ACCA paper SBL strategic business leader exam kit

Professional Examinations

Paper SBL

Strategic Business Leader
EXAM KIT


P AP ER SB L : S TR A TE GI C BU SI N E S S LE A DE R

British Library Cataloguing-in-Publication Data
A catalogue record for this book is available from the British Library.
Published by:
Kaplan Publishing UK
Unit 2 The Business Centre
Molly Millar’s Lane
Wokingham
Berkshire
RG41 2QZ
ISBN: 978-1-78415-841-5

© Kaplan Financial Limited, 2017
Printed and bound in Great Britain
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Acknowledgements
The past ACCA examination questions are the copyright of the Association of Chartered Certified
Accountants. The original answers to the questions from June 1994 onwards were produced by
the examiners themselves and have been adapted by Kaplan Publishing.
We are grateful to the Chartered Institute of Management Accountants and the Institute of
Chartered Accountants in England and Wales for permission to reproduce past examination
questions. The answers have been prepared by Kaplan Publishing.
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CONTENTS
Page
Index to questions and answers

P.5

Paper specific information

P.11

Exam technique

P.13

Kaplan’s recommended revision approach

P.15

Kaplan’s detailed revision plan

P.19

Section
1

Technical practice questions

1

2

Case study questions

117

3

Answers to technical practice questions

185

4

Answers to case study questions

401

5

Specimen 1 exam

6

Specimen 2 exam

Key features in this edition
In addition to providing a wide ranging bank of adapted real past exam questions and new case
studies, we have also included in this edition:
•

Paper specific information and advice on exam technique.

•

Our recommended approach to make your revision for this particular subject as effective
as possible.
This includes step by step guidance on how best to use our Kaplan material (Study text,
pocket notes and exam kit) at this stage in your studies.

•

Enhanced tutorial answers packed with specific key answer tips, technical tutorial notes
and exam technique tips from our experienced tutors.

•

Complementary online resources including full tutor debriefs and question assistance to
point you in the right direction when you get stuck.

You will find a wealth of other resources to help you with your studies on the following sites:
www.mykaplan.co.uk
www.accaglobal.com/SBL/

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P AP ER SB L : S TR A TE GI C BU SI N E S S LE A DE R

Quality and accuracy are of the utmost importance to us so if you spot an error in any of our
products, please send an email to with full details, or follow the
link to the feedback form in MyKaplan.
Our Quality Co-ordinator will work with our technical team to verify the error and take action to
ensure it is corrected in future editions.
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Section 1

TECHNICAL PRACTICE QUESTIONS
NOTE: THE MAIN PURPOSE OF THE QUESTIONS IN THIS SECTION IS TO HELP YOU FOCUS
ON SPECIFIC SYLLABUS AREAS TO ENSURE YOU HAVE THE LEVEL OF TECHNICAL ABILITY
REQUIRED FOR SUCCESS. MANY OF THESE QUESTIONS ALSO HAVE PROFESSIONAL

SKILLS ASPECTS AS WELL.

LEADERSHIP
1

ACADEMIC RECYCLING COMPANY (ARC)
Ten years ago Sully Truin formed the Academic Recycling Company (ARC) to offer a
specialised waste recycling service to schools and colleges. The company has been very
successful and has expanded rapidly. To cope with this expansion, Sully has implemented a
tight administrative process for operating and monitoring contracts. This administrative
procedure is undertaken by the Contracts Office, who track that collections have been
made by the field recycling teams. Sully has sole responsibility for obtaining and
establishing recycling contracts, but he leaves the day-to-day responsibility for
administering and monitoring the contracts to the Contracts Office. He has closely defined
what needs to be done for each contract and how this should be monitored. ‘I needed to
do this’, he said, ‘because workers in this country are naturally lazy and lack initiative. I
have found that if you don’t tell them exactly what to do and how to do it, then it won’t get
done properly.’ Most of the employees working in the Contracts Office like and respect
Sully for his business success and ability to take instant decisions when they refer a problem
to him. Some of ARC’s employees have complained about his autocratic style of leadership,
but most of these have now left the company to work for other organisations.
A few months ago, ARC was acquired by an international company Scat. Scat intend to
leave the management of ARC completely in Sully Truin’s hands but want to integrate its
activities into complementary activities carried out by the Scat group.
As part of Scat’s human resource strategy every manager must attend one of Scat’s internal
leadership programmes. Scat’s programmes actively advocate and promote a democratic
style of management. Sully Truin attended once such course programme as part of the
conditions for him retaining his managing directorship of ARC.
The course caused Sully to question his previous approach to leadership. It was also the
first time, for three years, that Sully had been out of the office during working hours for a

prolonged period of time. However, each night, while he was attending the course, he had
to deal with emails from the Contracts Office listing problems with contracts and asking him
what action they should take. He became exasperated by his employees’ inability to take
actions to resolve these issues.

