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© The Chartered Institute of Management Accountants 2011

Enterprise Pillar

Operational Level

E1 – Enterprise Operations

30 August 2011 - Tuesday Morning Session

Instructions to candidates

You are allowed three hours to answer this question paper.

You are allowed 20 minutes reading time before the examination begins during which you should read the question paper and, if you wish, highlightand/or make notes on the question paper. However, you will not be allowed,under any circumstances, to open the answer book and start writing or useyour calculator during the reading time.

You are strongly advised to carefully read ALL the question requirementsbefore attempting the question concerned (that is all parts and/or sub-questions). The requirements for questions 3 and 4 are highlighted in adotted box.

ALL answers must be written in the answer book. Answers or notes writtenon the question paper will not be submitted for marking.

ALL QUESTIONS ARE COMPULSORY.

Section A comprises 10 sub-questions and is on pages 2 to 4.

Section B comprises 6 sub-questions and is on page 5.

Section C comprises 2 questions and is on pages 6 and 7.

The list of verbs as published in the syllabus is given for reference on page11.

Write your candidate number, the paper number and examination subject titlein the spaces provided on the front of the answer book. Also write yourcontact ID and name in the space provided in the right hand margin and sealto close.

Tick the appropriate boxes on the front of the answer book to indicate thequestions you have answered.

TURN OVER

E 1 – E

n t e r p r i s e O p e

r a t i o n s



Enterprise Operations 2 September 2011

SECTION A – 20 MARKS

[You are advised to spend no longer than 36 minutes on this question]

ANSWER ALL TEN SUB-QUESTIONS

Instructions for answering Section A

The answers to the ten sub-questions in Section A should ALL be written in your answer book.

Your answers should be clearly numbered with the sub-question number and ruled off so themarkers know which sub-question you are answering. For multiple choice questions youneed only write the sub-question number and the answer option you have chosen. Youdo not need to start a new page for each sub-question.

Each of the sub-questions numbered from 1.1 to 1.10 inclusive, given below, has only ONEcorrect answer. Each is worth two marks.

Question One

1.1 Small groups of employees that meet to identify work problems and their solution areknown as

A quality circles.

B peer counsellors.

C cellular production teams.

D teleworkers.

(2 marks)

1.2 The extended marketing mix does NOT include which ONE of the following:

A People

B Processes

C Physical evidence

D Positioning

(2 marks)

1.3 According to Hertzberg's dual factor theory of motivation, one set of factors is known as

A demotivation factors.

B disposition factors.

C self actualisation factors.

D hygiene factors.

(2 marks)



September 2011 3 Enterprise Operations

1.4 Porter's value system shows the organisation in terms of

A the value chains of suppliers, channels and the customer.

B primary activities, support activities and margin.

C the technostructure, strategic apex and operating core.

D passive, independent, supportive and integrative approaches to supply.

(2 marks)

1.5 Which ONE of the following is NOT associated with quality management?

A 5-S practice

B 180 degree feedback

C Six Sigma methodology

D Five-why process

(2 marks)

1.6 Intrinsic satisfaction is said to be derived from which ONE of the following issues:

A Perks of the job

B Job content

C Job rewards

D Group cohesiveness and belongingness

(2 marks)

1.7 Which ONE of the following is an example of direct marketing?

A Writing an article for a trade journal

B Targeting individual customers with promotional material

C Posting 'blogs' to draw attention to the organisation

D Public relations activities

(2 marks)

1.8 Motivation theories and reward systems derived from F W Taylor's thinking are by naturebest described as

A behavioural.

B human relations.

C content.

D scientific.

(2 marks)

Section A continues on the next page

TURN OVER




1.9 Service Level Agreements are normally associated with

A job reductions negotiated with staff groups.

B deskilling.

C agreed appraisal outcomes.

D outsourcing.

(2 marks)

1.10 Which ONE of the following is NOT associated with a government's fiscal policy?

A Levels of taxation

B Level of spending by the government

C Revenue raising

D Interest rates

(2 marks)

(Total for Section A = 20 marks)

Reminder All answers to Section A must be written in your answer book.

Answers or notes to Section A written on the question paper will not be submitted for marking.

End of Section A

Section B starts on the opposite page




SECTION B – 30 MARKS

[You are advised to spend no longer than 9 minutes on each sub-question in this section]

ANSWER ALL SIX SUB-QUESTIONS IN THIS SECTION - 5 MARKS EACH.

Question Two

(a) Explain why 'Supply' has been described as being more significant than 'Purchasing' for

an organisation.(5 marks)

(b) Economies in Asia and Latin America have been a target for two main forms of ForeignDirect Investment (FDI) by Multi National Enterprises (MNEs). Briefly describe the twomain forms of FDI and the likely benefits of these to the host economies.

(5 marks)

(c) Explain the reasons why management might choose a direct approach to a systemchangeover in preference to other alternatives (such as phased, parallel running or pilotschemes).

(5 marks)

(d) Explain FIVE main disadvantages of outsourcing for an organisation.

(5 marks)

(e) Explain FIVE main disadvantages of an organisational policy of HR succession planning.

(5 marks)

(f) Briefly explain the main arguments for a country wishing to restrict free trade.

