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CIMA E3 - Strategic Management Question Tutorial Sample Questions:

1. 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) Divest product T1 and Harvest product T5.
C) Harvest both product T1 and product T5.
D) Harvest product T1 and Divest product T5.

2. Directors have a duty to shareholders and other stakeholders and are required to promote the success of the company.
Which THREE of the following are valid roles and responsibilities of directors? (Choose three.)

A) To have regard for the interests of the company's employees.
B) To consider the likely consequences of any decision in the long term.
C) To avoid conflicts of interest and of duties.
D) To be responsible for keeping all external stakeholders satisfied.
E) To focus only on maximizing company profits.

3. 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) Strength
B) Opportunity
C) Weakness
D) Threat

4. RST is a company specializing in the production of wood-based products. RST has decided to introduce a fully integrated Information System across all divisions in order to improve knowledge sharing throughout the business and enhance customer relationship management.
RST is expecting resistance to the integrated Information System from it's staff who are key to the business and would be difficult to replace. Staff have a good understanding of why the new system and knowledge sharing is needed and how the system will work but many staff are not happy about the potential changes to their working conditions.
Which of the following change leadership styles, as outlined by Kotter and Schlesinger, would be most appropriate for RST to adopt?

A) Coercion
B) Negotiation
C) Manipulation
D) Education

5. ZYX is a global hotel chain, employing over 10,000 staff worldwide. ZYX operates a Code of Conduct for all of its staff, which states "Our staff are the most important assets of our business operations. We expect the highest standards of ethical and professional conduct from all staff, who must display the principles of trust, respect, equality, integrity and fairness at all times." Which THREE of the following actions could ZYX take to positively influence its staff to work to the ethical and professional principles in its Code of Conduct? (Choose three.)

A) Operate a system of reward incentives for staff who display high ethical and professional standards.
B) Set performance targets in diversity and equality for its hotel senior managers.
C) Publication on its website of ZYX's Code of Conduct and regular examples of staff displaying the highest standards of professional conduct.
D) Induction and on-going staff training on ZYX's Code of Conduct and ethical and professional principles.
E) Interview process for staff prior to employment, to assess their understanding of ethical and professional behavior.
F) Disciplinary actions, such as fines, for staff who do not display high ethical and professional standards.

Solutions: