E2 Enterprise Management Post Exam Guide September General Comments

Transcription

1 General Comments The overall performance of candidates on this paper was lower than in the comparable re-sit diet in March Relatively few candidates gained high scoring marks with the majority of candidates scoring between 50 and 60 per cent. Only a few candidates managed to gain a mark in excess of 70%. This relatively poor performance seems to have been due to two main failings on the part of candidates. First a significant number of candidates prepared answers to questions that had been set for the main diet in May 2012 in the expectation that the questions would be pretty much the same for the September re-sit diet. Some candidates even went so far as to make reference to the case scenarios used in the May exam. This kind of preparation is obviously a mistake. The second reason for the poor performance of candidates was a failure to read the questions thoroughly. The outcome of this lack of care was that candidates spent considerable time on writing an answer that brought them little if any benefit and used up precious time that could have been employed more profitably on another part of the paper. Details of the performance of candidates on each question are detailed below but in summary it is useful to note that Question 3 on the bases of competitive advantage and the reasons for competitive rivalry seemed to cause problems for a large majority of candidates. By contrast Question 4 on the distinction between project owners and project sponsors and the relationships between the project manager and the other major stakeholders was generally well answered. Of the remaining Questions, 1, 2, 5, and 7(a) were generally well answered while Q6(a) requiring the application of Prince 2 methodology and 7(b) requiring knowledge of factors that contribute to the effectiveness of a multidisciplinary management team were generally badly answered. The Chartered Institute of Management Accountants Page 1

2 SECTION A 50 MARKS ANSWER ALL FIVE QUESTIONS Question 1 Describe what the analysis shows about R Company's current product portfolio and the implications for the future developments of its products. (Total for Question One = 10 marks) This question tests candidates' understanding of the product portfolio. It examines learning outcome A1(a) 'discuss the nature of competitive environments'. Answers should commence by describing what the analysis shows for each product, and then explain the implications for future development. Candidates could use the BCG matrix to organise their answers. Good answers will work through the analysis in a systematic way and explain the position of each product in the portfolio, with a clear description of implications for future development. Weak answers will be unstructured and limited to describing the position of products without consideration of the implications for future development. Product A e.g. cash cow, generator of cash, defensive strategy, protect market share Product B e.g. question mark, needs significant investment, confidence that can grow to be a star in future Product C e.g. star, good long term prospects, requires investment, need to stave off competitor attack strategies Product D e.g. dog, limited future prospect without significant investment, time to divest, could be used as a loss leader Maximum marks awarded 10 Question 1 was generally well answered. Many candidates simply repeated sections of the scenario without reference to the implications of the analysis for the development of R Company's products. The Chartered Institute of Management Accountants Page 2

3 Question 2 (a) Explain what the corporate strategy of a multi-business organisation is typically concerned with. (6 marks) (b) Describe the important role that the corporate level strategy has in relation to the development of the business and functional strategy in a multi-business organisation. (4 marks) (Total for Question Two = 10 marks) This question tests candidates' appreciation of the importance of corporate strategy as the hierarchy to the other levels of strategy that exist within the organisation. It examines learning outcome A2(c) 'explain the relationships between different levels of strategy in organisations'. (a) The answer could start with an overview of the essential role of strategy. It could then develop by discussing the main considerations of corporate level strategy. A weak answer will simply identify any concerns with strategy and not concentrate on the decisions made at the corporate level. A good answer will include examples of the specific decisions to be made at this level. (b) A good answer will explain the importance of the framework. A weak answer will just describe the levels. (a) Role of strategy - strategic direction for growth Acquisitions, mergers etc. Balanced portfolio of strategic business units Overall aim and purpose - mission statement Stakeholders Example of stakeholder Corporate social responsibility Other (b) Explanation of business/functional strategy Constrain lower levels Reduce any reputational issues Guidance when levels of autonomy at lower levels are high Ensure control and goal congruence Maximum marks awarded (max 6) (max 4) 10 Examiner's comments Most candidates achieved a pass mark on this question. Many candidates lost marks because of poor performance in part (b). It was evident that many candidates were unable to distinguish between the three levels of strategy and therefore unable to spell out the role that corporate strategy played in relation to business and functional strategy. The Chartered Institute of Management Accountants Page 3

4 Question 3 (a) Describe the concept of competitive advantage and include reference to the different bases DF Company could use to achieve competitive advantage. (5 marks) (b) Describe the factors that can create competitive rivalry between organizations. (5 marks) (Total for Question Three = 10 marks) This question tests candidates' comprehension of the concept of competitive advantage and the factors that can create competitive rivalry. It examines learning outcome A2(b) 'compare and contrast approaches to strategy formulation'. To address the first part of the question, candidates should start by explaining what is meant by the concept of competitive advantage and then go on to explain the bases for achieving competitive advantage. The second part of the question should provide a description of the different factors that can create competitive rivalry. A good answer will provide a comprehensive explanation of the concept of competitive advantage, articulating the different ways in which it can be achieved. Candidates will describe a range of factors that can create competitive rivalry. Weak answers will give an unclear explanation of competitive advantage and will describe only a couple of factors that can create competitive rivalry. (a) Explanation of competitive advantage Reference to low price Reference to differentiation/added value (b) Explanation of competitive rivalry Description of factors, e.g.: Low rate of growth High fixed costs High exit barriers Low differentiation Other 1 (max 5) 1 each (max 5) Maximum marks awarded 10 Few candidates answered this question well. For part (a) many candidates rightly noted the two main approaches to securing competitive advantage; either by the positioning approach or via the resource based approach. This represents a good start to answering the question but to complete the answer it is necessary to go beyond this and spell out the actual bases for advantage which include Porter s generic strategies of cost leadership, differentiation and focus as the outcome of a positioning analysis and/or to make reference to the kinds of unique, hard to imitate core competences that resource based theorists argue are the real bases of sustainable competitive advantage. For part (b) many candidates simply presented Porter's Five Forces model and argued that each of these forces created competitive rivalry, an answer which is only partially correct. What was required was to consider other factors that form part of the detailed analysis of competitive rivalry and are found in the examiner's answers. The Chartered Institute of Management Accountants Page 4

5 Question 4 (a) Distinguish between the role of the project owner and project sponsor, with reference to X Company's project. (b) Explain with a view to successfully completing X Company's project, the relationship required between the project manager and (i) the project owner (ii) the project sponsor (iii) the project team (4 marks) (6 marks) (Total for Question Four = 10 marks) This question tests candidates' appreciation of the roles of important project stakeholders. It examines learning outcome B2(c) 'explain the roles of key players in a project organisation'. The answer should start with an overview of the role of the project owner and project sponsor highlighting the differences and should then develop into the project manager's relationships with the project owner, project sponsor and project team. A weak answer will simply identify general responsibilities. A good answer will discuss the responsibilities relating to the scenario. (a) Definition of owner Recognition of local authority Recognition of needs Definition of sponsor Recognition of project board Recognition of concerns (b) Relationship with owner - e.g. resources not wasted, management of expectations Relationship with sponsor/board - e.g. project progress on objectives, decisions on corrective action Relationship with team - e.g. updated project plans, motivation Maximum marks awarded Max 2 Max 2 each 10 This question was generally well answered. Some candidates did not read the scenario carefully enough and mixed up the identification of project sponsor and project owner despite the fact that this information was provided in the scenario. The Chartered Institute of Management Accountants Page 5

6 Question 5 Explain the factors which can influence the development of an organisation's culture. (Total for Question Five = 10 marks) This question tests candidates' ability to explain the factors which can influence the development of organisational culture. It examines learning outcome C1(b) 'demonstrate the importance of organisational culture'. The answer could start by providing a brief explanation of the concept of culture, developing to provide examples of the various factors that can influence the development of culture. Good answers will offer a wide ranging set of factors, whereas weak answers will only be able to provide a few. Brief explanation of organisational culture Factors that can influence culture, e.g.: Vision Management style Nature of business Ownership Size History Structure Attitude to risk Reward system Diversity - product range Diversity - geographical spread Nationality Other Maximum marks awarded 10 Most candidates gained a pass mark for this question. Weaker answers included those that simply presented cultural typologies such as Harrison's role, task, power and people cultures and/or McKinsey's 7S framework without any attempt at explaining how each type or element can actually influence the development of an organisation's culture. The Chartered Institute of Management Accountants Page 6

7 SECTION B - 50 MARKS ANSWER BOTH QUESTIONS Question 6(a) Explain how using the elements of a PRINCE2 methodology could have helped to prevent the failures of the robotic painting system project. (13 marks) This question tests candidates' appreciation of the need to manage projects using a recognised methodology. It examines learning outcome B1(b) 'apply suitable structures and frameworks to projects to identify common project management issues'. The answer should start with an explanation of PRINCE2. It should then make reference to the project issues mentioned in the question and apply them to the methodology. A pass standard answer will define the project components and processes and discuss them in the context of the scenario giving justification for their use on future projects. A weak answer will discuss the project methodology at a general level and will not develop the answer in the context of the scenario. Introduction to PRINCE2 Rectification earlier in the project Components - Organisational chart, work packages Responsibility identified on L Company project Component - Business case Reputational issues managed on L Company project Setting plans/standards/control points Corrective action taken on L Company project Management products as check points PRINCE2 forces the identification of potential problems Maximum marks awarded 13 This part of the question produced many weak answers. The main weaknesses included the absence of any explanation of PRINCE2 methodology and even when candidates were able to outline the methodology there was often an absence of its application to the case in question. The Chartered Institute of Management Accountants Page 7

8 Question 6(b) Discuss the importance of undertaking a project completion review and provide examples of what would be involved in such a review for the robotic painting system project. (12 marks) This question tests candidates' appreciation of the importance of a post completion review. It examines learning outcome B1(i) 'discuss the value of post-completion audit'. A pass standard answer would identify and explain the importance of a review and would go on and explain the benefit to L Company. A weak answer will discuss the general process and not relate it to L Company. Process involves: Debriefing meetings with all parties involved Assessment of all aspects of project performance (time, cost, quality) Importance: Understand successes and failures Identify areas for improvement for L Company in future projects Improvement on performance of team members Improvement on client satisfaction Understanding of CSFs for L Company (max 12) Review of business case Reinforces the need for L Company to use milestones and progress reporting Company needs to assess quality achieved L Company needs to analyse reasons for cost over-runs Recommendations need to be circulated throughout the organisation L Company will need to train everyone on the methodology to be used Maximum marks awarded 12 This part of the question produced a few good answers but also many poor ones. Many candidates avoided the key focus of the question and simply detailed the need for the checking of cost, quality and time issues. Many also neglected to make reference to the lessons that could be learned for future projects, an important point in answer to this question. The Chartered Institute of Management Accountants Page 8

9 Question 7(a) (i) Explain the advantages and disadvantages of each of GBF Group's strategic business units (SBUs) having its own finance function. (9 marks) (ii) Discuss TWO alternative models that the GBF Group could use to deliver the finance function other than the one it currently uses. (6 marks) This question tests candidates' appreciation of the different ways in which the finance function can be positioned. It examines learning outcome C2(c) 'discuss the effectiveness of the relationships between the finance function and other parts of the organisation and with external stakeholders'. The answer for part (i) should provide a discussion of the advantages of embedding the finance function in each strategic business unit. This should be followed by a discussion of the disadvantages. For part (ii) a description of two alternative models for delivering the finance function should be given, for instance shared service centre model and outsourced model. Good answers will provide a balanced discussion of the advantages and disadvantages, and then provide a solid description of the two alternative models. Weak answers will provide only a superficial explanation of the advantages and disadvantages, and will simply identify alternative models, rather than provide a description. (i) Advantages of having finance function embedded in each SBU e.g. stronger connection with SBU, local knowledge, contribute to strategic decisions, information needs, stronger relationship and trust Disadvantages of having finance function embedded in each SBU e.g. cost, duplication of activities, finance staff feel isolated, no sharing of best practice, inconsistencies in financial reporting and systems across company (ii) Shared service model described Outsourced model described Up to 5 Up to 5 (max 9) (max 6) Maximum marks awarded 15 This part of the question was generally well answered. Several candidates did not make clear for whom a dedicated finance function for each SBU was advantageous or disadvantageous. The Chartered Institute of Management Accountants Page 9

10 Question 7(b) Explain the factors that will contribute to the effectiveness of a high performing multi-disciplinary management team for the GBF Group. (10 marks) This question tests candidates' appreciation of the factors that make for a high performing team. It examines learning outcome C2(d) 'identify tools for managing and controlling individuals, teams and networks, and for managing group conflict'. Answers should explain the various factors that will contribute to ensuring the multi-disciplinary management team is a high performing team. Good answers will provide a thorough explanation of the range of factors, drawing on relevant theory to support points made, and with specific reference to multi-disciplinary teams. Weaker answers will provide only a few general factors, without the use of theory. Brief explanation of multi-disciplinary management team Examples of factors: Purpose and objectives Roles and responsibilities Norms and values established - ref: Tuckman Clear communications Regular meetings Strong leadership Self management of conflict Mutual trust Recognition of different backgrounds Balance of roles - ref: Belbin Other Maximum marks awarded 10 This part of the question was generally poorly answered. Many candidates misread the question and instead of considering the factors that can contribute to the effectiveness of a multi-disciplinary management team argued instead that such teams were effective because of the composition of the team. Other answers only made reference to the theories of Tuckman and Belbin and so gained relatively few marks. The Chartered Institute of Management Accountants Page 10