Paper P4 Organisational Management and Information Systems Post Exam Guide May 2009 Exam

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1 General Comments This represented the ninth and penultimate examination diet of the current syllabus. The paper comprised the (by now) familiar style and mark weighting of questions. Consistent with previous examination performance, candidates scored heavily on Section A (Question 1). Questions 3 and 4 (Section C) were poorly answered, some responses being extremely weak. SECTION A 40 MARKS ANSWER ALL FIFTEEN SUB-QUESTIONS Questions 1.1 to 1.10 are worth 2 marks each (20 marks in total) Questions 1.11 to 1.15 are worth 4 marks each (20 marks in total) Question 1.1 For firms wishing to build market share in a market new to them, penetration pricing involves pricing A high enough to convey an impression of quality. B low enough to challenge buyer loyalties. C low enough on a few items to attract customers to a wider product range. D to cover fixed costs only. The answer is B Question 1.2 A system that simulates the problem solving techniques of human experts is known as A an expert system. B a knowledge transfer programme. C a smart system. D a management information system. The answer is A Question 1.3 Attainments, general intelligence, circumstances and special aptitudes are part of Roger s seven-point plan for person requirements. What are the remaining points? A B C D Expectations, attitudes and flexibility. Experience, past progression and characteristics. Qualities, responsibility taken and life experience. Physical make-up, interests and disposition. The answer is D The Chartered Institute of Management Accountants Page 1

2 Question 1.4 Motivation theories that assume that behaviour is caused by, and directed towards, the satisfaction of personal needs are referred to as A B C D carrot and stick theories. content theories. process theories. satisfaction theories. The answer is B Question 1.5 Porter s value system reflects the value created through the relationship of A suppliers, manufacturers, distribution channels and customers value chains. B customers and sales staff. C production and sales departments. D economy, efficiency and effectiveness in the use of resources. The answer is A Question 1.6 Inventory management using a method that concentrates effort on the most expensive items is called A PDCA. B JIT. C Five S. D ABC. The answer is D Question 1.7 A duplication of an organisation s data in two or more files is called A an integrated data set. B second life. C data redundancy. D entropy. The answer is C The Chartered Institute of Management Accountants Page 2

3 Question 1.8 A company that concentrates on product features it instinctively believes to be right is referred to as A a learning organisation. B production orientated. C product orientated. D early stage entrepreneurial. The answer is C Question 1.9 Teleworkers is a term applied to staff using communication technology and working A in an unstructured way. B in the telecommunications industry. C from home. D in a call centre. The answer is C Question 1.10 The induction process refers to A a test used as part of employee selection. B an understanding of expectations between the individual and the organisation. C ways of familiarising new employees to the organisation. D feelings of complacency or dissatisfaction caused by a reward system. The answer is C Question 1.11 Explain the aim of a promotion (or promotional) mix, giving examples of the promotional tools or activities which might be used. (4 marks) Answer The aim is to communicate the benefits of a product / service to potential customers using tools such as: Advertising Personal selling Sales promotion Publicity campaigns Public relations Direct mailing Sponsorship The Chartered Institute of Management Accountants Page 3

4 Question 1.12 Describe the ways in which IT or IS might support primary and secondary market research. (4 marks) Answer Web enabled secondary data searches (customers, competitors, market) Databases, statistics Technology assisted primary data gathering Focus groups, on-line surveys Interviews (voice recognition software) Observation (recording equipment) EPOS equipment, etc. Analysis Marketing information systems Display software (graphics, charts, simulation, extrapolation, etc.) Question 1.13 Explain the relationship between McGregor s theory Y and Maslow s higher order needs. (4 marks) Answer McGregor Theory Y = managers support workers assuming they seek responsibility, self direction, etc. Maslow Unsatisfied (hierarchical) needs motivate behaviour. Higher level needs: esteem and self actualisation. Relationship Esteem generated when managers apply theory Y assumption Self actualisation gained through management support Higher order needs coincide with theory Y Question 1.14 In systems theory there are several common features present in any system. Explain with examples what these features are. (4 marks) Answer Features Explanation Examples Inputs Raw materials People, energy, materials, equipment, money, data Process Conversion of inputs Assembling, machining, sorting Outputs Finished outcome Product, service Boundary Some separation from outside Organisation, office, department environment Environment Influencing external factors Suppliers, customers The Chartered Institute of Management Accountants Page 4

5 Question 1.15 Distinguish Fast Moving Consumer Goods (FMCGs) from durable consumer goods providing examples of each. (4 marks) Answer FMCGs Durable Feature of Product Sold quickly at relatively low price & in large quantities Does not quickly wear out Long time between two successive purchases May be relatively expensive Examples Canned foods, soft drinks, confectionery, toiletries, cosmetics detergents, light bulbs, batteries TVs, computers, cars, home furnishings, sporting goods Rationale Question One sub-questions test candidates knowledge of a wide variety of topics within the syllabus through the use of objective test questions (OTQs) in a conventional multiple choice format. Question One sub-questions provide further brief testing through limited word responses. Responses for each sub-question are expected to conform to the word limit indicated of 50 words. Experience shows that the strongest candidates invariably comply with this restriction. These subquestions (valued at 4 marks each) test knowledge and understanding in all five sections of the syllabus. Suggested Approach/Marking Guide Marks Sub-questions 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 Sub-questions Responses should be in note form and should not exceed 50 words per sub-question. The use of bullet points, tables and short definitions as part of notes is perhaps the most effective approach. An excellent response containing the majority of the points suggested in the examiner s answers or with valid alternative points instead. An excellent demonstration of understanding and application of subject matter. A good/very good response containing a substantial number of the points suggested in the examiner s answers or with valid alternative points instead. A good demonstration of understanding and application of subject matter. A sound response containing some points suggested in the examiner s answers or with valid alternative points instead. Demonstrates understanding and application of subject matter. A weak response that nevertheless may contain some valid point(s). Demonstrates little understanding and application of subject matter. A failure to achieve the standard suggested above. 3.5 to to to to 1 0 The Chartered Institute of Management Accountants Page 5

6 Detailed guidelines: 1.11, 1.13, 1.14: One full mark per substantive relevant point made. No more than 4 marks in total. 1.12, 1.15: One half mark per relevant point made. No more than 4 marks in total. Examiner s Comments Most candidates scored heavily on this question, particularly the multiple-choice sub-questions Of the other sub-questions, 1.14 appeared to be the only sub-question that caused difficulty. Common Errors Failure to identify this subject as a marketing concept Failure to recognise features of systems theory or tendency to restrict to IT alone. SECTION B 30 MARKS ANSWER ALL PARTS OF THIS QUESTION. Question 2 (a) (b) (c) (d) (e) (f) Explain the difficulties associated with the way in which MLD has, up until now, dealt with HR issues in the packet foodstuffs and bottled drinks divisions. (5 marks) Identify the advantages and disadvantages of MLD s strategy of growth through acquisition of smaller firms. (5 marks) Explain how the proposed People and Payroll system could benefit MLD. (5 marks) From the alternative system implementation systems available, recommend, with reasons, which MLD should use when introducing the new People and Payroll system. (5 marks) Explain the key stages involved in developing an HR strategy for MLD. (5 marks) Using Mintzberg s five part categorisation for organisations, explain how MLD supports its operations. (5 marks) (Total for Section B = 30 marks) Rationale Question two represents 30% of the paper and tests topics from four main syllabus areas. The question takes the familiar form of a common workplace related scenario (in this case a family run business producing confectionary and undergoing change) from which all sub-questions are drawn. All subquestions are valued at 5 marks each and require an application of knowledge to the scenario. These subquestions test a number of learning outcomes and require an application of candidates knowledge and understanding as follows: 2(a) and (e) Managing Human Capital (learning outcomes E(i) and E(v)) 2(b) Change Management (learning outcome B (iv)) 2(c) and (d) Information Systems (learning outcomes A(ii) and A (v)) 2(f) Operations Management (learning outcome C(i)) The Chartered Institute of Management Accountants Page 6

7 Suggested Approach/Marking Guide Responses for each sub-question are expected on a single side of A4 and in a form that might include a few sentences and bullet points. This limit simulates a real life scenario in which accuracy, brevity and clarity are called for and hopefully prevents candidates from spending a disproportionate amount of time on each sub-question. As with question one, the strongest candidates invariably comply with this restriction. Requirement (a) Identify potential difficulties (e.g. inefficient operations, lack of support for managers, piecemeal HR provision, lack of strategic approach to planning and resource deployment, lack of economies of scale, lack of consistency of practice, poor career planning and unnecessary staff turnover, etc.) Explain the issues associated with each difficulty Limited answer: Some discussion of potential difficulties. Confused or insufficiently related to the scenario. Pass standard answer: Some explanation of potential difficulties. Explanation either insufficiently related to the scenario or not established. One mark per substantive point made. Strong answer: Cohesive explanation of potential difficulties, clearly relevant to the scenario. One or two marks per substantive point made. Marks 1 max Requirement (b) Identify, with some elaboration, likely scenario related advantages (e.g. quick growth, insulation from takeover, portfolio readjustment, sale of unwanted assets, etc.) Identify, with some elaboration, likely scenario related disadvantages (e.g. loss of focus, culture clashes and conflict, management cover, lack of synergy, etc.) Limited answer: A few relevant points identified, lacking in elaboration or scenario relevant context. Pass standard answer: Several advantages and disadvantages identified, limited elaboration or only scenario relevant in context. One full mark per substantive point made. Strong answer: Cohesive discussion of several relevant issues covering advantages and disadvantages. One to two marks per substantive point made. Max 2 5 for advantages, max 2 5 for disadvantages. 1 max The Chartered Institute of Management Accountants Page 7

8 Requirement (c) Identify potential benefits (e.g. system integration, ability to reduce costs and increase efficiency, improve accuracy, better control, improved communication, speed of entry and processing, will not be behind competitors in terms of systems, improved security features, etc.) Explain each benefit in turn within the context of the scenario Limited answer: Either listing of several potentially relevant points with no explanation or one or two points only with limited explanation. Pass standard answer: Some explanation of several relevant benefits relevant to the scenario. One full mark per substantive point made. Strong answer: Comprehensive explanation of several relevant benefits within the context of the scenario. One to two full marks per substantive point made. 1 max Requirement (d) Identification of implementation approaches (e.g. direct approach, parallel approach, retrospective pilot, phased approach, etc.) Explanation of each in a way that is relevant to the scenario Recommend one approach with justification Limited answer: Some approaches identified but little explanation or only one approach identified and explained. Pass standard answer: Some realistic, scenario related approaches identified and argument partially developed. Possible recommendation without justification. One full mark per substantive point made. Strong answer: Several realistic, scenario related approaches identified. Approaches well explained and fully developed. (Recommendation with appropriate justification 1 mark.) One to two full marks per substantive point made. 1 max Requirement (e) Identify key stages Explain each stage in turn related to the scenario context Limited answer: Listing and brief note on key stages or explanation of one stage. Pass standard answer: Identification and explanation of key stages or explanation of one or two stages. Some attempt to explain the stage within the context of the scenario. One full mark per substantive point made. Strong answer: Identification and explanation of key stages within the context of the scenario. Clearly expressed explanation of each stage. One to two marks per substantial point made. 1 max The Chartered Institute of Management Accountants Page 8

9 Requirement (f) Explain Mintzberg s five categories (operating core, strategic apex, middle line, technostructure and support staff) Conceptualize each to MLD Limited answer: Identification of Mintzberg s five categories or explanation of one only. Pass standard answer: Explanation of Mintzberg s five categories with some conceptualization of each. One full mark per substantial point made Strong answer: Comprehensive explanation of Mintzberg s five categories with good conceptualization to the scenario. One to two full marks per substantive point made. 1 max Up to one mark for explanation/labelled depiction of Mintzberg s categorisation. Marks awarded thereafter must relate to MLD scenario. Examiner s Comments There was a mixed performance when responding to Question two. Well prepared candidates who applied their knowledge to the scenario scored heavily. Common Errors For sub-questions 2(d) and 2(e), a large number of responses were unfocused For sub-question 2(f), a significant number of candidates failed to recognise Mintzberg s academic model SECTION C 30 MARKS ANSWER ONE QUESTION ONLY Question 3 (a) (b) (c) Explain the relationship between TQM and marketing for RWDi. (10 marks) Discuss the factors that need to be taken into account when planning training in TQM for different groups of RWDi staff. (10 marks) Explain how the technique force field analysis might be helpful when introducing TQM in RWDi. (10 marks) (Total for Question Three = 30 marks) Rationale Question Three requires an application of knowledge and understanding to the scenario of a manufacturing organisation introducing TQM. Operations Management learning outcome C(iv) and C(vi) are tested in requirements (a) and (b) and Change Management learning outcome B(iii) in requirement (c). The Chartered Institute of Management Accountants Page 9

