a temporary basis by LL and they will work alongside
the other call centre staff. However, they will work at a lower pay rate and will only be paid
for the actual hours they work.
This change will lead to a shift in the working environment, the routine and the composition of
the group.
Which THREE statements apply in respect of this proposed change?
A. The proposed change will affect the group dynamics, which can be seen as being similar to a
'force field' situation.
B. In times of change, LL can give sensitivity training to this group of workers who can then be
used as a source of support during the change process.
C. A Facilitator, as the leader of change, will allow the group to talk about their issues and
concerns with this change in a formal and structured manner.
D. As the change process LL is proposing is an internal matter involving a group of its staff,
there is no need to undertake a stakeholder analysis.
E. LL will need to identify the Adversaries in the group, because if they are influential they may
persuade other group members to resist the change.
Answer: A, B, E
QUESTION NO: 131

BBB has often encountered difficulties when it has introduced strategies which involve
Organizational change. BBB is about to enter a period of much change and has decided to
appoint one or more change agents to help to manage this. Select ALL of the statements that
apply in respect of a change agent.
A. Sensitive to the impact of change on all stakeholders.

B. Tolerant of ambiguity and uncertainity.
C. Skilled communicator with colleagues and subordinates.
D. Skilled at successfully meeting budget targets.
E. Worked in three similar change environments.
F. Willingness to drive through difficult decisions.
Answer: A, B, C
QUESTION NO: 132

Kaplan and Norton developed a model called the Balanced Scorecard to assist in the formation
and achievement of strategic policy. Within this model are four perspectives. Which of the
following statements is NOT applicable to a Balanced Scorecard perspective?
A. To succeed financially, how should we appear to our shareholders?

B. To achieve our vision, how should we appear to our customers?
C. To achieve our vision, how will we sustain our ability to change and improve?
D. To achieve our vision, how should we appear to our stakeholders?
Answer: D
QUESTION NO: 133

McKinsey saw culture as seven interconnected elements and described these in the '7S' model.
Which of the following is NOT a 'hard' factor within the '7S' model?
A. The way the Organization is structured and who reports to who.

B. The way in which the Organization plans to gain a competitive advantage.
C. The daily activities and procedures followed by staff.
D. The core values of the Organization.
Answer: D
QUESTION NO: 134

DD is a medium size company and has decided to appoint a data mining company to collate
information from a wide variety of sources and analyse the data into more meaningful
information.
The Board of DD believes that by using a data mining company to undertake this work, it will
add value to its business and help it to remain competitive.
Which of the following statements does NOT apply to data mining?
A. Data mining involves looking for new patterns and relationships in the underlying data.
B. Data mining can guide decision-making and predict future behaviour.
C. Data mining uses statistical analysis tools and other intelligent techniques.
D. The goal of data mining is the extraction of data.
Answer: D
QUESTION NO: 135

Lynch developed the performance pyramid to define the links between objectives and
performance measures. Which THREE of the following statements apply to the performance
pyramid?
A. The performance pyramid is designed to ensure that all activities support the Organization's
vision.
B. The left-hand side of the pyramid contains measures which have an external focus.
C. The lowest level of the pyramid contains the day-to-day operational measures.
D. The business operating systems level includes the market-related Critical Success Factors.
E. The business unit level includes measures which relate to internal systems needed to meet
customers' needs.
F. The right-hand side of the pyramid contains measures which are predominantly non-financial.
Answer: A, B, C
QUESTION NO: 136

CIMA has conducted research into the implications of sustainability for business. CIMA's report
contained a number of key conclusions. Which of the following statements was NOT a
conclusion in CIMA's report?
A. Strong ethical principles can add great value to a brand.

B. Reporting on sustainability needs to provide hard evidence of the positive impact on society.
C. Management Accountants have a responsibility to promote an ethics-based culture.
D. The ethical tone within a business must come from the bottom.
Answer: D
QUESTION NO: 137

Kanter identified seven 'power skills' that change agents need to overcome apathy or resistance
to change. Which of the following are power skills?
A. Ability to work independently.

B. Ability to collaborate effectively.
C. Ability to develop relationships based on trust.
D. Ability to keep within a budget.
E. Ability to work ethically and sustainably.
F. Ability to keep projects to a strict time-line.
Answer: A, B, C
QUESTION NO: 138

Data mining is an important part of an Organization's knowledge discovery process.
Effective data mining provides insight and can help unlock previously hidden opportunities.
Which of the following are disadvantages of Data Mining?
A. Privacy issues
B. Security issues
C. Ethical issues
D. Financial crime issues
E. Manufacturing issues
Answer: A, B, C
QUESTION NO: 139

'Big data' refers to datasets whose size is beyond the ability of typical database software tools to
capture, store, manage and analyse.
Which of the following statements is NOT a valid statement regarding 'big data'?
A. As technology advances over time, the size of datasets that qualify as 'big data' will also
increase.
B. The definition of 'big data' can vary by sector, depending on the software tools and dataset
sizes common to a particular industry.
C. Sufficient analytical and managerial talent is available to exploit the opportunities associated
with 'big data'.
D. 'Big data' will require the right infrastructure, incentives and safeguards to address public
concerns.
Answer: C
QUESTION NO: 140

You have applied for a job with a large accountancy practice and have been requested to attend
for an interview. You have also been informed that you will be required to give a ten minute
presentation on Corporate Political Activity (CPA).
Which are valid statements with respect to Corporate Political Activity?
A. The CIMA Code of Ethics does not consider it appropriate for a company to offer bribes to
politicians to secure publicly-funded business.
B. CPA can be considered to be part of a company's strategy to generate and sustain profits.
C. When established laws and regulations affect a firm's competitive environment, the company
will not be able to use CPA to try to influence political decision-making.
D. It is acceptable for a company to make an election contribution for a particular candidate and
then to try to influence subsequent parliamentary voting.
E. Companies can establish Coalitions to respond to specific political issues, but these are always
formed on a temporary basis.
Answer: A, B, D
QUESTION NO: 141

Which TWO of the following would be measures included within the 'Department and work
centres' level of the Performance Pyramid?
A. Market share percentage

B. Percentage of on-time deliveries
C. Number of product returns per period
D. Customer satisfaction levels
E. Production output per period
Answer: B, C
QUESTION NO: 142

QQQ is Country M's largest supermarket with 40% of the market share. In addition it has opened
several stores around the world in the last 10 years. One of the reasons for QQQ's success is
its loyalty card. The loyalty card is used to gather information about the spending patterns of its
customers. Around two billion pieces of information each week are captured and stored in an
enormous data warehouse that can be accessed by QQQ and other selected large retail partners.
The information can be used to assess the success of new product launches as well as which
demographics of customer are making the purchases. The system also allows QQQ to tailor its
special offers to particular segments of the market and to predict the buying behaviour of its
customers, which assists QQQ in procurement planning.
Which of the following best describes the activities outlined above for QQQ?
A. Customer relationship management

B. E-business
C. Market segmentation
D. Data mining
Answer: D
QUESTION NO: 143

Communication is a critical element of the Organizational change process. Communicating the
change vision is a component of Kotter's eight steps to transforming Organizations.
Which of the following statements support Kotter's component 'Communicate the change
vision'?
A. Ensure the change message and vision are memorable and repeatable.
B. One-way communication is more powerful than two-way communication.
C. Storytelling and symbolic actions are unnecessary.
D. Unaddressed inconsistencies undermine the credibility of strategic communications.
E. Face-to-face communications improve clarity of message.
Answer: A, D, E
QUESTION NO: 144

Corporate political activity can be seen as a proactive attempt by a company to influence
government decision-making. In particular, lobbying represents a direct but often private attempt
by businesses to influence a government's decision-making.
Which of the following is NOT a legitimate and private form of lobbying?
A. Monitoring
B. Advocacy
C. Application of pressure
D. Undisclosed party financing
Answer: D
QUESTION NO: 145

You are the youngest member of the senior management team and have recently been invited to
become a member of the company's Board.
You have been sent an outline agenda ahead of your Board induction meeting with the Company
Secretary. The first item on the agenda is the role of the Board.
Which of the following statements is NOT the role of the Board?
A. Establish the company's vision, mission and values.

