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CIMA E3 - Strategic Management Question Tutorial Sample Questions:

1. 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 TWO of the following statements are TRUE? (Choose two.)

A) 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.
B) A company's Code of Business Conduct can be rules based.
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) As a CIMA qualified Management Accountant you must follow CIMA's Code of Ethics.
E) 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.

2. HHH is an international distribution company which operates a number of large distribution warehouses. HHH employs over 10,000 staff who operate the warehouses 24 hours per day and process over 500,000 packages and parcels each day. HHH operates in a highly competitive market and the senior management team recognize the importance of focusing upon its Critical Success Factors (CSF's). However, some senior managers are confused as to the difference between CSF's and Key Performance Indicators (KPI's).
Which of the following are Critical Success Factors for HHH? (Choose all that apply.)

A) Percentage of stock damaged.
B) Customer satisfaction.
C) Continual maintenance of warehouse facilities.
D) Time taken to load and unload deliveries.
E) Efficient staff planning systems.
F) Market share percentage.

3. RRR is a medium sized company, which has built family homes in Country D' for twenty years. The Board of RRR wishes to expand company operations and start building homes in the neighboring country. The Board of RRR wishes to undertake a position audit to help in this decision.
Which of the following strategic analysis tools would be used in a position audit for RRR?

A) Five Forces
B) SWOT
C) Gap Analysis
D) PEST

4. HHH is a manufacturer which has a bonus scheme for its production workers related to the speed of output.
HHH's products are very specialized and are made in a dangerous production environment. HHH's production workers usually work alone but sometimes, if there are problems in the production environment (for example, machinery breakdowns), they have to work in teams. When the production workers are working in teams they do not receive any bonus.
HHH's senior management is proposing to amend the current bonus scheme to encourage increased productivity. Under the current bonus scheme, production workers receive extra pay when they achieve 45% of their individual target: The target level is low because of the dangerous production environment and the need to occasionally work in teams.
Under the proposed bonus scheme, production workers will not receive any extra pay until they have achieved
90% of their individual target. Workers who achieve 90% or above of their individual target will be paid a 30% higher bonus.
Which THREE of the following problems is HHH most likely to encounter with the introduction of the proposed bonus scheme? (Choose three.)

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

5. 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 focus only on maximizing company profits.
C) To avoid conflicts of interest and of duties.
D) To have regard for the interests of the company's employees.
E) To consider the likely consequences of any decision in the long term.

Solutions: