Final Examination

The Institute of
Chartered Accountants
of Pakistan

Module E
4 December 2014
3 hours 100 marks
Additional reading time 15 minutes

Business Management
Q.1

Rivalry among competing firms is usually considered to be the most powerful of Michael
Porters Five-Forces Model of competitive analysis. Identify and illustrate the
circumstances in which rivalry among the competitors would be intense.
Also identify any one business in Pakistan in which you consider rivalry among
competitors to be intense and give a reason for your choice.

Q.2

Q.3

(a)

MNCs pursue policies of managing their foreign businesses through local nationals
of the countries in which the MNCs conduct their operations. Give four significant
advantages which the MNCs seek to achieve by appointing local staff in the countries
in which they conduct their business operations.

(04)

(b)

What are the advantages of having appropriately designed Job Application Forms?

(03)

(c)

Some organisations are moving towards policies of more frequent exercises of

Employee Performance Appraisal as compared to Annual Appraisals. Explain briefly
the main objectives of such shift in Employee Performance Appraisal policies.

(05)

Alpha Enterprises, a partnership firm, intends to launch a major expansion program

for which a large number of employees would be recruited for appointment at
different tiers in the firm. As Manager Human Resources advise the partners of the
main advantages and shortcomings of recruitment tests. Also identify and state the
key features of any four types of recruitment tests.

(08)

(a)

(b)

Business entities often fail to realise that high rates of employee turnover not only
result in high operating costs but also have adverse repercussions on the overall
performance of the organisation.
Identify the different costs and disadvantages associated with high rates of employee
turnover.

Q.4

Q.5

(09)

(07)

Joint ventures and strategic alliances are popular modes of penetrating in foreign markets
to achieve synergies and augment competitive advantages. Despite the potential benefits of
these partnerships, the participants must be cognisant of the risks of these arrangements and
keep them within manageable proportions.
Identify and explain briefly the risks which should be considered while negotiating
agreements for joint ventures and strategic alliances.

(08)

(a)

Identify the key stages involved in the process of conducting market research.

(05)

(b)

In the present business environment, consumer power is accorded more importance

by marketers than in the past. Explain briefly the factors which are responsible for the
increase in consumer power.
(05)
Continued on next page......

Business Management

Q.6

Page 2 of 2

Identify the strategy/policy that the companies are pursuing in each of the scenarios given
below and state the important features/characteristics of the strategy/policy:
(i)

Saaf Soap Company (SSC) is a manufacturer of washing soap for clothes whose
target market comprises of low income consumers. SSCs strategy is highly focussed
and it successfully fulfils the needs of customers who want to economise on their
day-to-day household expenditures.

(ii)

Wholesome Meat Company (WMC) is engaged in the business of selling meat and
caters to affluent customers who prefer to purchase good quality meat in a clean
environment. WMCs prices are approximately 25 percent higher than the prices
charged by the traditional meat shops.

(iii) Strong Steel Limited (SSL), a manufacturer of steel billets, intends to acquire and
develop its own iron ore mines within the country. Shipments of imported iron ore
are often delayed due to transportation bottlenecks and besides, the foreign suppliers
manipulate prices during peak demand periods causing uncertainties for SSL.
(iv)

Winall Appliances Company (WAC) is a leading manufacturer of refrigerators and is

rated among the four top players in the country. WAC is presently in the advanced
stage of establishing facilities for manufacture of air conditioners.

(08)

Q.7

In your role as an internal human resource specialist, explain briefly the human resource
policies you would recommend for a learning organisation which pursues and implements
a system of efficient knowledge management at all levels of the organisational hierarchy.
(09)

Q.8

(a)

(b)

Q.9

(a)

The edible oil industry in Pakistan is characterised by a large and expanding market
in which the leading players pursue aggressive pull marketing strategies.
Identify and explain briefly the main objectives and important features/characteristics
of the pull marketing strategies which might be pursued by these companies.

(06)

State the advantages which firms seek to achieve by developing ongoing relationships
with a base of loyal customers.

(04)

A phenomenon witnessed in several progressive business groups is to own and

manage diversified businesses.
Identify and describe significant corporate level strategies which these groups pursue
for successful management and operations of their diverse business enterprises.

(b)

Quality is a strategic advantage which can be achieved by an enterprise through

long-term commitment to excellence in all areas of operations.
Identify the factors you consider to be most critical for achieving quality as a
sustainable strategic advantage.

Q.10

(a)

(04)

Certain companies prefer penetrating in foreign markets through licensing

arrangements in the target countries instead of exporting or making direct foreign
investments.
Describe briefly the advantages which companies seek to achieve by pursuing
strategies of entry in foreign markets through licensing arrangements.

(b)

(08)

Identify six major impediments in attracting foreign investments in an

underdeveloped country.
(THE END)

(04)
(03)