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CIMA E3 - Strategic Management Question Tutorial Sample Questions:

1. QWE is a private company belonging to a famous former sports professional. It operates gyms and fitness clubs across its home country. Each gym or fitness club is treated as a profit center and the manager of each center is paid bonuses based on its financial performance.
QWE introduced multidimensional performance measures into its management control systems 3 years ago.
These measure competitiveness, financial performance, capacity utilization, innovation and the flexibility of its centers to cope with changing demands.
The managers of QWE's centers have been leaving at a very high rate over the last 2 years. They have claimed that the measures are too open to interpretation and when they think they are improving their center's performance they are told they are doing the wrong things. They also complain that the managers in the centers near big cities find it much easier to reach their targets than the managers of other centers.
According to Fitzgerald and Moon's Building Block model, where does the problem lie?

A) Standards, Dimensions and Rewards
B) Standards and Rewards
C) Dimensions and Standards
D) Dimensions and Rewards

2. DF Company is undertaking a strategic review of its 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) Identify influential senior managers who will drive through changes in DF's strategic direction.
B) Identify forces facing DF's activities that may create barriers and resistance to change.
C) As part of DF's strategic review, identify forces facilitating the need for proposed change.
D) Provide a framework for identifying forces for and against the proposed changes within DF.

3. Directors have a duty to shareholders and other stakeholders and are required to promote the success of the company.
Which THREE of the following are valid roles and responsibilities of directors? (Choose three.)

A) To be responsible for keeping all external stakeholders satisfied.
B) To consider the likely consequences of any decision in the long term.
C) To avoid conflicts of interest and of duties.
D) To focus only on maximizing company profits.
E) To have regard for the interests of the company's employees.

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

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

5. M has been appointed as an external change agent to lead and implement a large scale re-structuring strategy which is being undertaken by a large bank. M has been appointed due to his extensive experience in a wide range of organizational re-structuring programmes. This re-structuring strategy will involve a large number of redundancies and the implementation of a new organization-wide management reporting system. M will need to work with staff from all departments and levels of the organization. The Board of Directors of the bank believes that an external change agent will bring more benefits to the change process than using an internal change agent.
Which of the following are the most likely benefits that could be achieved by the bank by appointing an external change agent to lead and implement the re-structuring strategy? (Choose all that apply.)

A) The bank can exploit the specialist expertise of the external change agent.
B) The change process should be less costly if an external change agent is appointed.
C) The speed of delivery of the change process will be quicker when using an external change agent.
D) As a dedicated resource, the external change agent can give more time to the change process.
E) The external change agent will be more objective in decision-making than an internal change agent.
F) The external change agent will have better relationships with the bank employees than an internal change agent.

Solutions: