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THE INSTITUTE OF COST AND MANAGEMENT ACCOUNTANTS OF BANGLADESH CMA JUNE, 2016 EXAMINATION
OPERATIONAL LEVEL
SUBJECT: E1. ENTERPRISE OPERATIONS.
Time: Three hours Full Marks: 100
All questions are to be attempted.
Show computations, where necessary
Answer must be brief, relevant, neat and clean.
Start answering each question from a fresh sheet.
Q. No. 1.
(a) Explain why 'Supply' has been described as being more significant than 'Purchasing' for an organization. Describe Reck and Long's purchasing development model.
(b) Explain the importance of assessing political risk for organisations engaging in Foreign Direct Investment (F.D.I.).
(c) Explain the relationship between 'Business Ethics' and 'Corporate Social Responsibility'.
(d) The concept of virtual organization is familiar day by day. How virtual organization works.
Explain the difficulties associated with the management of geographically dispersed (virtual) teams.
(e) What are the challenges to implement JIT in a country like Bangladesh? How the Bangladeshi RMG sector can reduce overhead costs by focusing TQM.
(f) Discuss what an organisation could do to motivate its workforce without offering financial incentives.
(g) Explain FIVE risks associated with a direct approach to changeover from one system to another.
(h) Knowledge management is relatively new approach to business in which an organization gathers, organizes, shares and analyzes its knowledge to further its aim.
Explain the types of knowledge management system.
[Marks: (8x5) = 40]
Q. No. 2.
Atlas Ltd is a Bangladesh-based nationalised car manufacturer that is going to be privatised in the next four years. It has suffered from years of poor management and under-investment. This has resulted in a poor public image and a diverse product range. Details of current models are given below.
Off-road division:
Range Rex. A market leader with a strong image as being the off-road vehicle to be seen in around town. It enjoys a high profit margin but is starting to face increasing competition in a growing market.
Land Rex.A leader in the market of 'working' off-road vehicles. Has a huge market share and faces few competitors in a fairly static market.
Family division:
Mindless. A revolutionary design – 30 years ago. This is the original small car. It is now competing against many larger models including Rex's Matchless in the small family hatchback market. The Mindless is not a hatchback and, as a result of nil investment over the last 20 years, is regarded as being an anachronism, bought only by enthusiasts. It is totally unprofitable.
Matchless. An economical and fun to drive small family hatchback. The car is well designed but poorly built. It has the potential to become market leader but is held back by its poor reputation.
This is a growing but highly competitive market.
Hopeless and Hapless. Two models in the medium-size family market. They are both poorly designed, poorly built and have astonishingly bad reputations. Neither car has a market share of any significance. The market is not growing. It is, however, thought vital to have a car aimed at this market sector.
Page 2 of 2 CMA JUNE, 2016 EXAMINATION
OPERATIONAL LEVEL
SUBJECT: E1. ENTERPRISE OPERATIONS.
Q. No. 2. (cont’d…….) Executive division:
The Rex. What was once a car synonymous with quality has had its reputation somewhat tarnished lately due to its unreliability? Its existing customer base is loyal but increasingly being persuaded to buy more reliable imported cars. This is a growing and highly profitable market.
Required:
As a management consultant you have been asked to comment on the company's existing products and to provide some advice about future strategy. Write briefing notes for the directors of Atlas Ltd. Your notes should include:
(a) How Atlas will be benefited by performing product life cycle analysis.
(b) An analysis of the existing product portfolio of Atlas Ltd showing its market share and market growth characteristics – explain fully any technical jargon used in this analysis and suggest how this analysis may help develop future strategy(Excluding product life cycle analysis).
(c) An explanation of what the terms 'product positioning' and 'market targeting' mean and how these might be applied in developing Atlas’s strategy.
[Marks: (5+15+10) = 30]
Q. No. 3.
The ABC group is organized into geographical regions and managed through Strategic Business Units (SBUs). The group has a small but skilled central core of service departments including Human Resources (HR), Marketing, Finance and Purchasing but power and responsibility is devolved to the SBUs' general managers. In addition to maintaining and providing standard information systems such as inventory, payroll, debtors and accounting systems, each central service provides monthly performance data and management reports to SBU general managers and offers additional 'consultancy' advice and services to individual SBUs on request.
BP has been the general manager of the North Western SBU for many years and is very traditional in his approach. He distrusts the monthly reports from the central service departments calling them 'ineffective' and prefers to trust his own instinct and judgment instead. He is also personally involved in the selection of all staff to the SBU as he believes he is a good judge of character. This involves conducting a twenty minute one-to-one conversation with candidates.
Although BP's methods seem to have worked in the past, North Western SBU's productivity and financial performance have fallen recently. BP believes this to be due to certain staffing problems, including abnormally high levels of staff turnover and a failure of new workers to fit into the patterns of work within the SBU. The SBU has been unable to retain its most valued workers who have often gone to join competitor organizations. When replacement staff have been appointed, BP finds that most do not perform their role to a very high standard and many leave after a short period of time.
BP calls a meeting of his assistant general managers who suggest consulting with the HR department about ways of improving the SBU's recruitment and selection processes so that only suitable candidates are appointed. One assistant explains that she has recently read a management article about the use of assessment centers in selection and wonders if this might help when replacing supervisors and more senior staff.
Required:
(a) Describe the factors that might be contributing towards the high levels of staff turnover in North Western SBU, apart from failures in its recruitment and selection processes.
(b) Explain the benefits to North Western SBU of using an assessment center approach to recruitment.
(c) Identify FIVE factors that should be taken into account when forecasting an organization’s need for additional staff.
(d) Describe the features that should be present in any organizational information system for it to be considered effective by its users.
[Marks: (10+10+5+5) = 30]
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