Page 5 - CIMA SCS Workbook August 2018 - Day 2 Suggested Solutions

CIMA AUGUST 2018 – STRATEGIC CASE STUDY

Management will need to monitor each aspect of this phase very carefully. They should be on the
alert for unexpected problems and act to solve them as quickly as possible.

New KPIs will need to be put in place, relevant to the new digital era and based on the perceived
critical success factors for FNG under its new strategic approach.

Remuneration schemes may need to be altered in line with the new KPIs. For example,
performance related pay may need to be a greater overall part of the remuneration package,
particularly for senior management, in order to provide the motivation to meet the new KPIs.

Refreeze

This is the final part of the change process. Once the step above has been fully implemented, FNG
will need to make sure that the new operating style is accepted by staff as the ‘norm’ from now
on; you do not want staff falling back into bad old habits.

This can be done by emphasising the benefits that the change programme has produced. For
example, it is to be hoped that the company will be restored to revenue and profit growth; the
financial statements can be used to show staff that, whilst the change process was disruptive, it
has resulted in a more secure business with much brighter prospects for the future.

Those who actively supported management in the change process can be used as a positive
example of how to progress in the business – they are rewarded with pay rises, bonuses and
promotions.

Anybody who is retained by FNG but continues to show resistance to change does not receive the
same pay and job progression – they are effectively used as a negative example of how not to
behave if you want to enjoy a successful career at FNG.

EXERCISE 2

Email

To: Den Rice, CFO
From: Senior Manager
Subject: DST Group

This email will evaluate the proposal to buy 100% of the share capital of DST Group, and then look
at any alternative way to achieving a similar desired outcome for FNG.

Evaluation of the proposal

There are many issues to be considered in deciding whether to purchase DST Group; these will be
addressed under the headings of benefits and risks before reaching a preliminary conclusion.

Benefits

Firstly, acquiring 28 new newspaper titles will greatly enhance the FNG portfolio, and will surely
make us one of the biggest media companies in Borland. The prestige of such a position in the
industry can have motivational benefits for shareholders and staff, and also potentially lower the
64 KAPLAN PUBLISHING