Management level case study – Interim Examiner’s report

May – August 2023 exam session

The purpose of this document is to give some feedback on the May 2023 Management Case Study (MCS). It also aims to provide some useful
advice for candidates who were unsuccessful in May 2023 and are preparing to re-sit in August 2023, which will be based on the same pre-
seen as May 2023. The unseen material introduced in May 2023 will not be relevant to August 2023.

The full set of post-exam materials (applying to both May 2023 and August 2023) including the full examiner’s report, along with model answers,
variants and marking schemes, will be available two weeks after the August 2023 exam results are released.

General comments
This case study was based on Happywell, a travel company that sells package holidays. The travel industry is complex. Happywell provides
flights and accommodation and so must manage bookings to ensure that the best possible use is made of seats on aircraft and hotel rooms.
Holidays are expensive and so customers are likely to have high expectations. The travel industry is very competitive and so companies cannot
afford to risk the loss of repeat bookings because of dissatisfied customers. It is also important that travel companies offer good value for
money because they will lose business if their holiday packages appear expensive.

Each variant consisted of four equally weighted tasks. Each of those tasks was subdivided into two requirements, with a recommendation as
to the percentage of the available time that should be spent on each requirement.
Candidates were expected to pay close attention to the pre-seen, which offers an introduction to the travel industry and Happywell’s business
model. Happywell is one of the largest travel companies serving its market. It competes directly with a major competitor that is of roughly the
same size and with some smaller, but nevertheless significant, companies. Happywell and its direct competitor, Mangusair, both own and
operate their own aircraft and hotels. The other companies use charter flights and rent rooms in hotels in order to create their holiday packages.

The following points were noted by the marking team:

Evaluate Senior managers often seek support from their subordinates when they are faced with decisions about strategic opportunities
opportunities or possibilities. The MCS often puts candidates in a position where they are required to provide such support. Tasks may seek
to add value recommendations as to the choice of model or advice on the use of a particular model.

Level 3 answers reflected the nature of the travel industry and the specific scenario under consideration. Candidates at this
level generally applied models to the requirements of the task and so were able to support the advice or recommendations
that they were offering. Candidates also tended to commit themselves to a particular response or course of action. Advising
senior managers will often require a choice between alternatives. Answers at level 3 tended to make a specific
recommendation, supported by a clear and logical justification.

Level 1 answers often describe models, providing summaries of study materials. It is unlikely that a senior manager will be
satisfied with a response to an assignment that summarises models, with no attempt to explain how those models might be
applied to the scenario. Level 1 answers also tend to avoid making specific recommendations. Instead, candidates often offer
the advantages and disadvantages of the different course of action that are available.
Implement Managers must often advise and assist their superiors with the implementation of decisions that have already been made.
senior Questions dealing with implementation may require candidates to demonstrate an understanding of the entity’s present
management position and the changes that a change of direction in one area might create elsewhere.
decisions
Level 3 answers made good use of the pre-seen to ensure that responses to requirements were applicable to the travel
industry and to Happywell itself. Answers at this level reflected the complexities of the business. Level 3 answers also provided
clear justification for candidates’ proposed plans for action. Senior managers are rarely willing to accept advice without a
logical explanation of its advantages.

Management level case study – Interim Examiner’s report – May - August 2023 exam session
 Level 1 answers tended to offer summaries of study materials that often bore very little direct relevance to the request made
by the task requirement. Generic descriptions of syllabus content are unlikely to satisfy a senior manager in the real world.
Manage Managers must be capable of measuring performance, both so that they can report to stakeholders and to motivate and
performance evaluate the performance of individuals and responsibility centres within the entity. Performance measurement must reflect
and costs to the needs of senior management in motivating and evaluating performance.
aid value
creation Level 3 answers reflected Happywell’s business and the nature of the industry. The company is based in Westland, but it owns
and operates many hotels, spread across several countries. It also has staff in different holiday resorts and operates flights to
those destinations. Answers at this level were realistic about the difficulties in measuring and managing performance, offering
sensible responses to those difficulties.

