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CIMA E3 - Strategic Management Question Tutorial Sample Questions:

1. When FarmCot Foods was founded five years ago, it was a small shop set up by a family of dairy farmers in a disused farm shed, selling their own produce to the local community. The family had decided, at that point in time, to diversify their dairy farming activities into also selling their own milk, cheese and ice cream products.
The aim was to increase their revenues, as dairy farming in their home country had been in decline for a number of years.
Since then, the shop has been very successful and has expanded rapidly over the last three years, due largely to a strong growth in tourism in its home country and a shift in consumer demand for locally sourced fresh farm products. FarmCot Foods is now located in a large purpose-built building on the site of the original farm shed and also operates a very popular cafa, a children's play area and sells a much wider range of products and gifts, which are all sourced from local suppliers.
Which of the following best describes FarmCot Foods approach to strategy development in the last five years?

A) Rational
B) Incremental
C) Freewheeling opportunism
D) Emergent

2. QWE is a private company belonging to a famous former sports professional. It operates gyms and fitness clubs across its home country. Each gym or fitness club is treated as a profit center and the manager of each center is paid bonuses based on its financial performance.
QWE introduced multidimensional performance measures into its management control systems 3 years ago.
These measure competitiveness, financial performance, capacity utilization, innovation and the flexibility of its centers to cope with changing demands.
The managers of QWE's centers have been leaving at a very high rate over the last 2 years. They have claimed that the measures are too open to interpretation and when they think they are improving their center's performance they are told they are doing the wrong things. They also complain that the managers in the centers near big cities find it much easier to reach their targets than the managers of other centers.
According to Fitzgerald and Moon's Building Block model, where does the problem lie?

A) Standards and Rewards
B) Dimensions and Rewards
C) Dimensions and Standards
D) Standards, Dimensions and Rewards

3. 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.)

A) Disciplinary actions, such as fines, for staff who do not display high ethical and professional standards.
B) Operate a system of reward incentives for staff who display high ethical and professional standards.
C) Induction and on-going staff training on ZYX's Code of Conduct and ethical and professional principles.
D) Publication on its website of ZYX's Code of Conduct and regular examples of staff displaying the highest standards of professional conduct.
E) Interview process for staff prior to employment, to assess their understanding of ethical and professional behavior.
F) Set performance targets in diversity and equality for its hotel senior managers.

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

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

Solutions: