ACCA SP Strategic Business Leadership — Questions and Answers
Question 1: Which of the following best describes 'strategic leadership'?
- Managing the day-to-day operations of a department
- Providing direction, vision and purpose for an entire organisation while balancing stakeholder interests (Correct answer)
- Setting annual sales targets for the marketing team
- Preparing the annual budget
Correct answer: Providing direction, vision and purpose for an entire organisation while balancing stakeholder interests
Strategic leadership involves setting the long-term vision and direction of the entire organisation, aligning resources, managing change and balancing the interests of diverse stakeholders.
Question 2: Porter's Five Forces model assesses:
- The internal strengths and weaknesses of an organisation
- The competitive forces that determine the attractiveness and profitability of an industry (Correct answer)
- The ethical framework governing professional behaviour
- The financial performance of competing firms
Correct answer: The competitive forces that determine the attractiveness and profitability of an industry
Porter's Five Forces (competitive rivalry, threat of new entrants, threat of substitutes, buyer power, supplier power) analyses the structural factors determining industry profitability.
Question 3: A 'balanced scorecard' at the strategic level links performance measures to:
- Annual budgets only
- The organisation's vision and strategy through four interconnected perspectives (Correct answer)
- The external audit findings
- Regulatory compliance requirements only
Correct answer: The organisation's vision and strategy through four interconnected perspectives
The strategic balanced scorecard (Kaplan & Norton) translates vision and strategy into objectives and measures across four perspectives: Financial, Customer, Internal Processes, and Learning & Growth.
Question 4: Which of the following is an example of a 'disruptive innovation' (Christensen)?
- An incremental product improvement by a market leader
- A new entrant offering a simpler, cheaper product that initially serves ignored market segments but eventually displaces incumbents (Correct answer)
- A multinational acquiring a direct competitor
- A company rebranding its existing product
Correct answer: A new entrant offering a simpler, cheaper product that initially serves ignored market segments but eventually displaces incumbents
Disruptive innovation starts at the low end or new market, ignored by incumbents focused on premium customers, and gradually moves upmarket, eventually displacing established players.
Question 5: The TOWS matrix extends SWOT by:
- Adding financial analysis to the four quadrants
- Generating strategic options by matching internal factors (S/W) with external factors (O/T) (Correct answer)
- Quantifying each SWOT element numerically
- Replacing qualitative analysis with scenario planning
Correct answer: Generating strategic options by matching internal factors (S/W) with external factors (O/T)
TOWS generates strategic options: SO (use strengths to exploit opportunities), ST (use strengths to counter threats), WO (address weaknesses to exploit opportunities), WT (minimise weaknesses, avoid threats).
Question 6: Which leadership style (Lewin) is most appropriate in a crisis requiring immediate, clear direction?
- Laissez-faire
- Democratic
- Autocratic (Correct answer)
- Transformational
Correct answer: Autocratic
Autocratic (authoritarian) leadership is most effective when rapid, decisive action is needed and there is no time for consultation — such as in a crisis or emergency situation.
ACCA SP Strategic Business Leadership
Which of the following best describes 'strategic leadership'?