Level 1 answers were generally unrealistic, offering proposals that would have been ineffective in satisfying the needs of
senior management or that would have encouraged dysfunctional behaviour by the staff they were supervising.
Measure Financial managers are often called upon to advise on the preparation and interpretation of financial statements for publication.
performance It may be necessary to advise senior management on the application of financial reporting standards and also on the manner
in which the reporting of a transaction could influence the opinions of external stakeholders.

Level 3 answers generally recognised the need for professional judgement in the preparation of financial statements. Answers
at this level recognised that financial reporting often involves “accounting choices”. Decisions often have to be made about
the manner in which an accounting standard must be applied (or even whether a particular standard is applicable). Once the
accounting principles have been decided, it may be necessary to estimate the figures that will be incorporated into the financial
statements. Level 3 answers generally recognised these issues and explained how they might be resolved.

Level 1 answers often did little more than summarise definitions and other elements of accounting standards. In some cases,
the standards were not particularly relevant to the task itself. There was often a concern that candidates were unfamiliar with
content from the F Pillar.

Management level case study – Interim Examiner’s report – May - August 2023 exam session
 Manage Managers must be able to maintain good relationships with both internal and external stakeholders. They may also be required
internal and to advise senior managers on the implications of events and proposed changes to the business for ongoing relationships. This
external can be complicated because it is not always possible to guarantee a satisfactory outcome for all interested parties. It may not
stakeholders always be possible to benefit one party without adversely affecting another.

Level 3 answers recognised that a travel company must deal with many different stakeholders and that each task might involve
interaction with different groups of stakeholders. Answers at this level recognised that maintaining a good relationship with
any given stakeholder group often involves achieving a balance between Happywell’s interests and those of the stakeholder
or stakeholders referred to in the task.

Level 1 answers often implied that Happywell should pursue its own interests while achieving the best possible outcome for
stakeholders. While such an outcome would be desirable, there are unlikely to be many situations in which it would be possible.
Level 1 answers often advised managers to be aware of conflicting objectives, without making any attempt to explain how
those conflicts might be managed or resolved.

Management level case study – Interim Examiner’s report – May - August 2023 exam session
The following hints and tips should be considered if you plan to sit the Management Case Study in August 2023:

Before the exam:

1. It is important to revise and master the study materials. Mastery implies that you can explain the meaning of technical terms and definitions
so that they can be understood by an intelligent colleague who does not have an accountancy background.
2. Review the pre-seen carefully. Happywell is a major travel company. The pre-seen describes the management issues relating to that
industry. There is no need to memorise the pre-seen, but it should inform answers to the various tasks in the case study.
3. Review the free resources available in the CGMA Study Hub. These include a re-sitters guide, performance descriptors and many more
support articles.
4. Take time to prepare detailed written answers to past cases. You can find them here. The case study tests the ability to interpret and
respond to practical situations. That requires skills that can be developed and improved by practising, even if practice is based on past
cases set in different industries.

During the exam:

1. Think about the requirements. Take a few minutes at the start of each task to digest the information that is provided with the requirements.
Think about the issue raised in the task and think about how that should be managed by Happywell.
2. Use your time wisely. Each task is broken down into two or three elements and each element has a percentage to reflect its weighting. If
you have 45 minutes for a task and sub-task (a) is worth 60%, then you should spend 45 x 60% = 27 minutes on it.
3. Try not to waste time. Don’t, for example, write out a formal definition just because you can, unless you believe that it will help you write a
better developed and more relevant answer. Or summarise a real-world business case that you read about when preparing, again unless
you believe that it is relevant to the requirement and supports your answer.
4. Do, please, write in paragraphs. But don’t waste time (and make your answer difficult to read) by over-elaborate use of highlighting with
bold or underlined text.

Management level case study – Interim Examiner’s report – May - August 2023 exam session