This document contains a summary of 9 questions that appear to be from an accounting exam. The questions cover a range of topics including: 1) Critically assessing a company's diversification strategy and recommending changes. 2) Explaining risks of e-commerce for customers and sellers. 3) Explaining benefits of business process reengineering before an ERP implementation. 4) Listing types of information needed to assess logical access controls of a hospital's IT system. 5) Advising a company on a corporate diversification strategy. 6) Critically evaluating a proposal to change a pottery business' products and markets. 7) Ensuring a fair disciplinary inquiry process

1. The HISAB 26h
NOV, 2021
School of Accountancy 3 hours
Lahore Additional reading time –15 minutes
BusinessManagementandStrategy
Instructions to examinees:
( i ) Answer all questions.
( i i ) Answer in black pen onl y.
( i i i ) Mention you CRN number in answer script
Question. 01
Swartz AG (SAG) is a German firm that has grown from a small engineering firm into a multinational
corporation employing over 100,000 people around the world. It has been in business for over 100 years and
currently has four divisions. The table below provides further information:
Further
Information
Motor Vehicle
Engine
Components
Power
Generators
/ Transmission
Engineering
Consultancy
Services
Medical
Devices
Business Started 1903 1927 1997 2011
% of SAG Revenue 37% 28% 14% 21%
% of SAG Operating
Profits
13% 27% 24% 36%
Rank in its
Industry
(Based on Revenue) 7th 5th 4th 2nd
Industry Lifecycle
Stage
Very Mature Mature Growing Growing
Rapidly
The senior management of SAG consider the motor vehicle engine components division and power
generators/transmission division to have considerable strategic fit. They also believe that the engineering
consultancy services division benefits from the reputation and brand built up by SAG. The medical devices
division has become very successful, but senior management do not consider that it has core competencies
that can readily fit with the other divisions.
The senior management of SAG have come under pressure from investors to review the firm’s corporate
strategy, and to potentially divest one or more of its divisions.
Required:
Critically assess SAG’s current diversification strategy. Recommend and justify if the firm should change its
corporate strategy to concentrate on a reduced range of businesses. (15 Marks)
Question. 02
Certified Finance & Accounting Professional Stage

2. E–commerce has gained a significant share of the overall market for goods and services in many countries.
However, in addition to its advantages, e–commerce has several limitations including risks for commercial
organizations as well as individual consumers.
Required: Briefly explain the risks associated with the use of e–commerce, from the customers as well as the
sellers‟ point of view and suggest measures that can be adopted to mitigate them.
(08 Marks)
Question. 03
The management of Utmost Textiles (UT) has decided to acquire an ERP solution. The ERP consultant hired
by the management is of the view that UT must conduct a business process reengineering (BPR) exercise
before acquiring the ERP solution. However, in order to save time, the management wants to conduct the BPR
exercise concurrently with the implementation of the ERP solution.
Required:
Explain the benefits of carrying out the BPR exercise. (05 Marks)
Question. 04
Modern Hospital (MH) has ninety computers, including three servers, which are connected through LAN.
There is one vacant network point in each department and in each of the four wards. Senior doctors use these
points for connecting their laptops to the network to view patients‟ history. Internet facility is available to all
users through LAN. Entrance to server room is through IT Manager‟s room. MH has deployed customised
user access control software developed by a local software house.
Required:
List the type of information (seven points) that you would require to assess MH‟s logical access controls.
(07 Marks)
Question. 05
Global computers inc (gci) manufacturers computers, servers, printers and peripherals. It sells globally and in
2015 it was the seventh largest firm in the sector – down from third five years ago. since it was founded in
california in 1983, gci has concentrated on the computer and hardware sector. inadvertently, gci has evolved
to focus on business clients – last year 94% of all sales were to corporate customers. While gci’s sales are
global, all 6% of consumer sales last year were in north america. for the past several years, it has struggled to
generate revenue growth and profits have declined each year - this is despite two separate organisational
restructurings and an increased marketing spend. the board has recently appointed a new ceo, lynda fordetti;
she is the first externally appointed ceo of the firm. lynda has commissioned market research which found that
corporate customers perceived gci products as “solid, reliable, efficient and technologically sound”, while gci
service levels were seen as “adequate but fine”. the research also showed consumers, in particular outside of
north america, were not really aware of gci, apart from it being “some big computer firm”. lynda has decided
that going forward, gci cannot remain concentrated only on the computer and hardware sector. although
outside gci’s current area of competence, lynda has initially identified two corporate diversification
alternatives: 1. outsourced it services. this service would involve gci building, managing and supporting the
full it infrastructure of client firms. to be accepted, lynda believes that ggi’s service division would have to be
entirely separate from its hardware division, and could not push the sale of gci hardware to client firms. 2.
consumer devices. this would involve gci manufacturing mobile phones and tablets for consumers. as the firm
is best known in north america, lynda thinks that gci would target that market first, before selling the devices
more globally.
Required:
Prepare a report for gci that assesses the strategic rationale for corporate diversification and advises lynda on
which option identified above should be investigated further, if either.
(10 Marks)
Question. 06

3. sarah Jane o’sullivan opened her pottery business – Kerry pottery - in 1983. The business has always produced
a very traditional style of pottery: hand-painted and decorated with flowers, trees and farm animals. the hand
crafted nature of the process means that production costs are high, but it allows the business to charge high
prices: for example, a single dinner plate may cost €20 or a coffee mug €15. The business is located just 5kms
outside Killarney, co Kerry. Killarney is one of ireland’s most popular tourist destinations, in particular for
american tourists. the business now includes the pottery, a visitor’s centre and shop, and a popular café. the
product range includes dinnerware, serveware, flatware, kitchen storage and table linens. to date, Kerry
pottery’s marketing communications strategy has been quite basic. it generally uses a combination of
information leaflets in all the local hotels, occasional newspaper advertising in the local paper and a simple
website (that does not facilitate online sales). there are also agreements with bus tour operators to include the
visitors’ centre on their tours of the county. ultimately though, the business relies greatly on word of mouth
and repeat business. sarah Jane’s daughter, moira, has taken over the running of the business although sarah
Jane still has to agree to any major decisions. moira is a little concerned at the customer profile of Killarney
pottery.
• 87% are over 40 years old
• 56% are from the usa,
while only 23% are irish moira has proposed to radically change the product range and target market for the
business. the proposal involves producing pottery that is much more modern and contemporary in style, and
targeting people under 40 years old. she proposes that this will happen incrementally over three years and as
a compromise, she suggests that three of the most popular traditional ranges will be retained. she also proposes
that this new marketing strategy will require the business makes use of more modern marketing
communication approaches.
Required:
(a) critically evaluate moira’s proposal to change Kerry pottery’s product range and target market. should
sarah Jane agree? (Marks 10)
(b) recommend to moira how digital marketing may be used as part of Kerry pottery’s integrated marketing
communications strategy. (Marks 07)
Question. 07
(a) As a Senior Manager in the Human Resources Department of Apex Bank Limited, you have been entrusted
with the task of conducting a Disciplinary Enquiry against Mr. Hameed Khan, an Assistant Manager in the
Bank Square Branch. The Branch Manager, who is a highly respected senior officer with considerable
experience, has leveled charges of aggressive attitude and gross misbehavior against the Assistant Manager in
dealings with his colleagues. What steps would you take to ensure that the Disciplinary Enquiry is conducted
in a fair and impartial manner and the final outcome is based on principles of equity?
(Marks 10)
(b)Appropriate Employee Compensation and Reward Packages are central to a healthy and enduring
relationship between the employer and the employees. These Compensation and Reward Packages comprise
of salaries and fringe benefits, pleasant working environment, career growth opportunities, challenging work,
self-respect and sense of achievement, etc. What principal objectives should an employer seek to achieve
through a well-formulated Employee Compensation and Reward system for a service-oriented company
operating in a competitive business environment?
(Marks 08)
Question. 08

4. Luminum plc is an AIM-listed company that manufactures a range of detergents, soaps and other hygiene
products, and distributes them to major retailers and independent customers in the UK. The board of directors
are developing two projects to expand the company's business into mainland Europe. However, management
has observed that the future of industry will depend on sustainability issues. Although business is currently
restricted to the UK, with plans for expansion into other parts of Europe, in the long run it must be able to
compete globally with competitors in all countries of the world, including developing countries in Africa and
Asia. Luminum plc will never succeed in becoming a successful listed company unless it can develop business
for global markets. Luminum plc is aware that competitors are already showing concern about sustainability
issues, such as disposal of toxic wastes, efficient use of scarce water, emissions to air and fuel consumption.
Management has reached the conclusion that sustainability is a lot more than just CSR and environmental
policy.
Required:
Prepare your analysis and explain what is sustainability is about and how it will affect industry in which
Luminum plc is operating. (Marks 10)
Question. 09
Briefly explain why focus on Compliance with Ethics is increasing day by day in our professional conduct.
Also highlight the reasons why professionals like Doctors, Auditors, Lawyers etc have to carry burden of
special obligation and fiduciary responsibilities towards their clients? (Marks 10)
(THE END)