Latest CIMA E3 Exam questions and answers
PrepPDF E3 Exam Practice Test Questions (Updated 282 Questions)
NEW QUESTION 135
TUV had an employee turnover rate of 25% among new recruits and was becoming short of skilled workers.
The Board of TUV realized there was something dramatically wrong and called in consultants to assess the problem. The consultants recommended transformational change in that TUV should redesign the entire production system, change the placement of all equipment and the flow of work, redefine every job and give all workers new assignments.
Which type of change did the consultants recommend for TUV?
- A. Reconstruction
- B. Revolution
- C. Adaptation
- D. Evolution
Answer: A
NEW QUESTION 136
DEF is a medium sized business which manufactures children's clothing. In the last 5 years demand has steadily increased and DEF is struggling to meet this demand within its current manufacturing capacity. DEF's current manufacturing machinery was installed over 10 years ago and now requires updating, if DEF is to survive in the marketplace.
DEF has established that the latest manufacturing technology would cost $2 million. This would be funded by the shareholders. It would payback within 2 years and would allow DEF to double output from its current level within this 2 year period. It will also improve product consistency and quality. However, it will result in the loss of 20% of DEF's manufacturing staff, most of whom are low paid and low skilled.
DEF is currently reviewing this proposed investment strategy, in terms of whether it meets the criteria of Suitability, Acceptability and Feasibility.
Which of the following correctly identifies the criteria which are met, in regard to DEF's proposed investment strategy?
- A. Acceptable and Feasible
- B. Suitable, Acceptable and Feasible
- C. Suitable and Feasible
- D. Suitable and Acceptable
Answer: B
NEW QUESTION 137
BBB operates a small chain of coffee shops within Country X. a mature economy in northern Europe. BBB was established 20 years ago and currently employs over 150 staff in 25 shops located in major towns and cities throughout Country X. BBB attracts a wide range of customers, who are attracted by its extensive menu of coffee products and food Customers can either consume their purchases within the shop or can take their purchases away.
Which THREE of the following external environmental changes would have the greatest impact on BBB in the next three years?
- A. An increase in the average age of the population in Country X due to falling birth rates.
- B. A planned refurbishment of 80% of BBB's shops to update its image and increase shop floor space
- C. An increase in the national statutory minimum wage in Country X.
- D. A worldwide shortage of coffee beans due to climate changes, affecting availability.
- E. The opening of an internationally renowned chain of coffee shops in Country X.
Answer: A,C,D
NEW QUESTION 138
SDC is a medium sized IT systems development company. SDC employs highly qualified and experienced systems development experts. It invests heavily in staff training and development and as a result, staff are highly motivated and staff turnover is low. SDC has a strong culture of team work and innovation, which the senior managers believe is the basis of SDC's success. The senior managers, who are also the founders of SDC, are highly experienced and have a strong vision for the business.
Which THREE of the following factors would be the main focus of a resource audit for SDC? (Choose three.)
- A. Management
- B. Money
- C. Markets
- D. Machinery
- E. Manpower
- F. Make-up
Answer: A,E,F
NEW QUESTION 139
CCC is a local authority based in Country M.
A local authority (LA) is a public sector Organization which has administrative responsibilities within a geographical area and is responsible for the provision of a range of public services within its area including schools, leisure, policing and housing.
The majority of CCC's income comes from central Government funding. In the last four years, the global economic downturn has resulted in the central Government of Country M having to drastically cut its funding to all LAs. Six months ago, CCC appointed a new Chief Executive who, since his arrival, has attempted to make a number of changes to the Organizational culture and structure of CCC. He has stated that these changes are essential if CCC is to continue to operate effectively within the current economic environment.
The Government of Country M has recently announced that all LA's must reduce their overall expenditure from current levels by 15% within the next year.
Which of the following types of change is CCC experiencing?
- A. Reconstruction
- B. Revolution
- C. Adaptation
- D. Evolution
Answer: B
NEW QUESTION 140
Place the correct label against each of the descriptors for the main principles of the UK Corporate Governance Code.
Answer:
Explanation:
NEW QUESTION 141
Your manager is undertaking a strategic review of XYZ's activities and has asked you to explain how a Force Field analysis would assist in the review process.
Which of the following statements would be most appropriate?
- A. Identify influential senior managers who will drive through changes in XYZ's strategic direction.
- B. Provide a framework for identifying forces for and against the proposed changes within XYZ.
- C. Identify forces facing XYZ's activities that may create barriers and resistance to change.
- D. As part of XYZ's strategic review, identify forces facilitating the need for proposed change.
Answer: B
NEW QUESTION 142
EEE is an international airline.
Indicate which of the following activities are 'primary' or 'support' in accordance with Porter's Value Chain.
Answer:
Explanation:
NEW QUESTION 143
A is a private healthcare organisation aiming to provide affordable and accessible high quality patient services.
A is introducing Big Data, which has not yet been adopted by the competition A's database will store a huge amount of information about its patients Clear access to wide sources of accurate information will enable patients to make more informed choices. Patients will be able to compare not only the prices of drugs, treatments and physicians but also their relative effectiveness Which of the following concerns should A have about its use of Big Data?
- A. Variety of information
- B. Privacy issues
- C. Lack of competitive advantage
- D. Veracity of information
Answer: A
NEW QUESTION 144
Company RR operates in the finance sector. It is experiencing increasing delays in approving loan applications, due to customers not promptly returning their signed copy of the application forms back to RR.
RR is now wanting to introduce e-signatures which allow customers to sign the document on their computer and return it back to RR through the Internet. This change will help to simplify the process and ensure that customers obtain their loans quicker.
To achieve this change, RR has established a project and has appointed you as the Project Leader to lead the change.
Select the THREE valid statements in respect of leading change.
- A. A Change Agent is an individual or group that helps to bring strategic change to an Organization.
- B. A change leader using the Change Approach will focus on procedures, control measures and monitoring performance.
- C. Managing change is a process of facilitating internal and external conflict resolution.
- D. An Affiliative leadership style is one where the change leader consistently asks the team for more.
- E. Transactional leaders focus on systems and controls and tend to seek improvement rather than change.
Answer: A,C,E
NEW QUESTION 145
According to Porter's Five Forces model which of the following would be evidence of high buyer power?
- A. There is a low probability of backward integration.
- B. Products are not standardised and buyers cannot easily switch to another product.
- C. There is a concentration of buyers.
- D. Buyers are fragmented and act independently of each other.
Answer: A
NEW QUESTION 146
LLL is an international oil and gas exploration company. It is considering investing S300 million in developing new oil fields in Country D.
For this it will need to obtain a licence from the government of Country 0.
These new oil fields will bring much wealth to Country D because a large proportion of the revenue from the production of oil will be paid to the government as part of the licensing agreement However, oil production in Country D will have some undesirable social effects, such as the threat of pollution, congestion to the roads and pressure on local amenities such as housing, electricity and clean water Which of the following approaches to stakeholder management should LLL NOT undertake in order to enter Country D?
- A. Commit to improving the local amenities and roads as a part of the application for a licence in Country D
- B. Undertake stakeholder mapping to identify the interests of the most powerful players in the decision to grant a licence to LLL
- C. issue free shares in a Joint Venture to develop oil fields to government ministers from Country D.
- D. Develop and circulate a promotional video showing the benefits enjoyed by other countries in which LLL operates
Answer: A
NEW QUESTION 147
'Big data' refers to datasets whose size is beyond the ability of typical database software tools to capture, store, manage and analyse.
Which of the following statements is NOT a valid statement regarding 'big data'?
- A. As technology advances over time, the size of datasets that qualify as 'big data' will also increase.
- B. The definition of 'big data' can vary by sector, depending on the software tools and dataset sizes common to a particular industry.
- C. Sufficient analytical and managerial talent is available to exploit the opportunities associated with 'big data'.
- D. 'Big data' will require the right infrastructure, incentives and safeguards to address public concerns.
Answer: C
NEW QUESTION 148
Which of the following is a direct external change trigger?
- A. A general increase in the use of the Internet by society.
- B. The introduction of new environmental protection policies by the government.
- C. A powerful competitor forcing an Organization to cut its prices.
- D. An economic recession in an Organization's home country.
Answer: C
NEW QUESTION 149
TTT is a conglomerate with two divisions, AAA and BBB. Advise TTT on the most appropriate strategy to adopt for each division.
Answer:
Explanation:
NEW QUESTION 150
GGG is a successful airline and has a proven record in successfully exploiting the resources it obtains Which of the following might create an additional Core Competence for GGG?
- A. The airline operations that operate below the level of middle management.
- B. A market with more passengers than the existing airlines can satisfy.
- C. Sufficient aircraft to operate a good timetable.
- D. Unique rights to operate from the most popular airport serving a capital city.
Answer: D
NEW QUESTION 151
F is an entrepreneur who runs a chain of health food shops in Country M.
There are no other similar health food shops operating in Country M and the chain has rapidly grown over the last three years. F wishes to continue to grow his chain of shops but is aware that he lacks the funds to enable him to grow at the pace which the market is demanding. He is also concerned that continued rapid growth will result in him losing control over the strong brand reputation and identity that he has built up for the chain of shops.
Which of the following would be the most feasible strategy for F to adopt to continue to grow his business?
- A. Franchising
- B. Joint venture
- C. Acquisition
- D. Licensing
Answer: A
NEW QUESTION 152
As a qualified Management Accountant you have been asked by a non-financial manager to explain the CEO's recent comments, featured in the CEO's regular update to investors and analysts.
The CEO's update suggested the company, an established property development business, was about to pursue an exciting strategy. The strategy is to focus on conglomerate diversification, to be achieved through a number of pre-identified acquisitions, with the aim of significantly increasing shareholder value.
Which of the following statements is consistent with the concept of conglomerate diversification?
- A. A portfolio of businesses involved in unrelated activities such as financial services, food retailing and property development, sharing nothing but a parent company.
- B. A structure involving a collection of unrelated businesses. For this company, acquisitions may include a variety of companies such as financial services and food retailing, all sharing operational relationships such as finance, sales and marketing.
- C. A strategy involving business expansion within a company's present industry. For this company, an example would be the acquisition of another property development business.
- D. A portfolio of unrelated businesses such as financial services, food retailing and property development, all sharing identity and risk, including group logo, corporate uniforms and risk management systems.
Answer: A
NEW QUESTION 153
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