E1 – Enterprise Operations

Enterprise Pillar
Operational Level

E1 – Enterprise Operations
22 November 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, highlight
and/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 use
your calculator during the reading time.

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

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 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 page
11.

Write your candidate number, the paper number and examination subject title
in the spaces provided on the front of the 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 the
questions you have answered.

TURN OVER

© The Chartered Institute of Management Accountants 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 the
markers know which sub-question you are answering. For multiple choice questions you
need only write the sub-question number and the answer option you have chosen. You
do 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 ONE
correct answer. Each is worth two marks.

Question One
1.1 Balanced trade is
A a national economic alternative to free trade.
B an example of free trade.
C a form of supply chain agreement.
D a form of alliance with other companies.
(2 marks)

1.2 Hofstede's cultural dimensions do NOT include which ONE of the following:
A Individualism versus collectivism
B Masculinity versus femininity
C Weak versus strong uncertainty avoidance
D Corrective versus perfective approaches
(2 marks)

1.3 EOQ represents a form of

A inventory system based on economic order quantities.
B European observance quality certification.
C equal opportunity quantification index used in HRM.
D Japanese inspired technique aimed at continuous improvement.
(2 marks)

Enterprise Operations 2 November 2011

1.4 5S and 6 Sigma are examples of
A portfolio analysis frameworks.
B marketing communication.
C quality improvement practices.
D Human Resource Development models.
(2 marks)

1.5 The use of assessment centres and psychometric tests is normally associated with
processes of
A recruitment.
B selection.
C induction.
D appraisal.
(2 marks)

1.6 CIMA's Code of Ethics for professional accountants is based upon

A a framework of fundamental principles.
B a framework of strict rules.
C a scale of penalties for non compliance.
D sustainability principles and best practice.
(2 marks)

1.7 According to Herzberg's motivation theory, which ONE of the following is the cause of
dissatisfaction?
A Demotivators.
B Motivation detractors.
C Hygiene factors.
D Process theories.
(2 marks)

1.8 David Kolb identified a four stage model representing

A a quality evaluation framework.
B a cycle of learning from experience.
C a career planning and development framework.
D a way of assessing the value of training events.
(2 marks)

Section A continues on the next page

TURN OVER

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1.9 The headings found in a person specification are likely to be based upon
A Rodger's 7 point plan.
B job enrichment principles.
C employment best practice guidelines.
D the main tasks within the job role.
(2 marks)

1.10 A key feature of a lean philosophy within operations is

A removal of waste.
B incremental change.
C official accreditation.
D continuous improvement.
(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

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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) Describe briefly FIVE forms of protectionism a government could engage in to discourage
imports.
(5 marks)

(b) Explain, with examples, the meaning and nature (dimensions) of corporate social
responsibility (CSR).
(5 marks)

(c) Explain the importance of assessing political risk for organisations engaging in Foreign
Direct Investment (F.D.I.).
(5 marks)

(d) Explain how Cousins' strategic supply wheel can help an organisation which is
considering moving away from price-based procurement and policies.
(5 marks)

(e) Describe the main types of inventory management systems.

(5 marks)

(f) Explain the different types of workforce flexibility that an organisation could use.
(5 marks)

(Total for Section B = 30 marks)

End of Section B

Section C starts on the next page

TURN OVER

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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
TT Drinks Company was established a hundred years ago and currently employs over 300
people. The company produces and sells a range of black, green and flavoured teas and fruit
infusions. TT's last Director of Marketing was away from work with illness for most of last year
and has now retired. Recently TT appointed a new Director of Marketing who had previously
been working for a rival drinks company.

The new director's analysis of TT's marketing approach is that the company adopts too many
'me too' strategies by simply copying the actions of its competitors. She believes that TT needs
to become more strategic in its approach with more systematic planning processes. In addition,
she notes the increasing cost of using contractors to dispose of waste from the production
process for flavoured teas and fruit infusions. (Her previous company recycled such waste to
make a soil enrichment treatment. This was used by both the company and its suppliers and still
there was too much for their needs.)

The new director has announced a series of initiatives including:

• Developing an effective strategic marketing plan in conjunction with key stakeholders.
Such a strategy would need the approval of TT's Executive board.
• Using a more strategic approach to product investment utilising models and frameworks
such as the product lifecycle and the Boston Consulting Group (BCG) matrix.
• Adopting more sustainable practices which she feels would 'make good business
sense'.

Required:
(a) Describe the features of TT's new strategic marketing plan which would be necessary
for it to be considered effective.
(10 marks)

(b) Explain how the marketing models and frameworks identified by the new director might
help TT manage its product portfolio.
(10 marks)

(c) Explain the potential benefits of sustainability to TT.

(5 marks)

(Total for Question Three = 25 marks)

Section C continues on the opposite page

Enterprise Operations 6 November 2011

Question Four
TB is a successful international telecommunication company with over 100,000 employees and
a headquarters in its base country's capital city, U. A recent report concluded that TB has been
successful because it has seized the opportunities of globalisation through a series of initiatives
including using virtual work teams spread across continents, cultures and time zones. These
initiatives helped to improve staff productivity and maximised TB's use of technology. Key
features of TB's operation include:
• Achieving fast communication and saving some travel costs through email,
videoconferencing technology and Voip (voice over internet protocol) combined with
webcam equipment;

• Working hard to improve communication through its own social networking sites with
blogs, wikis, podcasts, RSS feeds and the use of instant messaging software;

• Offering a scheme of flexible working practices and home-working to its headquarters

staff (10,000 employees have opted to work from home including accountants,
Information Systems (IS) and Human Resource (HR) staff). Those switching to home
working 'give back' 50% of the time they previously spent commuting in the form of
extra working hours. (TB estimates that home-workers get 20% more work done than
those based in the headquarters building and have comparitively lower absence and
staff turnover levels.)

Required:

(a) Explain the ways in which managers with responsibility for teams might meet the
challenges of teams being geographically dispersed.
(10 marks)
(b) Describe the advantages AND disadvantages of home-working for TB's
headquarters staff.
(10 marks)
(c) Describe the role that the HR department of TB can play given TB's current
working practices.
(5 marks)
(Total for Question Four = 25 marks)

(Total marks for Section C = 50 marks)

End of Question Paper

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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 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 explain
something

Level 3 - APPLICATION
How you are expected to apply your knowledge. Apply To put to practical use
Calculate 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 Analyse Examine in detail the structure of
what you have learned. Categorise Place into a defined class or division
Compare and contrast Show the similarities and/or differences
between
Construct Build up or compile
Discuss Examine in detail by argument
Interpret Translate into intelligible or familiar terms
Prioritise 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 Advise Counsel, inform or notify
evaluate, make decisions or recommendations. Evaluate Appraise or assess the value of
Recommend Propose a course of action

November 2011 11 Enterprise Operations

 Enterprise Pillar

Operational Level Paper

E1 – Enterprise Operations

November 2011

Tuesday Morning Session

Enterprise Operations 12 November 2011