Enterprise Pillar Management Level

E2 Enterprise Management
Thursday 3 March 2011
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, highlight and/or make notes on the question paper. However, you are not allowed, under any circumstances, to open the answer book and start writing or use your calculator during this reading time. You are strongly advised to carefully read all the question requirements before attempting the question concerned (that is all parts and/or subquestions). ALL answers must be written in the answer book. Answers or notes written on the question paper will not be submitted for marking. ALL QUESTIONS ARE COMPULSORY. Section A comprises 5 questions and is on pages 2 to 5. Section B comprises 2 questions and is on pages 6 and 7. The list of verbs as published in the syllabus is given for reference on page 11. Write your candidate number, the paper number and the examination subject title in the spaces provided on the front of the examination answer book. Also write your contact ID and name in the space provided in the right hand margin and seal to close. Tick the appropriate boxes on the front of the answer book to indicate which questions you have answered.

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The Chartered Institute of Management Accountants 2011

E2 Enterprise Management

SECTION A 50 MARKS
[You are advised to spend no longer than 18 minutes on each question in this section]

ANSWER ALL FIVE QUESTIONS IN THIS SECTION

Question One
T has recently been appointed as the new Chief Executive of PV Company which manufactures cosmetics and toiletries. She has spent the first three months meeting with her senior management team, employees and customers of the company to establish how PV is currently perceived by some of its various stakeholders. The discussions with the different groups have revealed that there seems to be a great deal of confusion on what PV Company stands for. It is apparent to T that there are many inconsistencies in the priorities and objectives across the different departments of the company. T has determined that immediate action is needed to establish a clear mission for PV Company. To start the process, T intends to run a series of events at which the mission will be discussed with different groups of employees. She has asked for your help in preparing for the first workshop session. Specifically, she has asked you to put together a presentation with the aim of helping the various audiences to understand why it would be beneficial for PV Company to have a clear mission.

Required
Discuss the points you would include in the presentation on the benefits of having a clear mission for PV Company. (Total for Question One = 10 marks)

Question Two

Required:
Discuss the ways in which the strategies of the functional areas of an organisation should support the other levels of strategy. (Total for Question Two = 10 marks)

Section A continues on the opposite page

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Question Three
S Company has for many years been a long standing household name, designing and manufacturing electrical appliances for use in the kitchen. It has developed a strong culture over the years which can be best typified as a role culture. However, this culture is now acting as a barrier to the companys ability to adapt to become more flexible so that it is able to respond quickly to changes in the environment and initiatives taken by its competitors in product design. In particular, the company is falling behind its new competitors when it comes to innovations in new product development and design. Effective new product development requires staff to work together across functional boundaries but this is becoming hard to achieve in S Company where people now fiercely protect their functional specialism and will only work on the tasks specified in their job descriptions.

Required: (a)
Describe the key characteristics of a role culture, explaining why this type of culture is no longer appropriate for S Company. (6 marks) Recommend, with reasons, the type of culture to which S Company now needs to change. (4 marks) (Total for Question Three = 10 marks)

(b)

Section A continues on the next page

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March 2011 3 Enterprise Management

Question Four
ST is the operations director of F Bakery. He is in the process of putting together a project plan for the introduction of a new production plant that will enable the bakery to expand its product range, moving into high quality cakes and desserts. ST has identified a number of activities that must be undertaken to set up the new bakery production plant. He now intends to construct a network analysis to assist ST in the planning of the project. This will also enable him to provide an answer for the HR manager who has asked him to provide advice on when she can start the recruitment campaign to select new employees needed to work in the new part of the bakery. The activities can be broken down as follows: Activity A B C D E F G* H G* = Recruitment campaign Preceding activities C A B E,F D,G Activity duration In Weeks 12 10 6 26 9 14 10 6

Required: (a)
Construct a network diagram showing the critical path for the introduction of the new production plant for the bakery and the overall duration of the project. (4 marks) Identify the earliest time the recruitment campaign can start. (2 marks)

(b) (c)

Identify the activities where there is float/slack time in the project, and calculate how much float/slack time there is. (4 marks) (Total for Question Four = 10 marks)

Section A continues on the opposite page

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March 2011

Question Five
DPW is a very successful home furniture company operating in P Country. It has a good reputation for being customer focused and providing value for money through its effective operations. Following a systematic analysis of its home/domestic market, it is apparent that the market is reaching maturity and to attain further growth and expansion will involve moving into markets abroad. It has identified F Country as a possible target for its first step into internationalisation. The company now wants to undertake formal analysis to help it to better understand the external environment of F Country.

