Notes. CIMA Paper E2. Enterprise Management. theexpgroup.com

Size: px

Start display at page:

Download "Notes. CIMA Paper E2. Enterprise Management. theexpgroup.com"

Thomas Lamb
5 years ago
Views:

1 CIMA Paper E2 Enterprise Management Notes

2 Contents 1. About ExPress Notes 3 Strategic Management & Assessing the Competitive Environment 2. Developments in Strategic Management Project Management Project Management Tools Project Management Teamwork & Quality The Effective Operation of an Organisation Managing People Corporate Governance & Ethics 42 7 Page 2

3 START About ExPress Notes We are very pleased that you have downloaded a copy of our ExPress notes for this paper. We expect that you are keen to get on with the job in hand, so we will keep the introduction brief. First, we would like to draw your attention to the terms and conditions of usage. It s a condition of printing these notes that you agree to the terms and conditions of usage. These are available to view at Essentially, we want to help people get through their exams. If you are a student for the CIMA exams and you are using these notes for yourself only, you will have no problems complying with our fair use policy. You will however need to get our written permission in advance if you want to use these notes as part of a training programme that you are delivering. WARNING! These notes are not designed to cover everything in the syllabus! They are designed to help you assimilate and understand the most important areas for the exam as quickly as possible. If you study from these notes only, you will not have covered everything that is in the CIMA syllabus and study guide for this paper. Components of an effective study system On ExP classroom courses, we provide people with the following learning materials: The ExPress notes for that paper The ExP recommended course notes / essential text or the ExPedite classroom course notes where we have published our own course notes for that paper The ExP recommended exam kit for that paper. In addition, we will recommend a study text / complete text from one of the CIMA official publishers, but we do not necessarily give this as part of a classroom course, as we think that it can sometimes slow people down and reduce the time that they are able to spend practising past questions. ExP classroom course students will also have access to various online support materials, including: The unique ExP & Me e-portal, which amongst other things allows view again of the classroom course that was actually attended. ExPand, our online learning tool and questions and answers database Page 3

4 How to get the most from these ExPress notes For people on a classroom course, this is how we recommend that you use the suite of learning materials that we provide. This depends where you are in terms of your exam preparation for each paper. Your stage in study for each paper These ExPress notes ExP recommended course notes, or ExPedite notes ExP recommended exam kit CIMA online past exams Prior to study, e.g. deciding which optional papers to take Skim through the ExPress notes to get a feel for what s in the syllabus, the size of the paper and how much it appeals to you. Don t use yet Don t use yet Have a quick look at the two most recent real CIMA exam papers to get a feel for examiner s style. At the start of the learning phase Work through each chapter of the ExPress notes in detail before you then work through your course notes. Don t try to feel that you have to understand everything just get an idea for what you are about to study. Don t make any annotations on the ExPress notes at this stage. Work through in detail. Review each chapter after class at least once. Make sure that you understand each area reasonably well, but also make sure that you can recall key definitions, concepts, approaches to exam questions, mnemonics, etc. Nobody passes an exam by what they have studied we pass exams by being efficient in being able to prove what we know. In other words, you need to have effectively input the knowledge and be effective in the output of what you know. Exam practice is key to this. Try to do at least one past exam question on the learning phase for each major chapter. Don t use at this stage. Page 4

