E2 Exp Notes PDF

Chapter 1 to 3 extract from our ExPress notes for
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A full set of E2 ExPress notes can be downloaded
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Notes
CIMA Paper E2
Enterprise Management
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ExPress Notes
CIMA E2 Enterprise Management
Contents
About ExPress Notes
1.
Strategic Management & Assessing the

Competitive Environment
2.
Developments in Strategic Management
14
3.
Project Management
16
4.
Project Management Tools
21
5.
Project Management Teamwork & Quality
28
6.
The Effective Operation of an Organisation
32
7.
Managing People
36
8.
Corporate Governance & Ethics
42
Page | 2
2011 The ExP Group. Individuals may reproduce this material if it is for their own private study use only. Reproduction by any means for any
other purpose is prohibited. These course materials are for educational purposes only and so are necessarily simplified and summarised. Always
obtain expert advice on any specific issue. Refer to our full terms and conditions of use. No liability for damage arising from use of these notes
will be accepted by the ExP Group.
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ExPress Notes
Chapter 1
Strategic Management & Assessing

the Competitive Environment
START
The Big Picture
This chapter introduces us to a variety of methods of analysing the competitive environment
faced by an organization.
KEYKNOWLEDGE
PESTEL(orPESTorSLEPT)Analysis
An analysis of the external macro environment. The organisation is unlikely to be able to

influence these factors but it should have an awareness of the issues.
Political - global, national and local changes and trends. Taxation policies. Relationships
between certain countries.
Economic - global, regional and local issues. Exchange rates. Link to topical issues such as
global recession, current interest rates for funding.
Social - changes in behavior and expectations in society. Demographics, lifestyle.
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ExPress Notes
Technological - changes including hardware, software, e-issues, materials and services.

Global communications.
Environmental what are the environmental considerations such as recycling, pollution,
attitude of the media, customers, etc.
Legal - changes and predicted changes to regional (e.g. EU) and national legislation.
Regulatory bodies. Changes to employment law.
KEYKNOWLEDGE
Stakeholdermapping
Stakeholders are individuals, groups or organisations that can impact or be impacted by, an
organisation.
Mendelows Matrix allocates stakeholders into quadrants according to their level of power
and how likely they are to exercise that power (i.e. their interest).
Stakeholder Interest
Low
High
Low
Minimum effort
Keep informed
Keep satisfied
Key players
Stakeholder
Power
High
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KEYKNOWLEDGE
SWOTanalysis
Strengths (internal)
Weaknesses (internal)
e.g. resources and capabilities
e.g. lack of certain resources or capabilities
Opportunities (external)
Threats
e.g. arrival of new technology
e.g. arrival of substitute product
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ExPress Notes
Threshold resources and competencies: These are the minimum required by an organisation
to meet customers minimum requirements. In effect, this is what is required to stay in
business.
Core competencies: These are processes and activities undertaken by an organisation which
are seen as being central to their success. Core competencies are capabilities which are
critical to a business achieving competitive advantage.
They provide customer benefits and are difficult for competitors to imitate.
A core competency can take many forms such as technical knowhow or customer
relationships.
Amazon.com has a number of core competencies such as reliable and efficient online
ordering and delivery system.
Support
Support
Activities
KEYKNOWLEDGE
Portersvaluechain
Firm Infrastructure
Human Resource Management
Technological Development
Service
Marketing
& Sales
Outbound
Logistics
Operations
Inbound
Logistics
Primary
Procurement
Primary Activities
The value chain was introduced by Porter and represents an approach to looking at the
development of competitive advantage within an organisation. All organisations consist of
activities which link together to develop the value of a business. Together these activities
represent the value chain.
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The value chain represents a series of activities that both create and build value. Combined
they represent the total value delivered by an organisation. The margin in the diagram is
the added value (the difference between the total value of the activities and the cost of
performing them).
Primary activities: related with production. Support activities: provide the background
for the effectiveness of the organisation (e.g. HRM)
KEYKNOWLEDGE
Dataforenvironmentalanalysis
Data for environmental analysis can be obtained from a number of sources:
Official government sources (e.g. trade reports)
Online specialist subscription databases (e.g. Reuters)
Online publically available information (e.g. corporate websites)
Private intelligence agencies (e.g. Dun and Bradstreet)
Tailored research (e.g. market surveys, discussion groups)
Quantitativeresearch
Page | 10
analysisofnumericaldata
moreobjective
statisticaltests
e.g.dataprovidedby
customers
Qualitativeresearch
analysisofwords
moresubjective
couldusefocusgroupsor
interviews
e.g.opinionsofcustomers
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ExPress Notes
KEYKNOWLEDGE
Porters5Forces
This model examines the role of 5 forces close to an organisation that impact on its ability to
make a profit and hence how attractive a particular market or industry is.
There are 5 forces as follows:
Entrants
Suppliers
Competition
Customers
Substitute
1. Threat of substitute products

If there are similar products, a customer will be more likely to switch rather than stay with a
product when there are price rises (elastic demand).
2. Competitive rivalry
The rivalry will depend on the number and strength of competitors, economies of scale and
exit barriers.
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ExPress Notes
3. Threat of new entrants
Markets generating high returns will attract new entrants which in turn could reduce
industry profits. Barriers to entry such as government licenses (mobile phone operators) are
important in reducing the threat of new entrants.
4. Power of customers
The stronger the power of the customer the more pressure it can place on the company.
Issues to consider include the size of the customer relative to the firms customer base,
switching costs and availability of substitute products.
5. Power of suppliers
Suppliers of materials and services can exercise power over an organisation. This depends
on the level of differentiation of the product, presence of substitute products, etc. Compare
the power of Intel supplying computer chips to the computer industry vs. a sugar producer
supplying sugar to a soft drinks manufacturer.
KEYKNOWLEDGE
PortersDiamond
This is a model outlining the theory why certain industries are competitive in particular
locations.
There are 4 broad factors within the diamond.
Factor
Conditions
FirmStrategy
&Structure
Demand
Conditions
Related&
Supporting
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ExPress Notes
Factor conditions include physical resources, human resources and specialised resources.
Demand conditions. A country with sophisticated home buyers who demand quality,
advanced and innovative products can create international competitiveness
Related and supporting industries can produce inputs for a company which feed into the
success of the business.
Firm strategy, structure and rivalry. Competition in the home market drives innovation and
quality. Protectionism can weaken a market.
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ExPress Notes
Chapter 2
Developments in Strategic
Management
START
The Big Picture
This chapter identifies various different approaches to strategy that organisations can take.
KEYKNOWLEDGE
Differentstrategicmodels
1. Ansoffs Rational Model - adapted by Johnson, Scholes and Whittington (JSW): The
Rational Model which shows the strategic planning process in 3 categories of analysis
choice implementation.
Analysis
Page | 14
Choice
Implementation
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ExPress Notes
2. Mintzbergs Emergent strategy: Very few strategies will result in outcomes exactly as
planned. Instead, strategy will emerge and develop over time as the strategy evolves. It
will result in intended, realised and emergent strategies.
3. Lindbloms incrementalism: Supports the view that strategy delivery should be based
on small (incremental) changes over time rather than a limited number of extensive planned
strategies.
4. Freewheeling opportunism: No planned strategy approach. Grab opportunities as and
when they are identified.
5. Positioning view: adapting the organisation so that it fits (i.e. is positioned) with the
environment it faces.
6. Resource based view: focusing on what works best with the organisations resources.
Identifying opportunities that work well with their resources.
KEYKNOWLEDGE
Levelsofstrategy
Strategy Hierarchy:
Corporate
Business
Functional
Corporate strategy: covers the big view of the organisation.

