Enterprise Pillar
E1 – Enterprise Operations
27 August 2013 – Tuesday Morning Session
Instructions to candidates
You are allowed three hours to answer this question paper.
You are allowed 20 minutes reading time before the examination begins
during which you should read the question paper and, if you wish, highlight
and/or make notes on the question paper. However, you will not be allowed,
under any circumstances, to open the answer book and start writing or use
your calculator during the reading time.
You are strongly advised to carefully read ALL the question requirements
before attempting the question concerned (that is all parts and/or subquestions).
ALL answers must be written in the answer book. Answers or notes written
on the question paper will not be submitted for marking.
ALL QUESTIONS ARE COMPULSORY.
Section A comprises 10 sub-questions and is on pages 2 to 4.
Section B comprises 6 sub-questions and is on page 5.
Section C comprises 2 questions and is on pages 6 and 7.
The list of verbs as published in the syllabus is given for reference on page
11.
Write your candidate number, the paper number and examination subject title
in the spaces provided on the front of the answer book. Also write your
contact ID and name in the space provided in the right hand margin and seal
to close.
Tick the appropriate boxes on the front of the answer book to indicate the
questions you have answered.
E1 – Enterprise Operations
DO NOT OPEN THIS QUESTION PAPER UNTIL YOU ARE TOLD TO DO SO
TURN OVER
© The Chartered Institute of Management Accountants 2013
SECTION A – 20 MARKS
[You are advised to spend no longer than 36 minutes on this question]
ANSWER ALL TEN SUB-QUESTIONS
Instructions for answering Section A
The answers to the ten sub-questions in Section A should ALL be written in your answer book.
Your answers should be clearly numbered with the sub-question number and ruled off so the
markers know which sub-question you are answering. For multiple choice questions you
need only write the sub-question number and the answer option you have chosen. You
do not need to start a new page for each sub-question.
Each of the sub-questions numbered from 1.1 to 1.10 inclusive, given below, has only ONE
correct answer. Each is worth two marks.
Question One
1.1
A lean approach is associated with which ONE of the following?
A
Supply sourcing strategies
B
Demographic profiling
C
Employee selection criteria
D
Removal of waste
(2 marks)
1.2
Which ONE of the following is NOT normally a barrier to international trade?
A
High levels of consumption tax
B
Subsidies for domestic (home) producers
C
Customs duties
D
Embargoes
(2 marks)
1.3
Under a free market economy prices are determined by which ONE of the following?
A
The stock market
B
Government regulation
C
Multinationals
D
Supply and demand
(2 marks)
Enterprise Operations
2
September 2013
1.4
Which ONE of the following is NOT a macroeconomic factor?
A
The relationship between price and demand in a particular market
B
Price inflation
C
Levels of savings and investment
D
Unemployment amongst young people
(2 marks)
1.5
Under an ABC inventory management system which ONE of the following items should
be monitored most closely?
A
'A' classified items
B
'B' classified items
C
'C' classified items
D
All items equally
(2 marks)
1.6
Which ONE of the following characteristics is NOT normally associated with a NonGovernmental Organisation (NGO)?
A
Furthering humanitarian causes
B
Championing social causes
C
Making profits
D
Exercising independence
(2 marks)
1.7
When government regulation and restriction is absent the effect is
A
protectionism.
B
economic nationalism.
C
liberalisation.
D
a mixed economy.
(2 marks)
1.8
Mintzberg's design of an effective organisation does NOT include which ONE of the
following categories?
A
Technostructure
B
Outsource partners
C
Operating core
D
Strategic apex
(2 marks)
Section A continues on the next page
TURN OVER
September 2013
3
Enterprise Operations
1.9
Which ONE of the following is NOT a feature of a service?
A
Intangibility
B
Immediate consumption
C
Inventory management
D
Involvement of the consumer
(2 marks)
1.10 Reck and Long's strategic positioning tool measures the contribution of which ONE of the
following organisational functions?