5 Your stage in study for each paper These ExPress notes ExP recommended course notes, or ExPedite notes ExP recommended exam kit CIMA online past exams Practice phase Work through the ExPress notes again, this time annotating to explain bits that you think are easy and be brave enough to cross out the bits that you are confident you ll remember without reviewing them. Avoid reading through your notes again. Try to focus on doing past exam questions first and then go back to your course notes/ ExPress notes if there s something in an answer that you don t understand. This is your most important tool at this stage. You should aim to have worked through and understood at least two or three questions on each major area of the syllabus. You pass real exams by passing mock exams. Don t be tempted to fall into passive revision at this stage (e.g. reading notes or listening to CDs). Passive revision tends to be a waste of time. Download the two most recent real exam questions and answers. Read through the technical articles written by the examiner. Read through the two most recent examiner s reports in detail. Read through some other older ones. Try to see if there are any recurring criticism he/ she makes. You must avoid these! The night before the real exam Read through the ExPress notes in full. Highlight the bits that you think are important but you think you are most likely to forget. Unless there are specific bits that you feel you must revise, avoid looking at your course notes. Give up on any areas that you still don t understand. It s too late now. Don t touch it! Do a final review of the two most recent examiner s reports for the paper you will be taking tomorrow. At the door of the exam room before you go in. Read quickly through the full set of ExPress notes, focusing on areas you ve highlighted, key workings, approaches to exam questions, etc. Avoid looking at them in detail, especially if the notes are very big. It will scare you. Leave at home. Leave at home. Page 5

6 Our ExPress notes fit into our portfolio of materials as follows: Notes Notes Notes Provide a base understanding of the most important areas of the syllabus only. Provide a comprehensive coverage of the syllabus and accompany our face to face professional exam courses Provide detailed coverage of particular technical areas and are used on our Professional Development and Executive Programmes. To maximise your chances of success in the exam we recommend you visit www. where you will be able to access additional free resources to help you in your studies. START About The ExP Group Born with a desire to be the leading supplier of business training services, the ExP Group delivers courses through either one of its permanent centres or onsite at a variety of locations around the world. Our clients range from multinational household corporate names, through local companies to individuals furthering themselves through studying for one of the various professional exams or professional development courses. As well as courses for CIMA and other professional qualifications, our portfolio of expertise covers all areas of financial training ranging from introductory financial awareness courses for non financial staff to high level corporate finance and banking courses for senior executives. Our expert team has worked with many different audiences around the world ranging from graduate recruits through to senior board level positions. Full details about us can be found at www. and for any specific enquiries please contact us at info@. Page 6

Chapter 1 Strategic Management & Assessing the Competitive Environment START The Big Picture This chapter introduces us to a variety of methods of analysing the competitive environment faced by an

7 Chapter 1 Strategic Management & Assessing the Competitive Environment START The Big Picture This chapter introduces us to a variety of methods of analysing the competitive environment faced by an organization. PESTEL (or PEST or SLEPT) Analysis An analysis of the external macro environment. The organisation is unlikely to be able to influence these factors but it should have an awareness of the issues. Political - global, national and local changes and trends. Taxation policies. Relationships between certain countries. Economic - global, regional and local issues. Exchange rates. Link to topical issues such as global recession, current interest rates for funding. Social - changes in behavior and expectations in society. Demographics, lifestyle. Page 7

8 Technological - changes including hardware, software, e-issues, materials and services. Global communications. Environmental what are the environmental considerations such as recycling, pollution, attitude of the media, customers, etc. Legal - changes and predicted changes to regional (e.g. EU) and national legislation. Regulatory bodies. Changes to employment law. Stakeholder mapping Stakeholders are individuals, groups or organisations that can impact or be impacted by, an organisation. Mendelow s Matrix allocates stakeholders into quadrants according to their level of power and how likely they are to exercise that power (i.e. their interest). Stakeholder Power Low High Low Stakeholder Interest Minimum effort Keep informed Keep satisfied Key players High SWOT analysis Strengths (internal) e.g. resources and capabilities Opportunities (external) e.g. arrival of new technology Weaknesses (internal) e.g. lack of certain resources or capabilities Threats e.g. arrival of substitute product Page 8

9 Primary Inbound Logistics Operations Outbound Logistics Marketing & Sales Service Support ExPress Notes Threshold resources and competencies: These are the minimum required by an organisation to meet customer s minimum requirements. In effect, this is what is required to stay in business. Core competencies: These are processes and activities undertaken by an organisation which are seen as being central to their success. Core competencies are capabilities which are critical to a business achieving competitive advantage. They provide customer benefits and are difficult for competitors to imitate. A core competency can take many forms such as technical knowhow or customer relationships. Amazon.com has a number of core competencies such as reliable and efficient online ordering and delivery system. Porter s value chain Support Activities Firm Infrastructure Human Resource Management Technological Development Procurement Primary Activities The value chain was introduced by Porter and represents an approach to looking at the development of competitive advantage within an organisation. All organisations consist of activities which link together to develop the value of a business. Together these activities represent the value chain. Page 9

The value chain represents a series of activities that both create and build value. Combined they represent the total value delivered by an organisation.

