The overall performance of candidates in this first diet of Integrated Management was most encouraging.

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1 May 005 Exam General Comments The overall performance of candidates in this first diet of Integrated Management was most encouraging. Most candidates were able to obtain a pass mark on the wide ranging set of short answer questions that made up the compulsory Section A. Many candidates did much better, with a small minority gaining full marks. At the lower end of the performance range however, some candidates did not gain any marks at all for Section A. This kind of poor performance underlines the need for careful preparation for this paper. Even with objective test questions that require candidates only to identify the correct answer, trying to gain marks by guess work is futile! The performance of candidates in Section B was rather more variable with marks spread across the whole range. The questions in this Section required the application of relevant theory to issues dealing with stress management, social responsibility and critical path analysis respectively. The specific weaknesses demonstrated by candidates are detailed in the discussion of each question below. Common general weaknesses included insufficient attention to the exact wording of the questions which resulted in all, or most, of some candidates answers being incorrect. Another was omitting to answer some parts of the question. For instance in Q3 on social responsibility some candidates only provided the arguments for why organisations should adopt socially responsible policies but neglected the arguments against the adoption of such policies. Similarly in Q4, many candidates concentrated only on providing a network diagram but neglected the second part of the question asking them to explain how information from the diagram could be helpful to the project manager. Performance in Section C was even more variable with the less carefully prepared candidates struggling to gain even a pass mark on some of the questions. Common weaknesses in this part of the paper included the tendency on the part of some candidates to ignore the requirements of particular parts of a question. For example, in Q5 many candidates answered in Part (b) much of what they should have been addressing in Part (a) (i) of the question. Another weakness involved the tendency to repeat parts of question scenarios as the answer to a question. This was most evident in Q7 (a) where many candidates simply repeated the words of the scenario as their answer instead of using their knowledge to work out what the underlying causes of conflict were likely to be in functionally structured organisations. A final weakness observed in a number of answers regards the limited skill of some candidates to summarise material. This weakness was most evident in the answers to Q6 (a). This required candidates to identify and explain the activities that would need to be undertaken in the planning phase of a project. It was clear from many answers that although candidates were familiar with what such activities were, they produced weak answers because they became bogged down in the detail of particular phases of the planning process rather than identifying the key phases and summarizing the key activities briefly as required. The above paragraphs have focused on the main weaknesses of some candidates for each section of the paper. Hopefully those who need to retake the examination will gain some understanding of where they went wrong and gain an idea of how to improve their performance next time around. For the majority who passed the examination, many of the above comments do not apply and to these candidates the examination team offers its congratulations. The Chartered Institute of Management Accountants Page

2 May 005 Exam SECTION A 0 MARKS ANSWER ALL EIGHT SUB-QUESTIONS Question. Identify which ONE of the following perspectives of strategic management is defined by Mintzberg as "patterns or consistencies realised despite, or in the absence of, intentions"? A B C D Rational Logical Incrementalism Emergent Positioning ( marks) The answer is C Question. State which ONE of the following represents the four phases of negotiation: A B C D Preparation, opening, bargaining, closing Opening, bargaining, decision, closing Preparation, bargaining, negotiating, closing Opening, negotiating, decision, closing ( marks) The answer is A Question.3 Which ONE of the following organisational forms is best suited to a project which requires integration from a number of different functions? A B C D Functional Network Divisional Matrix ( marks) The answer is D The Chartered Institute of Management Accountants Page

3 May 005 Exam Question.4 Identify which ONE of the following best describes the scope of a project? A B C D A statement of client needs The extent of work needed to produce the project s deliverables The specification of resources required The sequence of activities ( marks) The answer is B Question.5 Porter s work on industry competition suggests that the strength of market entry depends on the existence of barriers to entry against the entrant. Identify three factors that create barriers to entering an industry. (3 marks) The answer could include:. Economies of scale. Capital requirements 3. Government action Acceptable alternatives included branding, access to distribution channels, market saturation, switching costs, expertise and strength of competition. The Chartered Institute of Management Accountants Page 3

4 May 005 Exam Question.6 Identify three missing words (using a, b and c) to complete the diagram of the five process areas of project management proposed by the Project Management Institute. a Planning b Executing c (3 marks) The answer is: a. Initiating b. Controlling c. Closing Acceptable alternatives for (a) included defining for (b) monitoring or reviewing and for (c) completion. The Chartered Institute of Management Accountants Page 4

5 May 005 Exam Question.7 List three types of feasibility study that might be undertaken as part of project planning. (3 marks) The answer is:. Technical feasibility study. Social or Ecological feasibility study 3. Financial (Cost/ Benefit, or Economic) feasibility study Acceptable alternatives included assessment of feasibility in terms of risk, quality, marketing, production and politics. Question.8 Blake and Mouton developed the managerial grid to provide a framework for applying effective management. Draw the managerial grid labelling the horizontal axis and vertical axis and identify on the grid where the team management style is located. (3 marks) The answer is: Concern for people Team Management Style Concern for production or task The Chartered Institute of Management Accountants Page 5

6 May 005 Exam SECTION B 30 MARKS ANSWER ALL THREE QUESTIONS Question Discuss the measures that T could introduce as part of the proposed stress management programme to minimise stress related problems. (Total for Question Two = 0 marks) Increasingly managers find themselves having to deal with employees with stress related problems. This question tests candidates ability to discuss the measures that can be taken to deal with stress in the workplace to minimise the problems that employees suffering from stress can create. This question requires candidates to discuss the various steps that can be taken to deal with stress related problems. Strong answers will explain how each suggestion will minimise stress related problems. Measures that could be introduced, for example:* Acknowledgement of causes of stress Stress audit Changes to job role/content Stress reduction programmes and counselling Physical/social environment marks for each point *To gain full marks requires link to the scenario. Maximum marks awarded 0 Generally well answered. Common Errors Some candidates tended to concentrate on the consequences of stress rather than focusing on the possible measures to overcome the problems of stress. The Chartered Institute of Management Accountants Page 6

7 May 005 Exam Question 3 Explain the main arguments for and against the view that socially responsible business decisions can achieve sustainable competitive performance and improve shareholder value. (Total for Question Three = 0 marks) This question examines candidates' understanding of the concept of social responsibility. Their ability to develop convincing arguments both for and against socially responsible business decisions in the context of creating sustainable competitive performance and improving shareholder value will be assessed. Answers should first explain the main arguments for socially responsible business decisions, making explicit reference to how they can improve sustainable competitive performance and shareholder value. The main arguments against socially responsible business decisions should then be explained in terms of why they may not improve competitive performance and shareholder value. Arguments against could include: Friedman s view on maximising shareholder wealth Cost Reduces revenues Diverting funds Arguments for could include: Reference to stakeholder theory To gain competitive advantage Supports corporate image Attracts socially responsible consumers Generally well answered. Common Errors Tendency by some candidates to focus too much on the advantages for firms of adopting a socially responsible stance and too little on the arguments against this approach. The Chartered Institute of Management Accountants Page 7

8 May 005 Exam Question 4 Using the information from the scenario, construct a network diagram and explain how information from this could be useful to R in planning the conference. (Total for Question Four = 0 marks) The question is designed to assess candidates ability to use the information from the scenario to construct a network diagram, and appreciate how the information can be helpful to project planning. It requires candidates to be familiar with the concepts associated with network analysis such as critical path and earliest and latest expected time to calculate project duration. Candidates should first produce a network diagram to identify the critical path and working out the EET and LET in order to calculate the project duration. The answer should then go on to provide an explanation of how the information in terms of the critical path analysis and time for project duration can be used in planning the various activities for the conference. Network Diagram Critical Path identified (A,C,E & G) Project duration (7 weeks) Explanation of how the information could be useful to R 4 Question generally very well answered. Common Errors Some candidates neglected to explain how the information provided by the network diagram could be useful to R. The Chartered Institute of Management Accountants Page 8

9 May 005 Exam SECTION C 50 MARKS ANSWER TWO QUESTIONS FROM THIS SECTION Question 5(a) (i) (ii) Compare and contrast an entrepreneurial structure and a functional structure. Advise A why a functional structure may no longer be appropriate for L Company. (7 marks) (6 marks) This question examines candidates ability to contrast between different organisational structures (entrepreneurial and functional). Drawing on information from the scenario, candidates are asked to argue why a functional structure may no longer be appropriate. The first part of the question is straightforward and candidates need to explain the characteristics of an entrepreneurial structure and then go on to explain how a functional structure is different. The second part of the question could be approached by identifying the disadvantages of a functional structure. Then using relevant information from the scenario, advise A why such a structure is no longer appropriate for L Company. Candidates must use information from the scenario to support their arguments on why the structure is no longer appropriate, not just produce general answers. Part (i) Characteristics of entrepreneurial structure could include: Founder leads Company & supervises tasks; Informal control, power/task culture Characteristics of functional structure could include: Division of specialist activities into functions; role culture, vertical communication, delegated formal authority; job demarcation. Part (ii) Appraisal of why functional structure not appropriate for L Company could include: Mechanistic; loses flexibility & responsiveness, stifles creativity & innovation; unsuited to quickly changing environment, promotes narrow focus on specialist interests; interdepartment conflicts. 3 (max) 4 (max) 6 (max) See 5(b). The Chartered Institute of Management Accountants Page 9

10 May 005 Exam Question 5(b) Discuss the different approaches that could be used to encourage creativity and innovation in L Company. ( marks) This question tests candidates' appreciation of the how creativity and innovation can be encouraged in the context of a particular organisational setting. The question should provide a discussion of the different approaches to encouraging creativity and innovation. To gain a pass each point should be explained in the context of how it could be applied to L Company - rather than a general list of points on creativity and innovation. Different approaches to encourage innovation: Structural issues e.g. divisional form. matrix, adhocracy, organic Cultural controls Devolvement of power Internal venturing 4 4 An alternative approach to the answer could be based on Moss Kanter s prescriptions and any of the following: Use of Balanced Score Card Adoption of appropriate management style Development of a Learning Organisation Recruitment and selection of people with a track record in innovation Rewards for Innovation Team working and team building to share ideas See Common Errors section below. Common Errors Part (a)(i) and part (b) generally well answered but in part (a)(ii), many candidates concentrated on what should to done in the future rather than on how the existing functional structure limited innovation. The Chartered Institute of Management Accountants Page 0

11 May 005 Exam Question 6(a) Identify and explain the activities that D would need to undertake in the planning phase of the project for re-location. (5 marks) The question is designed to examine candidates' understanding of the different activities in the project planning phase of project management. The answer should develop to identify the different activities in the project planning phase for re-location, providing an explanation of the purpose of each activity. The various activities should be explained with reference to the project for re-location. Planning phase activities: Establish project goals/objectives (applied to scenario) Determination of project scope assumptions/risks/obstacles Establishment of project team Plan of authorisation Cost plan Schedule/time plan with reference to relevant techniques 3 4 See 6(b). The Chartered Institute of Management Accountants Page

12 May 005 Exam Question 6(b) Compare and contrast the roles of P, as the project sponsor and D, as the project manager. (0 marks) This examines candidates ability to contrast between the different roles of key stakeholders (for example, the project sponsor and the project manager) in project management. The answer should start with an explanation of the role of P as project sponsor, providing some specific examples of what P will be responsible for, relating to the context of the scenario. The answer should then go on to explore the project manager s role, explaining D s responsibilities and making the distinction between P and D's roles. Role of Project Sponsor could include: Initiate project and appoint project manager Approve project definition and project plans, changes and status reports Ensure priorities are maintained and watch over project progress Oversee budgets Provides support and commitment - champion Role of Project Manager could include: Leading the project team &line management responsibilities Managing expectations of different stakeholders Defining, planning and co-ordinating the project Allocating and securing resource commitment Monitoring and tracking project progress, controlling costs Delivering project on time and within budget 5 (max) 5 (max) See comments under Common Errors below. Common Errors Part (b) generally well answered but the answers of many candidates often became lost in the detail of a particular phase of the planning process rather than concentrating on the main phases of the process of planning. The Chartered Institute of Management Accountants Page

13 May 005 Exam Question 7(a) Analyse the nature and sources of conflict between the different departments in M Company. (0 marks) This question examines candidates ability to analyse a particular situation to determine the nature and different sources of conflict. The different reasons for conflict should be analysed along with an explanation of the nature and sources of conflict in M company. Examples should be used from the case scenario to support the points made. Answers that discuss conflict without reference to the scenario will not obtain a pass mark. Nature and source of conflict analysed: Horizontal conflict Goal incompatibility between different functions, with specific examples Lack of understanding and pressures Task interdependencies Different cognitive and emotional orientations 4 See 7(b). The Chartered Institute of Management Accountants Page 3

14 May 005 Exam Question 7(b) Describe the factors that V should consider in building a successful cross-functional project team. (5 marks) This tests candidates knowledge of the factors that need to be considered to build a successful cross functional team. The range of factors that should be considered to build a cross functional team should be described. Answers should make reference to relevant theories on group development and building effective teams. Personality, characteristics and team roles making reference to Belbin Communication and team meetings Common goal Environment/physical surroundings Appropriate leadership style Team development, with reference to Tuckman s work 4 (max) 3 4 (max) See Common Errors section below. Common Errors In part (a), many candidates tended to repeat the scenario rather than writing about the underlying reasons/causes for conflict. Part (b) was generally well answered but some candidates did not focus on how to build a good cross functional team as required but instead provided a discussion of what was needed for good project management. The Chartered Institute of Management Accountants Page 4