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CIMA E3 Sample Questions
Question # 1
HHH is a teaching Organization. HHH has begun to employ virtual reality to train the customerson its courses in how to perform complex manual tasks such as repairing machinery.Which activity in Porter's Value Chain has been impacted by HHH's use of virtual reality?
A. Operations B. Service C. Procurement D. Human resources management
Question # 2
BBB is a publisher. As a consequence of BBB using the Internet to outsource its typesetting andstudio activities it has been able to move its few remaining staff into much smaller and lessexpensive office accommodation.Which activity in Porter's Value Chain has benefitted from BBB's use of information systems?
A. Infrastructure B. HR management C. Sales and marketing D. Outbound logistics
Question # 3
Which of the following distinguishes a learning curve effect from a learning Organization?
A. Learning curve effects depend on repetition of the same behaviour. Learning Organizationsseek to modify behaviour. B. Learning curve effects apply to the factory. Learning Organizations are always serviceindustries. C. Learning curve effects increase with time. Learning Organizations cease to learn after a time. D. Learning curve effects always reduce costs. Learning Organizations always increase costs.
Question # 4
PPP uses the Boston Consulting Group Matrix (BCG Matrix) to prioritise products forinvestment and divestment. PPP invests or divests according to the quadrant of the BCG Matrixthat the product occupies.Which TWO of the following quadrants might receive only as much investment as required tomaintain PPP's relative market share?
A. Stars B. Question marks C. Dogs D. Cash cows
Question # 5
JJJ presently makes motorcycles for use by the armed forces in its home country. Defencespending cuts have forced JJJ to seek a new business direction. JJJ has decided to make trucksfor sale to private businesses in its home country.Use the Ansoff product/market matrix to identify the new strategic direction of JJJ.
A. Related diversification B. Product development C. Market development D. Market penetration
Question # 6
Which of the following is a 'hard' factor according to McKinsey's '7-S' model?
A. Staff B. Skills C. Strategy D. Success
Question # 7
McKinsey's '7-S' model distinguishes between 'hard' and 'soft' factors.Which TWO of the following statements are correct?
A. Hard factors tend to be intangible and hard to identify. B. Soft factors tend to be intangible and hard to identify. C. Hard factors tend to be formal and measurable. D. Soft factors tend to be formal and measurable. E. Soft factors focus on the future and hard factors focus on the present.
Question # 8
The future can be viewed as consisting of a large number of alternatives. Forecasting techniqueshave been designed to assist decision-making and planning.Which TWO of the following statements are correct regarding the use of trend analysis as aforecasting tool?
A. Suitable for mature and stable products / services / companies. B. Suitable for young and dynamic products / services / companies. C. Useful where the external environment is always stable. D. Useful where the external environment is always changing. E. Useful where comparatives are not available.
Question # 9
Which TWO of the following statements are NOT characteristics of a robust 'coaching climate'?
A. Personal growth, team development and Organizational learning are integrated. B. Coaching is seen primarily as an opportunity to be proactive rather than reactive. C. People are able to engage in destructive confrontation. D. Time for reflection takes place only out of office hours. E. People are recognised and rewarded for sharing knowledge.
Question # 10
You are the youngest member of the senior management team and have recently been invited tobecome a member of the company's Board.You have been sent an outline agenda ahead of your Board induction meeting with the CompanySecretary. The first item on the agenda is the role of the Board.Which of the following statements is NOT the role of the Board?
A. Establish the company's vision, mission and values. B. Relinquish responsibility for implementation of strategy to management. C. Confirm the adequacy and alignment to strategy of internal control and risk managementsystems. D. Establish strategy with regard to the risk appetite of the Organization.
Question # 11
Corporate political activity can be seen as a proactive attempt by a company to influencegovernment decision-making. In particular, lobbying represents a direct but often private attemptby businesses to influence a government's decision-making.Which of the following is NOT a legitimate and private form of lobbying?
A. Monitoring B. Advocacy C. Application of pressure D. Undisclosed party financing
Question # 12
Communication is a critical element of the Organizational change process. Communicating thechange vision is a component of Kotter's eight steps to transforming Organizations.Which of the following statements support Kotter's component 'Communicate the changevision'?Select ALL that apply.
A. Ensure the change message and vision are memorable and repeatable. B. One-way communication is more powerful than two-way communication. C. Storytelling and symbolic actions are unnecessary. D. Unaddressed inconsistencies undermine the credibility of strategic communications. E. Face-to-face communications improve clarity of message.
Question # 13
QQQ is Country M's largest supermarket with 40% of the market share. In addition it has openedseveral stores around the world in the last 10 years. One of the reasons for QQQ's success isits loyalty card. The loyalty card is used to gather information about the spending patterns of itscustomers. Around two billion pieces of information each week are captured and stored in anenormous data warehouse that can be accessed by QQQ and other selected large retail partners.The information can be used to assess the success of new product launches as well as whichdemographics of customer are making the purchases. The system also allows QQQ to tailor itsspecial offers to particular segments of the market and to predict the buying behaviour of itscustomers, which assists QQQ in procurement planning.Which of the following best describes the activities outlined above for QQQ?
A. Customer relationship management B. E-business C. Market segmentation D. Data mining
Question # 14
Which TWO of the following would be measures included within the 'Department and work
centres' level of the Performance Pyramid?
A. Market share percentage B. Percentage of on-time deliveries C. Number of product returns per period D. Customer satisfaction levels E. Production output per period
Question # 15
You have applied for a job with a large accountancy practice and have been requested to attendfor an interview. You have also been informed that you will be required to give a ten minutepresentation on Corporate Political Activity (CPA).Which are valid statements with respect to Corporate Political Activity?Select ALL that apply.
A. The CIMA Code of Ethics does not consider it appropriate for a company to offer bribes topoliticians to secure publicly-funded business. B. CPA can be considered to be part of a company's strategy to generate and sustain profits. C. When established laws and regulations affect a firm's competitive environment, the companywill not be able to use CPA to try to influence political decision-making. D. It is acceptable for a company to make an election contribution for a particular candidate andthen to try to influence subsequent parliamentary voting. E. Companies can establish Coalitions to respond to specific political issues, but these are alwaysformed on a temporary basis.
Question # 16
'Big data' refers to datasets whose size is beyond the ability of typical database software tools tocapture, 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 datasetsizes common to a particular industry. C. Sufficient analytical and managerial talent is available to exploit the opportunities associatedwith 'big data'. D. 'Big data' will require the right infrastructure, incentives and safeguards to address publicconcerns.
Question # 17
Data mining is an important part of an Organization's knowledge discovery process.Effective data mining provides insight and can help unlock previously hidden opportunities.Which of the following are disadvantages of Data Mining?Select ALL that apply.
A. Privacy issues B. Security issues C. Ethical issues D. Financial crime issues E. Manufacturing issues
Question # 18
Kanter identified seven 'power skills' that change agents need to overcome apathy or resistance
to change. Which of the following are power skills?Select ALL that apply.
A. Ability to work independently. B. Ability to collaborate effectively. C. Ability to develop relationships based on trust. D. Ability to keep within a budget. E. Ability to work ethically and sustainably. F. Ability to keep projects to a strict time-line.
Question # 19
CIMA has conducted research into the implications of sustainability for business. CIMA's report
contained a number of key conclusions. Which of the following statements was NOT a
conclusion in CIMA's report?
A. Strong ethical principles can add great value to a brand. B. Reporting on sustainability needs to provide hard evidence of the positive impact on society. C. Management Accountants have a responsibility to promote an ethics-based culture. D. The ethical tone within a business must come from the bottom.
Question # 20
Lynch developed the performance pyramid to define the links between objectives and
performance measures. Which THREE of the following statements apply to the performance
A. The performance pyramid is designed to ensure that all activities support the Organization'svision. B. The left-hand side of the pyramid contains measures which have an external focus. C. The lowest level of the pyramid contains the day-to-day operational measures. D. The business operating systems level includes the market-related Critical Success Factors. E. The business unit level includes measures which relate to internal systems needed to meetcustomers' needs. F. The right-hand side of the pyramid contains measures which are predominantly non-financial.
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