CIPS Exam Report for Learner Community:

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1 CIPS Exam Report for Learner Community: Qualification: Professional diploma in procurement and supply Unit: PD2 - Corporate and business stratergy Exam series: January 2016 Question 1 Learning Outcome 1 (a) Explain the differences between strategic management decisions and operational management decisions (b) For each of the following, explain the potential impact on an organisation s strategy (i) The external environment (ii) The strategic purpose (iii) The strategic capability (iv) The organisation s culture (9 marks) (16 marks) Learning Outcome(s) covered by these questions: 1.1 Part (a) Command word: in this part of the question it was Explain here we were looking for candidates to give a detailed account of the differences between strategic management and that of operational in the context of the types and levels of decisions that are made. Examples of good content/good approaches: (1) Defining and explaining well the term strategic management & operational management ; (2) Putting across that a strategy will comprise both levels here those candidates who used examples to illustrate this demonstrated more clarity in their answer; (3) Showing a good appreciation that strategic management is generally concerned with the development of resources and the managing of complexity and uncertainty, dealing in the main with non-routine arisings, and is more about being effective rather than efficient; (4) Demonstrating that strategic management has a long time horizon (5) Whereas operational management is more the domain of tactical and the efficient and effective use of resources, tends to be functional as opposed to be organisation wide under strategic management and operates within the boundaries set by the over-arching strategic direction; (6) Operational management includes detailed planning and has short to medium term time horizons. Examples of poorer content/poorer approaches: (1) Lack of scope, just defining both strategic management JANUARY 2016_PD2 EXAM_REPORT_LEARNER_COMMUNITY_FV 1/7

2 and operational management; (2) Missing the setting of the question which was about decisions made at both the strategic and operational level; (3) non adherence to the command word set in this question. (4) Lack of content. The common errors made by candidates: (1) Failure to recognise the command word associated with the question; (2) Lack of depth and scope; (3) Limited use of examples to illustrate points being made; (4) Lack of logical structure to responses given including an imbalance to the response in some over egging strategic management to that of operational management and vice versa. Overall most candidates did pass this question but by small margins due in the main to the approach taking which was more descriptive rather than explaining the differences. However there were exceptions to this with some excellent responses that were balanced and contextualised well in an organisational setting, with good examples reinforcing the differences being made. Part (b) Command word: in this part of the question it was also Explain here we were looking for candidates to give a detailed account of the impacts of four different terms in the context of an organisation s strategy. Examples of good content/good approaches: (1) Defining and explaining well each of the four terms; (2) Balanced responses between each of the points explained; (3) Showing a good appreciation of the impact each of the four terms being addressed had on an organisation s strategy; (4) taking each point in turn and in summary with the External Environment here good responses highlighted that this provides the basis for an analysis of the macro factors that will impact on a business strategy and the most commonly used tool of analysis used here would be STEEPLE or its variants. It is also concerned with the micro or immediate environment linked in the main with stakeholders and stakeholder analysis which can be analysed using tools of analysis such as SWOT and Porter s Five Forces, all allowing the strategy being developed to be in sync with the current external environment. Next taking the Strategic Purpose here good responses defining the term well and demonstrated that candidates understood that it helps identify the organisations key aims and objectives and is influenced by the range of stakeholders impacting on it and finally the strategy should be considered against the strategic purpose in terms of its suitability, acceptability and feasibility. Next taking Strategic Capability here good responses put across well that this is concerned with resources and competencies that exists within an organisation and how this will have a direct impact on the development of a strategy and in particular when it comes to the implementation stage of that strategy. Next and finally comes Culture here good explanations included reference to culture being the collective history, assumptions and norms of the organisation. It can be influenced by the industrial sector, the nationality and the personality traits of the founders. Culture is a strong influence on the eventual strategy being formulated and in some instances it may lead to certain strategic options being discounted as inconsistent with the culture of the organisation; (5) Sound use of examples within each to illustrate the points made. JANUARY 2016_PD2 EXAM_REPORT_LEARNER_COMMUNITY_FV 2/7

3 Examples of poorer content/poorer approaches: (1) Imbalanced responses to illustrate many candidates wrote a lot about the Environment in two cases THREE PAGES primarily by conducting a STEEPLE ANALYSIS which misses the point of the question as a whole; (2) Poor understanding of the Strategic Purpose; (3) Limited or inappropriate examples given. The common errors made by candidates: (1) Failure to recognise the command word associated with the question; (2) Lack of depth and scope more illustrative rather than explaining the term; (3) Limited use of examples to illustrate points being made; (4) Over egging the Environment in comparison to the other three aspects which from the mark on offer should have indicated equal marks for each of the four points. Overall most candidates did pass this question but again by small margins due in the main to the approach taking which was more descriptive rather than explaining each of the terms in equal measure. However there were exceptions to this with some excellent responses that were balanced and contextualised well in an organisational setting, with good examples reinforcing the explanations given. Question 2 Learning Outcome 2 An organisation has decided to pursue a corporate strategy of diversification which involves selling a new product range to new markets. (25 marks) Assess how an organisation s supply chain strategy may be aligned with this corporate strategy of diversification Learning Outcome(s) covered by the question: 2.3 Command word: in this question it was Assess here we were looking for candidates to weigh up the need to align the organisation s supply chain strategy with that of the new corporate strategy of diversification accounted for in the preamble to this question. Examples of good content/good approaches to answers: (1) Commencing their response with a definition and explanation of the term diversification (2) Making use of theory such as Ansoff to reinforce that definition, however other s chose to apply other logical applications of the term which was equally acceptable the point here being application was discussed at some point within the response; (3) A discussion on building on existing competencies with new competencies also added to good responses; (4) Including within the response that Diversification is seen as the riskiest of the four strategies Ansoff describes and for that extra care must be taken when formulating an appropriate and robust supply chain strategies; (5) Several approaches in good responses were taken including assessing the impact of diversification on the organisation s supply chain strategy and the ways those new supply chains need to be managed through proper alignment with the supply chain strategy either in broad terms as some good candidates did, others JANUARY 2016_PD2 EXAM_REPORT_LEARNER_COMMUNITY_FV 3/7

4 choosing to assess the extent to which supply chain capabilities might influence the success or failure of the diversification strategy and the involvement of supply chain personnel in its implementation; (6) Where candidates showed a good understanding of benefits and risks this also secured higher marks with some examples of the benefits of alignment being potential economies of scale, innovation coming through from the supply base, introduction of new technologies, the adoption of outsourcing to reduce cost and project management skills. Moving to a cross section of risks they include but not limited to distribution and logistical difficulties, lack of expertise in new supply markets, lack of proper resources, the dilution of existing relationships and loss of focus; (7) An alternative approach demonstrated in some good responses were answers around the potential directions for growth in terms of related and unrelated diversification linked into horizontal integration, backward vertical integration and forward vertical integration. Examples of poorer content/poorer approaches in answers: (1) Again, as a recurring theme too many candidates failed to write to the command word down grading it to a mere descriptive answer and thus lost marks due to lack of depth and scope; (2) Fixated on simply doing an Ansoff Matrix with the briefest of explanations and not being truly related to the question as set; (3) Lack of proper understanding of what diversification means; (4) confusing related and unrelated diversification. The common errors made by candidates: (1) Insufficient depth; (2) Exam technique, poor evidence of structure in particular a sound introduction and a solid conclusion; (3) Too short answers As was the case in Question 1 most candidates did pass but too many candidates did so marginally leaving little wriggle room for the reasons explained under examples of poor content and common errors above. However on a more positive note there were amongst the scripts some outstanding answers here contributing to those candidates achieving Merit as well as Distinction grades. Question 3 Learning Outcome 3 Analyse how people, as a resource, can support the development and implementation of strategy in organisations in supply chains. (25 marks) Learning Outcome covered by the question was 3.2 Command word: in this question it was Analyse here we were looking for candidates to fully explain how people as an important resource can support the development and implementation of strategy in supply chains; using supporting arguments and evidence for and against as well as how these interrelate to one another. Examples of good content/good approaches to answers: (1) Recognising the impact of the command word Analyse and more importantly the need to link to the organisation and its supply chains; (2) Putting in sufficient justification and/or credible examples for each point being made: (3) Recognising the need to JANUARY 2016_PD2 EXAM_REPORT_LEARNER_COMMUNITY_FV 4/7

5 address the implementation part to this question looking at in particular strategic objectives, formulation of specific plans, resource allocation and budgeting and monitoring and control procedures; (4) Equally valid responses came through an approach taken by some candidates to link people and strategy as managing and developing people as an integral part of the corporate plan here good responses highlighted capitalising on the strengths of the people within the organisation, sufficient recruitment policies and levels of recruitment, changing in house personnel dynamics as a result of potential outsourcing initiatives, training needs analysis, management development programmes and cost of manpower linked to new procurement projects; (5) Good broad discussions around Human Resource Management (HRM) highlighting that this is a process aimed at managing and developing people, which consists of four primary activities which are: acquisition, development, motivation and maintenance of human resources; (6) Sound discussion around the planning function of HRM looking at Organisation, Directing, and Controlling; (7) Discussion on a procurement function when developing its strategy to look closely at the talent pool when engaging new staff. Examples of poorer content/poorer approaches in answers: (1) Candidates applying the command word wrongly (2) Lack of sufficient depth to the responses given; (3) Poor understanding of the impact people as a resource can have; (4) Short responses that were overly descriptive. The common errors made by candidates: (1) Failure to recognise the command word associated with the question. (2) Limited responses in relation to the marks on offer (3) Poor strategic understanding with too operational answers given. For those candidates who passed well in this question it was due to their depth of response as well as their understanding of the impact people can have on the management of the organisation s supply chain; those who just passed that later point was missed and to those who failed it was as a result of poor generic and tactical responses. Question 4 Learning Outcome 4 Compare the concepts of incremental and transformational change, and examine how each type of change could be successfully planned and achieved. Illustrate your answer with appropriate examples from the supply chain function. 25 marks Learning Outcome(s) covered by the question: 3.4 & 4.2 Command words: in this question in there were two command words the first was Compare here the candidates need to identify the similarities and differences between incremental and transformational change, reinforcing the points made and say if any of the shared similarities or differences are more important than others. The second command word was Illustrate here this meant the candidate had to put in definite examples from the supply chain function to reinforce the points being made. JANUARY 2016_PD2 EXAM_REPORT_LEARNER_COMMUNITY_FV 5/7

6 Examples of good content/good approaches to answers: (1) Reinforcing early on in the response acknowledging that the approach taken when it comes to dealing with either incremental or transformational change is very different in reality with each approach being taken in different sets of circumstances; (2) Putting in definitions of each type of change and separating the answer out dealing with each in turn; (3) In the case of Incremental Change putting in aspects such as: a more common way change takes place, allows organisations to be more adaptive to changes within the external environment, facilitating the management of the learning process and its compatibility with the concept of continuous improvement; the culture of the organisation is not likely to be effected and management only requires to ensure an environment conducive to continuous improvement is in place. Mention of strategic drift when in reality incremental change does not keep pace with the external environment. Moving onto Transformational Change here candidates who discussed the following aspects did well Is a change pattern that occurs in times of crisis, but may be driven through quickly which leads to heighted uncertainty and resistance this is where effective change management principles are of paramount importance covering aspects such as: robust communications, participation and negotiation. Top management commitment will also be necessary to aid the overcoming of resistance. Existing behaviours must be broken down and new practices reinforced once the changes have been implanted. Appropriate structures, systems, processes and resources will also be required as the culture of the organisation is greatly impacted at this time; (4) Good examples given to illustrate the valid points made (5) Candidates using the command word(s) correctly; (6) Showing an equal balance to any comparison drawn and that of planning and achieving change. Examples of poorer content/poorer approaches in answers: (1) Lack of depth & scope; (2) Command word(s) ignored; (3) Over-reliance on theory with little application the giving of a credible examples in support was lacking in the poor responses; (4) Poor exam technique including poor layout and structure to the answer and non use of introductions and conclusions; (5) Imbalance to the response with more on Transformational Change to that of Incremental Change. The common errors made by candidates: (1) Failure to recognise the command words associated with the question. (2) Poor structure (3) Shortness of responses lacking justifications and contextualisation to a supply chain etc., (3) Poor introductions & conclusions. General Observations: Generally this was a well answered paper usual suspects remain though (a) lack of understanding of command words to questions; (b) lack of sufficient depth to answers with good application essential at the Professional Stage; (c) lack of strategic awareness and application with responses erring towards the tactical/operational as opposed to pure strategy and strategic implications. There also remains a small percentage of candidates misreading questions This all conspires to keep marks on the low side of a pass. JANUARY 2016_PD2 EXAM_REPORT_LEARNER_COMMUNITY_FV 6/7

7 Overall despite some of the comments made with regard to the poorer aspects to responses many candidates still managed to pass but as before by tighter margins increasing the possibility of failure. However on a more positive note more candidates achieved Merit and Distinction grades than has been the case in more recent series of exams. Again exam technique still in many cases leaves a lot to be desired which I still am concerned about for Professional Stage candidates. Further at this level it is not just expected but necessary to be seen to be more widely read looking at contemporary issues of the day and not simply relying on the CIPS Study Guide. Time management issues continue to see improvement with even less of problem this series as opposed to the last. JANUARY 2016_PD2 EXAM_REPORT_LEARNER_COMMUNITY_FV 7/7