A small group of employees that meet to identify work problems and their solution are known as

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1 General Comments This represented the fourth paper under the revised syllabus. All questions in the paper are compulsory. As with past papers, candidates scored well overall on Section A (Question1) multiple choice questions. Candidates also generally scored well on Question 2 and better time management was evident in performance in the two Section B questions. The paper posed no problems for well prepared candidates. SECTION A 20 MARKS ANSWER ALL TEN SUB-QUESTIONS Each question is worth 2 marks Question 1.1 A small group of employees that meet to identify work problems and their solution are known as A B C D quality circles. peer counsellors. cellular production teams. teleworkers. The answer is A Question 1.2 The extended marketing mix does NOT include which ONE of the following: A People B Processes C Physical evidence D Positioning The answer is D Question 1.3 According to Hertzberg's dual factor theory of motivation, one set of factors is known as A demotivation factors. B disposition factors. C self actualisation factors. D hygiene factors. The answer is D Question 1.4 Porter's value system shows the organisation in terms of A the value chains of suppliers, channels and the customer. B primary activities, support activities and margin. C the technostructure, strategic apex and operating core. D passive, independent, supportive and integrative approaches to supply. The answer is A The Chartered Institute of Management Accountants Page 1

2 Question 1. Which ONE of the following is NOT associated with quality management? A -S practice B 180 degree feedback C Six Sigma methodology D Five-why process The answer is B Question 1.6 Intrinsic satisfaction is said to be derived from which ONE of the following issues: A Perks of the job. B Job content. C Job rewards. D Group cohesiveness and belongingness. The answer is B Question 1.7 Which ONE of the following is an example of direct marketing? A Writing an article for a trade journal B Targeting individual customers with promotional material C Posting 'blogs' to draw attention to the organisation D Public relations activities. The answer is B Question 1.8 Motivation theories and reward systems derived from F W Taylor's thinking are by nature best described as A B C D behavioural. human relations. content. scientific. Question 1.9 The answer is D Service Level Agreements are normally associated with A job reductions negotiated with staff groups. B deskilling. C agreed appraisal outcomes. D outsourcing. The answer is D The Chartered Institute of Management Accountants Page 2

3 Question 1.10 Which ONE of the following is NOT associated with a government's fiscal policy? A Levels of taxation B Level of spending by the government C Revenue raising D Interest rates The answer is D Question One sub-questions 1.1 to 1.10 test candidates knowledge of a wide variety of topics within Sections A, D, C and E of the syllabus through the use of objective test questions (OTQs) in a conventional multiple choice format. Suggested Approach/Marking Guide Sub-questions 1.1 to These sub-questions have been constructed on the basis that there is only one correct answer. Marking is therefore on the basis of 2 marks for a correct answer and 0 marks for an incorrect answer. 0 or 2 Examiner s Comments Candidates generally scored well on this question. The Chartered Institute of Management Accountants Page 3

4 SECTION B 30 MARKS ANSWER ALL SIX SUB- QUESTIONS. Question Two and general suggested approach Question two represents 30% of the paper and tests topics from across sections A, B, C and E of the syllabus. Responses for each sub-question are expected in a form that might include a few headings, sentences and bullet points over a page or so per sub-question. Questions are direct and are not complicated by detailed scenarios. As such, accuracy, brevity and clarity are called for and hopefully candidates should not spend a disproportionately long time on each sub-question. Guidance on what constitutes a good answer and indication on what represents a weak/fail answer: Weak answer: Limited or some knowledge of the concepts involved. Possible confusion. Sketchy notes or bullet points, a failure to demonstrate comprehension. Good answer: Demonstrates knowledge, comprehension and, where applicable, analysis through a series of clear developed notes relevant to the requirements of the sub-question. Question Two (a) Explain why 'Supply' has been described as being more significant than 'Purchasing' for an organisation. This question examines learning outcome C2(e) 'describe ways to manage relationships with suppliers'. Describe both purchasing and supply Identify the key features of each Use key features to explain the greater significance of supply Full description of both purchasing and supply Purposeful use of Reck & Long's model to illustrate nature of supply Beyond the day to day Planning and implementing a supply strategy rather than details of goods themselves Managing the overall supply process Considering outsourcing strategies Investigating strategic partnerships The number of suppliers the organisation should use Innovation as a feature of supply Maximum mark awarded The Chartered Institute of Management Accountants Page 4

