DO NOT OPEN THIS QUESTION PAPER UNTIL YOU ARE TOLD TO DO SO Enterprise Pillar E1 Enterprise Operations 27 August 2013 Tuesday Morning Session Instructions to candidates You are allowed three hours to answer this question paper. You are allowed 20 minutes reading time before the examination begins during which you should read the question paper and, if you wish, highlight and/or make notes on the question paper. However, you will not be allowed, under any circumstances, to open the answer book and start writing or use your calculator during the reading time. You are strongly advised to carefully read ALL the question requirements before attempting the question concerned (that is all parts and/or subquestions). ALL answers must be written in the answer book. Answers or notes written on the question paper will not be submitted for marking. ALL QUESTIONS ARE COMPULSORY. Section A comprises 10 sub-questions and is on pages 2 to 4. Section B comprises 6 sub-questions and is on page 5. Section C comprises 2 questions and is on pages 6 and 7. The list of verbs as published in the syllabus is given for reference on page 11. Write your candidate number, the paper number and examination subject title in the spaces provided on the front of the answer book. Also write your contact ID and name in the space provided in the right hand margin and seal to close. Tick the appropriate boxes on the front of the answer book to indicate the questions you have answered. E1 Enterprise Operations TURN OVER The Chartered Institute of Management Accountants 2013
SECTION A 20 MARKS [You are advised to spend no longer than 36 minutes on this question] ANSWER ALL TEN SUB-QUESTIONS Instructions for answering Section A The answers to the ten sub-questions in Section A should ALL be written in your answer book. Your answers should be clearly numbered with the sub-question number and ruled off so the markers know which sub-question you are answering. For multiple choice questions you need only write the sub-question number and the answer option you have chosen. You do not need to start a new page for each sub-question. Each of the sub-questions numbered from 1.1 to 1.10 inclusive, given below, has only ONE correct answer. Each is worth two marks. Question One 1.1 A lean approach is associated with which ONE of the following? A Supply sourcing strategies B Demographic profiling C Employee selection criteria D Removal of waste 1.2 Which ONE of the following is NOT normally a barrier to international trade? A High levels of consumption tax B Subsidies for domestic (home) producers C Customs duties D Embargoes 1.3 Under a free market economy prices are determined by which ONE of the following? A The stock market B Government regulation C Multinationals D Supply and demand Enterprise Operations 2 September 2013
1.4 Which ONE of the following is NOT a macroeconomic factor? A The relationship between price and demand in a particular market B Price inflation C Levels of savings and investment D Unemployment amongst young people 1.5 Under an ABC inventory management system which ONE of the following items should be monitored most closely? A B C D 'A' classified items 'B' classified items 'C' classified items All items equally 1.6 Which ONE of the following characteristics is NOT normally associated with a Non- Governmental Organisation (NGO)? A B C D Furthering humanitarian causes Championing social causes Making profits Exercising independence 1.7 When government regulation and restriction is absent the effect is A protectionism. B economic nationalism. C liberalisation. D a mixed economy. 1.8 Mintzberg's design of an effective organisation does NOT include which ONE of the following categories? A B C D Technostructure Outsource partners Operating core Strategic apex Section A continues on the next page TURN OVER September 2013 3 Enterprise Operations
1.9 Which ONE of the following is NOT a feature of a service? A Intangibility B Immediate consumption C Inventory management D Involvement of the consumer 1.10 Reck and Long's strategic positioning tool measures the contribution of which ONE of the following organisational functions? A B C D Quality control and assurance Purchasing and supply The management of systems The management of human resources (Total for Section A = 20 marks) Reminder All answers to Section A must be written in your answer book Answers or notes to Section A written on the question paper will not be submitted for marking End of Section A Section B starts on the opposite page Enterprise Operations 4 September 2013
SECTION B 30 MARKS [You are advised to spend no longer than 9 minutes on each sub-question in this section] ANSWER ALL SIX SUB-QUESTIONS IN THIS SECTION - 5 MARKS EACH Question Two (a) Describe FIVE types of loss that a company may face when investing in another country unless the risks are managed. (b) Distinguish a wide area network (WAN) from a local area network (LAN) providing an example of each. (c) Explain the relationship between system implementation and a systems development life cycle (SDLC). (d) Describe the potential disadvantages of introducing Just-In-Time (JIT) operations within a manufacturing organisation. (e) Explain FIVE ways in which advances in technology have allowed international trade to expand. (f) The implementation of a new information system may sometimes meet with staff resistance. Explain TWO management strategies for overcoming resistance that have the advantage of speed but could raise ethical and possibly legal concerns. (Total for Section B = 30 marks) End of Section B Section C starts on the next page TURN OVER September 2013 5 Enterprise Operations