B. Relinquish responsibility for implementation of strategy to management.
C. Confirm the adequacy and alignment to strategy of internal control and risk management
systems.
D. Establish strategy with regard to the risk appetite of the Organization.
Answer: B
QUESTION NO: 146

Which TWO of the following statements are NOT characteristics of a robust 'coaching climate'?
A. Personal growth, team development and Organizational learning are integrated.
B. Coaching is seen primarily as an opportunity to be proactive rather than reactive.
C. People are able to engage in destructive confrontation.
D. Time for reflection takes place only out of office hours.
E. People are recognised and rewarded for sharing knowledge.
Answer: C, D
QUESTION NO: 147

The future can be viewed as consisting of a large number of alternatives. Forecasting techniques
have been designed to assist decision-making and planning.
Which TWO of the following statements are correct regarding the use of trend analysis as a
forecasting tool?
A. Suitable for mature and stable products / services / companies.

B. Suitable for young and dynamic products / services / companies.
C. Useful where the external environment is always stable.
D. Useful where the external environment is always changing.
E. Useful where comparatives are not available.
Answer: A, C
QUESTION NO: 148

McKinsey's '7-S' model distinguishes between 'hard' and 'soft' factors.
Which TWO of the following statements are correct?
A. Hard factors tend to be intangible and hard to identify.

B. Soft factors tend to be intangible and hard to identify.
C. Hard factors tend to be formal and measurable.
D. Soft factors tend to be formal and measurable.
E. Soft factors focus on the future and hard factors focus on the present.
Answer: B, C
QUESTION NO: 149
Which of the following is a 'hard' factor according to McKinsey's '7-S' model?
A. Staff
B. Skills
C. Strategy
D. Success
Answer: C
QUESTION NO: 150

JJJ presently makes motorcycles for use by the armed forces in its home country. Defence
spending cuts have forced JJJ to seek a new business direction. JJJ has decided to make trucks
for sale to private businesses in its home country.
Use the Ansoff product/market matrix to identify the new strategic direction of JJJ.
A. Related diversification
B. Product development
C. Market development
D. Market penetration
Answer: A
QUESTION NO: 151

PPP uses the Boston Consulting Group Matrix (BCG Matrix) to prioritise products for
investment and divestment. PPP invests or divests according to the quadrant of the BCG Matrix
that the product occupies.
Which TWO of the following quadrants might receive only as much investment as required to
maintain PPP's relative market share?
A. Stars
B. Question marks
C. Dogs
D. Cash cows
Answer: A, D
QUESTION NO: 152
Which of the following distinguishes a learning curve effect from a learning Organization?
A. Learning curve effects depend on repetition of the same behaviour. Learning Organizations
seek to modify behaviour.
B. Learning curve effects apply to the factory. Learning Organizations are always service
industries.
C. Learning curve effects increase with time. Learning Organizations cease to learn after a time.
D. Learning curve effects always reduce costs. Learning Organizations always increase costs.
Answer: A
QUESTION NO: 153

BBB is a publisher. As a consequence of BBB using the Internet to outsource its typesetting and
studio activities it has been able to move its few remaining staff into much smaller and less
expensive office accommodation.
Which activity in Porter's Value Chain has benefitted from BBB's use of information systems?
A. Infrastructure
B. HR management
C. Sales and marketing
D. Outbound logistics
Answer: A
QUESTION NO: 154

HHH is a teaching Organization. HHH has begun to employ virtual reality to train the customers
on its courses in how to perform complex manual tasks such as repairing machinery.
Which activity in Porter's Value Chain has been impacted by HHH's use of virtual reality?
A. Operations
B. Service
C. Procurement
D. Human resources management
Answer: A
QUESTION NO: 155 DRAG DROP

