CIMAPRO15-E03-X1-ENG Online Practice Questions and Answers

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

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

Which of the following would be a suitable performance measure of Internal Business Processes within Kaplan and Norton's 'Balanced Scorecard' model?

A. Reduction in manufacturing cycle times.

B. New products developed.

C. Increase in market share.

D. Higher P/E ratio.

TTT recently appointed a new Chief Executive, R, to lead it through a period of major change. R immediately set up a change management team which consisted of several senior managers and directors from across the organization. Together, they formulated an overall goal for change and then spent several weeks presenting the need for change to all of the staff through a series of staff meetings. At these meetings R involved staff and built their ideas into the final change strategy.

R also set a series of interim goals to encourage ongoing performance throughout the change process. When the organization reached these goals, R widely publicized these achievements to help motivate staff.

However, after six months, TTT had failed to reach most of the interim goals that had been set. Most of the members of the change management team had not maintained a significant interest in the change process and many of the staff felt that there had been a lack of communication and reward following the initial few weeks of the change process.

Kotter suggested that there were eight steps required to successfully lead change.

Which TWO of the following did R fail to achieve? (Choose two.)

A. Never letting up

B. Incorporate change into the culture

C. Develop a change vision

D. Generate short term wins

E. Empower broad based action

You have been given responsibility, as a newly qualified management accountant, for delivering an ambitious project to centralize and computerize the accounts function within a medium-sized, geographically dispersed business. The timetable also requires the project to be delivered within a very short timescale with limited resources. You have built a team to deal with these proposed changes.

With regard to effective teams and change, which THREE of the following statements are correct? (Choose three.)

A. Teams that cross departmental boundaries can destroy shared values.

B. Teams play minor roles in institutional change.

C. Individuals must become more than they were when working alone and must develop new commitments and behaviors.

D. Teams should continue after their purpose has been served.

E. Teams that cross departmental boundaries can develop new performance criteria.

F. Teams enhance learning and address change directly through creating recommendations and new ideas.

Plush is a medium-sized hotel which recently opened on the outskirts of a city which is popular with tourists. It has a sophisticated website which allows customers to pre-book rooms and additional items, such as meals in its restaurant and tickets for popular tourist attractions in the city.

Plush has listed its website on a popular hotel price comparison website, which allows customers to compare prices and facilities of hotels in the same area and this has resulted in over 60% of Plush's customer bookings so far.

Since listing on the price comparison website, the Sales Manager of Plush has noticed that the prices offered by its nearest competitors have reduced dramatically and their range of special offers have also increased.

Which TWO of Porter's Five Forces have been most affected by the use of the price comparison website by the hotels in the same area as Plush? (Choose two.)

A. Competitive rivalry.

B. Threat of substitutes.

C. Bargaining power of suppliers.

D. Threat of new entrants.

E. Bargaining power of customers.

TUV had an employee turnover rate of 25% among new recruits and was becoming short of skilled workers. The Board of TUV realized there was something dramatically wrong and called in consultants to assess the problem. The consultants recommended transformational change in that TUV should redesign the entire production system, change the placement of all equipment and the flow of work, redefine every job and give all workers new assignments.

Which type of change did the consultants recommend for TUV?

A. Evolution

B. Reconstruction

C. Revolution

D. Adaptation

Ansoff has provided a product/market growth matrix which denotes possible strategic directions that an organization can follow.

Which of the following statements correctly describe the strategic options generated by the matrix? (Choose all that apply.)

A. Diversification using new products in new markets.

B. Product development using new products in new markets.

C. Market development using existing products in new markets.

D. Market penetration using existing products within existing markets.

E. Market penetration using existing products in new markets.

F. Market penetration using new products within existing markets.

Which of the following would be likely to encourage an organization to use Scenario Planning? (Choose all that apply.)

A. The organization often experiences 'group-think', leading to a narrow view of the future.

B. Competitor's are increasingly using Scenario Planning as part of their strategy formulation process.

C. The organization has achieved all of its objectives and operates within a stable external environment.

D. The organization has not previously experienced any major surprises or expensive strategic mistakes.

E. Uncertainty in the industry is high, relative to management's ability to predict or adjust to change.

Information Systems (IS) strategy is correctly defined as:

A. The planning, organizing, investment and control of information applications in the organization.

B. Identifying the information needs of the organization and aligning development to them.

C. Decisions on the hardware, software and communications solutions used in the organization.

D. The roles and structure of information specialists in the organization and their relationship with users.

Which of the following statements is NOT a role for Management Accountants involved in the strategy development process?

A. Consider and raise awareness of the ethical impact of proposed strategic decisions.

B. Integration of financial and non-financial information.

C. Writing the Annual Report.

D. Assist the Board in determining risk appetite.

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 less expensive to measure than financial performance measures.

B. They present a wider view of organizational performance than financial performance measures.

C. They are less subjective than financial performance measures.

D. They are not distorted by inflation.

E. They are easier to measure than financial performance measures.

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. Divest both product T1 and product T5.

B. Harvest product T1 and Divest product T5.

C. Harvest both product T1 and product T5.

D. Divest product T1 and Harvest product T5.

HHH is a manufacturer which has a bonus scheme for its production workers related to the speed of output. HHH's products are very specialized and are made in a dangerous production environment. HHH's production workers usually work alone but sometimes, if there are problems in the production environment (for example, machinery breakdowns), they have to work in teams. When the production workers are working in teams they do not receive any bonus.

HHH's senior management is proposing to amend the current bonus scheme to encourage increased productivity. Under the current bonus scheme, production workers receive extra pay when they achieve 45% of their individual target: The target level is low because of the dangerous production environment and the need to occasionally work in teams.

Under the proposed bonus scheme, production workers will not receive any extra pay until they have achieved 90% of their individual target. Workers who achieve 90% or above of their individual target will be paid a 30% higher bonus.

Which THREE of the following problems is HHH most likely to encounter with the introduction of the proposed bonus scheme? (Choose three.)

A. The extra production output will lead to an increase in inventory.

B. The proposed bonus scheme conflicts with health and safety legislation.

C. Production workers could consider the new target as unachievable.

D. Production workers will not be motivated by the proposed level of bonus.

E. There could be a rise in the level of workplace accidents.

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 set a target for reported profit.

B. JJJ needs to acquire and install appropriate hardware and software.

C. JJJ should unfreeze current habits and standard operating procedures.

D. JJJ should convince staff of the benefits of sharing their tacit knowledge.

E. Z should gain the support of the Board of Directors.

F. JJJ should integrate knowledge management and management accounting.