CIMA E1: ENTERPRISE OPERATIONS
 
　　1.6
　　If interest rates are high:
　　A there will be an increase in investment
　　B output will increase, to satisfy increased demand
　　C the country’s currency will strengthen
　　D exports will increase (2 marks)
　　Required:
　　Each of the sub-questions numbered 1.7 to 1.8 below requires a brief written response. The
　　response should be in note form and should not exceed 50 words.
 
　　1.7
　　Many organisations are now actively seeking flatter hierarchies, better quality and
　　ways of contracting out non-core activities. What are the implications of these
　　developments for the five basic parts of the organisation identified by Mintzberg?
　　(4 marks)
 
　　1.8
　　Explain what general principles of corporate governance apply to the Board of
　　Directors. (4 marks)
　　(Total: 20 marks)
　　KAPLAN PUBLISHING
　　INTERIM ASSESSMENT QUESTIONS
　　SECTION B
　　ANSWER ALL PARTS OF THIS QUESTION
 
　　QUESTION 2
 
　　Revor Cars is an ailing motor vehicle manufacturer which has just been acquired by a large
　　foreign investor, HK Holdings.
 
　　Revor was once a source of national pride, producing high-quality, innovative designs
　　popular in its local market. One product, the Mighty Atom, was originally conceived and
　　constructed fifty years ago, and is still considered one of the best small cars around.
　　However, the rest of the product lines, including sports and saloon cars, are rapidly losing
　　their appeal, being overtaken by overseas manufacturers who can offer quality, functionality
　　and reliability at extremely competitive prices.
 
　　HK Holdings understands that it needs to invest in Research and Development, in order to
　　develop new and improved products, whilst at the same time supporting the handful of
　　models which are likely to remain profitable for the next three years. To do this, it is
　　embarking on an organisational-wide quality-improvement programme, similar in substance
　　to improvement approaches it had already delivered successfully in its home country. The
　　thrust of the programme will include:
　　1.The need to instil a culture of excellence driven by committed, quality-focused teams
　　2.The need to provide every employee with a simple set of ideas as to how to
　　3.implement quality improvements in their workspace
　　4.The need to monitor performance closely through the use of appropriate performance
　　indicators.
 
　　One aspect of the change strategy will be to make further use of technology in Revor’s
　　production facility. HK has already identified the need for a multi-million-dollar investment
　　in CAD/CAM technologies in order to successfully develop an ERP system at the heart of a JIT
　　manufacturing methodology. It understands that an OPT philosophy will assist in targeting
　　key improvement areas, and that existing MRP technologies will need to be replaced.
　　In order to deliver these major changes, particularly in the new systems development
　　projects, HK is *uating the use of outsourcing. This would involve the use of local
　　technology suppliers in the analysis, design and implementation of a number of systems. As
　　an alternative, HK could bring in its own in-house technologists from its home country,
　　although finding a suitable team willing to live for long periods in a foreign land may prove
　　difficult.
 
　　You are a management consultant working alongside HK Holdings management team as they
　　*uate strategic and tactical options during the first few weeks following the acquisition of
　　Revor Cars.