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Strategic Management Questions and Answers

Question 1

PQR is a software design company. The Board of PQR has always openly encouraged partnerships with a wide range of designers and other Organizations in its industry, to continually develop and enhance the services it offers and to utilise the expertise and knowledge of a range of individuals and Organizations. PQR's staff have also been highly creative and innovative in the design services they provide.  PQR regularly analyses and keeps up to date with changes in the environment in which it operates. PQR operates a sophisticated website to promote its services and keep in touch with its service users.

 

Which TWO of the following attributes of a change adept Organization, as defined by Kanter, has PQR demonstrated?

Options:

A.

Environmental awareness

B.

Openness to collaborate

C.

Sophisticated systems

D.

Imagination to innovate

E.

Continual service development

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Question 2

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?

Options:

A.

CCC should focus on its stakeholders' needs in turn.

B.

CCC should give the animal charity the money to establish a wildlife sanctuary.

C.

CCC should conduct discussions with its stakeholders and reach an acceptable compromise.

D.

CCC should conduct a PESTLE analysis.

Question 3

DEF is a medium sized business which manufactures children's clothing. In the last 5 years demand has steadily increased and DEF is struggling to meet this demand within its current manufacturing capacity. DEF's current manufacturing machinery was installed over 10 years ago and now requires updating, if DEF is to survive in the marketplace. 

 

DEF has established that the latest manufacturing technology would cost $2 million. This would be funded by the shareholders. It would payback within 2 years and would allow DEF to double output from its current level within this 2 year period. It will also improve product consistency and quality. However, it will result in the loss of 20% of DEF's manufacturing staff, most of whom are low paid and low skilled.

 

DEF is currently reviewing this proposed investment strategy, in terms of whether it meets the criteria of Suitability, Acceptability and Feasibility.

 

Which of the following correctly identifies the criteria which are met, in regard to DEF's proposed investment strategy?

Options:

A.

Suitable and Acceptable

B.

Suitable and Feasible

C.

Acceptable and Feasible

D.

Suitable, Acceptable and Feasible

Question 4

ZZZ is a retailing Organization that is suffering falling market share and falling profits.

 

ZZZ has a new Chief Executive Officer (CEO) who is urgently setting up a strategic performance evaluation system. This will involve identifying Critical Success Factors (CSFs) and then monitoring Key Performance Indicators (KPIs).

 

Advise the CEO which of the following statements is suitable for the role that a Chartered Global Management Accountant should undertake.

Options:

A.

Identify CSFs, develop KPIs, and report on ZZZ's performance against them.

B.

Help strategic management to clarify CSFs then develop KPIs, and report on ZZZ's performance against them.

C.

Develop KPIs from a range of external data and report on ZZZ's performance against them.

D.

Act as a change leader in developing the strategic performance evaluation system.

Question 5

TTT is a software design company which has grown successfully over the last 8 years. It has been highly innovative and often collaborates with a number of external partners to produce high quality, innovative software for a wide range of customers.

 

TTT's owner, K, has been a driving force behind its success. He spends a great deal of time analysing what is happening in the marketplace and trying to predict what customers need from TTT, through a network of industry contacts. He has a strong vision for TTT and communicates this, with conviction, to his staff in regular face to face meetings. He recognises and rewards his staff when new developments are undertaken and completed successfully and believes that if staff feel appreciated, then they will be more motivated to succeed. 

 

Which THREE of the following skills for a leader in a change adept Organization does K demonstrate?

Options:

A.

Tuning into the environment

B.

Building coalitions

C.

Communicating a compelling aspiration

D.

Learning to persevere

E.

Making everyone a hero

Question 6

AAA is a car manufacturer which has undertaken a strategy to lobby a regional authority to include Its flagship hybrid model in a regional initiative to grant low-emission cars access to faster moving vehicle lanes. These faster vehicle lanes were historically only available to cars carrying passengers. Given the benefits of AAA's low emission vehicles, AAA's cars were authorised to make use of the faster lanes, even when no passengers were on board providing AAA with a decisive competitive edge.

Which of the following strategies is AAA pursuing?

Options:

A.

An environmental strategy.

B.

A sustainability strategy.