5 Question Two (b) Economies in Asia and Latin America have been a target for two main forms of Foreign Direct Investment (FDI) by Multinational Enterprises (MNEs). Briefly describe the two main forms of FDI and the likely benefits of these to the host economies. This question examines learning outcome A1(a) 'explain the emergence of major economies in Asia and Latin America'. Briefly identify and describe the two main forms of FDI Describe the likely benefits of these to the host economies Description of Acquisitions and Greenfield investment Benefits: Saving company from significant difficulties/collapse Continued employment New employment opportunities Improved skills and knowhow Access to global economy Infrastructure improvements Income earned by local suppliers (max 2) (max 3) Question Two (c) Explain the reasons why management might choose a direct approach to a system changeover in preference to other alternatives (such as phased, parallel running or pilot schemes). This question examines learning outcome B2(a) 'discuss ways of overcoming problems in information system implementation'. Describe direct approach to a system changeover Identify and explain the reasons Description of direct approach to changeover Low risk e.g. 'off the shelf' package More cost efficient than alternatives Symbolic gesture of commitment Ready opportunity to use direct approach Existing system too problematic The Chartered Institute of Management Accountants Page

6 Question Two (d) Explain FIVE main disadvantages of outsourcing for an organisation. This question examines learning outcome A1(b) 'explain the emergence and importance of outsourcing and offshoring'. Identify the disadvantages Explain each in turn Surrender of core competences Lack of understanding by contractor Damage to culture Transaction costs Finality of decision Loss of flexibility Question Two (e) Explain FIVE main disadvantages of an organisational policy of HR succession planning. This question examines learning outcome E2(a) 'explain the HR activities associated with developing the abilities of employees'. Identify the disadvantages Explain each in turn Organisational size, only feasible for large organisations Operational issues; staff movement slow or reliant on staff turnover Negative culture reinforcement 'Too' rational Insularity from talent outside of organisation Career trends: outdated concept Management demands: expensive to operate Complacency by successor Lack of suitable successor The Chartered Institute of Management Accountants Page 6

7 Question Two (f) Briefly explain the main arguments for a country wishing to restrict free trade. This question examines learning outcome A2(b) 'analyse relationships among business, society and government in national and regional contexts'. List and then articulate arguments Protection of fledgling industries Avoid 'dumping' excess goods at unrealistically low prices Overcoming spoiling tactics of foreign competitors (e.g. loss leader pricing) Protect national cultural identity Ethical or moral grounds: safeguard against harmful or distasteful imports Independence: breed self sufficiency from political adversaries Sanctions to bring about change Examiner s Comments Question two was quite well answered overall. The main weakness in this question was part (e), succession planning, where many candidates gave a vague response relating to HR planning and many candidates did not attempt this part of the question at all. The Chartered Institute of Management Accountants Page 7

8 SECTION C 0 MARKS ANSWER BOTH QUESTIONS Question Three (a) (b) (c) Explain how effective brand management can assist ib4e's 'sharpening the focus' initiative. (10 marks) Describe the advantages and disadvantages of ib4e developing a 'total reward package' approach. (10 marks) Explain the value of internal marketing to ib4e. (Total for Question Three = 2 marks) Question three requirement (a) examines learning outcome E2(c) 'describe the HR activities associated with improving the opportunities for employees to contribute to the firm'. Requirement (b) examines learning outcome D2(e) 'explain the role of branding and brand equity'. Requirement (c) examines learning outcome D2(c) 'describe the business contexts within which marketing principles can be applied'. Suggested Approach/Marking Guide Guidance on what constitutes a good answer and indication on what would represent a weak/fail answer: Weak answer: Limited or no knowledge of concepts involved. Possible confusion and a failure to demonstrate comprehension. Possible narrative answer descriptive and repetitive of given scenario or sketchy notes/bullet points made. Possible failure to expand upon points made fully enough. An inability to synthesise thinking to the context of the scenario. Good answer: Demonstrates knowledge and understanding through clear, well developed narrative relevant to the requirements of the question. Purposeful expansion of points made and good application of thinking to the context of the scenario. Requirement (a) Outline the three dimensions for the 'sharpening the focus' initiative (improved corporate performance, connecting more closely with consumers and improving marketing practice) For each, identify how effective brand management can help and provide an explanation for each point Improved performance: Improved profitability Brands as a key asset for business Positive influence on share performance Improved performance through higher prices Differentiation from competitors Connecting with consumers: Brands as an emotional conduit Brand loyalty Improved marketing practices: Focus for customer relationship management Base for other marketing practices Heart of the marketing mix 1 to 2 marks per substantive point 10 The Chartered Institute of Management Accountants Page 8

