AnswersStrategic Professional - Essentials, SBL Strategic Business Leader (SBL) ‘September/December 2022 Sample Answers In the Strategic Professional Examinations itis not always possible to publish suggested answers which comprehensively cover ali the valid points which candidates might make. Credit will be glven to candidates for points not included in the suggested answers, but which, nevertheless, are relevant to the requirements. In addition, in this integrated case study examination candidates may ‘e-Introduce points made in other questions or parts of questions 2s long as these are made in the specif context of the requirements Of the question being answered. The suggested answers presented below inevitably give much more detail than would be expected from most candidates under ‘examination conditions, and include most of the obvious points evidenced from the case Information. The answers are therefore {intended to provide a structure of the approach required from candidates, and cover the range and depth of knowledge relating to ‘each task which might be demonstrated by the most well prepared and able candidates. They are also intended to support revision ‘and tuition for future examinations. 1 To: The Board of directors From: Senior finance manager Date: September 20X2 ‘The external drivers of change impacting on QH Introduction ‘This report considers the kay external divers of change which are likely to Impact on GH in the next five years. External drivers of ‘change are things, events or situations which occur outside the organisation, which may impact on the way it operates, either in a Positive or negative way. Each of the drivers considered below could have a significant impact, either positively or negatively, in the next few years and therefore QH must identify appropriate strategies to manage the potential changes these wil cive. External drivers of change Customer-ted drivers Demand for homes in Motil is likely to continue to grow, with a population growth of 6% predicted in the next decade. This will inevitably mean the need for more new housing and a wider range of housing options to be provided by house builders such as GH, This can be evidenced by the changing demographies, with the growing preference for later marriages, an increase in single ‘occupier homes and an ageing population, Therefore, GH should consider the housing needs of each demographic segment, in order to satisfy these customer groups. These housing needs will certainly drive the types of houses which we expect to bulid inthe future, In addition, the economic outlook for customers is highly favourable, with low unemplayment ratas and low intorest rates predicted, ‘thus increasing consumer confidence. When consumer confidence is high, itis more likely that customers will consider purchasing a new home. In addition, customers are becoming more and more demanding as is evidenced by the complaints QH has recently received about its customer services and is falling customer satisfaction rating. Therefore, customer demands are likey to be a key ctiver of change for QH in the coming years, particularly in how we manage and deliver customer expectations Government-ied drivers The goverment is clealy supportive ofthe house building industry in Morlia, which is @ positive driver for change, as evidenced by its commitment to delivering 200,000 new homes each year by the end of 20X8. In addition, the upcoming Planning Policy Framework should impact on the ease and speed of obtaining land for housing development, which should enable QH to build more houses more quickly, in those ereas vinere customers want to ve. Improved Working relationships between Nlouse bullders an local authorities regarding gaining access to development sites should be a key positive driver of change. Competitor-ed drivers Such nigh demand for housing in the next few years wil ikely increase competite rivalry In the house bullding market and attract new entrants to the market. Currently, the top five house buliders in Moria construct and sell more than 80% of the new homes built and with an expected 200,000 new homes required each year for the next six years, competion to build these homes will be intense. This is likely to not only be amongst QH's clases rivals but also against the smaller rivals and new entrants to the market, ‘who may offer a better or more personalised customer service, New entrants offering altemative and improved services to the ‘established house building providers such as QH are likely to have a large impact on the market and therefore QH must maintain a ‘lose focus on its competitive environment, as it will inevitably drive change. Environmental-led drivers Governments around the world are increasingly focusing on sustainability and this will Inevitably impact on the house building industry tis likely that in the coming years Moria’s government will look towards implementing more policies driven by international ‘expectations for sustainable homes, meaning that GH will have to focus more on reducing its environmental impact and building sustainable and environmentally frendly homes. These environmentally focused developments are also driving technological change In the house building industry, with new technologies, such as solar energy heated homes and greater intemet connectivity to ‘enable ‘smart’ homes likely to become more mainstream. Therefore, GH will also need to consider how it can integrate more environmentally focused technology within the houses which it builds to match the expectations of not only Its customers but also the government.Conclusion There are soveral key external drivers of change that are likely to impact on GH in the next five years, which must be considered if we are to remain the leading house building business in Morli. Government led changes are creating a positive environment for growth in the house building industy, boosting customer confidence bul there are also key competitive, environmental and technological ctivers of change which could impact negatively on QH's strategie position if not acted upon effectively and decisively in the coming yeas. ‘To: Chief executive officer, QH From: Senior finance manager Date: September 20X2 Integrated reporting () Introduction This report explains the roe of and evaluates the value of to GH and its wider stakeholders. As the corporate landscape develops, could be seen as a vital tool to express our value creation, heloing QH to provide more authentic, comprehensive ‘and meaningful information about all aspects of our performance and value creation to both internal and external stakeholders. Role of ‘An integrated report would set out how QH's strategy, governance, performance and prospects would lead to the creation of value. Its primary ole being to explain to providers of financial capital how GH creates value over time An integrated report should also benefit all stakeholders interested In QH's ability to create value, Including GH’s employees, ‘customers, supplies, local communities, local authorities and the goverment, However, it must be noted that the primary role Is, to provide more focus on explaining in more detall the value creation to QH's investors of financial capital, as attompting to alm the report at all stakeholders would be an impossible task and could reduce focus and increase the length ofthe report, therefore being ‘counter-productve tothe aim of , Therefore, getting the correct balance is vital to ensuring is effective, Historical financial statements are essential in financial reporting, but these do not provide real insights into how business value is created. has a key ole in showing a fuller picture of QH's value and importantly, offering a more holistic view ofthe business, The key role ofthe integrated report is to enable our stakeholders to make more informed assessments ofthe organisation and its {uture prospects. Value to QH = <1R> would allow QH to telts own story tots stakeholders by highlighting how value fs created more effectively, both internally {and extemally, in a succinct and user-iendly way. This would help GH to gain the trust of a wide range of stakeholders. This could also help secure its reputation by encouraging better relationships with investors, employees, customers, suppliers and government, —_ could assist GH to better understand and connect the diverse sources and drivets ofits long-teim value. This should enable betier strategy formulation, decision-making and strategy implementation = and organisational value. Large institutional investors require Information on business models, strategy, and the key resources of the businesses in which they invest. Improved reporting through on these key areas of the business 1s important to investors’ understanding of QH and will influence their Investment of capital Value to stakeholders GH's mission recognises its need for engagement with stakeholders and could help achieve this. The current KPIs are balanced between financial and non-financial which is useful for informing a range of stakeholders, but these are limited as to the value they can create forall of our stakeholders. Using would show how QH has used these ta make lis houses. This Information would be ot value to its suppliers and government, who are interested in the resources we use and how we use them. 3. Intellectual capital ‘This would report intangible value creation, such as the RAD and innovation which underpin GH’s basis of competion. These can add value to customers and employees in the Iong term by creating future products nd skils base.4, Human capital ‘This would reporton the knowledge, skills and experience of QH’s employees. I will show how value has been created through better training and skils development in the workforce and will be of value to current and future employees and the wider ‘community, 5, Social and relationships capital This would report relationships with external stakeholders which should enhance societal and community connections. If local communities, local authorities and government value QH’s contribution to society through community projects or social Improvement, then value is created in this way. 6. Natural capital Environmental activities can be reported through metrics based on CO, emissions, wastage, andor through the organisation's activities. Wider community stakeholders and the government will gain particular value from such information, as they will be able to better assess QH's contribution to/impact on the natural environment. Conclusion could help QH create value and tell ts own story and contribute to mote efficient and betterinformed investors and capital ‘markets, through having a broad, mult-capital focused reporting structure. @ Internal memo To: Development site controllers Date: September 20x2 The importance of cost management and control ‘Strategic importance to QH ‘Adhering to QH's site cost management and control activities wil play a key role in placing QH in a strategically competitive position. As the competitive environment has intensified and the expectations of customers is increasing, a competitive house price Is not the only relevant factor for QH's customers, From the KPIs published in the latest annual report, in the last two years QH’s operating profit margin has dropped from 29-9% ln 2069 to 26-8% in 20X1, indicating that costs are increasing 2s a proportion of revenues. A reduction in profit wil impact fn funds available for investment into the business which in turn will impact on the success of QH. Improved cost management at site development level wil play a fundamental role in Improving overall pertormanice of the business. GH operates in a highly competitive market and therefore effective cost management and control activities are Important in ‘maintaining compettive advantage. These will help to strengthen business performance and ensure that sufficient resources, are available to invest in urther housing development sites and, ultimately, the growth and success ofthe overall business. In adcition, large investors will study a wide range of QH's management strategies before investing, and sound cost management {and contol activities says a lot about the health of our business. Poor cost control and management not aly impacts on overall proftabilty but could also damage investor confidence H's management, including you as site contollers, should view cost management and contiol activities as a ertical source of potential competitive advantage and as a tool which can be used to contol the waste and inefficiencies on housing development sites which can inluence the performance and image of OH. Our development sites are the key drivers of QH's total costs and therefore you, as site controler, play a fundamental role in ‘managing these costs and ultimately its overall financial performance. () Confidential memo To: The chief executive officer, QH Date: September 20x2 ‘The Shendar development review: business and ethical threats ‘Thank you for inviting me tothe recent meetin to consider the issues which occurred on the Shendar development site which hhave led to some recent negative publicity, As the audit and risk committee is responsible for monitoring adherence to our code of ethics, | recommend that this Commitize should carefully consider the contents of tis memo. Business threats and ethical issues Drainage issues It was noted at the meeting that compensation had been paid to customers for damages caused due to a drainage problem, hich caused flooding. There is nothing unethical in payment of compensation and, in fact, Is @ sound business policy to ‘maintain customer goodwill. My concern Is that the site controller belleved this compensation was paid to ‘keep customers Quiet’ and not as part of the obligation wo have to our customers to provide build quality assurance. The site controller's, statement is conceming, as it suggests a lack of professional competence in believing that the compensation paid was to ‘keepcustomers quiet. A potential business threat is that this particular site controller could take this approach with other on-site Issues, which could be seen as ‘bribery’ and would lead to damaging reputational consequences for QH. Root tiles issue ‘Another ethical issue identified in the discussions at the meeting was the lack of integrity displayed by the site controler in the attempt to pass off roof tles as locally sourced ones, which would have broken local planning regulations. The site controller did not appear to be aware that this was not only dishonest, but also could potentially have resulted in either a fine from the local planning authorities or high rectification costs, tad the non-authentic roof tles been sourced and used. Integrity was not displayed here and there was a worrying ack of understanding ofthe potential financial and reputational consequences of such a breach, Quality and accidents, ‘There is @ question about the site contrlla’s professional competence and due care relating to his attitude to the use of ‘ower quality materials and less labour time on roofing each house. The issues identiied not only compromised the quality of the rooting, but aso clearly put the roofing staff in dange, a8 evidenoad by the higher than average level of accidents which loccurted on this housing development site. The professional behaviour and professional competence of the site controller is. |uestioned, in his lack of awareness of the higher level of accidents. However, this could also be a serious business threat for QH ifsite controllers are not made aware of key measures, such as the level of accidents on the sites which they manage. His focus seems to have been on meeting the budget at all costs. This isa clear issue for the board to consider. The site controller considers that he is being forced to act lke this because of QH’s budget focus. Either he is not fully trained of aware of how to manage a budget effectively of QH needs to review its budget management expectations and how it report key statistics such as accidents on sito Ignoring emails However, the site controler admitted that he does not read his emalls, so he may miss many Important pieces of information, ‘as well as ignoring customer complaints. Again his professional competence is questioned in this instanco, as it Is part of his, Job to manage all aspects of the site, including customer communications, By lgnoring his emails, he may also be missing key Information which Is important to the successful completion ofthe site and the safety ofthe on-site staf, Business consequences ‘The largest business teat isthe overall potential damage to QH's reputation. As you are aware, GH faces a challenging and highly competitive market and such ethical breaches could damage customer goodwill and result in QH losing its place as, the number one house builder in Morlia. With new entrants being successful in the market in the last five years, such ethical breaches could result in loss of future business and loss of investor trust. Much ofthe site controlr’s behaviour is at odds with, the customer focused culture as expressed in QH's strategic objectives. This atltude could have a negative impact on all sit team members whom this site contaller works with, which could have a negative impact on the performance of tat sit. (@) Slide 1 Benefit of two separate committees = Allows each committee to focus on specific areas — Allows backward and forward-looking reviews = Reduoes overload of work on one commit — Maintains the independence of the audit committee By having two separate committees, QH can ensure that appropriate and separate attention fs given to backward and forward-looking risk and assurance functions. A separate audit committee would have a ‘backward-ooking’ responsibilty for assessing the effective implementation of policies decided by the board. A separate risk committee would in parallel with, but separately ftom the aucit committe, have a more forward-looking focus, with responsibilty for determining risk tolerance and risk appetite in the context of future strategy and the oversight of risk in real-time. Current, the remit of the audit and risk commit is very wide and covers many diverse areas of responsibility. Spliting the responsibilities will allow greater focus on specific areas of audit and assurance responsibilities and on risk responsibilities, allowing for more expert focus on each. More time could be dedicated to purely audit and assurance by the audit committee and risk management control, assessment and monitoring by a risk committee. Importantly, it allows the audit committee to ‘maintain more effectively its independent oversight role ofthe Business,Slide 2 Challenges of two separate committees — Potential confusion of reporting of internal audit ~ Workload of existing non-executive dlrectors = Spreading non-executives too thiniy ~ Dilute focus However, a separation into two committees may cause some confusion in reporting lines forthe internal audit department. ‘Although itis recommended that they should primarlyreportto the audit committe, the intemal auait department is responsible for managing GH's tisk register, so there will need to be some liaison with the isk committee, Therefore, ensuring that lines of authority do not overlap would need to be addressed to ensure that the risk register is maintained effectively, that lines of reporting ate clear and that key audit activities are not overlooked. Another committee would create more meetings for non-executive directors who may alteady be working at full capacity and likely to already be members of multiple committees. This could potentially dilute the focus of attention across all areas of ovemance, as non-executive directors’ time would be spread more thinly (0) To: Chair of the audit and risk committee Briefing note: Proposed principal risks and their mitigation Labour and resources ‘Access to an appropriately skilled workforce isa key requirement for QH. The increasing demand for houses to be bulttin Moria, Inthe foreseeable future in turn increases the demand for skilled labour, This wil also increase pressure on costs, which could adversely impact on our strategic objective of maintaining our financial stength. Additionally, an inability to secure the required levels of skilled labour to meet Mort's future housing demands means that QH may be unable fo maintain and bull a diverse and falented workforce which is sufficient to meet the demands of our customers. ‘A further risk is that land may be purchased at too high a price, or in the wrong location for customers’ housing neads or at the wrong time in the housing market cycle. All these factors could impact on the strtogic objective of maintaining financial strength and could also adversely affect QH's abily to provide quality Homes where people want to live. ‘Mitigation Projected build programmes should be monitored closely to manage labour requirements effectively. Operating in-house apprentice and training programmes to support the supply of skilled labour are also advised. QH should commit to possible Wider external initiatives to address industry-wide skills shortages with other house building companies and supporting trade oiganisations and bodies. An important mitigating activity isto retain key staf through a range of actvitles, including employee engagement surveys, development of performance management trameviorks, career management iniiatves and incentives. At boat level, the nomination commie should oversee these processes and promote effective succession planning. To mitigate its land resource risks, QH should maintain strong land holdings. All land purchases should undergo rigorous, assessment and must meet specifi levels of projected retums. The board should determine appropriate timing of land purchases regarding existing market conditions and predicted house sales rates climate change The effects of climate change are causing most goveriments across the world to focus on reducing their carbon autput. This is. likely to result in increasing regulation, causing addtional planning delays, increased costs of materials within the construction process and potentaly limit supply of materials or require additional features which could increase costs. In adaltion, changes In weather patterns and the frequency of extreme weather events, particularly storms and flocding, may inctease the likeliiood of distuption to the construction process and may require additional costs to guard against such events. Any additonal costs Will impact on returns to investors andi our ability to maintain financial stiengin. However, focus on climate change initiatives, should positvaly impact on QH' strategic objective of supporting sustainable communities by embedding environmental and sustainability considerations into its core competencies. ‘Mitigation Monitoring operational efficiency and direct environmental impact should be undertaken, including measuring CO, emissions and the amount of waste genetated for each home. Development of a climate change risk register would ensure that the ‘management and mitigation of climate associated risk is embedded within the QH's risk management process. Consideration, Of potential impacts of climate change should be undertaken throughout the land acquisition, planning and build processes, {and QH should work with planning authorities and other statutory bodies to manage and mitigate these risks, QH could also engage with the housing industry and the government to develop industry wide solutions to meet climate change requirements5 ‘To: Chief operating officer Date: September 20X2 @ (oy Briefing paper: Customer service process re-design Process-strategy matrix The customer services process fs clearly a concern for QH which has been highlighted in a recent newspaner report. The current customer services process does not seem to take into account the complexity of the customer services needs of our customers nor the strategic importance to QH of having strong customer services. ‘A useful tool which could be used to help the project team to decide what type of process re-design Is appropiate