Enterprise Pillar

E2 – Enterprise Management
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 sub-
questions).

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.

TURN OVER

© The Chartered Institute of Management Accountants 2011

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

Enterprise Management 2 March 2011

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 company’s 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)

(b) Recommend, with reasons, the type of culture to which S Company now needs to
change.
(4 marks)

(Total for Question Three = 10 marks)

Section A continues on the next page

TURN OVER

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 Preceding activities Activity duration

In Weeks
A - 12
B - 10
C - 6
D C 26
E A 9
F B 14
G* E,F 10
H D,G 6

G* = Recruitment campaign

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)

(b) Identify the earliest time the recruitment campaign can start.
(2 marks)

(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

Enterprise Management 4 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

TURN OVER

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)

(b) 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)

Section B continues on the opposite page

Enterprise Management 6 March 2011

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)
(b) 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)

(Total for Section B = 50 marks)

End of Question Paper

March 2011 7 Enterprise Management

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Enterprise Management 10 March 2011

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

1 KNOWLEDGE
What you are expected to know. List Make a list of
State Express, fully or clearly, the details of/facts of
Define Give the exact meaning of

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

3 APPLICATION
How you are expected to apply your knowledge. Apply Put to practical use
Calculate Ascertain or reckon mathematically
Demonstrate 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

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

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

March 2011 11 Enterprise Management

 Enterprise Pillar

Management Level Paper

E2 – Enterprise Management

March 2011

Thursday Session

Enterprise Management 12 March 2011