C.

A non-market strategy.

D.

A market strategy

Question 7

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?

Options:

A.

Scenario planning

B.

Morphological analysis

C.

Cross impact analysis

D.

Porters 5 Forces

E.

Brainstorming

Question 8

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?

Options:

A.

As part of DF's strategic review, identify forces facilitating the need for proposed change.

B.

Identify forces facing DF's activities that may create barriers and resistance to change.

C.

Provide a framework for identifying forces for and against the proposed changes within DF.

D.

Identify influential senior managers who will drive through changes in DF's strategic direction.

Question 9

'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'? 

Options:

A.

As technology advances over time, the size of datasets that qualify as 'big data' will also increase.

B.

The definition of 'big data' can vary by sector, depending on the software tools and dataset sizes common to a particular industry.

C.

Sufficient analytical and managerial talent is available to exploit the opportunities associated with 'big data'.

D.

'Big data' will require the right infrastructure, incentives and safeguards to address public concerns.

Question 10

DDD is a business which sells entertainment products and now wants to move to a position where it uses e-business as a fundamental part of its business strategy.

Which of the following benefits would result from DDD's use of e-business? (Choose all that apply.)

Options:

A.

Cost reductions because of lower overheads and cheaper procurement.

B.

Better control of information through monitoring website activity.

C.

Easier access to loan finance.

D.

An increased use of tacit knowledge.

E.

A reduction in labour turnover and higher morale.

F.

Increased online revenues.

Question 11

Which TWO of the following benefits could be achieved through the use of Triple Bottom Line (TBL) Reporting?

Options:

A.

It may attract ethically aware customers.

B.

It is a straightforward and easy method for measuring targets.

C.

It is easy to quantify the environmental measures included

D.

It can ensure consistency in maximising stakeholder goals

E.

lt can result in cost savings.

Question 12

QQQ has identified a new strategy which is both Suitable and Feasible However, it will not be Acceptable to some groups of QQQ's stakeholders who have publicly objected to it.

Which THREE of the following statements are correct ways of resolving competing stakeholder objectives, as suggested by Cyert and March?

Options:

A.

Negotiate with the key stakeholders to achieve an acceptable compromise.

B.

Conduct research into the causes of the stakeholders' objectives.

C.

Offer to fully address one group of stakeholders' objections now with a promise to meet the other groups' objections in the future

D.

Threaten to close down the business unless the objectors withdraw their opposition

E.

Publish more information about the new strategy including its profit potential.

F.

Exercise the Board of Directors' power and implement the strategy despite the objections.

Question 13

RRR is a state-funded hospital serving a major city. It is under political pressure to reduce the waiting times of patients requiring surgical operations who need to stay at the hospital for several nights. The doctors blame a lack of bed spaces and are calling for more investment in extra beds.

 

You have been conducting some research into the problem and have discovered the following problems affecting the utilisation of the existing beds at RRR:

 

   • many patients stay extra nights due to lack of communication with the health professionals needed to monitor the patients at home

   • beds are left empty each day when patients miss their admission date but there are no processes to inform other patients to offer them the space

   • patients are admitted on days when there are no spaces available on the special equipment needed to treat their particular condition

 

Which THREE  linkages between Primary Activities in the Value Chain of RRR need to be improved to provide extra bed spaces at RRR?

Options:

A.

Between outbound logistics and service.

B.

Between inbound logistics and marketing and sales.

C.

Between inbound logistics and operations.

D.

Between inbound logistics and outbound logistics.

E.

Between inbound logistics and technology development.

Question 14

HHH is a teaching Organization. HHH has begun to employ virtual reality to train the customers on its courses in how to perform complex manual tasks such as repairing machinery.

 

Which activity in Porter's Value Chain has been impacted by HHH's use of virtual reality?

Options:

A.

Operations

B.

Service

C.

Procurement

D.

Human resources management

Question 15

ZYX is a global hotel chain, employing over 10,000 staff worldwide. ZYX operates a Code of Conduct for all of its staff, which states “Our staff are the most important assets of our business operations. We expect the highest standards of ethical and professional conduct from all staff, who must display the principles of trust, respect, equality, integrity and fairness at all times.”

Which THREE of the following actions could ZYX take to positively influence its staff to work to the ethical and professional principles in its Code of Conduct? (Choose three.)

Options:

A.

Disciplinary actions, such as fines, for staff who do not display high ethical and professional standards.

B.

Publication on its website of ZYX's Code of Conduct and regular examples of staff displaying the highest standards of professional conduct.

C.

Induction and on-going staff training on ZYX's Code of Conduct and ethical and professional principles.

D.

Interview process for staff prior to employment, to assess their understanding of ethical and professional behavior.

E.

Set performance targets in diversity and equality for its hotel senior managers.

F.

Operate a system of reward incentives for staff who display high ethical and professional standards.

Question 16

Which of the following is NOT one of the main principles contained within the UK Corporate Governance Code?

Options:

A.

Remuneration

B.

Leadership

C.

Disclosure

D.

Accountability

Question 17

SDC is a medium sized IT systems development company. SDC employs highly qualified and experienced systems development experts. It invests heavily in staff training and development and as a result, staff are highly motivated and staff turnover is low. SDC has a strong culture of team work and innovation, which the senior managers believe is the basis of SDC's success. The senior managers, who are also the founders of SDC, are highly experienced and have a strong vision for the business.

Which THREE of the following factors would be the main focus of a resource audit for SDC? (Choose three.)

Options:

A.

Make-up

B.

Markets

C.

Manpower

D.

Machinery

E.

Management

F.

Money

Question 18

A leading supermarket chain is undertaking environmental scanning as it is concerned that it is becoming uncompetitive and profits have started to fall. The Board is concerned that when the next Annual General Meeting is held, it will need to have a viable strategy to present to its shareholders, in order to prevent shareholders' protests.

  

In the past the company has been reluctant  to offer an Internet shopping service. However, it now believes that by offering this service and also introducing customer relationship marketing (CRM) this will produce a strategy that will help it to improve its competitiveness.

 

Which of the following statements apply to CRM?

 

Select ALL that apply.

Options:

A.

CRM utilises marketing resources to retain, rather than simply attract new customers.

B.

The company must be prepared to take customers' needs into account and be able to meet these needs.

C.

In mature markets, existing customers provide the most likely source of future earnings. 

D.

CRM is about marketing to customers to obtain their loyalty, so customer research is not needed. 

E.

The CRM process needs to include increasing the range of products that will be offered to customers. 

Question 19

DDD has just issued a profit forecast in connection with a proposed take-over of a business.  The take-over is strongly opposed by the target company. DDD's Management Accountant played a large part in helping DDD's Finance Director prepare the profit forecast.  However, the Management Accountant believes that the profit forecast is overly optimistic and is based on some false assumptions.  As a result the Management Accountant thinks the profit forecast is misleading. Select THREE of the actions below which are consistent with CIMA's Code of Ethics.

Options:

A.

The Management Accountant should follow established internal procedures.

B.

The Management Accountant should obtain advice from his professional body/bodies.

C.

The Management Accountant should resign from his job.

D.

The Management Accountant should maintain a discreet silence.

E.

The Management Accountant should anonymously inform the media of his concerns.

F.

The Management Accountant should publicly accuse the Finance Director of issuing a misleading profit forecast.

Question 20

In 1989 Earl developed a framework to analyse the linkages between information systems, information technology and information management. Which of the following is NOT a characteristic of Information Systems strategy?

Options:

A.

Aligning strategy development with business needs and seeking strategic advantage.

B.

Business-led and demand-orientated; developing new strategic choices.

C.

Formed with key objectives of using the information resource and generating new businesses.

D.

Organization-based, relationships-orientated and management focused.

Question 21

Which of the following categorizations would be correct, according to McFarlan's Strategic Grid, for a system which is critical to sustaining existing business but its future strategic importance is considered to be low?

Options:

A.

Turnaround

B.

Support

C.

Strategic

D.

Factory

Question 22

Information Systems (IS) strategy is correctly defined as:

Options:

A.

The planning, organizing, investment and control of information applications in the organization.

B.

Identifying the information needs of the organization and aligning development to them.

C.

Decisions on the hardware, software and communications solutions used in the organization.

D.

The roles and structure of information specialists in the organization and their relationship with users.

Question 23

A Service Level Agreement (SLA) defines exactly what services a service provider will provide and the required level or standard for those services.

Which of the following statements regarding Service Level Agreements is NOT correct?

Options:

A.

Service Level Agreements should include the expected response time to technical queries.

B.

Service Level Agreements should include the targets and benchmarks to be used and the consequences for failing to meet them.

C.

Service Level Agreements should include the procedures for cancelling the contract.

D.

Service Level Agreements should include a guarantee to provide 100% availability for complaint resolution.

Question 24

VWX is a successful airline with a proven record in successfully exploiting the resources it obtains. Which of the following might create an additional Core Competence for VWX?

Options:

A.

Unique rights to operate from the most popular airport serving a capital city.

B.

Sufficient aircraft to operate a good timetable.

C.

A market with more passengers than the existing airlines can satisfy.

D.

The airline operations that operate below the level of middle management.

Question 25

As a Group Management Accountant you have been asked to explain the different types of change currently taking place within a number of the Group's subsidiaries.

Select the appropriate type of change for each of the descriptions below:

Options:

Question 26

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?

Options:

A.

Design of key performance measures for an information system.

B.

Employing an IT Director to control the Organization's information system.

C.

Selection of the hardware for a new Information system.

D.

Evaluation of an SBU's information system to ensure that it continues to meet customer needs.

Question 27

Which of the following correctly defines Information Systems (IS) strategy?

Options:

A.

Identifying the information needs of the Organization and aligning development to them.

B.

The roles and structure of information specialists in the Organization and their relationship with users.

C.

Decisions on the hardware, software and communications solutions used in the Organization.

D.

The planning, organising, investment and control of information applications in the Organization.

Question 28

The Boston Consulting Group developed a matrix to assist managers in identifying the cash flow requirements of different businesses.  The matrix suggests a number of appropriate strategies. Select ALL the strategies that apply to the Boston Consulting Group's matrix.

Options:

A.

Hold

B.

Build

C.

Divest

D.

Defer

E.

Re-appraise

F.

Diversify

Question 29

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.)

Options:

A.

It provides a market development opportunity for YZ.

B.

YZ will gain a first mover advantage.

C.

There is stakeholder approval for the investment.

D.

It is essential given the strategic threats to YZ.

E.

There are sufficient investment funds available

Question 30

Which of the following would be likely to encourage an organization to use Scenario Planning? (Choose all that apply.)

Options:

A.

The organization often experiences 'group-think', leading to a narrow view of the future.

B.

Competitor's are increasingly using Scenario Planning as part of their strategy formulation process.

C.

The organization has achieved all of its objectives and operates within a stable external environment.

D.

The organization has not previously experienced any major surprises or expensive strategic mistakes.

E.

Uncertainty in the industry is high, relative to management's ability to predict or adjust to change.

Question 31

GQF is an exclusive fashion retailer. GQF has built its strong name and reputation upon its high price and exclusive image. It has recently attempted to increase sales by expanding into lower-pnced clothing sales in department stores. It has also allowed its name to appear on a number of licensed products such as perfume and watches. Many customers who would not normally purchase GQF products have shown a high level of interest in these lower-priced products and in the last twelve months, sales have increased dramatically GQF's shareholders have expressed their satisfaction with the results.

However, over the same period, sales of its high priced, exclusive branded goods have fallen as some of its traditional, loyal customers have become disillusioned by the lack of exclusivity of the GQF brand.

Which of the following criteria have been achieved by the strategy adopted by GQF?

Options:

A.

Suitable, Acceptable and Feasible

B.

Acceptable and Feasible

C.

Suitable and Acceptable

D.

Feasible and Suitable

Question 32

TTT, a manufacturer of computer monitors, is conducting a strategic analysis.  Which THREE of the following should be classified as Threats?

Options:

A.

An increase in the rate of inflation

B.

A serious fire in its main factory

C.

Its main competitor going out of business

D.

Consumers' increased preference for tablet computers

E.

A 20% increase in corporate taxation

F.

A design fault means TTT must compensate customers

Question 33

Which TWO of the following are economic factors?

Options:

A.

Change of government

B.

Interest rates

C.

Obsolescence

D.

Exchange rates

E.

Demographic change

Question 34

In respect of mission statements, place the word "characteristic" or "purpose" against the relevant activity.

Options:

Question 35

JJJ is a private company belonging to a famous former athlete. It operates gyms and fitness clubs across its home country. Each gym or fitness club is treated as a profit centre and the manager of each centre is paid bonuses based on its financial performance.

 

Three years ago it introduced multidimensional performance measures into its management control systems. These measure capacity utilisation, financial performance, competitiveness, innovation, and the flexibility of its centres to cope with changing demands.

 

The managers of its centres have been leaving at a very high rate over the last two years. They have claimed that the measures are too open to interpretation and when they think they are improving the centre's performance they are told they are doing the wrong thing. They also complain that the managers in the centres near big cities find it much easier to reach their targets than the managers of other centres.

 

Using Fitzgerald and Moon's Building Block model,  where does the problem lie?

Options:

A.

Standards and Rewards

B.

Dimensions and Rewards

C.

Dimensions and Standards

D.

Standards, Dimensions and Rewards

Question 36

Porter's Generic Strategies are often applied within an Organization's value chain, in order to organise the value-adding activities to support the chosen strategy.

Place the Generic Strategy which best defines the strategic approach being taken against each of the activities listed below.

Options:

Question 37

QR is a conglomerate with two divisions, A and B. Given the information below, select the most appropriate strategy for each division to implement.

Options:

Question 38

Strategy is usually described as having three different levels: namely corporate strategy, business strategy and functional strategy. Which of the following are corporate strategies? Select ALL that apply.

Options:

A.

A company has decided to invest to increase its levels of service to its key customers.

B.

A company has decided to liquidate its assets and go out of business.

C.

A company has decided to diversify into a new industry

D.

A company has decided to implement pay equality for all its employees

E.

A company has decided to implement a price cut to increase its market share.

F.

A company has decided to implement a cloud based disaster-recovery strategy.

Question 39

CIMA has described the two roles of enterprise governance as 'preventing failure' and 'ensuring success'. CIMA sees 'preventing failure' as being related to having proper risk management and corporate governance procedures in place. CIMA sees 'ensuring success' as being concerned with the practise of strategic management.

 

Which THREE of the following responsibilities of senior management are essential to 'ensuring success' for the Organization?

Options:

A.

Providing leadership and direction to the Organization.

B.

Maintaining awareness and responsiveness to abrupt change in the Organization's environment.

C.

Demonstrating competence in the execution of new initiatives.

D.

Avoiding the dominance of the executive team by particular personalities. 

E.

Ensuring conformance with the codes of corporate governance.

Question 40

BBB operates a small chain of coffee shops within Country X. a mature economy in northern Europe. BBB was established 20 years ago and currently employs over 150 staff in 25 shops located in major towns and cities throughout Country X. BBB attracts a wide range of customers, who are attracted by its extensive menu of coffee products and food Customers can either consume their purchases within the shop or can take their purchases away.

Which THREE of the following external environmental changes would have the greatest impact on BBB in the next three years?

Options:

A.

A worldwide shortage of coffee beans due to climate changes, affecting availability.

B.

The opening of an internationally renowned chain of coffee shops in Country X.

C.

An increase in the national statutory minimum wage in Country X.

D.

A planned refurbishment of 80% of BBB's shops to update its image and increase shop floor space

E.

An increase in the average age of the population in Country X due to falling birth rates.

Question 41

MNO has decided to widen the scope of its performance measurement by constructing and using a Balanced Scorecard. MNO has established a range of Key Performance Indicators (KPI's) for use within its Balanced Scorecard.

Place each of the Balanced Scorecard perspectives against the most relevant KPI.

Options:

Question 42

HHH is a mobile telecommunications provider in Country D. HHH presently offers telephone and text services at a price per unit (a unit is defined as 1 minute or 160 text characters). It provides Internet connection from handsets at a fixed fee per month. Select the appropriate strategic response to each of the industry developments listed below.

Options:

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Total 280 questions