is the Harmon process strategy matrix ‘Strategic importance tow High ‘Comex rors Dut Tow satel | Complex and dynamic pracessos hat sien |Poraee provide competitive advantage T = | potentia to outsource Improve through business process redesign Process complexty Routine, Salehoward processes Routine and staightorward but provide compettive vantage tow Potential to automate or outsource _| Potntal automation to improve efelency or add value In terms of process complexity, GH's customer services process is not routine or straightforward. In a recent news report, GH customer's have complained that their individual needs and requirements have not been met, suggesting a degree of complexity Inthe customer services process. This means automation (such as FAQs on the website) would likely be insufficient to improve customer services, In terms of strategic Importance, customer service isa critical activity for GH, as competitive rivaty Is increasing and new entrants have recently successfully accessed the market. Keeping customer satisfied Is a key requirement for QH and Is likely to be citcal to retain competitive advantage. When customers are buying high value products such as a house, they expect to receive a high level of customer service, as noted by feedback In the recent news report Also, the damage done to GH's reputation by customers stating that they will not be recommending GH to other potential customers is likely to he significant, particularly when one of QH's core capabilities is to develop a business based on strong customer relations and one of QH's. strategic objectives is to provide high quality homes and customer service’. QH has clealy set out in its mission and strategic objectives that customer service isa sttatagic pricy for QH, yet, asthe atcle suggests, it would appear that the focus on its stateglc importance has been lost. Therefore, using Harmon's process re-design matrix, the customer service process falls nto the top right hand quadrant, as tis, ‘complex and dynamic and should not be automated, Customer services are crucial to adding value tothe business and helping (GH make profit and therefore must be carefully investigated, analysed and improved. Cleary, QH's customer services process Would benefit from a process re-design Roles and responsibilities of the project sponsor Roles ‘As the project sponsor, you have overall accountability for the customer services re-design project. You have an important tole in the leadership of the project by providing your expertise and business knowledge of QH to the project manager and project team. You will also be required to make any decisions which are beyond the authority of the project manager, such as, authorisation of additional resources. As the project sponsor, yau wil also play an Important role In communicating the project progress and outcomes to key stakeholders, such as the boatd and shareholders, Responsibilities, You should take part in the Initial planning and scoping of the project so that you fully understand the key outcomes and expectations ofthe re-designed customer servioes process and thatthe business Case for custome services re-design Is viable and valid. As the project sponsor, you must ensure that the customer services process re-design projec is aligned with QH's business strategy and you must have set out clear criteria for the suocess of the new customer Services process. ‘A key responsibility ofthe project sponsor is also to negotiate the required funding and resources for the project. This will require thorough planning of the resource requirements (including funding and securing appropriately skilled and experienced staff in customer services) which will need to be presented to the board. You will also need to liaise with key stakeholders such, 2s staff and customers to ensure that the project scope and direction are aligned to customer needs and expectations. It is your responsibilty to make sure that the project is appropriately organised and that its priority and focus is sustained throughout the life of the project. Its clear that customer services delivery Is of strategic importance to QH and therefore you ‘must make sure that focus on this is maintained by not only the project team but also that other members ofthe organisation recognise its importance and support the customer services re-design project. 8You should also be available to support the project manager and the project team members, particularly in escalating any {sues to senior levels of management about project progress, Throughout the life ofthe project, you should continually check on the status and performance ofthe project and lise with the project manager regularly. You will be the main source of information ta the board on project progress. As the project sponsor, you may be too busy to participate in detailed day ta day decisions. However, close coordination between the manager and the Sponsor is necessary throughout the whole project to facilitate success,Strategic Professional - Essentials, SBL Strategic Business Leader (SBL) ‘September/December 2022 Sample Marking Scheme 1 Award 1 mark for each relevant point explained relating to external drivers of change affecting QH (Up to.@ maximum 14 marks in total) Key points Customer-ted drivers Population growth — increase demand for houses = Changing demographics — incroase demand for varity of housing Low unemployment and interest rates — increasing consumer confidence = Customers more demanding ~ more complaints Government-led drivers Government supportive of housing industry Committed to delivering 200,000 homes pa. = Planning Policy Framework impact Improved relationship with local authorities Competitor-ed drivers = Demand increases competitive rivalry = Attracting new entrants = Competition intense = _ New entrants offering atractive services Environmental-led drivers = Governments focusing on sustainability = More regulations — criven by international expectations = Reduce environmental impactbuild sustainable homes Driving technological change in the industry Professional skills may be additionally rewarded as in the following rubric: How wellhas | Not atall ‘Not so well Quite well Very well the candidate demonstrated professional skills as follows: Analysis skits | The candidate has The candidate nas The candidate The candidate inconsidering | demonstrated no demonstrated timited | has demonstrated ras demonstrated and reflecting | anaysis skis. Thoro is | analysis skis. The 00d arialysis skis. ‘excallnt analysis ertectvely on the | no evidence of using or | candidate nas reflected | The candidate has skis. The canatdate relevant extemal | reflecting on the mest | on some of the relevant | considered and reflected | fas considered and information and | relevant information and | information but has effectively on several —_| reflected very effectively evidence which | evidence to effectively | identified a limited ppoints rom the relevant | an most of the relevant could assist QH | assist QH in identifying | number of key external | information and evidence | information and evidence in identifying ts | tts key external drivers of ‘| drivers of change which | and has identified a ‘and has identified most? extemal crivers of | change. would be of use to the | reasonable range of all of QH's key external change, board. relevant key external _| drivers of change useful Report drivers of change. to the board. The answor isin an The answer isn an ‘sppropriate report appropriate report format. fonrmat. ° 133 2-66 4 ul2 Award 1 mark for each relevant point made in elation to the ole of (Up to 4 marks), Award 1 mark for each relevant point made in relation to ts value to GH (Up to 5 marks) ‘Award 1 mark for each relevant point made in relation to its vaiue to wider stakeholders (Up to 6 marks) (Up to a maximum of 12 marks in total) Key points Role of = Biplain to investors now GH creates value over time = Explain to stakeholders QH's ability to create value for them = Demonstrate fuller picture - more holistic view of QH = Enable stakeholders to make informed assessments Value to QH — Allow GH to tal vin story to stakeholders Assist QH to better understand diverse sources/divers of value Enable better strategy formulation, decision-making and strategy implementation = Help gain trust of a wide range of stakeholders = Help secure reputation — better relationships with stakeholders Better informed investors — more likely to invest Value to wider stakeholders Lenders and investors — interested in how funds used to generate investors returns — financial capital Suppliers, staff and government - want to know about the products GH produce - manufactured capital = Customers and employees - interested in intangible value (R&D/innovation) — intellectual capital Current and future employees and wider community — interested in knowledge, skills and experience - human capital ~ Local authorities and government — interested in elationships to enhance societal and community connections and contribution, to society ~ social and relationship capital = Wider community and government - interested in environmental and natural resource usage — natural capital Professional skills may be additionally rewarded as in the following rubric: How weltnas | Not at all ‘Not so well Quite well Very well the candidate demonstrated professional skills as follows: Commarciat The candidato has The candidate has The candidate has The candidate has acumen skits in| demonstrated poor demonstrated tmted | demonstrated good demonstrated excelent using appropriate | commercial acumen. | commercial acumen. | cormmercial acurnen. | commercial acumen professional There is no evidence of | There is some evidence | There is reasonable skis. The candidate has judgement to | commercial judgement | of commercial judgement | evidence of appropriate | demonstrated strong determine the | shown in demonstrating | shown in demonstrating | commercial judgement | commercial judgement fale of | anunderstanding of | some understanding —_| used in determining in clearly determining and its value to | the ole and value of |_| of the role and value | the ole and vatue of | the rale and the QH and its wider | for QH or fs of to QH and - to QH and its value of to QH stakeholders, stakeholders, The answer | its stakeholders. There | stakeholders. Application | and its stakeholders, Report 's woly theoretical was evidence of some | of the value to H and | Application to @H and pplication to GH and its | its stakeholders was Its stakeholders was stakenalders, but it was | sound. excellent. limited. a s The answer was The answer was presented in ant presented in an) ‘appropriate report ‘appropriate report format. forrnat. 0 1 2 3 123° (a) Award up to 2 marks for each developed point relating to the sttategic importance of site controllers adhering to QH's cost ‘management and control activities. (Up to a maximum of & marks in total) Key points Strategic importance = Competitive environment intensified — expectations of customers increasing = Operating profit % falling — costs increasing — need to be managed more effectively = Cost managementicontrol important in maintaining competttve advantage — Investors favour businesses with sound cost management — Assists control of waste and inefficiencies — influence performance and image Professional skills may be additionally rewarded as in the following rubric: How welt has | Not at all ‘Not so well Quite well Very well the candidate demonstrated professional skills follows: Commercial The candidate has The candidate nas The candidate has The candidate has ‘acumen skis | demonstrated no demonstrated tmted | demonstrated good demonstrated excellent in showing commercial acumen. The | commercial acumen. | commercial acumen. | commercial acumen. commercial candidate demonstrated | There is some basic Theres reasonable There is strong evidence insight into the | no commercial insight | understanding of the | evidence of commercial | of sound insight into the Importance ct | into the importance of | importance of cost Insight into the strategic importance of ettecive cost | cost management and | management and control | importance of cost cost management and management and | control specific to QH’s | activities but oniy ited | management and control activites, directly contol activities | housing development | insight of ts importance | control activities, directly | applied to QH’s housing for OH. site activites. directly to QH's housing | applied to QH’s housing | development site Memo development site development site activities, The answer activities, activities, thas a strong stratenic Tho answor was focus, presonted in ant Tho answer was ‘appropriate memo ‘prosented in an format. ppropriate memo fonrmat. ° 1 2 3 13o) ‘Award up to 2 matks for each point identified and explained relating to the business threats or ethical issues raised. (Upto a maximum of 12 marks in total) Key points Drainage issues = Lack of professional behaviour — compensation paid to ‘keep customers quiet’ = __ Business threat ~ reputational consequences Roof tiles issue = Lack of integrity — attempt to pass off roof tes as locally sourced = Broken local planning regulations — fine or rectification costs = Business threat ~ potential financialreputational consequences Quality and accidents = Lack of professional competence — attitude to use of lower quality materatsiless labour — Compromises quailty of roofing - puts staf in danger ~ Lack of awareness of higher leva of accidents ~ serious business threat — Focus on meeting the budget at all costs = _ Business threat ~ poory trained site controllers, Ignoring emails = Lack of professional competence and behaviour — ignoring customer complaints = Business threat - ignoring key information important to completion of site/Safety of staf Overall business consequences = Damage to reputation — Highly competitive market - could damage customer goodwill — Result in loss of future business and loss of investor trust Professional skills may be additionally rewarded as in the following rubric: How well has the candidate demonstrated professional skills follows: [Not at all [Not so well Quite well Very well Scepticism skis in challenging professionally and appropriately the The candidate has demonstrated no scepticism skis. There is ‘no evidence of challenge The candidate nas demonstrated fimited scepticism skils. The candidate has presented The candidate has demonstrated 2000 scepticism skis. The candidate has The candidate has demonstrated excellent scepticism skis The candidate fas comments made | made to the comments | some limited challenges | professionally and professionally and atthe meeting. | at tne meoting, or the | to the comments mado | appropriately challenged | appropriately challenged confidential Challenges presented —_| at the meeting, but a reasonable range of | 2 wide range of the ee 2re unprofessional) some chatfenges made | the comments made at _ | comments made at inappropriate. are not appropriate or | the meeting the meeting and has professionally made. Tre answer presente | eREMSe the most ee ‘important business an ‘oamat me ethical threats to QH. The answer is presented ina sultable memo fournat. ° 1 2 3 144 (a). Award 1 mark for each relevant benefit and challenge identified (Upto a maximum of 8 marks in total) Key points Slide 1 notes = Greater and mote expert focus on each = Allow backward and forwarc-looking review — More time dedicated to each = __ Audit committee independence Slide 2 notes = Confusion for intemal aut department — Need some liaison with the risk committee = Create more meetings for non-executive dtectors — consider appointing additional non-executive with tisk management experience = Dilute focus of non-executive directors Professional skills may be additionally rewarded as in the following rubric: How wellhas | Not at all ‘Not so well Quite well Very well the candidate demonstrated professional skills as follows: Communication | The candidato has Tho candidate has Tho candidato has Tho candidate has stils in domonstrated no demonstrated limited | demonstrated good demonstrated excellent persuasively communication skits. | communication skis. | communication skits. | communication sls. and objectively | The presentation is not | The presentation is not | Most af the presentation | The presentation is informing board | clear and would not be | always clear or concise | fs reasonably clear and | clear, concise and members of ‘appropriate or effective | and only some of it would be appropriate | is highly effective in the proposed | in informing the board | would be appropriate | and effective in informing | objectively and effectively changes to QH's | members effectively of | and effective to inform | the board members of | informing the board risk management | the proposed changes | the board members of | the proposed changes | members effectively of framework. to the risk management | the propesad changes | to the isk management | the proposed changes Presentation framework. to the risk management | framework. to the risk management slides and notes, Framework, The answer contains | T@mework. both appropriate slides ‘and notes. The answer contains both appropriate slides and notes. 