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CIMA E3 Exam Prep
E3 Strategic Management (Page 8 )

Updated On: 21-Sep-2026
Page 7 of 36
PDF with 278 Questions

University researchers want the government of Country Y to invest in the creation of a database of information about the lives of people who have lived in the country during the past 300 years. 
Population information is based on official registers of data about individual people. This data will include the person's name, the dates they were born, the names of their parents, the names of partners if they decide to marry, the names and dates of birth of their children and, finally, the person's date of death and cause of death. In the past this information was recorded on paper by hand, but today there are an increasing number of computerised databases that record this information. This will include data about the 58 million people alive in Country Y at the moment.
Additional data may come from government questionnaires that are circulated once every 10 years and completed by every household in Country Y all on the same day of that year. 
The system is intended to help the researchers analyse demographic change but it will also be useful to people who want to identify who their ancestors were and the links between families.
What THREE obstacles will the University researchers face in developing and implementing this system?

  1. This is a very large and expensive project for which the benefits will not be clear until it has been implemented.
  2. The data will be in many different forms and will be very hard to standardise and put into digital form.
  3. There may be resistance from members of the population to sharing this data and making it public.
  4. No database systems have been developed yet that are able to store, cross reference, search and report on this much data. 
  5. The individual data does not provide a comprehensive picture of the factors the researchers are interested in.

Answer(s): A,B,C



LLL is considering entering Country B to sell its zero emissions car.
LLL has invested heavily in fuel cell technology for its car. It does not rely on any polluting fuels for its energy. This means that LLL's car is the only true zero emissions car. 
Research conducted in Country B for LLL has revealed the following:
   • Country B's Government is concerned that all forms of pollution have risen to dangerous levels. 
* Despite being worried about pollution the Government of Country B has not yet adopted taxation policies to encourage the use of low pollution cars.
* Drivers choosing a car continue to rank the speed and appearance of a car very much higher  than its impact on environmental pollution. 
* About 2% of motorists own an electric or hybrid powered car. 
* A high rate of sales tax levied on the price of new cars in Country B encourages motorists to continue to drive older, more polluting, cars.
LLL recognises that it needs to plan its strategy for Country B over the long-term.
Which THREE of the following strategies would you advise LLL to use to build its long-term sales in Country B?

  1. Meet relevant members of the government of Country B to present the value of including emissions from electricity generating stations in their calculation of vehicle pollution to help reduce pollution.
  2. Sponsor environmental groups in Country B to launch a campaign to take older cars off the road by calling on government to reduce the sales tax on new cars according to its emissions.
  3. Try to win the affection of motorists by donating funds to campaigns that resist attempts by the government to impose taxes on cars, according to the pollution they generate.
  4. Approach government lawyers in Country B and offer to engage them as paid consultants in exchange for their help in drafting taxation legislation that favours zero emission cars.
  5. Provide schools and colleges with pre-prepared lesson resources that teach the science behind fuel cell technology and why it leads to zero emissions.

Answer(s): A,B,E



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?

  1. As part of XYZ's strategic review, identify forces facilitating the need for proposed change.
  2. Identify influential senior managers who will drive through changes in XYZ's strategic direction.
  3. Provide a framework for identifying forces for and against the proposed changes within XYZ.
  4. Identify forces facing XYZ's activities that may create barriers and resistance to change.

Answer(s): C



Which of the following statements would encourage an Organization to use Scenario Planning?
Select ALL that apply.

  1. Uncertainty in the industry is high, relative to management's ability to predict or adjust to change.
  2. Competitor's are increasingly using Scenario Planning as part of their strategy formulation process.
  3. The Organization has not previously experienced any major surprises or expensive strategic mistakes.
  4. The Organization has achieved all of its objectives and operates within a stable external environment.
  5. The Organization often experiences 'group-think', leading to a narrow view of the future.

Answer(s): A,B,E



Which of the following is NOT one of the main principles contained within the UK Corporate Governance Code?

  1. Remuneration
  2. Leadership
  3. Disclosure
  4. Accountability

Answer(s): C



Which of the following structures would you recommend for the Board of Directors of a UK public company in order to fulfill its legal responsibilities?

  1. The Board of Directors should have a minimum of six directors with the Board's tasks divided amongst them. The Board should also have a Chairman or Chairwoman who may serve as the Chief Executive if time permits.
  2. The Board should have no more than six members with clearly defined executive and non-executive responsibilities. To make the role more efficient Chairman or Chairwoman of the Board should also be the Chief Executive.
  3. There should be no restriction placed on the minimum or maximum number of Directors. The Directors' roles should be shared but the Chairman or Chairwoman should not act also as the Chief Executive.
  4. The Chairman or Chairwoman should not have an executive role within the company. There should be at least two directors to carry out the Board's roles.

Answer(s): D



Which of the following is an example of a value adding activity within the outbound logistics aspect of an Organization's value chain?

  1. Refunds offered to customers if they are dissatisfied with a purchase.
  2. Promotions and discounts offered to loyal customers.
  3. Delivery of customers' purchases directly to their homes.
  4. Regular training provided to staff in customer care.

Answer(s): C



TTT, a manufacturer of computer monitors, is conducting a strategic analysis.  Which THREE of the following should be classified as Threats?

  1. An increase in the rate of inflation
  2. A serious fire in its main factory
  3. Its main competitor going out of business
  4. Consumers' increased preference for tablet computers
  5. A 20% increase in corporate taxation
  6. A design fault means TTT must compensate customers

Answer(s): A,D,E



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