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CIMA E3 - Strategic Management Question Tutorial Sample Questions:

1. M is a car manufacturer in Country C.
Every day, at 09.00, members of M's staff practice meditation and Tai Chi for 30 minutes, before their normal workday commences.
M's staff are paid during this time and M considers the practice to be a benefit both to staff and the company.
Staff operate with high levels of efficiency and absenteeism levels are low.
The auditors of M have recommended that M stop these sessions, stating that they consider them to be a waste of time and a drain on resources.
Which of the following aspects of M's culture would the auditors recommendation impact on?

A) Symbols
B) The organizational paradigm and values
C) Stories and myths
D) Routines and rituals

2. 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) Strategic
B) Turnaround
C) Support
D) Factory

3. Which THREE of the following issues relate to the Corporate Strategy of an organization? (Choose three.)

A) Achieving advantage over competitors.
B) Meeting the needs of key customers.
C) Acquisitions, disposals and diversification.
D) Avoiding competitive disadvantages.
E) Entering new industries.
F) Leaving existing industries.

4. Company TTT produces a range of products, including products T1 and T5.
Product T1: Profitability has declined in recent years, although small profits continue to be made as the market contracts due to changing customer preferences. Overall market share is low and continues to reduce.
However, in addition to external sales T1 is also used as a component of product T5.
Product T5: A market leader within a low growth market, sources components both externally and from TTT's other subsidiaries. T5 benefits from significant economies of scale and TTT has recently considered modernizing its T5 production line but following a cost benefit analysis, decided not to proceed.
Which of the following is an appropriate strategy for TTT to adopt?

A) Harvest product T1 and Divest product T5.
B) Harvest both product T1 and product T5.
C) Divest product T1 and Harvest product T5.
D) Divest both product T1 and product T5.

5. LLL is an international oil and gas exploration company. It is considering investing S300 million in developing new oil fields in Country D.
For this it will need to obtain a license from the government of Country D.
These new oil fields will bring much wealth to Country D because a large proportion of the revenue from the production of oil will be paid to the government as part of the licensing agreement.
However, oil production in Country D will have some undesirable social effects, such as the threat of pollution, congestion to the roads and pressure on local amenities such as housing, electricity and clean water.
Which of the following approaches to stakeholder management should LLL NOT undertake in order to enter Country D?

A) Issue free shares in a Joint Venture to develop oil fields to government ministers from Country D.
B) Commit to improving the local amenities and roads as a part of the application for a license in Country D.
C) Develop and circulate a promotional video showing the benefits enjoyed by other countries in which LLL operates.
D) Undertake stakeholder mapping to identify the interests of the most powerful players in the decision to grant a license to LLL.

Solutions: