CIMA UK Course - Enterprise Strategy E3 Syllabus
The Enterprise Strategy E3 course is the first sub-module of the Strategic Level CIMA courses and syllabus in the UK.
The Enterprise Strategy syllabus covers the integration of several skills across all functions but will spend more time on developing candidate’s knowledge and skills necessary for designing and implementing strategy. Candidates develop an understanding of how the strategic options available are largely determined by the context and the internal capabilities of an organisation. Implementing strategy requires the use of skills associated with change management.
The E3 course is split into four syllabus areas with different study weightings. The weightings for each section can be found beside the relevant title.
A. INTERACTING WITH THE COMPETITIVE ENVIRONMENT (20%)
• Non-market strategy and forms of corporate political activity.
• External demands for responsible business practices and ways to respond to these.
• Stakeholder management (stakeholders to include government and regulatory agencies, non-governmental organisations and civil society, industry associations, customers and suppliers).
• The customer portfolio: Customer analysis and behaviour, including the marketing audit and customer profitability analysis as well as customer retention and loyalty.
• Strategic supply chain management.
• Implications of these interactions for Chartered Management Accountants and the management accounting system.
• The impact of IT (including the internet) on an organisation (utilising frameworks such as Porter’s Five Forces, the Value Chain).
• Competing through exploiting information (rather than technology), e.g. use of databases to identify potential customers or market segments, and the management of data (warehousing and mining).
• Contemporary developments in the commercial use of the internet (e.g. Web 2.0).
B. CHANGE MANAGEMENT (20%)
• External and internal change triggers (e.g. environmental factors, mergers and acquisitions, re organisation and rationalisation).
• Stage models of change.
• Problem identification as a precursor to change.
• Cultural processes of change i.e. change within the context of the whole firm.
• The importance of managing critical periods of discontinuous change.
• Tools, techniques and models associated with organisational change.
• Approaches, styles and strategies of change management.
• Importance of adaptation and continuous change.
• Leading change.
• Change management and its role in the successful implementation of strategy.
• The advantages and disadvantages of different styles of management on the successful implementation of strategy.
• Group formation within organisation and its impact on change processes within organisations.
• Business ethics in general and the CIMA Code of Ethics for Professional Accountants (Parts A and B) in the context of implementation of strategic plans.
C. EVALUATION OF STRATEGIC POSITION AND STRATEGIC OPTIONS (30%)
• Mission statements and their use in orientating the organisation’s strategy.
• The process of strategy formulation.
• The identification and evaluation of strategic options.
• Strategic options generation (e.g. using Ansoff’s product/market matrix and Porter’s generic strategies).
• Real Options as a tool for strategic analysis. Note: Complex numerical questions will not be set.
• Scenario planning and long range planning as tools in strategic decision-making.
• Game theoretic approaches to strategic planning and decision-making. Note: Complex numerical questions will not be set.
• Acquisition, divestment, rationalisation and relocations strategies and their place in the strategic plan.
• The relationship between strategy and organisational structure.
• The role and responsibilities of directors in making strategic decisions (including issues of due diligence, fiduciary responsibilities).
• Audit of resources and the analysis of this for use in strategic decision-making.
• Forecasting and the various techniques used: trend analysis, system modelling, in-depth consultation with experts (Delphi method).
• Management of the product portfolio.
• Value chain analysis.
• Strategic decision-making processes.
D. IMPLEMENTATION OF STRATEGIC PLANS AND PERFORMANCE EVALUATION (30%)
• Alternative models of performance measurement (e.g. the balanced scorecard).
• Business unit performance and appraisal, including transfer pricing, reward systems and incentives.
• Project management: monitoring the implementation of plans.
• The implementation of lean systems across an organisation.
• Theories of control within organisations and types of organisational structure (e.g. matrix, divisional, network).
• Assessing strategic performance (i.e. the use and development of appropriate measures that are sensitive to industry characteristics and environmental factors).
• Non-financial measures and their interaction with financial ones. (Note: candidates will be expected to use both qualitative and quantitative techniques).
• The purpose and contents of information systems strategies, and the need for strategy complementary to the corporate and individual business strategies.
• Critical success factors: links to performance indicators and corporate strategy, and their use as a basis for defining an organisation’s information needs.
CIMA UK Enterprise Strategy E3 Past Papers
The CIMA Enterprise Strategy E3 assessment is a two-part assessment involving a pre-seen case study with further material introduced after the commencement of the exam, for section A. Section A represents a total of 50 marks. Section B comprises of three questions of which TWO must be chosen.
A specimen past question from section B of the E3 paper has been provided to give an idea on the format and level of questions used.
ZZM is a multinational company which buys agricultural products for use in its manufacturing process. ZZM has committed to observe all guidelines and codes of conduct for multinationals. This policy was prompted by ZZM’s desire to be a good corporate citizen.
ZZM has been trading profitably for ten years with farmers’ co-operatives in Agriland, an agricultural country. ZZM’s business is an important part of Agriland’s economy. ZZM has made efforts to improve both the production techniques of the farmers and the living conditions of farm workers and their families. ZZM has built a number of schools and also a district hospital in Agriland.
The farmers’ co-operatives have freedom to trade with anyone but have chosen to deal exclusively with ZZM. ZZM has enjoyed harmonious relationships within Agriland but this now seems threatened by a number of factors.
The Government of Agriland has been under the control of the same political party for the previous 15 years. Recently there have been allegations of corruption made against the Government and its popularity has decreased: some analysts think it might lose the next general election. The main opposition party is very nationalistic and opposed to free trade. It has stated that if it is elected it will nationalise all foreign owned businesses without compensation.
The farm workers’ union in Agriland has asked for an immediate 10% pay rise as farm workers’ pay has not increased for two years although prices have increased by 20%. The farm workers have never been militant but this is changing. In some areas of Agriland, farm workers have gone on strike.
At a recent meeting between the President of Agriland and ZZM, the President said there was a common interest in preventing the main opposition party from winning the next general election. The President suggested a number of strategies which could be followed:
1. ZZM could give a substantial donation to the President’s party for its election funds.
2. ZZM could agree to an extra tax on its Agriland operations. This could be used to increase the national minimum wage for farm workers.
3. ZZM could open an agricultural processes factory within Agriland to assist economic development.
The President stated his strategies were not mutually exclusive. He added that if ZZM was not able to help him, then he would seriously consider nationalising ZZM’s operations without any compensation.
a) Advise how stakeholder mapping could assist ZZM in deciding the options to pursue with respect to Agriland.
Note: You are not required to draw Mendelow’s matrix
b) Construct a stakeholder analysis for ZZM’s business in Agriland.
c) Evaluate the options suggested by the President and one other option which you have identified.
d) Recommend the option which you consider ZZM should follow. Explain the reasons (s) for your recommendation.
(Total = 25 marks)