9 Requirement (b) Identify the advantages and disadvantages Describe each in the context of the scenario Brand/Brand management definition Advantages (max ): Retention and motivation Attract talented staff Non-pay motivators consistent with contemporary thinking Conformation of organisational/individual match (offers staff opportunity to consider what they value most from their employer and compare it with the investment ib4e is making on their behalf) Project a positive image Disadvantages (max ): Additional costs Gives wrong image e.g. viewed as 'soft touch' Suspicion of motives Workers only want improved pay Costly failure if design flaws 1 mark per substantive point 10 Requirement (c) Explain internal marketing Identify reasons why relevant to ib4e Explain the value of each for ib4e Explanation of what internal marketing is Align employees' attitudes and behaviour to correspond with corporate vision Enhance service levels so strengthening customer loyalty Communicate actions and attitudes that lead to improved corporate performance and ensure right corporate messages conveyed Gain employee understanding of the brand and buy-in Recognise and reward employees who achieve against these marketing goals 1 mark per substantive point Examiner s Comments Some candidates answered this question well, though others tended to write all they knew about branding, rather than answering the question set. Many responses to part (a) were unfocused, discussing Brand or 4Ps, instead of focusing on potential benefits. With regard to responses to part (c), some candidates merely discussed promoting products to staff. The Chartered Institute of Management Accountants Page 9

10 Question Four (a) (b) (c) Explain how the People and Payroll system could benefit LD2. Describe the main approaches to quality that are available to LD2. (10 marks) (10 marks) Briefly describe the likely features of the proposed corporate website if it is to be comparable to the best in the industry. (Total for Question Four = 2 marks) Question four requirement (a) examines learning outcome B1(a) 'identify the value of information and information systems organisations'. Requirement (b) examines learning outcome C2(a) 'apply contemporary thinking in quality management' and requirement (c) examines learning outcome B2(b) 'discuss ways of organising and managing information system activities in the context of the wider organisation'. Suggested Approach/Marking Guide Guidance on what constitutes a good answer and indications of what represents a weak/fail answer is the same as for Question Three. Requirement (a) List the potential benefits of the new system to LD2 Explain each benefit in turn Improved systems quality System integration to overcome incompatibility of software and complex reconciliation processes Ability to reduce costs and increase efficiency Improved accuracy helps eliminate errors and inaccuracies arising from existing duplication of data sources Better management control Improved management reporting ; speed up and improve managerial information for decision making Improved communication by making scheduling easier Speed of entry and processing improved Relative competitive advantage from having most advanced system available Improved security 1 to 2 marks per substantive point 10 The Chartered Institute of Management Accountants Page 10

11 Requirement (b) Identify the main approaches to quality Describe each approach in a way that is relevant to LD2 Quality control (QC): main features of the approach Quality assurance (QA): systems in overview International accreditation of standards (ISO 9000:2000 series quality award) - main features of the approach Total Quality Management (TQM) - main features of the philosophy (includes Lean and 6 Sigma) Self-assessment quality model e.g. European Foundation Quality Model - main features of the approach 1 1 Up to 3 marks each 10 Requirement (c) Identify the likely features Describe each feature in turn with reference to LD2 Online trading function Accessibility by all browsers and IT platforms Credit and debit card security and privacy safeguards for customers Features: comprehensive yet user friendly, formative and easy to navigate Customer friendly Visually appealing Potential to update quickly and easily Customer feedback facility Information on LD2 products 1 mark per substantive point Examiner s Comments This question attracted the better responses overall of the two 2 mark questions and appeared the more accessible for candidates. Many responses to part (b) were of the 'all I know about' variety regarding quality, though parts (a) and (c) were answered well by many candidates. The Chartered Institute of Management Accountants Page 11