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					               CIMA Chartered Management Accounting Qualification 2010


           Student Support Guide                            Paper E3 Enterprise Strategy




Introduction

This guide outlines matters to be considered by those wishing to sit the examination for Paper E3
Enterprise Strategy of the CIMA 2010 qualification. The first part compares the syllabus of Paper
E3 to that of the equivalent Paper P6 in the 2005 qualification and looks at issues relating to
transition from the 2005 to the 2010 qualification.

It should be noted that in the new 2010 syllabus learning outcomes are shown as overarching lead
outcomes, with several component outcomes resulting from that lead. The syllabus comparison
displays the learning outcomes from the previous syllabus with the component learning outcomes
from the new syllabus.

The remainder of the guide looks at issues that are likely to be relevant to all students planning to
sit this examination and ends with a series of ‘frequently asked questions’.



Overview of syllabus changes

Paper E3 has lost the section on assessing the competitive environment (20%) to the new Paper
E2 and gained change management (20%) from the old Paper P4. Change management had a
weighting of only 10% in P4 and has now been extended considerably. However the bulk of the
paper remains the same with some specific syllabus inclusions not seen previously and a general
update to reflect current developments. The skill levels were generally already at level 5 but there
are a few individual changes.

The direction of this paper reflects the increasing pace of change within organisations and the
continuing need to consider and evaluate strategic alternatives.




                                                  1
Syllabus comparison

    Old syllabus Paper P6                 New syllabus Paper E3                   Comments

P6 A – Assessing the                                                     • This material is now
competitive environment 20%                                                covered in Paper E2 –
                                                                           Enterprise Management,
 (i) identify relevant stakeholders                                        in section E2 A, now
 in respect of an organisation;                                            entitled Strategic
                                                                           management and
 (ii) evaluate the impact of                                               assessing the competitive
 regulatory regimes on strategic                                           environment (20%).
 planning and implementation;

 (iii) evaluate the nature of
 competitive environments,
 distinguishing between simple
 and complicated competitive
 environments;

 (iv) distinguish the difference
 between static and dynamic
 competitive environments;

 (v) evaluate strategies for
 response to competition.

P6 B – Interacting with the           E3 – A. Interacting with the       • The syllabus weighting
competitive environment 20%           competitive environment 20%          remains the same at 20%.

 (i) evaluate the impact and          1 (a) evaluate the impact and
 influence of the external            influence of the external          • The learning outcomes
 environment on an organisation       environment on an organisation       are largely unchanged but
 and its strategy;                    and its strategy;                    have been updated. For
                                                                           example:
 (ii) recommend pro-active and        1 (b) recommend approaches to        1 (c) refers to the
 reactive approaches to               business/government relations        demands for corporate
 business/government relations        and to relations with civil          social responsibility and
 and to relations with civil          society;                             the organisations
 society;                                                                  response where (iii)
                                      1 (c) discuss the drivers of         referred to the work of
 (iii) discuss how stakeholder        external demands for corporate       stakeholder groups.
 groups work and how they             social responsibility and the        2 (a) is concerned with the
 affect the organisation;             firm’s response;                     impact of the internet on
                                                                           an organisation where (v)
 (iv) discuss how suppliers and       1 (d) recommend how to               mentioned electronic
 customers influence the              manage relationships with            commerce.
 strategy process and                 stakeholders;
 recommend how to interact with                                          • There are changes in skill
 them;                                1 (e) recommend how to interact      levels:
                                      with suppliers and customers.        For example:
 (v) evaluate the impact of                                                1 (d) asks for the ability to
 electronic commerce on the           2 (a) evaluate the impact of the     make recommendations
                                                   2
   Old syllabus Paper P6              New syllabus Paper E3                     Comments
way business is conducted and     internet on an organisation and       on the management of
recommend an appropriate          its strategy;                         stakeholder groups while
strategy;                                                               (iii) required a discussion
                                  2 (b) evaluate the strategic and      (from level 4 to 5)
(vi) evaluate the strategic and   competitive impact of                 1 (e) requires the ability to
competitive benefits of IS/IT     information systems.                  make recommendations
and advise on the development                                           on how to interact with
of appropriate strategies.                                              suppliers and customers
                                                                        while (iv) asked for a
                                                                        discussion (from level 4 to
                                                                        5).

                                  E3 – B. Change management            • This material was
                                  20%                                    previously in Paper P4 –
                                                                         Organisational
                                  1 (a) discuss the concept of           Management and
                                  organisational change;                 Information Systems with
                                                                         a study weighting of 10%.
                                  1 (b) recommend techniques to
                                  manage resistance to change.         • Although the learning
                                                                          outcomes from Paper P4
                                  2 (a) evaluate approaches to            have been moved into
                                  managing change;                        this section, they are
                                                                          extended with a higher
                                  2 (b) compare and contrast              skill level to reflect the
                                  continuous and discontinuous            increased study
                                  change;                                 weighting. In particular:
                                                                         1 (a) requires a discussion
                                  2 (c) evaluate tools, techniques       on the process of
                                  and strategies for managing the        organisational
                                  change process;                        development while (i)
                                                                         asked for an explanation;
                                  2 (d) evaluate the role of             1 (b) requires the ability to
                                  leadership in managing the             recommend techniques to
                                  change process.                        manage resistance to
                                                                         change whereas (ii) asked
                                  3 (a) evaluate the role of change      for a discussion;
                                  management in the context of           1 (d) specifically identifies
                                  strategy implementation;               the role of leadership in
                                                                         managing the change
                                  3 (b) evaluate ethical issues and      process;
                                  their resolution in the context of     2 (b) identifies ethical
                                  organisational change.                 issues in the context of
                                                                         change.




                                               3
    Old syllabus Paper P6                  New syllabus Paper E3                    Comments

P6 C - Evaluation of Options,          E3 – C. Evaluation of Strategic • The syllabus weighting
Planning and Appraisal 30%             Position and Strategic            remains the same at 30%.
                                       Options 30%
                                                                           • This section has some
 (i) evaluate strategies for           1 (a) evaluate the process of         specific inclusions that
 response to competition;              strategy formulation;                 are not seen in the old
                                                                             Paper 6. These include
 (ii) evaluate the product portfolio                                         the evaluation of the
                                       1 (b) evaluate strategic options;     strategy formulation
 of an organisation and
 recommend appropriate                                                       process, game theory,
                                       1 (c) evaluate different              real options and
 changes to support the                organisational structures;
 organisation’s strategic goals;                                             organisation structure in
                                                                             the context of strategy.
                                       1 (d) discuss the role and
 (iii) prepare a benchmarking
 exercise and evaluate the
                                       responsibilities of directors in    • Benchmarking is now
                                       the strategy development              included under ‘models of
 results;                              process.                              performance
 (iv) identify an organisation’s                                             measurement’ in section
                                       2 (a) evaluate strategic analysis     E3 - D.
 value chain;                          tools;
 (v) evaluate the importance of                                            • 2 (c) asks for the ability to
                                       2 (b) recommend appropriate           produce an organisations
 process innovation and re-            changes to the product portfolio
 engineering.                                                                value chain where (iv)
                                       of an organisation to support the     asked for an identification
                                       organisation’s strategic goals;       of an organisation’s value
 (vi) discuss and apply both
 qualitative and quantitative                                                chain.
                                       2 (c) produce an organisation’s
 techniques in the support of the      value chain;
 strategic decision making
 function;                             2 (d) discuss both qualitative
                                       and quantitative techniques in
 (vii) discuss the role and            the support of the strategic
 responsibilities of directors in      decision making function.
 the strategy development
 process.

P6 D - Implementation of               E3 – D. Implementation of           • The syllabus weighting
Strategic Plans 30%                    Strategic Plans and                   remains the same at 30%
                                       Performance Evaluation 30%
                                                                             .
 (i) evaluate and recommend            1 (a) recommend appropriate         • Paper E3 now specifically
 appropriate control measures;         control measures;                     identifies performance
                                                                             evaluation in the title and
 (ii) prepare and evaluate             1 (b) evaluate alternative            includes a wider range of
 multidimensional models of            models of performance                 performance
 performance measurement;              measurement;                          measurement models.

 (iii) identify problems in            1 (c) recommend solutions to        • The distinction between
 performance measurement and           problems in performance               IT, IS and IM is removed.
 recommend solutions;                  measurement;

                                                     4
     Old syllabus Paper P6              New syllabus Paper E3                  Comments
 (iv) evaluate and advise          1 (d) advise managers on the
 managers on the development       development of strategies for    • Information Systems
 of strategies for knowledge       knowledge management and           content is updated.
 management, IM, IS and IT that    information systems that support
 support the organisation’s        the organisation’s strategic     • Old syllabus section D (vi)
 strategic requirements;           requirements;                      on change management
                                                                      has now been moved to
 (v) identify and evaluate IS/IT   1 (e) recommend changes to         new syllabus section E3 –
 systems appropriate to the        information systems appropriate    B
 organisation’s strategic          to the organisation’s strategic
 requirements, and recommend       requirements.                    • Skill levels generally
 changes where necessary;                                             remain unchanged.

 (vi) discuss the role of change
 management in a strategic
 context.



Knowledge gaps

If you have successfully completed Papers P4 and P5 on the 2005 syllabus and now have to sit
Paper E3 on the 2010 syllabus, the following should be noted:

   (a) New Paper E1 contains a section on the global environment which students will not have
       covered on the 2005 syllabus. E3 will assume some knowledge in this area and students
       are recommended to review this before starting their studies for Paper E3.

   (b) New Paper E2 contains a section on assessing the competitive environment which students
       will not have covered on the 2005 syllabus. E3 will assume some knowledge in this area
       and students need to review this before starting their studies for Paper E3.

   (c) New Paper E3 contains a section on change management that was included in Paper P4 of
       the 2005 syllabus. However the skill level now required is higher, with the topic being
       placed at a Strategic level.


Assessment methodology

There will be a written examination paper of three hours, plus 20 minutes of pre-examination
question paper reading time. The examination paper will have the following sections:

       Section A – 50 marks
       A maximum of four compulsory questions, totalling fifty marks, all relating to a pre-seen
       case study and further new un-seen case material provided within the examination.
       (Note: The pre-seen case study is common to all three of the Strategic level papers at each
       examination sitting i.e. Paper E3, P3 and F3).

       Section B – 50 marks
       Two questions, from a choice of three, each worth twenty five marks. Short scenarios will
       be given, to which some or all questions relate


                                                5
The Enterprise Strategy examination will primarily test the higher skills of application, analysis and
evaluation, using verbs from levels 3 - 5 of the CIMA verb hierarchy. You will be expected to use all
of your knowledge and skills, gained from your study of the Enterprise Strategy syllabus and earlier
parts of the CIMA Professional qualification, to analyse complex situations and provide insight and
advice. The scenarios used in this examination are based on real life, and also prepare you for the
T4 Part B (Test of Professional Competence in Management Accounting) examination.


Preparing for the exam

At the Strategic Level, textbook learning is not sufficient. In order to develop the required skills of
application, analysis and evaluation you need to use your knowledge to solve unstructured
problems. This can best be done by means of simulations and case studies, and by practising
examination-standard questions. You should also read articles in the business press, to become
familiar with how the models and theories studied at the Strategic Level can (or cannot) be applied
in the real world.


FAQs

Question                                  Answer

I have passed the old Managerial          Yes – you should look at the material relating to
level of the 2005 CIMA syllabus, and      assessing the competitive environment, which was
this is my first attempt at Paper E3.     previously contained in section A of the Paper P6
Have I missed anything that I need to     syllabus. This material has been moved to the new
catch up on?                              Paper E2, so you will not have studied it under the
                                          2005 syllabus. Section A of Paper E3 syllabus
                                          assumes that you have studied that material.

I have failed old Paper P6. Where         In three areas.
should I concentrate my efforts before
                                          1. You need to concentrate on the new learning
doing my resit?
                                             outcomes relating to change management,
                                             contained in section B of Paper E3 syllabus.
                                             While you may be familiar with some of the basic
                                             concepts (from your studies for Paper P4 in the
                                             2005 CIMA syllabus) you will not have developed
                                             the skill levels required to pass this examination.
                                          2. You need to look through the detail of the
                                             syllabus content, concentrating on those topics
                                             which are new (such as game theory and real
                                             options) or have changed (such as those relating
                                             to information systems). These topics will require
                                             (further) study, if you are to be fully prepared for
                                             the Paper E3 examination.
                                          3. The assessment methodology for the strategic
                                             level has changed. There is now a case study,
                                             with pre-seen and unseen material. The pre-seen
                                             element of this case is common to the three
                                             strategic level examinations. You should look at
                                             (and attempt) the specimen paper for this
                                             examination (see below).
                                                   6
Question                                 Answer

Where can I find the detailed syllabus   On the CIMA website under ‘the 2010 syllabus’.
for this paper?

Will there be a specimen examination     Yes – it will be available on the CIMA website at the
paper?                                   end of October.

What knowledge is assumed prior to       It is assumed that you have passed (or been
studying this syllabus?                  exempted from) all of the Operational and
                                         Management level papers. You should read the
                                         support guides for these subjects.

What will be the balance between         You should look at the specimen examination paper
calculations and discussions on this     for guidance (see above).
exam?


End
                                                                                          Ver1 Aug09




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