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E3 Strategic Management Questions 89–96 (page: 13)

Updated On: 4-Aug-2026

HHH is about to undergo a period of significant change.  HHH intends to draw upon the model suggested by Beer and Nohria, concerning 'Theory E' and 'Theory O'. In which circumstances should HHH use 'Theory O' strategies?
Select ALL that apply.

  1. Change which will involve cultural adjustments.
  2. Change where there is a desire to involve employees in the process. 
  3. Change which involves feedback and reflection.
  4. Change where shareholder value is the main consideration.
  5. Change which will involve downsizing and restructuring.
  6. Change which will involve key stakeholders.

Answer(s): A,B,C



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.

  1. Managing change is a process of facilitating internal and external conflict resolution.
  2. A Change Agent is an individual or group that helps to bring strategic change to an Organization.
  3. Transactional leaders focus on systems and controls and tend to seek improvement rather than change.
  4. A change leader using the Change Approach will focus on procedures, control measures and monitoring performance.
  5. An Affiliative leadership style is one where the change leader consistently asks the team for more.

Answer(s): A,B,C



JJJ is about to undergo a period of rapid and far-reaching change. JJJ's Chief Executive has heard about work published by Beer and Nohria, 'Theory E' and 'Theory O', which identified reasons for business change initiatives failing. Select THREE of the following circumstances where it would be appropriate to use a 'Theory E' approach. 

  1. Shareholder value is the main concern.
  2. The Chief Executive is going to use a 'Top-down' approach.
  3. The change will be large and knowledge-driven.
  4. The change will be small and process-driven.
  5. The change is emergent and participative.
  6. The change is a response to new legislation.

Answer(s): A,B,C



McKinsey's '7-S' model can provide companies with a useful insight into some of the issues experienced as part of a change initiative within a company.
Which THREE of the following are identified as SOFT elements within McKinsey's '7-S' model?

  1. Strategy
  2. Style
  3. Sentiment
  4. Staff
  5. Skills
  6. Sustainability

Answer(s): B,D,E



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?

  1. 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.
  2. 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.
  3. 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.
  4. A portfolio of businesses involved in unrelated activities such as financial services, food retailing and property development, sharing nothing but a parent company.

Answer(s): D



A company runs a distribution warehouse. Its information systems constantly monitors inventory levels, with automatic re-order processing occuring with suppliers when inventory items reach a specified level. It operates a robotics system which automatically picks inventory from its location in the warehouse and delivers it to the pick-up are a. The company also has a large database of customer information which it uses to analyse buying behavior and sales trends so that it can provide customers with relevant and targeted marketing information.
Which THREE of the following activities of the Value Chain have been affected by the use of IT/ IS?

  1. Inbound Logistics
  2. Operations
  3. Outbound logistics
  4. Sales and Marketing
  5. Services

Answer(s): A,B,D



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?

  1. Acquisition
  2. Joint venture
  3. Franchising
  4. Licensing

Answer(s): C



Coaching and Mentoring essentially involves a conversation where learning takes place through asking the right questions rather than providing answers. Consequently, Coaching and Mentoring can lead to both personal and professional transformation.
There have been many attempts to distinguish between Coaching and Mentoring, but it is widely acknowledged that the same skills and models are often used in both.
You have been asked to prepare a short briefing note on the Coaching and Mentoring of the Executive Management Team within your company.
Which of the following statements highlight the similarities between Coaching and Mentoring?
Select ALL that apply.

  1. Both require the ability to generate trust, support and commitment.
  2. Both extend the learning curve.
  3. Both provide support without removing responsibility.
  4. Both do not require Organizational know-how or awareness.
  5. Both encourage the individual to stay within their comfort zone.
  6. Both can function as a career guide to review career goals.

Answer(s): A,C,F



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