10 Suggested Approach/Marking Guide Marks Requirement (a) Define both TQM and marketing Identify and explain the relationship between the two concepts (e.g. long term philosophy, culturally embedded, customer centred orientation, shared responsibility, active involvement from front line staff, continual betterment, etc.) Limited answer: Confused or unstructured presentation, indicating some understanding of the concepts but a failing to identify the strong relationship between them. Possibly unconnected to the scenario. Pass standard answer: Understanding of the concepts and relationship between them established. Possibly undeveloped explanation and/or only slightly linked to the scenario. Strong answer: Well-structured explanation of the concepts and relationship between them. Several well developed explanations linked or relevant to the scenario. One to two full marks per substantive point made. Up to 10 marks maximum. 10 max Requirement (b) Outline the Total Quality Management approach and the need for training. Identify training issues ( e.g. different training needs, training facilitators, venue, etc. ) and staff requirements (e. g training senior managers, the workforce, supervisors, Quality Committee members, Quality Circle participants, training in supporting processes and documentation, etc.) Discuss each effectively within the scenario context. Limited answer: Confused or unstructured discussion, some understanding of TQM training. Pass standard answer: Identification of a number of aspects of TQM training. Some discussion in a way that is scenario relevant. Strong answer: Comprehensive identification of a number of TQM training issues and mature discussion of these in a way that is wholly scenario relevant. One to two full marks per substantive point made. 10 max Requirement (c) Identify the technique Identify and then explain how it might be useful (e.g. considering the variables involved, assisting good decision-making, improving the chances of success, getting a momentum for change, providing a focus on points of resistance, helping develop a plan of positive measures, etc.) with specific reference to TQM in RWDi Limited answer: Understanding of the technique but explanation of use in this context confused or poor. Pass standard answer: Clear understanding of the technique, explanation of its use in this context with well developed argument in a few areas. Strong answer: Clear understanding of the technique. Well-structured and strongly scenario linked clear explanation of use. Well developed argument throughout. One to two full marks per substantive point made. 10 max The Chartered Institute of Management Accountants Page 10

11 Examiner s Comments Most responses in Section C were disappointing. A substantial 30 marks are available in this section. However, there was a lack of content in most cases, indicating that insufficient time had been spent in addressing the issues in the scenarios. One common (unsuccessful) tactic for those candidates unable to link the knowledge they have to a case study scenario was to write everything I know about Common Errors Not writing enough! Some answers were nothing more than outline notes when the question had more substantial requirements 3(c) Describing the components of a force field analysis rather than explaining how the technique might be helpful Question 4 (a) (b) (c) Discuss the processes and activities which the 222 group might undertake in order to reposition the XX5 brand. (10 marks) Describe the different forms of workforce flexibility that might be relevant in this case. Explain the principles that should guide the design of an employee reward scheme for XX5. (10 marks) (10 marks) (Total for Question Four = 30 marks) Rationale Question Four involves a car producer with a strong brand image. The requirements test candidates understanding and application of issues associated with Marketing (learning outcome D(iii)) in requirement (a) and Managing Human Capital (learning outcomes E(v) and E(iv) in requirements (b) and (c). Suggested Approach/Marking Guide Requirement (a) Establish the concept of brands and the value of their development Identify a process for brand development Note: There are alternative processes that might be applied. The one suggested in the examiner s answers is as follows: Undertake up to date research, understand who is attracted to the brand and what their emotional needs are, decide whether the existing segment is sufficient, establishing current position, enhance features of the brand with valued features, creatively communicate with XX5 s target segment, develop supportive systems, develop a supportive workforce). Explain how this process might be applied to the XX5 brand Limited answer: Confused or partial explanation of some relevant points, possibly features of the XX5 brand rather than the process of development. Pass standard answer: Clearly developed explanation of several relevant points within the context of the process of development, with relevance to the XX5 brand. Strong answer: Well developed explanation of several relevant points all set within the context of the process of brand development for XX5 brand. One to two full marks per substantive point made. Marks 10 max The Chartered Institute of Management Accountants Page 11

12 Requirement (b) Introduce the concept of workforce flexibility Identify the main types of flexibility (e.g. technology/staffing trade off, numerical flexibility, internal flexibility, task flexibility, flexible working patterns, external flexibility, etc.) Discuss each in a way that might be relevant in this case Limited answer: Some understanding of workforce flexibility. General or unstructured discussion with little apparent linkage to the scenario. Pass standard answer: Understanding of workforce flexibility. Structured discussion of certain types with some linkage to their relevance in the scenario. Strong answer: Mature understanding of workforce flexibility. Well structured discussion of several forms of flexibility clearly linked to the scenario. One to two full marks per substantive point made. 10 max Requirement (c) Identify aims that should guide the design of an employee reward scheme (e.g. rewards employees financially, motivates individuals, recognises contribution, makes clear a linking between results and rewards, simplicity, alignment with corporate goals, reflects both individual and team contributions, fairness, consistency, predictability of total cost, aid to recruitment and retention, flexibility, etc.) Explain each in turn in a way that is relevant to XX5 Limited answer: Confused discussion of issues associated with generic reward schemes. Pass standard answer: Identification of several clear design aims with relevance to the scenario, some explanation. Strong answer: Identification and clear explanation of several clear design aims all strongly linked to XX5. One to two full marks per substantive point made. 10 max Examiner s Comments Common Errors Not writing enough! Some answers were nothing more than outline notes Few good answers to 4(a), most concentrated on applying the marketing mix 4(c): A large number concentrated on the components of the scheme rather than the principles underpinning it The Chartered Institute of Management Accountants Page 12