cima management case study core activity c

CIMA

Management Case Study

HTFT Focus Pack

Core Activity C

© HTFT Partnership – Frinta Core Activity C Focus Pack 2

Contents

The Competency Framework .................................................................................................................. 4

Core Activity Area C – Manage performance and costs to aid value creation ............................................ 4

Task 14: Discipline ......................................................................................................................................... 5

Task 15: Enhancing Team Performance ........................................................................................................ 6

Task 16: Leadership Styles ............................................................................................................................ 7

Task 17: Responsibility centres ..................................................................................................................... 8

Task 18: Cost Transformation ....................................................................................................................... 9

Task 19: Total Quality Management ........................................................................................................... 10

Task 20: Target Costing ............................................................................................................................... 12

Task 21: Quantifying Risk ............................................................................................................................ 14

Task 22: Business risks arising from a collaborative agreement ................................................................. 15


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Core Activity Area C – Manage performance and costs to aid value creation

Assessment Outcomes

AO C1 I can advise on the measurement, analysis and reporting on the performance of responsibility

centres.

AO C2 I can analyse the processes needed to ensure employee engagement, empowerment, and

alignment to enhance individual and team performance.

AO C3 I can compare leadership styles and identify the most appropriate style to use.

AO C4 I can use appropriate cost management and cost transformation techniques to manage costs

and improve profitability.

AO C5 I can identify and apply appropriate quality management techniques to enhance value.

AO C6 I can identify and apply value management techniques to enhance value.

AO C7 I can apply the techniques that quantify and present risk to stakeholders.

15 – 25 marks in your paper are from this section.

The Competency Framework




Task 14: Discipline

Taras Kononenko, Frinta’s Finance Director, stops by your workspace:

“I think we have a problem in the way we have handled a disciplinary procedure in the production

team. Geoff, who has worked on the Frinta Friend production line for the last two years, was sent to

meet with his supervisor yesterday afternoon.

At the meeting, which lasted less than ten minutes, Geoff was told that Frinta are unhappy with his

performance and that his attitude was “not as it should be”. He was informed that, in accordance with

Frinta’s disciplinary code, he was being demoted to a lower grade role with immediate effect.

Geoff was shocked by this as he had never been informed of Frinta’s unhappiness with his

performance before and he was confused about the comment about his attitude. He had always

enjoyed his job and thought he got on well with his colleagues. He had also never heard of Frinta’s

‘disciplinary code’.

Geoff has now raised this as a formal grievance, but Petunia is away this week. I’ve been asked to

oversee this issue, but I don’t know anything about HR! Amadou mentioned that you have covered a

wide range of business aspects, including HR, as part of your professional qualification and so I was

hoping you can help me better understand the issue.

Can you send me a report that:

• evaluates what has gone wrong in the handling of this discipline case and how this may affect

our employees’ engagement?”

(sub-task (a) = 33%)

AO C2




Task 15: Enhancing Team Performance

Taras Kononenko, Frinta’s Finance Director, calls you into their office:

“Thank you for your notes on how we can build an effective team for the new Frinta Friend Junior

project. We’re looking to set this team up as soon as possible but have concerns that we haven’t

managed an innovative team like this before. Given the importance of this venture, the directors are

really keen for this to work so one of us will be overseeing this product development team personally.

Could you write a briefing note in which you:

• recommend, with reasons, the ways in which we might improve the design team’s

engagement with the development of this range of products.”


AO C2


AO C3 I can compare leadership styles and identify the most appropriate style to use.

Task 16: Leadership Styles

A week later you receive the following email:

From: Taras Kononenko, Finance Director

To: Financial Manager

CC: Amadou Gallo

Subject: Leadership styles

Hi,

I was chatting to David Wyn Jones, about your suggestions on motivating and engaging our new team

on the Frinta Junior project - I was really singing your praises!

David questioned how we are going to manage the team. David advised that we should keep a close

eye on the team to make sure they’re delivering what we need them to and when we need it. David

argued that if we don’t tell the team what to do then there is a good chance that they will get it wrong

and we won’t have a new Frinta Junior model at all.

I don’t agree with David’s suggested leadership approach as we need the team to be as creative as

possible with the tools and functions we offer and the technology we make available. Micromanaging

the team in this way will no doubt stunt the team’s engagement and motivation.

I know you’ve covered leadership styles in your professional studies so please could you write a

briefing note:

• evaluating whether David’s suggested leadership approach to manage the Frinta Junior team

is the best approach or whether there are any other factors that we should consider in our

leadership style so that we can ensure the team are performing at their most productive.


Thanks

Taras

AO C3


AO C1 I can advise on the measurement, analysis and reporting on the performance of responsibility

centres.

Task 17: Responsibility centres

One month later you receive the following email:

From: Amadou Gallo, Senior Financial Manager


Subject: Home Security Division

Hi,

Home security feels like it might be the next big thing in Westland – as people use their smartphones

to integrate their devices.. As you know, Frinta had already seen this as a potential opportunity and

we have already considered a location for a new manufacturing plant within Teck City . We’re

thinking that this plant could be used to support the launch of a new Home Security division, that

would produce and sell devices such as home security cameras and doorbells.

The board have questioned how a new Home Security division will be managed from a responsibility

centre perspective. It is unclear as yet who will be responsible for the new division, but we may recruit

externally.

Please can you draft a briefing note that I can pass on to Taras to present to the board which:

• recommend, with reasons, whether the Home Security division should operate as a separate

investment centre within the Frinta Group.


Regards

Amadou

AO C1


AO C4 I can use appropriate cost management and cost transformation techniques to manage

costs and improve profitability.

Task 18: Cost Transformation

Taras Kononenko, Frinta’s Finance Director, swings by your workspace and shows you a handout they

received at a recent CIMA networking event:

“It has been a long time since I qualified, and although I attend these meetings regularly, this cost

transformation model is really unfamiliar to me.

There was a lot of talk about ‘understanding cost drivers’ which must be very important as I can see

that this is also one of the sections on the model - I don’t know what a cost driver is though!

Can you draft me a briefing paper that:

• explains what cost drivers are and how we can use these to help highlight potential areas of

cost transformation”


AO C4

Reference Material

Figure 1: Cost Transformation Model © CIMA 2021


AO C5 I can identify and apply appropriate quality management techniques to enhance value.

Task 19: Total Quality Management

You receive the following email:

From: Asma Al-Kuwari, Production Director


Subject: Improving Quality

Hi

As you know, we’re very responsive to our customer feedback. There’s been a bit of a storm on social

media recently, whereby customers haven’t been so happy with the Frinta Friend range. Our Smart

Speakers are designed for use in homes, often in family environments. They need to be robust and

withstand a little bit of wear and tear – it sounds like Ypburn’s products are coming out on top here.

This really surprises me – are we facing quality issues we aren’t aware of? It’s not unknown for us to

realise we have quality problems after it’s too late to rectify them!

I need to give my team some inspiration in order to think of ways to ensure our quality is excellent.

Can you draft me a memo which:

• explains how we could use total quality management at Frinta to improve the user experience

of Smart Speakers in the home market?


Thanks,

Asma

AO C5

The social media post referred to can be found in the Reference Material above.

Reference Material


Yummy Mummy posts...

We were so excited to get our Frinta Friend screen – my little munchkins love watching their

educational but fun programmes on it! However, my daughter picked it up the other day and

the screen has broken – she didn’t even do anything at all! I’m really unhappy...anyone else

found this?

Frazzled in Farnham replied...

This happened to us! My son has our Frinta Friend Screen on his lap, and he leant slightly on

the screen – and bam, broken! You’d think that they’d withstand a bit of rough and tumble,

given that you can stream kids TV programmes?! I used to have the other one – an Ypyox and

that was brilliant, they could throw it around all day!


AO C4 I can use appropriate cost management and cost transformation techniques to manage costs

and improve profitability.

Task 20: Target Costing

Amadou Gallo, Frinta’s Senior Financial Manager, telephones you:

“I have something I’d like you to work on. As you know, our office space is on the outskirts of Central

City. We’ve been contacted by Westland’s Public Health Department, as they’re looking for a large

office space in which to home a twilight vaccination centre. Given that our offices empty at 4pm and

we aren’t back on site until 9am, the empty space could be useful to the PHD and the opportunity

could bring in a new revenue stream for us.

The PHD are looking to hold twilight vaccination clinics out of town, in the hope that factory workers

and other commuters will stop in and get vaccinated. We would be expected to provide staff to man

the administrative side, and also ensure people move around the building and find their way around.

They have requested that we also provide drinks and light snacks for the potential visitors to the

centre, partly in order to entice them in in the first place.

The PHD have indicated that they’re prepared to pay W$7,500 for one evening and they are saying

that this figure is non-negotiable.