EEE is an international airline.
Indicate which of the following activities are 'primary' or 'support' in accordance with Porter's
Value Chain.
Answer:

Select the ethical principle which is most likely to be challenged in each of the following
situations.
Answer:

TTT is a conglomerate with two divisions, AAA and BBB. Advise TTT on the most appropriate
strategy to adopt for each division.
Answer:
RST is a national airline that differentiates itself by the quality of service it provides to its
passengers. Place the appropriate Value Chain activity next to each aspect of RST's service.
Answer:
PPP wishes to increase shareholder value using the Seven Value Drivers identified in
Shareholder Value Analysis (SVA). Place the correct direction of change next to each driver.
Answer:

You have been asked to advise a junior member of your team what qualities they should look for
when identifying a coach or mentor to work with.
Place the qualities associated with effective coaching and mentoring next to the relevant
statements below.
Answer:

You are responsible for managing a small team of people tasked with implementing a new
environmental management reporting system across all Group subsidiaries. Senior management
teams within subsidiary businesses are increasingly resisting the introduction of the system.
Place your recommended approach for dealing with each of the following comments.
Answer:

Place the correct label against each of the descriptors for the main principles of the UK
Corporate Governance Code.
Answer:
Mendelow developed a matrix in which he characterised stakeholders by reference to their
degree of power and level of interest.
Place the correct category against each of the classes of stakeholders.
Answer:
Porter suggests that competitive advantage can be attained by organising value-adding activities
in support of the generic strategies which he identified.
Place the appropriate generic strategy against each of the value-adding activities.
Answer:

In respect of mission statements, place the word "characteristic" or "purpose" against the relevant
activity.
Answer:

BCD manufactures a well known breakfast cereal, the 'Weetyflake'. As a result of a steady slow
down in the market growth of this product in its home country in the last five years, BCD is
considering a number of possible strategic directions.
Select the label which best describes each of the strategic directions being considered by BCD.
Answer:

Select the label which best defines the periods of decline outlined in the situations presented
below.
Answer:
Select the MOST appropriate leadership style to manage each change situation outlined below.
Answer:

Collaborative leadership is particularly useful in situations where "no one is in charge", where
the issues or problems are so complex that no one person or entity has either the information or
the power to change.
Which of the following would facilitate the role of a collaborative leader effectively?
Place 'Yes' or 'No' next to each Role.
Answer:

Porter's Generic Strategies are often applied within an Organization's value chain, in order to
organise the value-adding activities to support the chosen strategy.
Place the Generic Strategy which best defines the strategic approach being taken against each of
the activities listed below.
Answer:

HHH is a mobile telecommunications provider in Country D. HHH presently offers telephone
and text services at a price per unit (a unit is defined as 1 minute or 160 text characters). It
provides Internet connection from handsets at a fixed fee per month. Select the appropriate
strategic response to each of the industry developments listed below.
Answer:

MNO has decided to widen the scope of its performance measurement by constructing and using
a Balanced Scorecard. MNO has established a range of Key Performance Indicators (KPI's) for
use within its Balanced Scorecard.
Place each of the Balanced Scorecard perspectives against the most relevant KPI.
Answer:

A. Porter states that competitive advantage can be gained by following one of three generic
strategies.
Place the appropriate generic strategy against each of the statements below.
Answer:

QQQ is a family run business which manufactures and sells chocolate. QQQ employs 80 staff in
its factory and shops. It operates 10 shops within a number of small towns in the northern region
of Country P. In the last four years, demand for QQQ's products has decreased, as customers in
its local region are increasingly shopping in large supermarkets and out of town facilities, which
are more convenient and tend to offer cheaper priced goods. The recent economic recession has
hit the region hard and many local people have moved away to find work in other regions of the
country. The internet has also impacted upon its business, as many customers are now making
purchases of chocolate via the internet.
The Managing Director (MD) of QQQ has recently retired and the Board took the decision to
make an external appointment to replace him. The new MD believes that QQQ needs to invest in
new technology within its factory. This would reduce staffing levels by 15% and would reduce
wastage and costs, allowing QQQ to offer more competitively priced products. He also believes
that QQQ must invest in its own website. However QQQ's staff are very unhappy with these
proposals. Some of the family members of the Board are concerned that this change will destroy
the family tradition and reputation of QQQ that has been built up over many years.
Select the correct descriptor for each of the forces for change below.
Answer:

