Subject: STRATEGIC CASE STUDY

Search 500 + past questions and counting.
  • Filter by Professional Bodies

  • Filter by Subject

  • Filter by Series

  • Filter by Topics

  • Filter by Levels

SCS – Mar2025 – L3 – Q4 – Financial Management

AML evaluates money market and forward contract hedges to mitigate USD/GHS exchange rate risk on USD 10M gold export revenue, with calculations and internal hedging strategies.

Akosa Minerals Limited (AML) exports a significant portion of its gold production, making its revenue highly sensitive to global gold prices and exchange rate fluctuations. Recently, gold prices have surged to a six-month high of USD 2,904.4 per troy ounce, creating an opportunity for AML to maximize export earnings. However, the company also faces foreign exchange risk, as the Ghanaian cedi (GHS) may depreciate before AML receives its USD payments.
To mitigate this risk, AML’s finance team is considering two hedging strategies: money market hedge and forward contracts. The company must determine which approach provides the best protection against exchange rate fluctuations while optimising its financial position.
AML expects to receive USD 10 million from gold exports in three months. The company is concerned that the USD/GHS exchange rate may depreciate and is evaluating both a money market hedge and a forward contract. The following information is available:

  • Current spot exchange rate: 1 USD = 12.50 GHS
  • Three-month forward rate: 1 USD = 12.20 GHS
    Three-month interest rates:
  • USD borrowing rate: 4% per annum
  • USD deposit rate: 3% per annum
  • GHS borrowing rate: 23% per annum
  • GHS deposit rate: 18% per annum

Required:
a) Explain the concept of both the money market hedge and forward contract hedge, and how AML can use each to mitigate its exchange rate risk.
(6 marks)
b) Calculate the amount AML needs to borrow or invest today in both USD and GHS under the money market hedge to fully hedge the future receipt of USD 10 million.
(4 marks)
c) Calculate the GHS amount AML would receive if it chooses the forward contract hedge instead.
(2 marks)
d) Compare the GHS amounts received under the money market hedge and forward contract hedge. Recommend the better option for AML based on the calculations.
(2 marks)
e) Discuss THREE internal hedging techniques AML can employ to mitigate the depreciation of the Ghana Cedi against the US Dollar.
(6 marks)

Login or create a free account to see answers

Find Related Questions by Tags, levels, etc.

Report an error

You're reporting an error for "SCS – Mar2025 – L3 – Q4 – Financial Management"

SCS – Mar 2025 – L3 – Q3 – Competitive advantage, International financial

Analyze AML's employee management using IR Framework and evaluate the appropriateness of its diversification strategy into lithium mining.

a) Akosa Minerals Limited (AML) operates in both local and international mining markets, with operations spread across different regions, including Ghana, Mali and Burkina Faso. AML faces pressures for local adaptiveness, such as meeting the specific needs of employees in diverse communities, and global integration, which requires maintaining consistent HR policies and performance standards across all operations. The IntegrationResponsiveness (IR) Framework helps organisations determine how to balance these competing pressures to achieve strategic objectives.

Required:

i) Explain the Integration-Responsiveness (IR) Framework, and show how AML can manage its employees across various locations by balancing the pressures for local adaptiveness and global integration. (6 marks)

ii) Suggest TWO situations where AML should emphasise local adaptiveness and TWO where it should prioritise global integration. Provide examples to support your response. (4 marks)

b) AML diversified its operations by integrating lithium extraction into its core business. Diversification is appropriate in some situations but not in others.

Required: Explain FIVE reasons why the diversification strategy of AML is appropriate and THREE factors that could make the diversification strategy inappropriate. (10 marks)

Login or create a free account to see answers

Find Related Questions by Tags, levels, etc.

Report an error

You're reporting an error for "SCS – Mar 2025 – L3 – Q3 – Competitive advantage, International financial"

SCS – Mar 2025 – L3 – Q2 – Change Management

Explain leadership's role in change management and three of Kanter's skills for AML's diversification strategy.

a) Akosa Minerals Limited (AML) has undergone significant transformations in its operations, particularly with the integration of lithium extraction into its core business. This shift has presented both opportunities and challenges, including regulatory compliance, technological advancements and stakeholder management. Successfully navigating these changes requires effective leadership and change management.

Rosabeth Moss Kanter suggests that managers in change-adept organisations must possess key skills to drive transformation effectively. As AML continues its diversification efforts, the company’s leadership must demonstrate these skills to sustain growth and maintain a competitive edge.

Required:

Identify and explain the critical role of leadership in managing change and THREE out of five key change management skills suggested by Kanter that AML’s leadership should exhibit to effectively manage its diversification and growth strategies.

b) Akosa Minerals Limited (AML) recently engaged a risk consultant from Isodek Consultants to conduct a comprehensive risk assessment and provide recommendations on managing the transformational changes the company is undergoing. The consultant’s report highlights key risks and challenges related to AML’s diversification strategy, operational restructuring, stakeholder engagement and compliance with global sustainability standards.

To navigate these challenges effectively, AML’s leadership needs to apply the Gemini Consultants’ 4Rs model which provides a structured framework for managing large-scale organisational change.

Required:

Using the Gemini Consultants’ 4Rs model, discuss how each component can be applied to address the operational and environmental risks identified in the consultant’s report.

Login or create a free account to see answers

Find Related Questions by Tags, levels, etc.

Report an error

You're reporting an error for "SCS – Mar 2025 – L3 – Q2 – Change Management"

SCS – Mar 2025 – L3 – Q1 – Employee Satisfaction

Identify two key concerns from AML's employee satisfaction survey and their impact on competitive advantage.

a) Akosa Minerals Limited (AML) recently conducted an employee satisfaction survey to address ongoing challenges in attracting and retaining skilled labour. The survey evaluated staff experiences across five critical areas: conditions of service, career development, performance support, work environment and work satisfaction. The survey revealed key issues related to job security, career progression and employee welfare. AML’s leadership is now focused on implementing strategic measures to enhance employee satisfaction and engagement to reduce turnover risks and improve productivity. Required: Identify and explain TWO key areas of concern from the employee satisfaction survey. How might these concerns impact AML’s ability to maintain a sustainable competitive advantage?

b) AML has expanded its operations beyond Ghana, securing mining concessions in Mali and Burkina Faso. The company’s international growth has been driven by rising global demand for gold and lithium, particularly for use in battery production and renewable energy technologies. However, AML must navigate various external factors such as economic fluctuations, trade policies, global commodity pricing, and regulatory frameworks in different countries. To maintain its competitive advantage, AML’s leadership must evaluate external business conditions using tools such as Porter’s Diamond Model, which assesses factors influencing national competitiveness, and broader international economic analysis to identify key opportunities and threats. Required: Using Porter’s Diamond Model, analyse THREE factors that contribute to Ghana’s competitiveness in the global mining industry. How can AML leverage these factors for long-term success?

c) AML has evolved through various strategic phases over the last decades, including modernization, diversification and international expansion. The company is evolving and strengthening its governance, financial structure and operational processes. As AML continues to grow in a competitive mining industry, selecting an appropriate strategic approach is crucial for sustaining long-term success. The board of AML must consider different organisational strategy approaches to align with its corporate objectives, resource capabilities and industry trends. These approaches include the systems-based approach, resource-based approach, core competencies approach, rational strategy and adaptive/emergent strategy. Required: Using AML’s strategic journey as a reference, explain each of the FIVE strategic approaches and how they are relevant to AML’s organisational strategy.

Login or create a free account to see answers

Find Related Questions by Tags, levels, etc.

Report an error

You're reporting an error for "SCS – Mar 2025 – L3 – Q1 – Employee Satisfaction"

SCS – Nov 2024 – L3 – Q1a – Charles Handy’s Cultural Types

Discuss the application of Charles Handy's cultural types to BOGML's growth phases and analyze their impact.

Charles Handy identified four distinct categories of corporate culture (cultural stereotypes) that can exist within an organization. Since its formation, BOGML has exhibited all four categories of corporate culture during different phases of its growth.

Required:
Identify and explain the specific and appropriate category of corporate culture applicable, and discuss its impact on the company for each of the following phases of growth when Dr. Ayimadu Baffour:

i) Created the functional departments.
ii) Stated that BOGML is built around him and without him the company will not exist.
iii) Insisted on retaining all authority for decision-making.
iv) Emphasized getting work done through teamwork.

Login or create a free account to see answers

Find Related Questions by Tags, levels, etc.

Report an error

You're reporting an error for "SCS – Nov 2024 – L3 – Q1a – Charles Handy’s Cultural Types"

AAA – Nov 2011 – L3 – SB – Q1 – Application of Audit and Assurance Principles

Evaluate the steps for identifying and responding to fraud risk during audit planning.

Fela Idaewor is the auditor for Matty Co. Ltd, a rapidly expanding retail business based in Lekki. This is her first year as the audit manager. During her engagement planning, she observed multiple risk factors, such as the company’s strong interest in maintaining earnings and share prices, unrealistic financial forecasts, and high reliance on debt financing for expansion. Additionally, there were strong indications that fraud might have been committed by top management.

Required
(a) What should Idaewor do about the possibility of fraud at the planning stage? (7 Marks)
(b) What documentation is required for identifying risk factors? (5 Marks)
(c) If Idaewor has evidence suggesting fraud, what are her communication responsibilities to management? (3 Marks)

Login or create a free account to see answers

Find Related Questions by Tags, levels, etc.