It answers the question What business or businesses should
we be in?
Business strategy: the strategy of a single business
organisation or the strategies of strategic business units
(SBUs)
Functional (or operational) strategy: the functional strategies
involving items such as marketing, IT and HRM that support
the business strategy.
It is important that the strategies support each other. For example, if the Business Strategy
of a SBU revolves around providing high quality consultancy advice on certain areas, a
functional strategy for HRM of minimising labour costs would cause problems.
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ExPress Notes
Chapter 3
Project Management
START
The Big Picture
This chapter looks at the big picture issues surrounding project management and introduces
us to some key concepts that underpin the subject.
KEYKNOWLEDGE
Aproject
Unlike ongoing work, a project has a beginning, middle and end.
Beginning
Page | 16
Middle
End
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ExPress Notes
KEYKNOWLEDGE
Theprojectlifecycle
The project life cycle
KEYKNOWLEDGE
ThePMBOKGuide
The Project Management Body of Knowledge (PMBOK Guide) is published by the Project
Management Institute (PMI).
The Guide identifies processes that fall into 5 groups and 9 knowledge areas:
The 5 process groups are:
1. Initiating
Process
groups
2. Planning
3. Executing
4. Monitoring and controlling
5. Closing
Page | 17
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ExPress Notes
The 9 knowledge areas are:

1. Project Integration Management
2. Project Scope Management
3. Project Time Management
4. Project Cost Management
Knowledge
areas
5. Project Quality Management

6. Project Human Resource
Management
7. Project Communications
Management
8. Project Risk Management
9. Project Procurement Management
KEYKNOWLEDGE
AppreciativeInquiry(the4Dmodel)
Appreciative Inquiry (the 4-D model) by Cooperrider and Srivastva is based on the view
that an organisation that inquires into problems will keep on finding more of the same
whereas one that focuses on what it is good at will discover more that it is good at. It is
often used in creative projects.
Identify
processesthat
workwell.
Implementing
thedesign.
Page | 18
Whatwould
workwellin
thefuture?
1.
Discover
2.Dream
4.
Deliver
3.Design
Planningthe
processes.
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ExPress Notes
KEYKNOWLEDGE
TheMckinsey7Smodel
Developed by Peters and Waterman (who wrote In Search of Excellence) the core idea is
that there are 7 internal aspects of an organisation that should be aligned with each other to
maximise the chances of the organisation being successful.
Structure how the organisation is structured and who reports to whom.

Systems the processes and procedures undertaken by staff.
Strategy the plan to build competitive advantage and achieve objectives.
Shared values (superordinate goals) the core values of the company and evidenced by
the culture.
Style including the style of leadership.
Staff numbers and categories of employees.
Skills skills and competencies of the employees.
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ExPress Notes
The 7 aspects are classified as either hard or soft elements:
Hard
Managementcan
directlyinfluence
these.
Soft
Structure
Systems
Strategy
Page | 20
Lesstangibleand
moredifficultto
describe.
Sharedvalues
Style
Staff
Skills
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Chapter 1 to 3 extract from our ExPress notes for

use with the current video.

Strategic Management & Assessing the

Developments in Strategic Management

Project Management Tools

Project Management Teamwork & Quality

The Effective Operation of an Organisation

Corporate Governance & Ethics

Strategic Management & Assessing

An analysis of the external macro environment. The organisation is unlikely to be able to

Technological - changes including hardware, software, e-issues, materials and services.

e.g. resources and capabilities

e.g. lack of certain resources or capabilities

e.g. arrival of new technology

e.g. arrival of substitute product

Data for environmental analysis can be obtained from a number of sources:

Official government sources (e.g. trade reports)

Online specialist subscription databases (e.g. Reuters)

Online publically available information (e.g. corporate websites)

Private intelligence agencies (e.g. Dun and Bradstreet)

Tailored research (e.g. market surveys, discussion groups)

1. Threat of substitute products

3. Threat of new entrants

Corporate strategy: covers the big view of the organisation.

Unlike ongoing work, a project has a beginning, middle and end.

The project life cycle

The 9 knowledge areas are:

4. Project Cost Management

5. Project Quality Management

Structure how the organisation is structured and who reports to whom.

The 7 aspects are classified as either hard or soft elements:

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