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He discussed this problem with the leaders of Scat’s training programme. They suggested
that his employees would be more effective and motivated if their jobs were enriched and
that they were empowered to make decisions themselves.
On his return from the course, Sully called a staff meeting with the Contracts Office where
he announced that, from now on, employees would have responsibility for taking control
actions themselves, rather than referring the problem to him. Sully, in turn, was to focus on
gaining more contracts and setting them up.
However, problems with the new arrangements arose very quickly. Fearful of making
mistakes and unsure about what they were doing led to employees discussing issues
amongst themselves at length before coming to a tentative decision. The operational (field)
recycling teams were particularly critical of the new approach. One commented that
‘before, we got a clear decision very quickly. Now decisions can take several days and
appear to lack authority.’ The new approach also caused tensions and stress within the
Contracts Office and absenteeism increased.
At the next staff meeting, employees in the Contracts Office asked Sully to return to his old
management style and job responsibilities. ‘We prefer the old Sully Truin’, they said,
‘problems are again referred up to him. However, he is unhappy with this return to the
previous way of working as he feels that this may upset the new company owners. He is

also working long hours and is concerned about his health. On top of this, he realises that
he has little time for obtaining and planning contracts and this is severely restricting the
capacity of the company to expand in order to integrate activities with other parts of the
Scat group.
Scat performs a 100 day review of all newly acquired businesses. This 100 day review
examines the impact of the acquisition after the first 100 days of Scat ownership. A review
of ARC has determined that ARC has yet to achieve integration targets that were set as
objectives for the first 100 days post acquisition.
The Scat human resource director is concerned that this may be caused by a poor
management style employed by Sully Truin or that perhaps Scat’s own internal training
programmes are not as effective as hoped. She believes that the management training
course promotes the best approach to leadership, one that she herself employs across all of
Scat’s business units.
Required:
You work as a member of the 100 day review team at Scat.
Prepare a brief report for the Scat HR director to explain why the change of leadership
style at ARC was unsuccessful and whether this reflects a poor approach to Scat’s
management training programme.
(15 marks)
Professional skills marks will be awarded for demonstrating commercial acumen in
demonstrating awareness of the wider external factors that may have affected the success
of Sully Truin’s new management style.
(3 marks)
(Total: 18 marks)

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TE CHN I C AL PR A C TI CE Q UE S T ION S : S EC TI ON 1

2

ICOMPUTE
iCompute was founded twenty years ago by the technology entrepreneur, Ron Yeates.
It initially specialised in building bespoke computer software for the financial services
industry. However, it has expanded into other specialised areas and it is currently the third
largest software house in the country, employing 400 people.
It still specialises in bespoke software, although 20% of its income now comes from the
sales of a software package designed specifically for car insurance.
The company has grown based on a ‘work hard, play hard work ethic’ and this still remains.
Employees are expected to work long hours and to take part in social activities after work.
Revenues have continued to increase over the last few years, but the firm has had difficulty
in recruiting and retaining staff. Approximately one-third of all employees leave within their
first year of employment at the company. The company appears to experience particular
difficulty in recruiting and retaining female staff, with 50% of female staff leaving within
12 months of joining the company. Only about 20% of the employees are female and they
work mainly in marketing and human resources.
The company is currently in dispute with two of its customers who claim that its bespoke
software did not fit the agreed requirements. iCompute currently outsources all its legal
advice problems to a law firm that specialises in computer contracts and legislation.
However, the importance of legal advice has led to iCompute considering the establishment
of an internal legal team, responsible for advising on contracts, disputes and employment
legislation.
The support of bespoke solutions and the car insurance software package was also
outsourced a year ago to a third party. Although support had been traditionally handled inhouse, it was unpopular with staff. One of the senior managers responsible for the
outsourcing decision claimed that support calls were ‘increasingly varied and complex,
reflecting incompetent end users, too lazy to read user guides.’ However, the outsourcing
of support has not proved popular with iCompute’s customers and a number of significant

complaints have been made about the service given to end users. The company is currently
reviewing whether the software support process should be brought back in-house.
The company is still regarded as a technology leader in the market place, although the
presence of so many technically gifted employees within the company often creates
uncertainty about the most appropriate technology to adopt for a solution. One manager
commented that ‘we have often adopted, or are about to adopt, a technology or solution
when one of our software developers will ask if we have considered some newly released
technology. We usually admit we haven’t and so we re-open the adoption process. We
seem to be in a state of constant technical paralysis.’
Although Ron Yeates retired five years ago, many of the software developers recruited by
him are still with the company. Some of these have become operational managers,
employed to manage teams of software developers on internal and external projects.
Subba Kendo is one of the managers who originally joined the company as a trainee
programmer. ‘I moved into management because I needed to earn more money. There is a
limit to what you can earn here as a software developer. However, I still keep up to date
with programming though, and I am a goalkeeper for one of the company’s five-a-side
football teams. I am still one of the boys.’

