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

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

3. As a CIMA qualified management accountant working within a manufacturing company, you are subject to both CIMA's Code of Ethics and your company's Code of Business Conduct.
Which TWO of the following statements are TRUE? (Choose two.)

A) Where there is a difference between CIMA's Code of Ethics and the company's Code of Business Conduct, the company's Code of Business Conduct takes priority.
B) Both CIMA's Code of Ethics and the company's Code of Business Conduct include references to Confidentiality. Disclosure on public interest grounds is therefore prohibited.
C) A company's Code of Business Conduct can be rules based.
D) Both CIMA's Code of Ethics and the company's Code of Business Conduct must be based on a set of basic principles.
E) As a CIMA qualified Management Accountant you must follow CIMA's Code of Ethics.

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

5. 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?

A) Support
B) Strategic
C) Turnaround
D) Factory

Solutions: