CIMA E3 dumps

CIMA E3 Exam Dumps

E3 Strategic Management
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Exam Code E3
Exam Name E3 Strategic Management
Questions 280 Questions Answers With Explanation
Update Date 04, 30, 2026
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CIMA E3 Sample Question Answers

Question # 1

You have applied for a job with a large accountancy practice and have been requested to attendfor an interview. You have also been informed that you will be required to give a ten minutepresentation on Corporate Political Activity (CPA).Which are valid statements with respect to Corporate Political Activity?Select ALL that apply.

A. The CIMA Code of Ethics does not consider it appropriate for a company to offer bribes topoliticians to secure publicly-funded business.
B. CPA can be considered to be part of a company's strategy to generate and sustain profits.
C. When established laws and regulations affect a firm's competitive environment, the companywill not be able to use CPA to try to influence political decision-making.
D. It is acceptable for a company to make an election contribution for a particular candidate andthen to try to influence subsequent parliamentary voting.
E. Companies can establish Coalitions to respond to specific political issues, but these are alwaysformed on a temporary basis.



Question # 2

'Big data' refers to datasets whose size is beyond the ability of typical database software tools tocapture, store, manage and analyse.Which of the following statements is NOT a valid statement regarding 'big data'?

A. As technology advances over time, the size of datasets that qualify as 'big data' will also increase.
B. The definition of 'big data' can vary by sector, depending on the software tools and datasetsizes common to a particular industry.
C. Sufficient analytical and managerial talent is available to exploit the opportunities associatedwith 'big data'.
D. 'Big data' will require the right infrastructure, incentives and safeguards to address publicconcerns.



Question # 3

Data mining is an important part of an Organization's knowledge discovery process.Effective data mining provides insight and can help unlock previously hidden opportunities.Which of the following are disadvantages of Data Mining?Select ALL that apply.

A. Privacy issues
B. Security issues
C. Ethical issues
D. Financial crime issues
E. Manufacturing issues



Question # 4

Kanter identified seven 'power skills' that change agents need to overcome apathy or resistance to change. Which of the following are power skills?Select ALL that apply.

A. Ability to work independently.
B. Ability to collaborate effectively.
C. Ability to develop relationships based on trust.
D. Ability to keep within a budget.
E. Ability to work ethically and sustainably.
F. Ability to keep projects to a strict time-line.



Question # 5

CIMA has conducted research into the implications of sustainability for business. CIMA's report contained a number of key conclusions. Which of the following statements was NOT a conclusion in CIMA's report?

A. Strong ethical principles can add great value to a brand.
B. Reporting on sustainability needs to provide hard evidence of the positive impact on society.
C. Management Accountants have a responsibility to promote an ethics-based culture.
D. The ethical tone within a business must come from the bottom.



Question # 6

Lynch developed the performance pyramid to define the links between objectives and performance measures. Which THREE of the following statements apply to the performance pyramid?

A. The performance pyramid is designed to ensure that all activities support the Organization'svision.
B. The left-hand side of the pyramid contains measures which have an external focus.
C. The lowest level of the pyramid contains the day-to-day operational measures.
D. The business operating systems level includes the market-related Critical Success Factors.
E. The business unit level includes measures which relate to internal systems needed to meetcustomers' needs.
F. The right-hand side of the pyramid contains measures which are predominantly non-financial.



Question # 7

DD is a medium size company and has decided to appoint a data mining company to collateinformation from a wide variety of sources and analyse the data into more meaningfulinformation.The Board of DD believes that by using a data mining company to undertake this work, it willadd value to its business and help it to remain competitive.Which of the following statements does NOT apply to data mining?

A. Data mining involves looking for new patterns and relationships in the underlying data.
B. Data mining can guide decision-making and predict future behaviour.
C. Data mining uses statistical analysis tools and other intelligent techniques.
D. The goal of data mining is the extraction of data.



Question # 8

McKinsey saw culture as seven interconnected elements and described these in the '7S' model. Which of the following is NOT a 'hard' factor within the '7S' model?

A. The way the Organization is structured and who reports to who.
B. The way in which the Organization plans to gain a competitive advantage.
C. The daily activities and procedures followed by staff.
D. The core values of the Organization.



Question # 9

Kaplan and Norton developed a model called the Balanced Scorecard to assist in the formation and achievement of strategic policy. Within this model are four perspectives. Which of the following statements is NOT applicable to a Balanced Scorecard perspective?

A. To succeed financially, how should we appear to our shareholders?
B. To achieve our vision, how should we appear to our customers?
C. To achieve our vision, how will we sustain our ability to change and improve?
D. To achieve our vision, how should we appear to our stakeholders?



Question # 10

BBB has often encountered difficulties when it has introduced strategies which involve Organizational change. BBB is about to enter a period of much change and has decided to appoint one or more change agents to help to manage this. Select ALL of the statements that apply in respect of a change agent.

A. Sensitive to the impact of change on all stakeholders.
B. Tolerant of ambiguity and uncertainity.
C. Skilled communicator with colleagues and subordinates.
D. Skilled at successfully meeting budget targets.
E. Worked in three similar change environments.
F. Willingness to drive through difficult decisions.



Question # 11

Company LL is a well established, reputable company which specialises in providing insurancecall centre services to the insurance industry. It has recently won a large contract to provide itsservices to a multi-national insurer. LL's staff are highly trained in insurance matters andmany have worked for LL for many years.LL undertakes long-term resource planning activities and has identified that during the wintermonths, when there will be more customers ringing up to make insurance claims, it willpotentially need to employ more staff. The Board has decided that rather than recruit its ownstaff, it will use an employment agency to supply manpower resources as required.The people supplied will be employed on a temporary basis by LL and they will work alongsidethe other call centre staff. However, they will work at a lower pay rate and will only be paidfor the actual hours they work.This change will lead to a shift in the working environment, the routine and the composition ofthe group.Which THREE statements apply in respect of this proposed change?

A. The proposed change will affect the group dynamics, which can be seen as being similar to a'force field' situation.
B. In times of change, LL can give sensitivity training to this group of workers who can then beused as a source of support during the change process.
C. A Facilitator, as the leader of change, will allow the group to talk about their issues andconcerns with this change in a formal and structured manner.
D. As the change process LL is proposing is an internal matter involving a group of its staff,there is no need to undertake a stakeholder analysis.
E. LL will need to identify the Adversaries in the group, because if they are influential they maypersuade other group members to resist the change.



Question # 12

The concept of Triple Bottom Line (TBL) reporting expands traditional accountancyreporting systems to consider social and environmental performance, rather than simply financialperformance.Which THREE of the following does the TBL concept suggest should be measured in order toencourage greater business social responsibility?

A. Productivity
B. Profit
C. People
D. Planet
E. Privacy



Question # 13

RRR is a large insurance company specialising in home and property insurance. It uses a highlysophisticated information system which it uses to process its insurance claims efficiently andeffectively. It also holds a vast database of customer information and records. RRR's staff arevery highly trained and considered to be the leading specialists in the industry.Which category of intellectual capital is NOT present in the description of RRR above?

A. Human capiltal
B. Innovation capital
C. Customer capital
D. Organizational capital



Question # 14

BCD is an independent training provider in Country P. It provides training to a wide range ofcorporate customers in business related subjects. All of its tutors must possess a nationallyaccredited training qualification before they are allowed to teach. Also, all of its courses follownationally accredited programs and are externally monitored. This is considered to be a criticalaspect of its business reputation.BCD has one major competitor, JKL, within Country P. JKL offers similar courses toBCD but its tutors do not have to have an accredited training qualification. In addition its coursesdo not follow the national accredited programs and the content and style of courses variessignificantly between JKL centres.There are a number of universities which offer nationally accredited courses within Country P.BCD does not consider these as competitors, as they typically attract students wishing toundertake degree courses. The average university pass rate for nationally accredited programsis currently higher than BCD'sWhich of the following types of benchmarking would be most useful for BCD?

A. Process
B. Internal
C. Competitor
D. Strategic



Question # 15

An IT project is currently being undertaken by VVV, a large university. The project is to designand install a secure information system network for all academic staff and administrative staff inthe university. The Executive Board of VVV has insisted that the key objective of the project team is to track and monitor how the information system is being used by the academic staff andthe administrative staff once it is implemented.Which of the following would be an appropriate performance measure for the key objective setby VVV's Executive Board?

A. Overall usage time of the system compared to plan.
B. Number of staff trained in the use of the new system.
C. Percentage of staff usage of the system split between academic staff usage and administrativestaff usage.
D. User satisfaction levels.



Question # 16

MM is a business which sells entertainment products. MM now wants to move to a positionwhere it uses e-business as a fundamental part of its business strategy.Which of the following benefits would result from MM's use of e-business? Select ALL thatapply.

A. Cost reductions because of lower overheads and cheaper procurement.
B. Increased online revenues.
C. Better control information through monitoring website activity.
D. An increased use of tacit knowledge.
E. A reduction in labour turnover and higher morale.
F. Better control of information.



Question # 17

XYZ is a local tourist attraction. XYZ has a website on which it advertises all of its forthcomingevents. XYZ's customers can also use the website to book tickets for these events and can alsocontact XYZ by email. XYZ's website also uses a range of interactive technologies includinggeographical location and map facilities and links to external information sites such as the localtourism board and local hotel listings.Which of the following best describes the range of interactive technologies used by XYZ withinits website?

A. Social media
B. Information Sharing
C. Mash-up
D. Competence syndication



Question # 18

MMM is a large national bank. MMM has developed a vision statement which states that it aimsto:• Provide superior returns to our shareholders• Offer customers the best financial products on the market• Continuously train and develop our staff• Continually improve our business processes by utilising the latest information technologyWhich of the following would be an appropriate performance measure within a BalancedScorecard for MMM?

A. Reduction in staff numbers to increase profit levels.
B. Undertake customer satisfaction surveys.
C. Number of training days per member of staff.
D. Ensure that all IT equipment used is not more than two years old.



Question # 19

In 1989 Earl developed a framework to analyse the linkages between information systems, information technology and information management. Which of the following is NOT a characteristic of Information Systems strategy?

A. Aligning strategy development with business needs and seeking strategic advantage.
B. Business-led and demand-orientated; developing new strategic choices.
C. Formed with key objectives of using the information resource and generating new businesses.
D. Organization-based, relationships-orientated and management focused.



Question # 20

The Boston Consulting Group developed a matrix to assist managers in identifying the cash flow requirements of different businesses. The matrix suggests a number of appropriate strategies. Select ALL the strategies that apply to the Boston Consulting Group's matrix.

A. Hold
B. Build
C. Divest
D. Defer
E. Re-appraise
F. Diversify



Question # 21

Porter suggests that competitive advantage arises from the implementation of a 'generic strategy'. Which THREE of the following are NOT generic strategies?

A. Cost leadership
B. Focus
C. Differentiation
D. Diversification
E. Market development
F. Market penetration



Question # 22

TTT is a software design company which has grown successfully over the last 8 years. It hasbeen highly innovative and often collaborates with a number of external partners to produce highquality, innovative software for a wide range of customers.TTT's owner, K, has been a driving force behind its success. He spends a great deal of timeanalysing what is happening in the marketplace and trying to predict what customers need fromTTT, through a network of industry contacts. He has a strong vision for TTT and communicatesthis, with conviction, to his staff in regular face to face meetings. He recognises and rewards hisstaff when new developments are undertaken and completed successfully and believes that ifstaff feel appreciated, then they will be more motivated to succeed.Which THREE of the following skills for a leader in a change adept Organization does Kdemonstrate?

A. Tuning into the environment
B. Building coalitions
C. Communicating a compelling aspiration
D. Learning to persevere
E. Making everyone a hero



Question # 23

As a recently qualified accountant, you have been given responsibility for delivering anambitious project to centralise and computerise the accounts function within a geographicallydispersed, medium-sized business. In addition, the reporting timetable requires the project to bedelivered within a very short timescale with limited resources. You have decided to put togethera team to deal with these proposed changes.Which THREE of the following statements regarding effective Teams and Change are correct?

A. Individuals must become more than they were when working alone and must develop newcommitments and behaviours.
B. Teams that cross departmental boundaries can develop new performance criteria.
C. Teams that cross departmental boundaries can destroy shared values.
D. Teams should continue after their purpose has been served.
E. Teams play minor roles in institutional change.
F. Teams enhance learning and address change directly through creating recommendations andnew ideas.



Question # 24

To lead change successfully, Kotter and Schlesinger recommends that an Organization shouldchange its strategy according to the situation. Effective change leadership therefore involvesdetermining the optimal speed of change.Which of the following statements would justify proceeding slowly with a change initiative?

A. Where resistance will be intense and extensive.
B. Where resistance will be low and more localised.
C. Where information and commitment from others is unnecessary.
D. Where you have more Organizational power than those who may resist the change.



Question # 25

Mission statements set out the purpose of an Organization to a range of stakeholders who havean interest in what the Organization does. As an employee, you have been asked to assess theeffectiveness of your Organization's mission statement.Which of the following would NOT help the effectiveness of a mission statement?

A. Mission statements should be specific enough to impact Organizational behaviour.
B. Mission statements should communicate the Organization's distinctive advantages.
C. Mission statements should be flexible, realistic and attainable.
D. Mission statements should be aspirational and capture the imagination of stakeholders.



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