Obviously we’ve never hosted a third-party event like this before, so this would be a new venture for

us. Alcine thinks that this is a proposal worth investigating. Alcine has even mentioned that we could

treat it as a pilot project, and if it goes well, we could begin to offer all of our spaces out for

commercial use when not in use by ourselves. Ghost hunting in the factory anyone?!

We need to determine if this project is going to be financially viable however. I have calculated some

estimated costs which I will email to you now.

Please can you send me an email in which you:

• explain, with examples, how we might be able to use target costing to help determine if the

fee of W$7,500 offered by Westland’s Public Health Department is acceptable to Frinta”.


AO C4

The estimated costs referred to can be found by clicking on the Reference Materials button above.


Reference Material

Description of expense Cost W$ Comments

Cleaning and security services 960

Cleaning required in addition to the normal end of

day cleaning. Longer hours of security to be provided

by Frinta.

Refreshments 1,870 Provided in line with requirements.

Wages and salaries for staff

provided

740

Total direct costs 3,570

Indirect facility costs 2,100

Total 5,670


AO C6 I can identify and apply value management techniques to enhance value.

Task 21: Quantifying Risk

Amadou Gallo, Frinta’s Senior Financial Manager, stops by your workspace and hands you a document:

“Remember we chatted about the new Home Security Division, and its factory in Teck City? We are

looking to launch this division and its factory in time to capitalise on the end of the year – in January

homebuyers tend to plan their year, and an investment in Home Security devices might be top of their

list! If we can be ready in time for the Christmas sales, then that would be even better. This is fast

approaching so I have been researching possible locations for the construction of the factory.

One of the junior data analysts has produced this risk quantification analysis however I can’t seem to

make much sense of it.

Please can you write a report:

• evaluating each location and recommending which location we should invest in. Please also

advise if there is anything we need to consider before we make this decision.”


AO C6

The risk quantification analysis referred to can be accessed by clicking the Reference Materials button.

Reference Material

Location Operating Profit EV of NPV (W$m) Standard Deviation (W$m)

A 39% 1.1 0.20

B 39% 1.8 0.50

C 43% 0.9 0.05


AO C7 I can apply the techniques that quantify and present risk to stakeholders.

Task 22: Business risks arising from a collaborative agreement

You receive the following email:


From: Amadou Gallo, Senior Financial Manager

Subject: Collaboration with YogaQueen

Hi,

I’m excited to share with you the news of our next intended launch – a range of online well-being and

health seminars that we are collaborating with lifestyle experts YogaQueen to design and launch. I

have attached a copy of one of the presentation slides from yesterday’s meeting to give you a sneak

peak of the proposed product.

This is like nothing we’ve ever done before! It was on our list of diversification options, but I never

thought we’d actually make it!

Other digital businesses like ours are working on productions their own – look at Amazon! Prime TV

has taken our industry by storm, and although it’s a stretch, I think we can do it! With well-being and

lifestyle conversations becoming so mainstream, it seems to make sense to capitalise on it. We think

we’ll be able to sell the seminars to our existing customers, advertising through their devices, as well

as new customers too!

YogaQueen will work with us and will support us with the promotion of these new seminars. The

filmed content will be produced by a third-party production studio. Both ourselves and YogaQueen will

buy the rights to the seminars we choose from the third-party production studio based on our

requirements.

As part of our contract agreement with YogaQueen, the seminars will launch exclusively through the

YogaQueen app, so clients and delegates will need to download the YogaQueen app if they want to be

one of the first to benefits from one of these fantastic seminars. This exclusive arrangement will be for

a period of 3 months. After this, we’ll be able to offer the seminars via our website, devices, and

associated apps.

David Wyn Jones has just come out of a board meeting where they have been discussing the on-going

negotiations with YogaQueen concerning the contractual agreement which will grant YogaQueen

exclusive rights to sell the seminars for a 3-month period from launch. David has provided me with an

extract of the minutes from today’s meeting and has asked for our help in considering these issues.

I’m on my way to interview a candidate so please can you:

• Evaluate the business risks arising from this agreement for both Frinta and YogaQueen. Please

include an explanation as to whether it matters if the business risks are faced by ourselves or

YogaQueen.


Thanks

Amadou


The attachment referred to can be accessed by clicking on the Reference Materials button

AO C7

Reference Material

Frinta are proud to announce our new collaboration with lifestyle experts, YogaQueen!

The collaboration will see the launch of a new range of online well-being and health seminars!

• Improves staff health and motivation.

• Online and convenient access to workouts and wellbeing sessions.

• Accessible via the YogaQueen app and latterly via Frinta.

cima management case study core activity c

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