The overall performance of candidates in this diet was significantly poorer than that in the comparable diet of September 2012.

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1 General Comments The overall performance of candidates in this diet was significantly poorer than that in the comparable diet of September 202. The main reason for this weaker performance seems to have been a lack of preparation by a sizable number of candidates. However, some candidates performed less well than they might have done because of a failure to read the scenarios and questions thoroughly. This was particularly evident in the answer to Question 2. This question focused on the barriers to communication and how these could be overcome in the negotiation process but too many candidates misinterpreted the question and provided an answer on how best to conduct a successful negotiation process rather than answering the question set. In the case of Question 5 a significant number of candidates produced very poor answers either because they misread the question and/or they lacked the theoretical knowledge necessary to answer the question. This had a particularly serious effect on the overall mark for a few candidates who did not score any marks for their answer to this question. The performance of candidates on particular questions is covered in some detail in the appropriate question's sections of the PEG below but in summary the key points relating to performance on each question are as follows. Q generally produced fairly good answers for part (a) but rather poorer answers for part (b). Q2 produced a weak performance on the part of many candidates because of their failure to read the question requirement carefully. Q3 was generally well done but a small minority appeared not to have an understanding of the concept of a matrix structure and so scored few, if any, marks for this question. Q4 produced a large number of good answers but also a significant number of poor answers. The reasons for the poorer answers seemed to stem from lack of knowledge on competitor analysis; probably arising from lack of adequate preparation. Q5, already noted, produced an overall poor performance because of a lack of knowledge about an appropriate model for summarising key strategies for collective bargaining. Q6 produced a mixed response with a few very good answers, through a majority of mediocre answers, to a minority of very poor answers. In general, part (a) was answered better than part (b) with most candidates having some idea of what the initiation stage of a project should contain. Many part (b) answers however, suffered from a lack of knowledge, especially in relation to the question about the project evaluation and review technique. Q7 was generally well answered by candidates who had done their preparation. This generalisation is applicable to the performance of candidates on parts 7(a) and 7(b). Finally, this review has concentrated on the weaknesses of poorer candidates but it would be neglectful not to congratulate all the hard working candidates who performed well in the examination and it is a pleasure to report that a number of candidates produced papers that gained marks in excess of 75%. The Chartered Institute of Management Accountants Page

2 SECTION A 50 MARKS ANSWER ALL FIVE QUESTIONS Question (a) Explain what TF should include in her briefing on the reasons why FS Company should have a disciplinary procedure as part of its internal control system. (6 marks) (b) Describe the main reasons, which TF could include in her briefing, when the dismissal of an employee could reasonably be considered to be fair. (4 marks) (Total for Question One = 0 marks) This question tests candidates' understanding of the disciplinary procedure as part of organisational control and the reasons for employee dismissal. It examines learning outcome C2(d) 'identify tools for managing and controlling individuals, teams and networks, and for managing group conflict '. The first part of the answer should explain the range of reasons for having a disciplinary procedure. The second part of the answer should provide examples of when employee dismissal is reasonably considered to be fair. Good answers will provide comprehensive reasons for having disciplinary procedures, along with examples of when dismissal is fair. Weak answers will provide only a couple of reasons for both parts. (a) Reasons for having a disciplinary process, e.g.: Change behaviours Compliance Legal costs Company image Employee well being Other (b) Reasons when dismissal is reasonably considered to be fair, e.g.: Redundancy Capability Conduct Illness Other (max 6) (max 4) Maximum marks awarded 0 Answers to part (a) were generally reasonable but there were many poor answers to part (b). For part (a) some candidates focused too much on the disciplinary procedures rather than why the disciplinary process is important as a form of internal control. In part (b) many candidates neglected to provide the reasons that could be the basis for fair dismissal of an employee. The Chartered Institute of Management Accountants Page 2

3 Question 2 Explain to J the potential barriers to effective communication in the negotiation process and how they can be overcome. (Total for Question Two = 0 marks) This question tests candidates' ability to explain the importance of effective communication skills in the negotiation process. It examines learning outcome C2(b) 'discuss the roles of negotiation and communication in the management process, both within an organisation and with external bodies'. Answers could use the communication process model to explain the potential barriers to communication, linking to the different stages in negotiation. Reference should be made to how the barriers can be overcome. Good answers will explain the different elements of the communication process in terms of potential barriers with specific reference to the different stages in the negotiation process along with reference to how to overcome the barriers. Weak answers will give a superficial explanation of barriers to communication but not in the context of negotiation. Communication model Preparation* e.g.: Purpose Setting clear objectives Have receiver in mind Opening and Bargaining* e.g.: Coding message Not too complex Free of jargon Logical sequence Non-verbal reinforce verbal Anticipate reactions Aware of individual bias/selectivity Encourage feedback Noise Closing* e.g.: Check joint understanding of outcome of communication * Answers should make reference to stages in negotiation process Maximum marks awarded 0 Examiner's comments This question was poorly answered by a large number of candidates. Many candidates appeared not to have read the question thoroughly and concentrated on how best to conduct the negotiation process rather than the barriers to communication and how to overcome these as required by the question. The Chartered Institute of Management Accountants Page 3

4 Question 3 Explain the advantages AND disadvantages of having a matrix structure for managing a project. (Total for Question Three = 0 marks) This question tests candidates' appreciation of the use of a matrix structure for projects. It examines learning outcome B(g) 'identify structural and leadership issues that will be faced in managing a project team'. Answers should develop to explain the advantages and disadvantages of having a matrix structure for managing projects. A weak answer will describe a matrix structure with limited explanation of advantages and disadvantages. A good answer will provide a comprehensive explanation of the advantages and disadvantages of a matrix structure in the context of a project. Brief explanation of matrix structure for a project Advantages, e.g.: Wide range of expertise for project Facilitates development of new skills Improved communication Encourages problem solving supporting project customers Flexibility and speed Increases project customer satisfaction and loyalty Disadvantages, e.g.: Lack of clear responsibility Functional managers feel authority diluted Difficult to decide on priorities Choose self interest as a priority rather than responsibility to the project manager Employees spend lots of time in meetings Meetings have time and cost implication Can be difficult to implement and lead to conflict Maximum marks awarded 0 Most candidates provided a fair answer to this question with a well prepared set of advantages and disadvantages of the matrix structure. A surprising number of candidates did not have an understanding of what was meant by a 'matrix' structure in the context of project management and as a result failed to score any marks for their answer. The Chartered Institute of Management Accountants Page 4

5 Question 4 (a) Explain the reasons why FLF should undertake competitor analysis. (6 marks) (b) Describe what is involved in benchmarking and how it could help FLF, as part of its competitor analysis. (4 marks) (Total for Question Four = 0 marks) This question tests candidates' understanding of the nature of competitive environments. It examines learning outcome A(b) 'distinguish between different types of competitive environment'. Answers to the first part of the question should develop to explain the different purposes of undertaking competitor analysis. Answers to the second part of the question could start with a brief description of what is meant by the term benchmarking and then develop to describe how benchmarking could help FLF Company. A good answer will provide a comprehensive explanation of the different purposes of competitor analysis. The description of how benchmarking could help FLF Company will draw on the scenario to provide relevant examples. A weak answer will provide a narrow explanation of the purpose of undertaking competitor analysis, and will describe benchmarking, but not in the context of the scenario. (a) Purposes of competitor analysis, e.g.: Competitor strengths and weaknesses Competitor strategies How to counteract competitor strategies Competitor objectives Competitor resources and capabilities Barriers to market entry for new competition Other (b) Description of benchmarking How can help FLF Company, e.g.: Market share - linked to vision of being No. Financial position Time for collections and delivery - linked to reputation on reliability Maximum marks awarded (max 6) (max 4) 0 This question provided a fair number of good answers to both parts of the question but a significant number of candidates appeared to lack knowledge about benchmarking which was the subject of part (b). Some answers were weak for both parts of the question but a large part suffered from omission of material rather than a lack of understanding of the question. The Chartered Institute of Management Accountants Page 5

6 Question 5 Discuss the different strategies that LG could use to manage the conflict occurring in NWP Company. (Total for Question Five = 0 marks) This question is designed to test candidates' appreciation of the different strategies available to resolve a conflict. It examines learning outcome C(d) 'discuss alternative approaches to the management of conflict'. The answer could start by explaining that the conflict occurring is vertical. It should then explain each of the different strategies that could be used to manage the conflict. Good answers will be contextualised with reference to the scenario information when explaining the different strategies that could be taken to manage the particular form of conflict occurring. Weak answers will provide a general discussion on conflict with only a couple of specific conflict handling strategies referenced. Definition of conflict Nature and form of conflict i.e. vertical Conflict handling strategies: Avoidance Accommodation Compromise Competition Collaboration each Maximum marks awarded 0 Candidates who had a knowledge of Thomas's framework for the management of conflict tended to score well in their answer to this question but those without this knowledge only obtained one or two marks for sensible suggestions. Lack of knowledge about strategies for dealing with conflict. This is down to lack of adequate preparation for the examination. The Chartered Institute of Management Accountants Page 6

7 SECTION B - 50 MARKS ANSWER BOTH QUESTIONS Question 6(a) Explain to T Company what should happen at the project initiation stage of the project lifecycle for the training centre project. (5 marks) This question tests candidates' appreciation of the initiation stage of the project lifecycle. It examines learning outcome B(c) 'construct an outline of the process of project management'. The answer should clearly explain the two stages in relation to the new training centre project for T Company. A good answer will explain what happens at each stage and relate this to the project. A weak answer will discuss the content at a general level and will not develop the answer in the context of the scenario. Initiation starts with identifying a need Explain need can be delivered in a number of ways so a feasibility report is compiled Explain the different types of feasibility (technical, operation, financial) Explain what final feasibility report might contain (objectives, scope, constraints, client resources) Reference to project risk and need for risk management Explain that initiation ends with PID Explanation of contents (purpose, boundaries, cost and time estimates, constraints, stakeholders, structure) Up to 3 Up to 3 Up to 3 Up to 6 Answer must relate to training centre project. Maximum marks awarded 5 Most candidates had a reasonably good understanding of what the initiation stage of the project lifecycle consists of and required for the project to proceed. Many candidates were unable to apply their knowledge of the initiation process to the scenario. The Chartered Institute of Management Accountants Page 7

8 Question 6(b) Explain how the techniques of PERT (Project Evaluation and Review Technique), scenario planning and buffering could be used in project management with specific reference to the time scale aspect of the new training centre project. (0 marks) This question tests candidates' appreciation of the PERT, scenario planning and buffering as part of the planning process of project management. It examines learning outcome B(e) 'apply key tools and techniques, including the evaluation of proposals'. A good answer will show clearly how the tools can be used in planning the new training centre project. A weak answer will show little understanding of the contribution these tools can make to the planning process. PERT - used to overcome uncertainty in project timings Explanation of how used by T Company Scenario planning - creating alternatives other than most likely or expected Explanation of how could be used by T Company Buffering - adding additional slack into activities Explanation that not usually encouraged Up to 3 Up to 3 Maximum marks awarded 0 Most candidates had some knowledge of scenario planning and buffering and gained marks for this part of the question. Many candidates had little or no knowledge of PERT. The Chartered Institute of Management Accountants Page 8

9 Question 7(a) Explain the theoretical principles of the Resource Based View (RBV), and the extent to which LD's business, LD Flowers, has developed its competitive advantage by using the RBV. (3 marks) This question tests candidates' understanding of the principles of the Resource Based View. It examines learning outcome A2(a) 'discuss concepts in established and emergent thinking in strategic management'. Answers should start by explaining the principles of the RBV to achieving sustainable competitive advantage. The principles should then be used to assess the extent to which the scenario organisation's competitive advantage is based on the RBV. Good answers will make reference to theory of the RBV, and use the criteria to discuss the scenario organisation's approach. Weak answers will give a simplistic overview of the RBV but without application to the scenario organisation. Principles of the RBV e.g.: Possession of scarce resources Unique resources/distinctive capabilities Not easily replicated Internal resources/inside out view Characteristics of RBV applied to LD Flowers: Valuable Rare Difficult to imitate Substitutes Summary view Maximum marks awarded each (max 5) each (max 8) 3 Most candidates displayed some knowledge of the RBV approach to strategy formulation and were able to apply it to the case in question. Most commonly, the omission of some parts of the RBV approach. The Chartered Institute of Management Accountants Page 9

10 Question 7(b) Discuss whether or not LD is right to be doubtful about the relevance of formal strategic planning for her business. (2 marks) This question tests candidates' appreciation of formal strategic planning and its relevance to small businesses. It examines learning outcome A2(b) 'compare and contrast approaches to strategy formulation'. Answers could start by providing a brief explanation of the formal approach to strategic planning. They should then develop to discuss why the formal process associated with formal strategic planning may or may not be relevant to the scenario organisation. Good answers will provide a comprehensive set of reasons why the formal approach to strategic planning is or is not relevant to a small business, with reference to the scenario organisation. Weak answers will provide only a limited number of reasons without elaboration to the scenario organisation. Explanation of the formal approach to strategic planning Reasons why may or may not be relevant e.g.: Expensive/time consuming Static/infrequent Bureaucratic process Goal congruence for wider stakeholder interests not necessary Preference of strategies to emerge Lack of resources Strategic management frameworks could be helpful to inform future decisions Help in monitoring the environment Help understand LD's internal strengths and weaknesses Other Maximum marks awarded each 0 There were some very good answers to this part of the question and most candidates managed a pass mark for part (b). Though most candidates answered this part of the question quite well, less prepared candidates were unable to give a sensible idea of the formal approach to strategic planning and thus of its relevance to LD. The Chartered Institute of Management Accountants Page 0