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CIMA E3 - Strategic Management Question Tutorial Sample Questions:

1. Which TWO of the following are advantages to an organization of using non-financial performance measures, rather than financial performance measures? (Choose two.)

A) They are easier to measure than financial performance measures.
B) They present a wider view of organizational performance than financial performance measures.
C) They are not distorted by inflation.
D) They are less expensive to measure than financial performance measures.
E) They are less subjective than financial performance measures.

2. YZ operates a national mobile phone (cell phone) network in one country. It is considering upgrading its network to 4th Generation (4G) by providing an improved bandwidth that will enable its customers faster access to the Internet.
This investment will cost S29 million which YZ's institutional investors have agreed to provide by subscribing to a rights issue. This is due to management having informed institutional investors that a rival is already offering
4G and that this is taking customers away from YZ because its network is now regarded as too slow. YZ'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? (Choose all that apply.)

A) It is essential given the strategic threats to YZ.
B) It provides a market development opportunity for YZ.
C) There is stakeholder approval for the investment.
D) There are sufficient investment funds available
E) YZ will gain a first mover advantage.

3. Which THREE of the following statements apply to Lynch's performance pyramid? (Choose three.)

A) The left-hand side of the pyramid contains measures which have an external focus.
B) The business operating systems level includes the market-related Critical Success Factors.
C) The business unit level includes measures which relate to internal systems needed to meet customers' needs.
D) The lowest level of the pyramid contains the day-to-day operational measures.
E) The right-hand side of the pyramid contains measures which are predominantly non-financial.
F) The performance pyramid is designed to ensure that all activities support the organization's vision.

4. DRAG DROP
In order to organize the value-adding activities to support a chosen strategy, Porter's Generic Strategies are often applied within an organization's value chain.
Against each of the activities listed below, select the Generic Strategy which best defines the strategic approach being taken.
Select and Place:

Correct

5. JJJ is a publically quoted advertising agency. JJJ's competitive advantage is based on the expertise of its staff and its reputation in digital media advertising. JJJ has robust systems to protect its intellectual property. These include patents and copyrights. JJJ has also restricted access for most of its staff to its most sensitive data, such as studies of its customers' profitability.
JJJ's new Managing Director, Z, is concerned that when staff leave JJJ, the company loses whatever tacit knowledge they possess. These losses also impact on JJJ's reported profits. In order to remedy the losses of knowledge and the reduced profits Z wants to introduce a knowledge management strategy.
Which of the following steps support the introduction of a knowledge management strategy? (Choose all that apply.)

A) Z should gain the support of the Board of Directors.
B) JJJ should integrate knowledge management and management accounting.
C) JJJ needs to acquire and install appropriate hardware and software.
D) JJJ should convince staff of the benefits of sharing their tacit knowledge.
E) JJJ should unfreeze current habits and standard operating procedures.
F) Z should set a target for reported profit.

Solutions: