CIMAPRO15-E03-X1-ENG E3 – Strategic Management Question Tutorial Exam

Strategic level
E3 builds on the insights gained from E1 and E2 about how organisations effectively implement their strategies by aligning their structures, people, process, projects and relationships. E3 aims to develop the skills and abilities of the strategic leaders of organisations, enabling them to create the vision and direction for the growth and long-term sustainable success of the organisation. This involves successfully managing and leading change within the process of strategy formulation and implementation.

Summary of syllabus
Each subject is divided into a number of broad syllabus topics.

A percentage weighting is shown against each syllabus topic and is intended as a guide to the proportion of study time each topic requires.

It is essential that all topics in the syllabus are studied, as all topics will be examined. The weightings do not specify the number of marks that will be allocated to topics in the examination.
Weight Syllabus topic
20% A. Interacting with the organisation’s environment
30% B. Evaluating strategic position and strategic options
20% C. Leading change
15% D. Implementing strategy
15% E. The role of information systems in organisational strategy

Assessment
Format: computer based Objective Test
Availability: on demand at any of the 5000 Pearson VUE centres around the world
Length: 90 minutes
Marking: computer marked
Results: provisional result available immediately followed by confirmation no more than 48 hours later

Further information
Objective Tests are comprised of a range of items including short multiple choice questions, number entry questions, drag and drop questions and other formats. They test all component learning outcomes across the whole subject.

A. The Strategy process
B. Analysing the organisational ecosystem
C. Generating strategic options
D. Making strategic choices
E. Strategic control
F. Digital strategy

What do you learn in E3?
• The foundation of strategic management and an understanding of the dynamics of the organisational ecosystem and how it affects the strategy of the organisation.
• Strategic choice and how options are generated, linking them to the purpose, values and vision of the organisation and how the options are evaluated, chosen and integrated coherently to form the strategy of the organisation.
• How strategy is implemented, how implementation objectives are achieved and how change is managed.
• What are the technologies that underpin digital transformation and various elements of digital strategy.

P3 Risk Management
A. Enterprise risk
B. Strategic risk
C. Internal controls
D. Cyber risk

What do you learn in P3?
• How to identify, evaluate and manage enterprise risks.
• Where strategic risks emanate from, how to evaluate them and understand how oversight of these risks is critical to the governance of the organisation.
• How internal controls can be used effectively in the risk management process and how to identify, analyse, remedy and report strategic risks including cyber risks.

F3 Financial Strategy
A. Financial policy decisions
B. Sources of long term funds
C. Financial risks
D. Business valuation

What do you learn in F3?
• The different strategic financial objectives and policy options that are open to organisations.
• The types of funds available to organisations to finance the implementation of their strategies, including where and how they access these funds at the right time, in the right quantities and at the right cost.
• The sources of financial risk, how to evaluate and manage financial risk appropriately, and techniques in business valuation to assess whether a company has created and preserved value within the organisation.
• The valuation techniques to calculate value of organisations and conditions applicable for such calculations especially intangibles in the digital world and how to report intangible value and their drivers in integrated reporting.

Strategic Level Case Study
Each level of the CIMA Professional Qualification culminates in a Case Study Examination, which integrates the knowledge, skills and techniques from across the three pillars into one synoptic capstone examination.

At the Strategic level, the role simulated is that of the senior finance manager. The Case Study Examination provides a simulated context which allows learners to demonstrate that they have acquired the required knowledge, skills, techniques and mindset for that role.

Further detail of the Management Case Study can be found in the Examination Blueprints

QUESTION 1
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. Turnaround
B. Support
C. Strategic
D. Factory

Answer: B

QUESTION 2
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. As a CIMA qualified Management Accountant you must follow CIMA’s Code of Ethics.
B. 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.
C. Both CIMA’s Code of Ethics and the company’s Code of Business Conduct must be based on a set of basic principles.
D. 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.
E. A company’s Code of Business Conduct can be rules based.

Answer: D,E
Section: (none)
Explanation
Explanation/Reference:

QUESTION 3
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.)

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

Answer: C,D,E

QUESTION 4
Which THREE of the following frameworks are used solely to evaluate the external environment of an organization? (Choose three.)

A. Porter’s Value Chain
B. Kaplan and Norton’s Balanced Scorecard
C. PEST Analysis
D. Porter’s Diamond
E. SWOT analysis
F. Porter’s Five Forces Model

Answer: A,C,F

QUESTION 5
RRR is an insurance company which maintains an extensive database of its customer transactions over the
last 10 years. RRR is developing a new product and has carried out a SWOT analysis.
Within which of the following aspects of the SWOT analysis would RRR include its customer database?

A. Opportunity
B. Threat
C. Weakness
D. Strength

Answer: D

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