0-66 133 15o) ‘Award 1 mark for each point made related to each of the proposed principal risks. ‘Award up to 2 marks for each developed point made in relation to explaining mitigating activities for each of the proposed principal sks (Up to a maximum of 12 marks in total) key points: Labour and resources = Increasing demand for skilled labour — increase pressure on costs — Impact on strategie objective (SO) of maintaining financial stiength ~ Unable to achieve $0 to maintain/bulld workforce sulficent to mest customer demand — Land purchased at too high a price, wrong. locaton or at wrong time — impact on SO of maintaining financial stength = Impact on ability to provide quality homes where people want to live ‘Mitigation = Projected build programmes monitored closely to manage labour requirements = Operate in-house apprentice and training programmes = Commit to wider external intiatves to address industry-wide sklls shortages = Retain staf - engagement surveys, performance management frameworks, career management and incentives — Nomination committee — oversee succession planning, = _ All land purchases undergo rigorous assessments climate change = Increasing regulation ~ additional planning delaysfcosts = Potentialy limited supply of material = Changes in weather - increase likelihood of disruption to construction process ~ Additional costs to guard against weather events ~ Impact on returns to Investors Positive impact on supporting sustainable communities ‘Mitigation = Monitoring operational efficiency and direct environmental impact = Develop climate change risk register = Consider impacts of climate change in the land acquisition, planning and build processes = Work with planning authorities and statutory bodies — Engage with housing industry and government to develop industry wide solutions Professional skills may be additionally rewarded as in the following rubric: How well has | Not at all Not so well Quite well Very well the candidate demonstrated professional skills as follows: Evaluation The candidate has The candidate has The candidate has The candidate has skill in using | demonstrated no demonstrated limited | demonstrated good demonstrated excellent professional evaluation skis. There | evaluation skis. There | evaluation skils. There is | evaluation skits. There Judgement to fs no evidence of sound | is some evidence of reasonable evidence of | is excellent evidence of Clearly assess | professional judgement | professional judgement | professional judgement | professional judgement the impact of | in assessing the impact | in assessing the impact | in assessing the impact | in assessing the impact the additional | of the addtional risks | of the aduttional risks | of the adolional risks _| of the adaftional risks risks proposed | proposed and their proposed and their proposed and their ‘proposed and their in the principal | required mitigating required mitigating required mitigating required mitigating risk register and | activites. activities but application | activities and application | activites, and application the required directly to QH's situation | of points made to QH is | of points made directly to mitigating is limited, reasonable. QH is strong actions The answers presented | The answer Is presented Briefing notes ‘in an appropriate briefing | in an appropriate briefing note format. note format. 0 1 2 3 165 (a) Award up to 2 marks for comtect application of Harmon's process strategy matrix. ‘Award 1 mark for each relevant point made in applying process re-cesign to GH's customer services process. (Up to a maximum of 6 marks) (Up to a maximum of 7 marks in total) Key points ‘Consider process complexity - customer service not routine or straightforward — Individual needs not met — automation (such as FAQs) insufficient = Consider strategic importance — customer service critical for QH = High competitive rivalry and increasing new entrants = Keeping customers satisfied key to retain competitive advantage = Mission to ‘develop a business based on strong customer relations’ ~ Strategic objectives ‘to provide high quality homes and customer service! — Customer services a strategic priority for QH — Should not be automates (b) Awerd 1 mark for each relevant point made in relation to the role and responsibiies of the project sponsor in this customer service re-design project (Upto a maximum of 7 marks in total Key points Role ~ Accountability for customer services re-design project — Leadership ~ providing expertise an business knowledge of QH — Make decisions beyond authority of PM — authorisation of additional resources = Communicating project proggess and outcomes to key stakeholders Responsibilities = Take part in inital planning and scoping of the project = Ensure project aligned with QH's business strategy — Sot out clear criteria for success of naw customer services process — Negotiate required funding and resources forthe project — Liaise with key stakeholders ~ ensure aligned to needs and expectations — Ensure project organised and that focus is sustained = Support project manager project team, particulary in escalating issues to senior managers Professional skills may be additionally rewarded as in the following rubric: How wellhas | Not atall ‘Not so well Quite well Very well the candidate demonstrated professional skills as follows: Communication | The candidate has The candidate has The candidate has The candidate has skis in explaining | demonstrated no demonstrated limited | demonstrated good domonstrated excellont concisely and | communication skis. | communication skits. | communication skits. | communication skis. effectively an The answer does not —_| The candidate has The candidate has The candidate nas appropriate effectively explain presented a framework, | explained an appropriate | clearly and effectively process re-design | any relevant process | but itis not explained | framework and triad to | applied an appropriate framework and | redesign framework, | effectively to the apply it to this project. | re-design framework the role and nor doas it effectively | project sponsor. Some | The candidate has also | and has identified responsibilities — | communicate to the ‘elements of the rale effectively explained and explained clearly of the project | project sponsor nis roles | and responsibiities are | some relevant roles and | and effectively most of sponsorto the | and responsibities, considered but are not | responsibifties ofthis | the refevant roles and chief operating, sufficiently applied to | project sponsor useful | responsibilities of the oer. this project to be useful | 10 the chief operating _| project sponsor, useful Briefing paper {21he cle peratng | off. fo teen operating The answer is presented ‘in an appropriate briefing | The answer is presented paper format. in an appropriate briefing ‘paper format. 0 0-66 1:33 2 Ww