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Q1, i evaluated the performance report. it had everything needed. It was aligned with objectives. However i should have mentioned also, it was helpful to have the variances and the commentary was aligned.
Part b was EVA calculation. This was straight forward but I’m sure i left some mistakes. As silly as i am, i added back corporate tax, instead of deducted it ;(
ROCE, RI for divisional performance..i argued here and RI was my final suggestions and ROI as it was more fitted (no further funding was going to be received)
BCG- this i did not quite understand. So i analysed the appendix and mentioned the dog could be de invested and use the cashcow for the research and development of a new product instead. Cash cow, try to innovate on the products, pizza is liked by many but maybe the price could be lowered to attract more growth.
As for the healthy food (?), Use cash cow and invest in appropriate marketing strategies to create awareness of this new range of product. This will perhaps move it to the star quadrant.
Q2 stakeholders matrix- i explained briefly the chair man was key player and how he should be treated.
Employees i argued they have interest on opportunities but less power as opposed to the interest. So they should be kept informed via emails, regular meetings about opportunities.
Bank: they had low interest and power therefore minimal activities for them..however not to ignore them because they have a level of trust on the business now but in the future they might start showing interest.
B ) Risk appetite- here i struggled a bit because not much information was given about the three stakeholders mindset. I wrote anyway:
Chairmain doesn’t want mishap to be repeated. Therefore no risk taking person. He was risk averse
Employees value their job and hence they would like to do things which they dont regret later or have a very minimal regret.
Bank has a certain level of trust because company is compliant and has a good cash flow..they were neural. (Not sure).
C) optimistic / pesimistic approach.
I calculated contribution then argued it was not enough as the products have massive FC to be considered. So i calculated profit under both approach, under pesimistic i had chosen silver as highly profitable and gold under optimistic. However i mentioned it was worth waiting for the election to be over to avoid any issue of regret. But if there is a need to go for the production now, its better to take the pessimistic approach. Produce 50k only and get a lower profit to start with., Then if election is favorable, demand will rise, profit will rise. Hence company can switch to production of gold type.Q3. BSC- i criticised the kpis given. Financial, eva would be more appropriate to measure shareholder wealth.
%of revisitng customers gives a measure of how many customers are satisfied thats why they come back. This can be collected also through surveys.
% of successful service based on appointment. This shows whether the internal process of taking orders manually works or not. As company caters for man power and resources based on appointment..if customer take appointment but don’t turn up, this means the internal process is not efficient.
No. Of cusomers requesting their hairdresser. This would show how they value the training/ qualifications. I also added another one which concerns % revenue but i dont quite remember. My point here was to emphasize its not about the qualifications which the staff already have but how much they are updated with new hair styling techniques. This is whats more important in this industry.
B) i mentioned why bsc is good. It reduces dysfunctional behaviour. It pushes managers to look at the bigger picture. It meets the objectives of the business. but what makes it unsuitable for this business. Reluctance of staff members esp managers were focussing much on financial aspects before., If objectives changes, we need to ensure they still lead to goal congruence. Outdated IT system which the company was using will need to be updated/changed if they wanted to implement bsc. And i have forgotten the remaining.
Such a relief to know you wrote somewhat similar. Of course, it was very generic (no use of models as such). More could be written if more time was given. I have mentioned many good points but my concern are with the headings. Under exams conditions, at times the right heading is not in my mind..so i write a heading then i speak about a different relevant factor.
Let’s hope we get through this paper..
Q1 Change in governing board (18 marks). A section of a report to analyse the points of the new Board. I talked about lack of independence, lack of committees etc although the new one would help meet the strategic aims.
Q2 Closing the smaller offices (17 marks) looked at the financial implications, 8% of revenue is not much significant. But more split of the revenue for each of the small offices, could have been more helpful to analyse. Closing of those firms would help the bigger offices to take a strategic position, invest in technology and compete in the market. Thre bigger offices would be able to focus on more specialised services, better control, enhanced communication internally and externally, be more client focussed, cost reduction if the offices are closed, but should find ways to compensate those who will lose jobs. (I could have written more on how about automating some of the services of the small offices, however i did not have time).
Q3 Email about conduct of Audit Partner (24 marks).. fraudulent activities, concealing some frauds. Familiarity threat..not supportive to staff..not acting professional at work by not reviewing certain reports, autocratic style.
Q4 Data analytics. Pros and cons taken from the exhibit (3-4 of each and elaborated on) part 2 of the question was about how to implement the audit approach..i used the lewins model of unfreeze change and freeze (28 marks)
Q5 3 slides about risks, implication and improvement in leadership (13 marks)
– risks were loss of staff/partners.
– fierce competitionThe implication was loss of clients and going concern problem in the long run.
Leadership improvement: use a particpative style instead.
Make decisions faster to act ahead of competitors.