SECTION C 50 MARKS [You are advised to spend no longer than 45 minutes on each question in this section] ANSWER BOTH QUESTIONS IN THIS SECTION 25 MARKS EACH Question Three A professional management body is funding a major research project into the relationship between certain HR systems and workplace motivation. As part of this project the University of S2013 has been engaged to investigate the use of staff performance appraisal systems in large organisations. The University's work involves a number of stages: Stage 1: questionnaires issued to all large organisations to understand the range of performance appraisal systems operating. Stage 2: initial results from stage 1 discussed with a group of senior managers (such as HR directors and chief executives). Stage 3: focus group meetings with employees at all levels within the organisations surveyed to understand employee motivations, attitudes and experiences. Stage 4: final report to the professional body and subsequent dissemination of findings. Stage 3 has now been completed and a number of interesting issues have emerged: The use of formal performance appraisal systems varies significantly between sectors from 80% of financial service organisations to only 50% in the retail sector. Organisations not using an appraisal system do not feel that the potential benefits of a formal system justify the time and cost involved in operating it. Of the systems in operation, 90% involved an annual meeting between employees and their appraiser, normally their line manager. 15% of organisations used the outcomes from the system to help determine pay. There was little relationship between levels of motivation and the existence of a staff performance appraisal system. (Motivation was more closely related to issues such as organisational reputation and the operation of environmental action and sustainability programmes.) Employees were generally critical of their own organisation's system of formal staff performance appraisal. Required: (a) Describe the potential benefits of a formal staff performance appraisal system for a large organisation. (10 marks) (b) Explain the possible reasons for employees being critical of their own organisation's system of formal staff performance appraisal. (c) (10 marks) According to the research findings, environmental action by organisations and sustainability programmes are highly regarded by employees. Explain why this might be the case. (Total marks for Question Three = 25 marks) Section C continues on the opposite page Enterprise Operations 6 September 2013
Question Four Repville is a region that has long been associated with growing fine quality fruit. Up until a century ago all produce was transported by rail for sale at markets in the country s major cities. This changed when a cooperative of the region s fruit producers called Repville Cooperative was formed and part of the fruit harvest was preserved, bottled and sold more profitably to an intermediary. Today, Repville is a private company and its products account for the entire region s harvest. The very word 'Repville' is associated with high quality, uniquely flavoured jams and marmalades. These products are sold in exclusive outlets and delicatessens throughout the country and are easily recognised by their distinctively coloured and shaped glass bottles which are similar to those used a century ago. The company recently appointed a new Head of Strategy from XYZ where she was Marketing Director. (XYZ is a fast growing low cost international producer of household furniture which appears in many stores, in some cases bearing the store s name). Having reviewed Repville s marketing and other operations she has produced a draft strategy which she has discussed with senior managers at a company 'away day'. Key features of the strategy include a doubling of revenues within five years and a need to strengthen existing marketing practices. Part of her proposals for strengthening marketing practices will involve the purchase of Customer Relations Management (CRM) software. (She favours particular software that is used by XYZ and is 'tried and tested'). Reactions to the draft strategy are 'mixed' and although senior managers favour a growth strategy, some believe that revenue projections are too ambitious. Others fear that rapid growth may damage the brand. One manager warned that 'Consumer goods vary enormously by type, Repville operates an entirely different marketing model to XYZ, and what worked at XYZ may not work here'. Required: (a) (b) (c) Discuss different marketing possibilities for increasing revenue which will not damage Repville's brand. (10 marks) Explain the differences between Repville and XYZ in terms of marketing considerations. (10 marks) Describe the advantages of the Head of Strategy's idea for strengthening customer relations management by using CRM software. (Total for Question Four = 25 marks) (Total marks for Section C = 50 marks) End of Question Paper September 2013 7 Enterprise Operations
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LIST OF VERBS USED IN THE QUESTION REQUIREMENTS A list of the learning objectives and verbs that appear in the syllabus and in the question requirements for each question in this paper. It is important that you answer the question according to the definition of the verb. LEARNING OBJECTIVE VERBS USED DEFINITION Level 1 - KNOWLEDGE What you are expected to know. List Make a list of State Express, fully or clearly, the details/facts of Define Give the exact meaning of Level 2 - COMPREHENSION What you are expected to understand. Describe Communicate the key features Distinguish Highlight the differences between Explain Make clear or intelligible/state the meaning or purpose of Identify Recognise, establish or select after consideration Illustrate Use an example to describe or explain something Level 3 - APPLICATION How you are expected to apply your knowledge. Level 4 - ANALYSIS How you are expected to analyse the detail of what you have learned. Level 5 - EVALUATION How you are expected to use your learning to evaluate, make decisions or recommendations. Apply Calculate Demonstrate Prepare Reconcile Solve Tabulate Analyse Categorise Compare and contrast Construct Discuss Interpret Prioritise Produce Advise Evaluate Recommend To put to practical use Ascertain or reckon mathematically To prove with certainty or to exhibit by practical means Make or get ready for use Make or prove consistent/compatible Find an answer to Arrange in a table Examine in detail the structure of Place into a defined class or division Show the similarities and/or differences between Build up or compile Examine in detail by argument Translate into intelligible or familiar terms Place in order of priority or sequence for action Create or bring into existence Counsel, inform or notify Appraise or assess the value of Propose a course of action September 2013 11 Enterprise Operations
Enterprise Pillar Operational Level Paper E1 Enterprise Operations September 2013 Tuesday Morning Session Enterprise Operations 12 September 2013