DDD is a company which publishes paper-based books. In the last 10 years DDD has seen a
steady decline in its sales. Last month, one of its major customers, a large chain of high street
bookshops announced that it would be closing as a result in declining sales in the paper-based
book market. The Board of DDD has therefore announced that in order to survive, it must re-
focus the business upon the developement of electronic books, which will require a significant
investment in new technology and staff training. However, some staff will be made redundant as
part of this process. The Board of DDD has stated that it will reward staff who actively embrace
the change process.
Which of the activities below would occur within the 'Unfreeze', 'Change' or 'Refreeze' stage of
Lewin's three-stage model?
Answer:
Company XX and Company YY are the only two providers of electricity to Country M. The
demand for electricity is price inelastic which means that buyers regard it as essential and
therefore demand for electricity does not change significantly if the average price of electricty
changes. However customers will switch between suppliers within a year to get cheaper
electricity. Using Game Theory place the long-run revenue impact on each firm of each of the
following pricing decisions.
Answer:

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E3

A. Appointment of a new Marketing Director

Select ALL that apply.

A. A sudden increase in international terrorism.

A. Government health warnings about food ingredients.

Select ALL that apply.

Select ALL that apply.

A. Establishes stakeholder interests and claims on the Organization.

What should be the next activity that D undertakes in this project?

A. Create a technological infrastructure of hardware and software.

Which of the following Stakeholder Management statements is NOT correct?

Which of the following is a Suitability consideration?

A. There are limited raw materials available.

Which of the following intuitive forecasting techniques is GGG undertaking?

A. The Delphi technique

A. CCC should focus on its stakeholders' needs in turn.

Which product should receive the investment?

A. Division / SBU / Function based

Which of the following statements would be regarded as improvements by using Strategic

Select ALL that apply.

The Ms model is used to help managers undertake a resource audit.

Which THREE categories will be included in a resource audit?

A. Design of key performance measures for an information system.

A. Where the proposed change will disadvantage a powerful group of employees.

Which of the following statements relate to Acceptability?

Select ALL that apply.

A. It considers the current position of the Organization.

A. Gives managers a deeper understanding of precisely what their Organization does.

Select ALL that apply.

A. Business processes that deliver to households at the promised time + or - 15 minutes.

A. Scientific research demonstrating the adverse impacts of global warming.

A. Pull not push

Which of the following would you advise JKL to do?

A. It can help understanding of the linkages between business activities.

Research conducted in Country B for LLL has revealed the following:

Which of the following statements would be most appropriate?

Select ALL that apply.

A. Uncertainty in the industry is high, relative to management's ability to predict or adjust to

A. Refunds offered to customers if they are dissatisfied with a purchase.

A. An increase in the rate of inflation

Select ALL that apply.

A. To invest a further $40 million in developing a car for sale.

Which of the following statements are correct?

Select ALL that apply.

A. BBB will gain a first mover advantage.

A. Providing leadership and direction to the Organization.

A. Cancel or postpone further investment spending on developing new SLR cameras.

Which of the following activities does the above definition describe?

A. Work based training

A. Develop a change vision

A. The excellent reputation of CCC

A. Set at a level which is easily achievable.

A. Suitable and Acceptable

A. A powerful competitor forcing an Organization to cut its prices.

A. A good Corporate Social Responsibility policy can attract customers.

Which of the following is NOT a correct sustainability statement?

A. The creation of wealth should be integrated with long-term sustainable development.

A. One of the aspects of the pyramid is Stakeholders.

Which of the following is a valid statement?

Which of the following statements apply to CRM?

Select ALL that apply.

Select ALL that apply.