Title: How to pass Cima E3 Exam?
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2- Question No 1
- XYZ operates a national chain of restaurants.
- Which THREE of the following are external
environmental drivers for XYZ? - Appointment of a new Marketing Director
- Recession in XYZ's country
- Reduced personal income of its customers due to
increased personal taxation - A direct competitor to XYZ closes down
- Launch of a new improved menu by XYZ
- Answer B, C, D
- Question No 2
- 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?
3- 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 3
- 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? - To invest a further 40 million in developing a
car for sale. - To ignore the research findings and not
commercialize any innovations. - To delay investment in building a hydrogen car
until the market demand becomes clearer. - To seek to recover the 20 million it has spent
because the research has yielded no commercial
benefit. - Answer D
- Question No 4
- 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. - The Management Accountant should follow
established internal procedures. - The Management Accountant should obtain advice
from his professional body/bodies. - The Management Accountant should resign from his
job. - The Management Accountant should maintain a
discreet silence.
4- The Management Accountant should anonymously
inform the media of his concerns. - The Management Accountant should publicly accuse
the Finance Director of issuing a misleading
profit forecast. - Answer A, B, C
- Question No 5
- 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.
5- Which of the following generic strategies is
being undertaken by SSS? - Cost Leadership
- Differentiation
- Differentiation Focus
- Stuck in the middle
- Answer B
- Question No 6
- 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. - Hold
- Build
- Divest
- Defer
- Re-appraise
- Diversify
- Answer A, B, C
- Question No 7 (Drag Drop)
- TTT is a conglomerate with two divisions, AAA and
BBB. Advise TTT on the most appropriate strategy
to adopt for each division.
Answer
6Question No 8 (Drag Drop) 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.
7Answer
- Question No 9
- 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? - Establish the company's vision, mission and
values. - Relinquish responsibility for implementation of
strategy to management. - Confirm the adequacy and alignment to strategy of
internal control and risk management systems. - Establish strategy with regard to the risk
appetite of the Organization. - Answer B
- Question No 10
- 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
8- Stakeholder Management. Which of the following
Stakeholder Management statements is NOT
correct? - Organizations will have a variety of stakeholders
each with differing attitudes to risk which can
cause conflict. - Pressure groups have an interest in matters of
public policy, but do not want to control the
workings of government. - Stakeholder management is made more complicated
for an Organization when individuals belong to
more than one stakeholder group. - In measuring the satisfaction of stakeholder
interests, Organizations should only focus on
quantitative matters. - Answer D
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