E3 Strategic Management Questions and Answers

Which of the following is NOT a key attribute of a successful stretch target?

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?

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?

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?

Select ALL that apply.

'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'? 

Company W manufactures marshmallows for sale to supermarkets across Europe. W follows a logical and formal approach to strategic planning. Which of the following are valid stages of such a rational strategic planning model? Select ALL that apply.

Which of the following is NOT a use of the Value Chain?

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.

Select ALL that apply. 

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.

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?

Select ALL that apply.

Which THREE of the following statements are correct in relation to the use of the Performance Pyramid?

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?

Company V has obtained planning permission to build 20 wind turbines in town W. This will be a highly profitable project and help the Government in Country H meet targets for renewable energy. However, local residents and wildlife groups are extremely unhappy and have objected to the plans and threatened to cause disruption at the site of the proposed wind turbines once building work commences

Which THREE of the following activities should Company V use, according to Cyert and March, to resolve these conflicting stakeholder objectives?

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?

Company CCC is an automotive component manufacturer. It manufactures three main products within its portfolio:

Product 1: Relative market share of 0.1; Market growth rate of -2%

Product 2: Relative market share of 4.0; Market growth rate of +3%

Product 3: Relative market share of 0.3; Market growth rate of +15%

Which TWO of the following statements are CORRECT? (Choose two.)

Which THREE of the following are valid reasons to follow a Corporate Social Responsibility strategy?

Which of the following is a 'hard' factor according to McKinsey's '7-S' model?

Which THREE of the following frameworks are used solely to evaluate the external environment of an organization? (Choose three.)

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?

ABC is an online bank which has just reported substantial trading losses. It has received advice from a leading business consultancy that it should implement the following two strategies:

1. Take advantage of its reputation and brand image by entering a new industry.

2. Update all its networks to fifth generation (5G) as soon as possible. Which TWO of the following strategies has ABC been advised to implement?

Select the label which best defines the periods of decline outlined in the situations presented below.

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.)

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?

Which TWO of the following would be measures included within the 'Department and work centres' level of the Performance Pyramid?

Select the quality associated with effective coaching and mentoring for each of the descriptions below:

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?

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?

Ansoff has provided a product/market growth matrix which denotes possible strategic directions that an organization can follow.

Which of the following statements correctly describe the strategic options generated by the matrix? (Choose all that apply.)

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?

XYZ operates a national chain of restaurants.

Which THREE of the following are external environmental drivers for XYZ?

SSS University wishes to introduce a new Car Park Management Strategy (CPMS). The aim of this strategy is to reduce the use of private cars and to encourage sustainable transport, such as cycling and public transport, by staff and students. SSS has decided to reduce the number of car parking spaces and introduce parking charges.

The Management Accountant has decided to use the Balanced Scorecard to help prepare a performance management system to assess the performance of the new CPMS.

Which of the following is an example of the Innovation and Learning perspective of a Balanced Scorecard for SSS?

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?

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?

The Chief Executive Officer (CEO) of Company Y has recently attended a series of presentations on the six key roles that the World Economic Forum (WEF) recommend organisations fulfil in order to succeed in the digital age.

The CEO is particularly interested in changing the focus of Y from a five year, to a one year planning cycle, with more focus on experimentation and less focus on long-term planning.

Which of the six roles suggested by the WEF is the CEO particularly interested in?

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.)

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?

You have been given responsibility, as a newly qualified management accountant, for delivering an ambitious project to centralize and computerize the accounts function within a medium-sized, geographically dispersed business. The timetable also requires the project to be delivered within a very short timescale with limited resources. You have built a team to deal with these proposed changes.

With regard to effective teams and change, which THREE of the following statements are correct? (Choose three.)

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? 

Which of the following is NOT an external driver that leads management to adopt greater sustainability in the activities of its business?