Support activities: provide the background for the effectiveness of the organisation (e.g. HRM) Data for environmental analysis Data for environmental analysis can be obtained from a number of sources: Official government sources (e.

10 The value chain represents a series of activities that both create and build value. Combined they represent the total value delivered by an organisation. The margin in the diagram is the added value (the difference between the total value of the activities and the cost of performing them). Primary activities: related with production. Support activities: provide the background for the effectiveness of the organisation (e.g. HRM) Data for environmental analysis Data for environmental analysis can be obtained from a number of sources: Official government sources (e.g. trade reports) Online specialist subscription databases (e.g. Reuters) Online publically available information (e.g. corporate websites) Private intelligence agencies (e.g. Dun and Bradstreet) Tailored research (e.g. market surveys, discussion groups) Quantitative research analysis of numerical data more objective statistical tests e.g. data provided by customers Qualitative research analysis of words more subjective could use focus groups or interviews e.g. opinions of customers Page 10

Threat of substitute products If there are similar products, a customer will be more likely to switch rather than stay with a product when there

11 Porter s 5 Forces This model examines the role of 5 forces close to an organisation that impact on its ability to make a profit and hence how attractive a particular market or industry is. There are 5 forces as follows: Entrants Suppliers Competition Customers Substitute 1. Threat of substitute products If there are similar products, a customer will be more likely to switch rather than stay with a product when there are price rises (elastic demand). 2. Competitive rivalry The rivalry will depend on the number and strength of competitors, economies of scale and exit barriers. Page 11

3. Threat of new entrants Markets generating high returns will attract new entrants which in turn could reduce industry profits.

Power of customers The stronger the power of the customer the more pressure it can place on the company.

Power of suppliers Suppliers of materials and services can exercise power over an organisation.

12 3. Threat of new entrants Markets generating high returns will attract new entrants which in turn could reduce industry profits. Barriers to entry such as government licenses (mobile phone operators) are important in reducing the threat of new entrants. 4. Power of customers The stronger the power of the customer the more pressure it can place on the company. Issues to consider include the size of the customer relative to the firm s customer base, switching costs and availability of substitute products. 5. Power of suppliers Suppliers of materials and services can exercise power over an organisation. This depends on the level of differentiation of the product, presence of substitute products, etc. Compare the power of Intel supplying computer chips to the computer industry vs. a sugar producer supplying sugar to a soft drinks manufacturer. Porter s Diamond This is a model outlining the theory why certain industries are competitive in particular locations. There are 4 broad factors within the diamond. Factor Conditions Firm Strategy & Structure Demand Conditions Related & Supporting Page 12

13 Factor conditions include physical resources, human resources and specialised resources. Demand conditions. A country with sophisticated home buyers who demand quality, advanced and innovative products can create international competitiveness Related and supporting industries can produce inputs for a company which feed into the success of the business. Firm strategy, structure and rivalry. Competition in the home market drives innovation and quality. Protectionism can weaken a market. Page 13

Notes. ACCA Paper F7. Financial Reporting (INT) DEMO PAGES - FREE FULL SET AT theexpgroup.com

Notes. ACCA Paper F7. Financial Reporting (INT) DEMO PAGES - FREE FULL SET AT theexpgroup.com ACCA Paper F7 Notes Financial Reporting (INT) Contents About ExPress Notes 3 1. The Conceptual Framework 7 2. IAS 1: Presentation of Financial Statements 12 3. Substance and IAS 18 Revenue 15 4. Construction