A
Quality control and assurance
B
Purchasing and supply
C
The management of systems
D
The management of human resources
(2 marks)
(Total for Section A = 20 marks)
Reminder
All answers to Section A must be written in your answer book
Answers or notes to Section A written on the question paper will not
be submitted for marking
End of Section A
Section B starts on the opposite page
Enterprise Operations
4
September 2013
SECTION B – 30 MARKS
[You are advised to spend no longer than 9 minutes on each sub-question in this section]
ANSWER ALL SIX SUB-QUESTIONS IN THIS SECTION - 5 MARKS EACH
Question Two
(a)
Describe FIVE types of loss that a company may face when investing in another country
unless the risks are managed.
(5 marks)
(b)
Distinguish a wide area network (WAN) from a local area network (LAN) providing an
example of each.
(5 marks)
(c)
Explain the relationship between system implementation and a systems development life
cycle (SDLC).
(5 marks)
(d)
Describe the potential disadvantages of introducing Just-In-Time (JIT) operations within a
manufacturing organisation.
(5 marks)
(e)
Explain FIVE ways in which advances in technology have allowed international trade to
expand.
(5 marks)
(f)
The implementation of a new information system may sometimes meet with staff
resistance.
Explain TWO management strategies for overcoming resistance that have the advantage
of speed but could raise ethical and possibly legal concerns.
(5 marks)
(Total for Section B = 30 marks)
End of Section B
Section C starts on the next page
TURN OVER
September 2013
5
Enterprise Operations
SECTION C – 50 MARKS
[You are advised to spend no longer than 45 minutes on each question in this section]
ANSWER BOTH QUESTIONS IN THIS SECTION – 25 MARKS EACH
Question Three
A professional management body is funding a major research project into the relationship
between certain HR systems and workplace motivation. As part of this project the University of
S2013 has been engaged to investigate the use of staff performance appraisal systems in large
organisations. The University's work involves a number of stages:
•
•
•
•
Stage 1: questionnaires issued to all large organisations to understand the range of
performance appraisal systems operating.
Stage 2: initial results from stage 1 discussed with a group of senior managers (such as
HR directors and chief executives).
Stage 3: focus group meetings with employees at all levels within the organisations
surveyed to understand employee motivations, attitudes and experiences.
Stage 4: final report to the professional body and subsequent dissemination of findings.
Stage 3 has now been completed and a number of interesting issues have emerged:
•
•
•
•
•
•
The use of formal performance appraisal systems varies significantly between sectors
from 80% of financial service organisations to only 50% in the retail sector.
Organisations not using an appraisal system do not feel that the potential benefits of a
formal system justify the time and cost involved in operating it.
Of the systems in operation, 90% involved an annual meeting between employees and
their appraiser, normally their line manager.
15% of organisations used the outcomes from the system to help determine pay.
There was little relationship between levels of motivation and the existence of a staff
performance appraisal system. (Motivation was more closely related to issues such as
organisational reputation and the operation of environmental action and sustainability
programmes.)
Employees were generally critical of their own organisation's system of formal staff
performance appraisal.
Required:
(a)
Describe the potential benefits of a formal staff performance appraisal system for a
large organisation.
(10 marks)
(b) Explain the possible reasons for employees being critical of their own
organisation's system of formal staff performance appraisal.
(10 marks)
(c)
According to the research findings, environmental action by organisations and
sustainability programmes are highly regarded by employees. Explain why this
might be the case.
(5 marks)
(Total marks for Question Three = 25 marks)
Section C continues on the opposite page
Enterprise Operations
6
September 2013
Question Four
Repville is a region that has long been associated with growing fine quality fruit. Up until a
century ago all produce was transported by rail for sale at markets in the country’s major cities.