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However, many of the software developers are sceptical about their managers. One
commented that ‘they are technologically years out of date. Some will insist on writing
programs and producing code, but we take it out again as soon as we can and replace it
with something we have written. Not only are they poor programmers, they are poor
managers and don’t really know how to motivate us.’ Although revenues have increased,

profits have fallen. This is also blamed on the managers. ‘There is always an element of
ambiguity in specifying customers’ requirements. In the past, Ron Yeates would debate
responsibility for requirements changes with the customer. However, we now seem to do
all amendments for free. The customer is right even when we know he isn’t. No wonder
margins are falling. The managers are not firm enough with customers.’
The software developers are also angry that an in-house project has been initiated to
produce a system for recording time spent on tasks and projects. Some of the justification
for this is that a few of the projects are on a ‘time and materials’ basis and a time recording
system would permit accurate and prompt invoicing. However, the other justification for
the project is that it will improve the estimation of ‘fixed-price’ contracts. It will provide
statistical information derived from previous projects to assist account managers preparing
estimates to produce quotes for bidding for new bespoke development contracts.
Vikram Soleski, one of the current software developers, commented that ‘managers do not
even have up-to-date mobile phones, probably because they don’t know how to use them.
We (software developers) always have the latest gadgets long before they are acquired by
managers. But I like working here, we have a good social scene and after working long
hours we socialise together, often playing computer games well into the early hours of the
morning. It’s a great life if you don’t weaken!’
Required:
In order to understand the failures within iCompute, analyse the company’s culture, and
assess the implications of your analysis for the company’s future performance. (13 marks)
Professional skills marks will be awarded for demonstrating analytical skills in considering
the implications of the issues raised.
(2 marks)
(Total: 15 marks)

3

THE NATIONAL MUSEUM

Walk in the footsteps of a top tutor

Introduction
The National Museum (NM) was established in 1857 to house collections of art, textiles and
metal ware for the nation. It remains in its original building which is itself of architectural
importance. Unfortunately, the passage of time has meant that the condition of the
building has deteriorated and so it requires continual repair and maintenance. Alterations
have also been made to ensure that the building complies with the disability access and
health and safety laws of the country. However, these alterations have been criticised as
being unsympathetic and out of character with the rest of the building. The building is in a
previously affluent area of the capital city. However, what were once large middle-class
family houses have now become multi-occupied apartments and the socio-economic
structure of the area has radically changed. The area also suffers from an increasing crime
rate. A visitor to the museum was recently assaulted whilst waiting for a bus to take her
home. The assault was reported in both local and national newspapers.

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TE CHN I C AL PR A C TI CE Q UE S T ION S : S EC TI ON 1

Thirty years ago, the government identified museums that held significant Heritage
Collections. These are collections that are deemed to be very significant to the country.
Three Heritage Collections were identified at the NM, a figure that has risen to seven in the
intervening years as the museum has acquired new items.
Government change
One year ago, a new national government was elected. The newly appointed Minister for
Culture implemented the government’s election manifesto commitment to make museums

more self-funding. The minister has declared that in five years’ time the museum must
cover 60% of its own costs and only 40% will be directly funded by government. This change
in funding will gradually be phased in over the next five years.
The 40% government grant will be linked to the museum achieving specified targets for
disability access, social inclusion and electronic commerce and access. The government is
committed to increasing museum attendance by lower socio-economic classes and younger
people so that they are more aware of their heritage. Furthermore, it also wishes to give
increasing access to museum exhibits to disabled people who cannot physically visit the
museum site. The government have asked all museums to produce a strategy document
showing how they intend to meet these financial, accessibility and technological objectives.
The government’s opposition has, since the election, also agreed that the reliance of
museums on government funding should be reduced.
Required:
(a)

Analyse the macro-environment of the National Museum.

(20 marks)

(b)

The failure of the Director General’s strategy has been explained by one of the
trustees as ‘a failure to understand our organisational culture; the way we do
things around here’.
Assess the underlying organisational cultural issues that would explain the failure
of the Director General’s strategy at the National Museum.
(20 marks)
Professional skills marks will be awarded for demonstrating commercial acumen in
applying judgement and insight into the cultural issues of the organisation which
have led to its failure.

(2 marks)
(Total: 42 marks)

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