Required:
Describe ONE strategic management model/framework and explain how it could be used to help DPW to understand the external environment of F Country. (Total for Question Five = 10 marks)

(Total for Section A = 50 marks)

End of Section A Section B starts on the next page

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March 2011 5 Enterprise Management

SECTION B 50 MARKS
[You are advised to spend no longer than 45 minutes on each question in this section]

ANSWER BOTH QUESTIONS FROM THIS SECTION 25 MARKS EACH

Question Six
ZEZ Company is in the business of designing and printing bottle labels for soft drinks distributors. The company is, at present, facing very difficult times as recessionary economic conditions have had a negative impact on the demand for its customers' products, which in turn is having a knock-on effect on the demand for ZEZ Company's labels. As a result, the senior management team has been investigating how the company can become more efficient to ensure its future survival. Redundancies across the company have recently been announced. In addition, the current operating conditions mean that there will be some significant changes made to the contractual terms and conditions for management and administration staff working in the various functional departments, along with a restructuring of operations. Of immediate concern to the senior management is the threat made by the trade unions to take industrial action to protect jobs and also the contractual terms and conditions of their members.

Required: (a)
Discuss the different conflict handling strategies that could be used in managing the conflict in ZEZ Company. (13 marks) Explain the different stages of negotiation that should take place to ensure the negotiation process between senior management and the trade union representatives is effective. (12 marks) (Total for Question Six = 25 marks)

(b)

Section B continues on the opposite page

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Question Seven
Over the years, E has had a number of business successes in the building trade and property development. Her latest venture is to build a hotel in YX town. E has already gained the financial backing, identified a suitable site, had an architect draw up plans and received planning permission. She wants the construction work on the hotel to start without delay. E has appointed P to be the project manager on the basis of his impressive record of managing successful construction projects. However, conflicts are already emerging as E is interfering in the management of the project. She is frustrated by the time P says he needs for the project planning phase, and is irritated by his insistence on formalising the project management process. E is putting pressure on P to cut corners in the first stages of the project, and to get started on the construction of the hotel.

Required: (a)
Discuss the potential problems that the hotel project could face without good project planning. (10 marks) Explain the contribution that different project management tools and techniques could make to help P in planning the hotel project. (15 marks) (Total for Question Seven = 25 marks)

(b)

(Total for Section B = 50 marks)

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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 for each question in this paper. It is important that you answer the question according to the definition of the verb. LEARNING OBJECTIVE
1 KNOWLEDGE What you are expected to know.

VERBS USED
List State Define

DEFINITION
Make a list of Express, fully or clearly, the details of/facts of Give the exact meaning of

2 COMPREHENSION What you are expected to understand.

Describe Distinguish Explain Identify Illustrate

Communicate the key features Highlight the differences between Make clear or intelligible/State the meaning or purpose of Recognise, establish or select after consideration Use an example to describe or explain something

3 APPLICATION How you are expected to apply your knowledge.

Apply Calculate Demonstrate Prepare Reconcile Solve Tabulate

Put to practical use Ascertain or reckon mathematically Prove with certainty or to exhibit by practical means Make or get ready for use Make or prove consistent/compatible Find an answer to Arrange in a table

4 ANALYSIS How you are expected to analyse the detail of what you have learned.

Analyse Categorise Compare and contrast Construct Discuss Interpret Prioritise Produce

Examine in detail the structure of Place into a defined class or division Show the similarities and/or differences between Build up or compile Examine in detail by argument Translate into intelligible or familiar terms Place in order of priority or sequence for action Create or bring into existence

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

March 2011

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Enterprise Management

Enterprise Pillar

Management Level Paper

E2 Enterprise Management

March 2011

Thursday Session

Enterprise Management

12

March 2011