This changed when a cooperative of the region’s fruit producers called Repville Cooperative was
formed and part of the fruit harvest was preserved, bottled and sold more profitably to an
intermediary. Today, Repville is a private company and its products account for the entire
region’s harvest. The very word 'Repville' is associated with high quality, uniquely flavoured
jams and marmalades. These products are sold in exclusive outlets and delicatessens
throughout the country and are easily recognised by their distinctively coloured and shaped
glass bottles which are similar to those used a century ago.
The company recently appointed a new Head of Strategy from XYZ where she was Marketing
Director. (XYZ is a fast growing low cost international producer of household furniture which
appears in many stores, in some cases bearing the store’s name). Having reviewed Repville’s
marketing and other operations she has produced a draft strategy which she has discussed with
senior managers at a company 'away day'. Key features of the strategy include a doubling of
revenues within five years and a need to strengthen existing marketing practices. Part of her
proposals for strengthening marketing practices will involve the purchase of Customer Relations
Management (CRM) software. (She favours particular software that is used by XYZ and is 'tried
and tested').
Reactions to the draft strategy are 'mixed' and although senior managers favour a growth
strategy, some believe that revenue projections are too ambitious. Others fear that rapid growth
may damage the brand. One manager warned that 'Consumer goods vary enormously by type,
Repville operates an entirely different marketing model to XYZ, and what worked at XYZ may
not work here'.
Required:
(a)
Discuss different marketing possibilities for increasing revenue which will not
damage Repville's brand.
(10 marks)
(b)
Explain the differences between Repville and XYZ in terms of marketing
considerations.
(10 marks)
(c)
Describe the advantages of the Head of Strategy's idea for strengthening customer
relations management by using CRM software.
(5 marks)
(Total for Question Four = 25 marks)
(Total marks for Section C = 50 marks)
End of Question Paper
September 2013
7
Enterprise Operations
This page is blank
Enterprise Operations
8
September 2013
This page is blank
September 2013
9
Enterprise Operations
This page is blank
Enterprise Operations
10
September 2013
LIST OF VERBS USED IN THE QUESTION REQUIREMENTS
A list of the learning objectives and verbs that appear in the syllabus and in the question requirements for
each question in this paper.
It is important that you answer the question according to the definition of the verb.
LEARNING OBJECTIVE
Level 1 - KNOWLEDGE
What you are expected to know.
Level 2 - COMPREHENSION
What you are expected to understand.
VERBS USED
DEFINITION
List
State
Define
Make a list of
Express, fully or clearly, the details/facts of
Give the exact meaning of
Describe
Distinguish
Explain
Communicate the key features
Highlight the differences between
Make clear or intelligible/State the meaning
or purpose of
Recognise, establish or select after
consideration
Use an example to describe or explain
something
Identify
Illustrate
Level 3 - APPLICATION
How you are expected to apply your knowledge.
Apply
Calculate
Demonstrate
Prepare
Reconcile
Solve
Tabulate
Level 4 - ANALYSIS
How you are expected to analyse the detail of
what you have learned.
Level 5 - EVALUATION
How you are expected to use your learning to
evaluate, make decisions or recommendations.
September 2013
Analyse
Categorise
Compare and contrast
To put to practical use
Ascertain or reckon mathematically
To prove with certainty or to exhibit by
practical means
Make or get ready for use
Make or prove consistent/compatible
Find an answer to
Arrange in a table
Construct
Discuss
Interpret
Prioritise
Produce
Examine in detail the structure of
Place into a defined class or division
Show the similarities and/or differences
between
Build up or compile
Examine in detail by argument
Translate into intelligible or familiar terms
Place in order of priority or sequence for action
Create or bring into existence
Advise
Evaluate
Recommend
Counsel, inform or notify
Appraise or assess the value of
Propose a course of action
11
Enterprise Operations
Enterprise Pillar
Operational Level Paper
E1 – Enterprise Operations
September 2013
Tuesday Morning Session
Enterprise Operations
12
September 2013