CIMA Managing Performance (E2) Practice Exam

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• In a service department, which metric is most appropriate for reflecting customer value in a performance scorecard?
• Distinguish between material price variance and material usage variance and give the formula for each.
• Market development may entail which changes?
• In the Ecological Model, what is considered more important than control?
• Which characteristic is associated with the Rational Approach to Strategy?
• Which factor is NOT part of LONGPEST analysis?
• Balogun and Hope-Hailey's change framework includes which of the following as a listed step?
• Which of the following is NOT one of the five categories of power proposed by French and Raven?
• Which action is associated with reflation?
• Which of the following is NOT listed as a characteristic of Vail's High Performing Systems?
• In a make-or-buy decision, what costs are relevant?
• Which statement best describes Market Penetration?
• What is the purpose of scenario planning in budgeting and forecasting?
• When analyzing a variance, what should be assessed before deciding on corrective action?
• What distinguishes activity-based costing from traditional costing in terms of cost drivers?
• Residual Income (RI) helps investment decisions by:
• According to David's list, which item is included in a mission statement?
• How can transfer pricing influence the incentives of separate business units?
• If actual output exceeds budgeted output, the fixed overhead volume variance is generally considered...
• In Mainwaring's conflict management framework, which approach aims to produce a win-win outcome and attitude change?
• In Mintzberg's five Ps, which P represents a tactic used to outmaneuver rivals?
• Explain the purpose of absorption of overhead to units produced.
• Which policy qualifies as an export subsidy (payments to domestic producers to export)?
• Which knowledge area is associated with obtaining external resources for the project?
• Which elements are included in corporate strategy's long-term external focus?
• The outside-in view of competitive advantage emphasizes
• How does a balanced scorecard help align performance measurement with strategy?
• According to Fiedler, is there an ideal leader that works in every situation?
• How is fixed overhead volume variance calculated and what does it indicate?
• Which is a typical effect of a cut in personal income tax?
• Content Theory emphasizes which of the following?
• In the Ashridge management model, which stage involves the leader joining others to make decisions?
• Which aspects are typically examined in sensitivity analysis within CVP?
• Which maturity level describes a follower who is willing to complete the task but lacks confidence?
• What is the overhead expenditure variance and how is it calculated?
• The strategy of selling an existing product in a new market is called
• Which term is the Veracity in Big Data most closely associated with?
• What is a likely result of increasing the money supply?
• Define ROI and RI and explain why RI can mitigate some ROI drawbacks.
• Which sequence correctly lists Fayol's five management functions (Planning, Organising, Commanding, Coordinating, Controlling)?
• What is a cash budget and why essential?
• How would you assess the risk of a new project using cost-volume-profit analysis?
• Which type of competitor, per Kotler, satisfies the same need in a different way (for example cinema vs pay-per-view streaming)?
• In Fiedler's contingency model, what does a high LPC score indicate?
• Which of the following is identified as a critical success factor element?
• Approximately what percentage of GDP is government spending in this framework?
• In Mintzberg's five Ps, which P corresponds to the actual location of the organization in the market?
• Which form is better for environments that undergo rapid change?
• Which of the following is NOT a form of corporate political activity described?
• In Handy's framework, which item is NOT part of the regulatory (conflict-specific) approach?
• Which of the following is NOT one of Porter’s three generic strategies?
• Why is it important to consider opportunity cost when deciding whether to discontinue a product?
• In Porter's model, what is the sixth force that can influence market attractiveness?
• In Porter's Diamond, which element represents the nature of domestic demand for a firm's products or services?
• What behavioral consideration is a potential demotivator when setting budgets and targets?
• In the Rational Model, which step involves evaluating and choosing among strategic options before implementation?
• Which of the following is a delegation type that involves seeking the views of others in the team?
• Which is the second Drucker question for driving strategy?
• How do you calculate labour rate variance and labour efficiency variance?
• Which knowledge area is primarily concerned with delivering the project within defined scope?
• Which is the element that specifically addresses policies and behavior standards in RSVP?
• Which of the following is a typical cause of price variance?
• In performance measurement, what is the role of non-financial measures in predicting financial outcomes?
• Which Porter's force describes the threat of substitute products?
• Which statement best describes responsibility in delegation?
• Content theories of motivation propose that motivation is primarily driven by which of the following?
• According to Stalk, who should lead the competition capability programme?
• In a position audit, which term describes resources that are difficult for competitors to imitate?
• Which delegation type means leaving the task to others?
• Which statement reflects a principle of Taylor's scientific management?
• Which statement best explains why a resource might support sustainable competitive advantage in the VRIN framework?
• Which Likert style is most participative with lots of delegation and frequent communication?
• Which of the following is a risk associated with foreign direct investment?
• Which budgeting characteristic is associated with potential demotivation among managers?
• Which statement best differentiates Process Theory from Content Theory?
• Which of the following is not a phase in the project life cycle?
• What is the aim of fiscal policy in this framework?
• Which budgets are typically included in the master budget?
• Which statement is true about GDP in relation to income earned abroad?
• What is the relevance of opportunity costs in decision-making and give an example?
• Which of the following is NOT one of the nine PMBoK knowledge areas listed?
• How is standard costing used to manage performance in manufacturing?
• Why are standards updated periodically and what triggers an update?
• Which statement best reflects Kotler's environmental analysis view on successful organisations?
• What is the significance of "uncontrollable variances" in performance evaluation?
• Provide an example of a non-financial KPI that aligns with strategy and explain its impact.
• How is the convention for using relevant costs in decision-making defined?
• What best describes distributed leadership?
• Which of the following represents a government action aimed at stimulating demand by acting as a customer?
• Peter & Waterman describe organizations with which structure?
• Which statement identifies an Internal Processes KPI?
• What is a rolling budget and its advantage?
• In cost-volume-profit analysis, what is the formula for contribution per unit?
• What is the inflation target range mentioned for the policy framework?
• Which of the following is a supply-side policy action to increase competition?
• What is the main purpose of a master budget in performance evaluation?
• Which center is primarily evaluated on return on assets and ROI?
• What is the impact of poor variance analysis on decision-making?
• Which set of needs did McClelland identify?
• Which transfer pricing method is simple to administer but may misstate profit?
• Which measure takes account of net income earned overseas?
• In the Hersey & Blanchard situational leadership model, which style provides high task direction and low relationship support?
• Which option describes a supply-side policy aimed at increasing labour efficiency?
• What triggers the Hawthorne effect?
• Which is NOT listed as a Kay business capability distinction?
• Campbell's RSVP framework includes which of the following elements?
• Which concept describes a continuum between authoritarian and participative leadership styles?
• What concept did Mayo's Hawthorne experiments illustrate?
• What should you compare when deciding whether to accept a one-off special order?
• What are the four phases of negotiation?
• Process Theory of motivation emphasizes what?
• In monetary policy, which action is typically used to deflate the economy by encouraging saving and reducing the money supply?
• In Bowman's Strategic Clock, which position is described as Low Price?
• In the Balanced Scorecard, which perspective would a cycle time KPI belong to?
• Why might ROI discourage necessary investments, and how can RI help?
• In the project life cycle, which phase focuses on defining the project and its feasibility?
• What role does ethics play in budgeting and performance measurement?
• A defining characteristic of sustainable competitive advantage is that it
• What is a core feature of using a balanced scorecard to balance short-term profitability with long-term capability development?
• Which item is a focus of a Change Adept Organisation?
• Weber identified three forms of authority; which is attached to the position rather than the individual?
• Which account measures trade in goods and services?
• Which KPI would best link process quality to cost and customer satisfaction?
• In the CSF concept, core competencies, skills and technologies are used to provide what?
• A 10% increase in spending on people yields about what productivity increase?
• Market Penetration describes growth by which scope?
• Which of the following is a possible source of sustainable competitive advantage under the positioning view?
• In Charles Handy's conflict framework, which is part of the environmental/general approach?
• Which needs form Adair's action-centered leadership model?
• On Blake & Mouton's Managerial Grid, what does 9.9 represent?
• Which statement best describes Operational Strategy?
• In Porter's framework, what is considered the sixth force?
• Which of the following is an example of a merit or public good provided by the government?
• In the ecological model, treating staff as assets and encouraging them to stretch is linked to
• Which statement best describes Business Strategy?
• Which statement best describes supranational culture?
• Which is a classic protectionist objective?
• Which statement explains how RI mitigates ROI drawbacks?
• Which variance is controllable by a manager?
• Define a flexible budget and explain how it differs from a static master budget.
• How would you evaluate the performance of a service department using cost and activity measures?
• Explain the difference between a fixed overhead volume variance and an overhead capacity variance.
• How would you design a performance measurement system for a manufacturing firm to balance short-term profitability with long-term capability development?
• How do you determine whether to accept a price offer that is below normal selling price?
• Adaptive approach to strategy (Mintzberg) is best described as
• Which KPI characteristic ensures data is available when decisions must be made?
• Which item is NOT a focus of a Change Adept Organisation?
• Which protectionist measure is described as administrative controls or red tape?
• Which of the following is NOT one of Porter’s four things to identify in competitors?
• Which expansion correctly corresponds to SMART objectives?
• According to Boyd, what is required of a transformational leader?
• Kotler's environmental analysis emphasizes focusing on which area?
• Content theories of motivation propose that motivation is primarily driven by what?
• What does contingency theory assert about management approaches?
• The Thomas-Killman model categorizes which of the following?
• Which is a correct sequence of steps in investigating variances and implementing corrective action?
• Which Porter's force covers the bargaining power of customers?
• M4 maturity maps to which leadership style in Hersey & Blanchard?
• Which phase of negotiation involves establishing ground rules and setting expectations?
• Power is defined as
• Which of the following is NOT a stated purpose of Wilson & Gilligan's Competitive Analysis?
• Which of the following is NOT part of Koontz & O'Donnell's criteria for effective delegation?
• Which transfer pricing method is simple to administer but may misstate profit?
• Which costing approach helps avoid fixed overhead distortion in product cost?
• Logical Incrementalism is characterized by
• How can performance measurement systems create behavioural issues, and what is a remedy?
• How can performance measurement be integrated with continuous improvement initiatives?
• Which statement aligns with competition capability according to Stalk?
• Which action is part of implementing Drucker's Management by Objectives?
• Which option is not one of McClelland's three needs?
• Which term describes the firm's capacity to renew competencies to match a changing environment?
• Diversification involves
• Explain the difference between incremental budgeting and zero-based budgeting; give an example of when each is appropriate.
• Which statement best describes a mechanistic organization?
• Which statement best describes the project manager's role in terms of trade-offs?
• What is the primary focus of Operational Strategy?
• According to the resources-based view, which selection best describes the focus to gain competitive advantage?
• Which option is NOT one of Mintzberg's three categories of managerial roles?
• In absorption costing, fixed overhead per unit is established by which of the following?
• Which statement best distinguishes mentoring from coaching?
• In the Rational Model, which step follows Mission & Objectives?
• What is the main drawback of using ROI as the sole performance measure for investment centers?
• After identifying the cause of a variance and assessing controllability, what is a typical next step?
• What is a KPI and what characteristics should be considered when selecting KPIs?
• Which of the following is NOT listed as a leader characteristic by Warren Bennis?
• What is responsibility accounting and how do cost centers, profit centers, and investment centers differ?
• Which Likert style is characterized by increased trust and some communication?
• How is contribution per unit of a constraint used to determine product mix when there is a limiting factor?
• In the Vertical Consistency Pyramid, which level sits directly above Corporate Goals?
• Which of the following is one of Warren Bennis' seven qualities of a leader?
• Fixed overhead volume variance arises from differences between actual output and budgeted output and indicates whether fixed overhead was under- or over-absorbed due to activity level.
• Which variance is not caused by price changes but by volume of activity?
• According to Woodward, which production type is associated with skilled, happy workers?
• Which instrument is primarily used in monetary policy to manage inflation and the balance of trade?
• Which method did Taylor advocate to improve efficiency?
• Which KPI would be most appropriate to measure quality improvement in a manufacturing process, and why?
• How should you handle budgetary slack or padding by managers?
• In the Rational Model, which activity follows Strategic Implementation (Change)?
• Which statement best describes a key benefit of using a balanced scorecard in manufacturing performance measurement?
• Which is the final phase of the project life cycle?
• What is a 'relevant cost' in the context of short-term decision making?
• When would you use a variable costing approach in decision making?
• Burns transactional leadership is characterized by what?
• Fayol's classical theory of management is most accurately described as which type of approach?
• Mayo's Human Relations School emphasized what as the key to better performance?
• Which is listed as a leader characteristic by Bennis?
• In Porter's Diamond, which of the following is included in advanced factor conditions?
• Emergent Strategy is described as
• In Drucker's Management by Objectives, which activity is used to set clear objectives?
• Which statement about overhead variances is true?
• Porter’s differentiation strategy is primarily about which aspect?
• What is the purpose of the master budget and how does it relate to the operating budget?
• VRIN characteristics stand for
• Product development in an existing market may require development of what?
• Which of the following is included among Bennis' seven qualities?
• What does corporate strategy primarily define?
• In performance measurement, which of the following is an example of a leading indicator of financial performance?
• Which statement correctly describes responsibility in delegation?
• Which of the following is NOT one of Lynch's three innovative competitive strategies?
• In a resources-based competitive advantage approach, which phrase best describes focusing on internal strengths rather than the external environment?
• What does First-pass yield measure?