DO NOT OPEN THIS QUESTION PAPER UNTIL YOU ARE TOLD TO DO SO

E1 – Enterprise Operations
Enterprise Pillar
Operational Level

E1 – Enterprise Operations
22 May 2012 – Tuesday Morning Session

Instructions to candidates

You are allowed three hours to answer this question paper.

You are allowed 20 minutes reading time before the examination begins
during which you should read the question paper and, if you wish, highlight
and/or make notes on the question paper. However, you will not be allowed,
under any circumstances, to open the answer book and start writing or use
your calculator during the reading time.

You are strongly advised to carefully read ALL the question requirements
before attempting the question concerned (that is all parts and/or sub-
questions). The requirements for questions 3 and 4 are highlighted in a
dotted box.

ALL answers must be written in the answer book. Answers or notes written
on the question paper will not be submitted for marking.

ALL QUESTIONS ARE COMPULSORY.

Section A comprises 10 sub-questions and is on pages 2 to 4.

Section B comprises 6 sub-questions and is on page 5.

Section C comprises 2 questions and is on pages 6 and 7.

The list of verbs as published in the syllabus is given for reference on page
11.

Write your candidate number, the paper number and examination subject title
in the spaces provided on the front of the answer book. Also write your
contact ID and name in the space provided in the right hand margin and seal
to close.

Tick the appropriate boxes on the front of the answer book to indicate the
questions you have answered.

TURN OVER

© The Chartered Institute of Management Accountants 2012

SECTION A – 20 MARKS
[You are advised to spend no longer than 36 minutes on this question]
ANSWER ALL TEN SUB-QUESTIONS

Instructions for answering Section A

The answers to the ten sub-questions in Section A should ALL be written in your answer book.

Your answers should be clearly numbered with the sub-question number and ruled off so the
markers know which sub-question you are answering. For multiple choice questions you
need only write the sub-question number and the answer option you have chosen. You
do not need to start a new page for each sub-question.

Each of the sub-questions numbered from 1.1 to 1.10 inclusive, given below, has only ONE
correct answer. Each is worth two marks.

Question One
1.1 A transition economy is one that is
A about to be controlled by a different political regime.
B still introducing the benefits of e-commerce.
C moving from a planned to a mixed or free market economy.
D retrenching due to adverse economic circumstances.
(2 marks)

1.2 Corporate governance is best described as

A a code for organisational direction, administration and control.
B stakeholder guidelines.
C a system of penalties for unethical behaviour.
D the relationship between an organisation and the government.
(2 marks)

1.3 Which ONE of the following is a program that impairs data and software?
A A virus
B Corrective maintenance
C Electronic Data Interchange (EDI)
D Cyber bullying
(2 marks)

Enterprise Operations 2 May 2012

1.4 Background and circumstances, special attributes and disposition are all factors often
identified in which ONE of the following?
A Service level agreements
B Key performance indicators
C Person specifications
D Job descriptions
(2 marks)

1.5 IS client-vendor relationship is a feature of which ONE of the following?

A An outsourced IS function
B Enterprise-wide systems
C Social networking
D Virtual team working
(2 marks)

1.6 If an employee who is opposing the introduction of a new system is given a key role in its
implementation, this is an example of which ONE of the following?
A Co-optation
B Career planning
C Succession planning
D Networking
(2 marks)

1.7 Contrived, volume and realistic are examples of which ONE of the following?
A System testing methods
B Supply relationship categories
C Ways of classifying inventory
D Ways of estimating market potential
(2 marks)

1.8 A psychological contract refers to which ONE of the following?

A Intangible costs arising from outsourcing
B The mutual expectations of an employer and employee
C The responsibilities of citizens to their nation
D The use of contracted experts in psychometric staff testing
(2 marks)

Section A continues on the next page

TURN OVER

May 2012 3 Enterprise Operations

1.9 According to Douglas McGregor, managers believe Theory X people
A naturally dislike work and avoid responsibility.
B naturally enjoy work and seek the challenge of responsibility.
C are a younger generation which is comfortable with new technology.
D are an older generation unlikely to engage in e-commerce.
(2 marks)

1.10 Which ONE of the following is most likely to lead to an organisation accessing a larger
market for its goods or services?
A Electronic Data Interchange (EDI)
B Teleworking
C e-trading
D Penetration marketing
(2 marks)

(Total for Section A = 20 marks)

Reminder
All answers to Section A must be written in your answer book
Answers or notes to Section A written on the question paper will not
be submitted for marking

End of Section A
Section B starts on the opposite page

Enterprise Operations 4 May 2012

SECTION B – 30 MARKS
[You are advised to spend no longer than 9 minutes on each sub-question in this section]
ANSWER ALL SIX SUB-QUESTIONS IN THIS SECTION - 5 MARKS EACH

Question Two
(a) Explain FIVE ways in which businesses might try to influence government policy in a way
that might benefit them.
(5 marks)

(b) Product manufacturing operations can be explained as a three stage transformation

model of inputs, processes and outputs.
Distinguish how a service differs from a product using this model as a framework.
(5 marks)

(c) Explain the main features of organisations that do NOT adopt a market or marketing
orientation.
(5 marks)

(d) Describe FIVE factors that can influence an individual when deciding whether or not to
purchase a product.
(5 marks)

(e) Explain the relationship between Frederick Herzberg's dual (two) factor motivation theory
and job enrichment.
(5 marks)

(f) Describe the marketing processes that are necessary before an organisation can
properly target the most lucrative part of a market.
(5 marks)

(Total for Section B = 30 marks)

End of Section B

Section C starts on the next page

TURN OVER

May 2012 5 Enterprise Operations

SECTION C – 50 MARKS
[You are advised to spend no longer than 45 minutes on each question in this section]
ANSWER BOTH QUESTIONS IN THIS SECTION – 25 MARKS EACH

Question Three
WV8 is a large not for profit (NFP) public sector organisation responsible for organising the
operation of publicly financed schools within its region. WV8 receives its income solely from
government grants but, because of funding cuts, is under pressure to maintain existing services
whilst operating more cost effectively. Recently, a government spokesperson publicly criticised
public sector organisations claiming that they are expensive, lack skills found in the private
sector, such as marketing and business acumen, and have a lack of understanding of the
customers they are meant to serve.

In order to meet these challenges, WV8's Chief Executive has created a policy review team
comprising experts from all areas of WV8's operations. Phase 1 of the review involves looking
at central support services which includes Corporate Information Systems (CIS) services. In the
past there have been difficulties in recruiting specialist staff in Information Systems (the Head of
CIS services claims that this is because of WV8's relatively unattractive rates of pay). In
addition, service users have complained that CIS is expensive and unresponsive to their needs.
Various options are currently being discussed, for example a complete decentralisation of the
CIS function to its main users and continuing centralised provision through a total outsourced
service to a single specialist supplier.

Phase 2 of the review will involve investigating ways in which WV8 can become more business-
like and the ways in which it might adopt marketing principles.

Required:
(a) Discuss the potential advantages for WV8 of decentralising the CIS function.
(10 marks)

(b) Discuss the issues associated with a total outsourcing of CIS for WV8.
(10 marks)

(c) Describe the lessons WV8 could learn from marketing principles and practices.
(5 marks)

(Total for Question Three = 25 marks)

Section C continues on the opposite page

Enterprise Operations 6 May 2012

Question Four
2JN is a large manufacturing organisation which is structured with a number of supervisors each
responsible for their own work production unit. Supervisors report to a team of senior managers
who in turn are accountable to a Managing Director (MD). Operations are supported by 2JN's
own finance, sales, distribution and human resource units.

Within the past two years, 2JN has implemented a series of initiatives aimed at reducing product
defects and customer complaints. The initiatives have included the appointment of a few quality
control inspectors to support supervisors. Despite these efforts, 2JN has lost some of its major
customers to its competitors and its profits are declining.

After discussions with customers and suppliers, the MD has discovered that other companies
within the same industry have successfully adopted a Total Quality Management (TQM)
approach. At a recent senior management meeting he announced that a TQM programme
would be introduced within 2JN as a matter of priority. To support this, a Quality Committee will
be established to oversee the programme's introduction and operation. He has tasked the
human resource unit to establish Quality Circles to meet on a regular basis and arrange training
in TQM for all staff. The MD concluded by saying that TQM was vital to 2JN and that high quality
'will both put costs down and revenue up'.

Required:

(a) Explain the requirements for achieving a Total Quality Management (TQM) approach
within 2JN.
(10 marks)
(b) Identify the important issues and work groups that need to be considered when
organising the TQM training in 2JN.
(10 marks)
(c) Discuss the claim that high quality 'will both put costs down and revenue up'.
(5 marks)
(Total for Question Four = 25 marks)

(Total marks for Section C = 50 marks)

End of Question Paper

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LIST OF VERBS USED IN THE QUESTION REQUIREMENTS
A list of the learning objectives and verbs that appear in the syllabus and in the question requirements for
each question in this paper.

It is important that you answer the question according to the definition of the verb.
LEARNING OBJECTIVE VERBS USED DEFINITION

Level 1 - KNOWLEDGE
What you are expected to know. List Make a list of
State Express, fully or clearly, the details/facts of
Define Give the exact meaning of

Level 2 - COMPREHENSION
What you are expected to understand. Describe Communicate the key features
Distinguish Highlight the differences between
Explain Make clear or intelligible/State the meaning
or purpose of
Identify Recognise, establish or select after
consideration
Illustrate Use an example to describe or explain
something

Level 3 - APPLICATION
How you are expected to apply your knowledge. Apply To put to practical use
Calculate Ascertain or reckon mathematically
Demonstrate To prove with certainty or to exhibit by
practical means
Prepare Make or get ready for use
Reconcile Make or prove consistent/compatible
Solve Find an answer to
Tabulate Arrange in a table

Level 4 - ANALYSIS
How you are expected to analyse the detail of Analyse Examine in detail the structure of
what you have learned. Categorise Place into a defined class or division
Compare and contrast Show the similarities and/or differences
between
Construct Build up or compile
Discuss Examine in detail by argument
Interpret Translate into intelligible or familiar terms
Prioritise Place in order of priority or sequence for action
Produce Create or bring into existence

Level 5 - EVALUATION
How you are expected to use your learning to Advise Counsel, inform or notify
evaluate, make decisions or recommendations. Evaluate Appraise or assess the value of
Recommend Propose a course of action

May 2012 11 Enterprise Operations

 Enterprise Pillar

Operational Level Paper

E1 – Enterprise Operations

May 2012

Tuesday Morning Session

Enterprise Operations 12 May 2012