(5 marks)

(Total for Section B = 30 marks )

End of Section B

Section C starts on page 6

TURN OVER




SECTION C – 50 MARKS

[You are advised to spend no longer than 45 minutes on each question in this section]

ANSWER BOTH QUESTIONS IN THIS SECTION – 25 MARKS EACH

Question Three

Over the past few years, the company iB4e has underperformed compared with its competitorswhich enjoy stronger brand recognition. In addition, many experienced staff responsible for keycustomer accounts have left the company. Even though it pays comparable salaries to its rivals,iB4e has had difficulty replacing these staff with outside appointments. This has led to someexisting employees temporarily taking on customer relationship management in return for smallone-off payments. This has been good for staff morale but the effectiveness of this measure asa long term alternative to appointing suitably experienced new staff is questionable given thatsome of these staff have been more successful than others.

The Chief Executive has responded decisively to these events by creating a new senior post ofDirector of Branding and launching a new initiative which he calls 'sharpening the focus' which is

centred on:• improved corporate performance;

• connecting more closely with customers, and

• improving marketing practices.

The new Director of Branding is highly experienced in brand management and promised at herinterview to 'revitalise the iB4e brand'. In addition to leading the 'sharpening the focus' initiative,she has been tasked to review a number of issues including internal marketing and employerbranding.

The new Director believes that employer branding can be enhanced by developing a strongercorporate brand and making employee benefits more explicit. As someone new to theorganisation, she is struck by the fact that iB4e offers a number of benefits beyond basic pay.Although she was previously aware of iB4e's good pension scheme, she was unaware of theflexitime scheme, training and development opportunities and a subsidised canteen and socialclub until she took up her position. She believes that a 'total reward package' approach whichdraws together all financial and non-financial benefits (including working practices, developmentopportunities and the challenge of working for iB4e itself) should be combined into an integratedscheme which would be available to all employees and be visible to potential employees. Inaddition, she feels bonuses for good performance could be awarded that involve an employeechoosing from a range of benefits to a maximum value from a 'menu' offered by the company.

Section C continues on the opposite page

Required:

(a) Explain how effective brand management can assist iB4e's 'sharpening the focus'

initiative.

(10 marks) (b) Describe the advantages and disadvantages of iB4e developing a 'total reward

package' approach.(10 marks)

(c) Explain the value of internal marketing for iB4e.

(5 marks)

(Total for Question Three = 25 marks)




Question Four

The LD2 group has grown rapidly over the past five years through acquiring a number of smallerkitchen accessory manufacturers and kitchen suppliers and fitters. As a consequence of thisstrategy LD2 has 'inherited' many different systems which it has continued to operate. LD2's

technology now lags far behind that of its competitors, many of whom are experimenting withonline trading. A number of quality and other problems within the group have now becomeapparent including:

• incompatibility of software;

• complex reconciliation of systems output being performed;

• stock shortages leading to contract delays;

• late management reports, and

• payroll and invoicing errors due to faulty data entry and calculation.

LD2 now wants to consolidate its business by simplifying and improving the quality of itsoperations. A budget has been established to introduce a quality approach, renew equipmentand standardise systems. LD2 has established two working groups to develop solutions and

bring about improvements.

Working Group 1 is required to advise on the replacement of the existing administrative andmanagement systems with the most advanced available. The group has already had itsrecommendations approved to:

• introduce a single People and Payroll system for the whole group. Within this system aweb browser would allow managers to have immediate access to information on diaries,overtime, holidays and sickness, as well as being able to submit accurate timesheetentries directly into a central payroll system;

• engage a specialist to develop a corporate website comparable to the best in theindustry.

Working Group 2 has been tasked with advising on the implementation across the group of the

most appropriate approach to improving quality.

(Total marks for Section C = 50 marks)

End of Question Paper

Required:

(a) Explain how the People and Payroll system could benefit LD2.(10 marks)

(b) Describe the main approaches to quality that are available to LD2.(10 marks)

(c) Briefly describe the likely features of the proposed corporate website if it is to becomparable to the best in the industry.

(5 marks ) (Total for Question Four = 25 marks)




This page is blank




LIST OF VERBS USED IN THE QUESTION REQUIREMENTS

A list of the learning objectives and verbs that appear in the syllabus and in the question requirements foreach question in this paper.

It is important that you answer the question according to the definition of the verb.

LEARNING OBJECTIVE VERBS USED DEFINITION

Level 1 - KNOWLEDGE

What you are expected to know. List Make a list of

State Express, fully or clearly, the details/facts of

Define Give the exact meaning of

Level 2 - COMPREHENSION

What you are expected to understand. Describe Communicate the key features

Distinguish Highlight the differences between

Explain Make clear or intelligible/State the meaning

or purpose of

Identify Recognise, establish or select after

consideration

Illustrate Use an example to describe or explainsomething

Level 3 - APPLICATION

How you are expected to apply your knowledge. Apply

Calculate

To put to practical use

Ascertain or reckon mathematically

Demonstrate To prove with certainty or to exhibit by

practical means

Prepare Make or get ready for use

Reconcile Make or prove consistent/compatible

Solve Find an answer to

Tabulate Arrange in a table

Level 4 - ANALYSIS

How you are expected to analyse the detail of

what you have learned.

Analyse

Categorise

Examine in detail the structure of

Place into a defined class or division

Compare and contrast Show the similarities and/or differencesbetween

Construct Build up or compile

Discuss Examine in detail by argument

Interpret

Prioritise

Translate into intelligible or familiar terms

Place in order of priority or sequence for action

Produce Create or bring into existence

Level 5 - EVALUATION

How you are expected to use your learning to

evaluate, make decisions or recommendations.

Advise

Evaluate

Recommend

Counsel, inform or notify

Appraise or assess the value of

Propose a course of action




Enterprise Pillar

Operational Level Paper

E1 – Enterprise Operations

September 2011

Tuesday Morning Session

e1_sept11_exampaper

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