Report an error

You're reporting an error for "AAA – Nov 2011 – L3 – SB – Q1 – Application of Audit and Assurance Principles"

SCS – Nov 2019 – L3 – Q2d – Ethics and social responsibility

Discuss the ethical operations of Ghanalux and recommend internal controls to enhance customer safety and service.

i) Discuss whether the company is operating in an ethical manner.
(5 marks)

ii) Recommend internal controls that might be implemented by the company to improve customer safety and security, and to deal with the problems of poor service to customers.
(7 marks)

Login or create a free account to see answers

Find Related Questions by Tags, levels, etc.

Report an error

You're reporting an error for "SCS – Nov 2019 – L3 – Q2d – Ethics and social responsibility"

SCS – Nov 2019 – L3 – Q2c – Controlling risk

Recommend governance and organizational changes for Ghanalux to improve its performance.

i) In response to the views of the company directors, and giving your reasons, recommend any changes to the governance and organization of Ghanalux that would benefit the performance of the company.
(8 marks)

Login or create a free account to see answers

Find Related Questions by Tags, levels, etc.

Report an error

You're reporting an error for "SCS – Nov 2019 – L3 – Q2c – Controlling risk"

SCS – Nov 2019 – L3 – Q2b – Capital structure

Discuss the potential benefits and problems of converting short-term borrowing into long-term loans.

i) Discuss the potential benefits and problems with proposals to convert the company’s short-term borrowings into a longer-term loan.

ii) Pay bigger cash salaries, or add a share option element to the remuneration packages.

iii) Maintain the dividend for 2019 at the 2018 level, or even reduce it further.

iv) Convert any surplus dollar cash into cedis.

(10 marks)

Login or create a free account to see answers

Find Related Questions by Tags, levels, etc.

Report an error

You're reporting an error for "SCS – Nov 2019 – L3 – Q2b – Capital structure"

SCS – Apr 2022 – L3 – Q1 – Strategy, stakeholders and mission

Discuss stakeholder groups' influence on business decisions using Mendelow's matrix.

As part of a review of the strategic position of HPC and its move to expand the business, management identified its major stakeholder groups, their power, and their expectations that could either fast-track or delay the implementation of the decision. These major stakeholder groups are the employees, farmers, regulatory authorities, and customers.

Required:
Using two matrices of approach to stakeholder mapping, discuss and show (with diagrams) the relative significance of stakeholder groups identified and their real and potential influences over HPC and its expansion strategies. (Use the stakeholder position/importance matrix and the stakeholder power/interest matrix – Mendelow matrix.) (10 marks)

Login or create a free account to see answers

Find Related Questions by Tags, levels, etc.

Report an error

You're reporting an error for "SCS – Apr 2022 – L3 – Q1 – Strategy, stakeholders and mission"

SCS – July 2023 – L3 – Q6b – Conflicts of Interest and Ethical Conflict Resolution

Explain the ICSA guidance on decisions that the board should reserve for itself and not delegate to individual or executive managers.

The Director of Human Resources and Organisational Development is concerned that her recent presentation about matrix management structure and performance management should be sent to the board for approval. Prof. Ernest Kofi Mensah vehemently disagrees. He referred her to the Institute of Chartered Secretaries and Administrators (ICSA) guidance.

Required:
Identify and explain FOUR (4) of the Institute of Chartered Secretaries and Administrators (ICSA) guidance on decision-making responsibilities that the board should reserve to itself and should not be delegated to individual or executive managers to confirm and comment on the view that the Director of Human Resources and Organisational Development’s matrix structure presented is not one of the issues which require board approval before implementation.

Login or create a free account to see answers

Find Related Questions by Tags, levels, etc.

Report an error

You're reporting an error for "SCS – July 2023 – L3 – Q6b – Conflicts of Interest and Ethical Conflict Resolution"

SCS – July 2023 – L3 – Q6a – Professional Practice and Codes of Ethics

Explain five reasons why the Director of Finance and Operations might project finance over other functions.

Some of the SavvyTech plc management team is concerned that the Director of Finance and Operations is domineering during the acquisition engagement processes at meetings. The Director of Finance and Operations mentioned in anger that ‘arguably, accountancy has an influence on business and government and that is both:
i) continuous and
ii) more extensive than any other profession’.

Required:
As a newly qualified Chartered Accountant responsible for code of ethics in SavvyTech plc, identify and explain FIVE (5) reasons in support of why the Director of Finance and Operations seems to be projecting finance over other functions.

Login or create a free account to see answers

Find Related Questions by Tags, levels, etc.

Report an error

You're reporting an error for "SCS – July 2023 – L3 – Q6a – Professional Practice and Codes of Ethics"

SCS – July 2023 – L3 – Q5b – Sources of Finance

Explain two benefits of increasing long-term capital using retained profits.

When companies retain profits in the business, the increase in the retained profits adds to equity reserves. This view was suggested by SavvyTech plc management team to the board. The Board is not convinced and seek further explanation.

Required:
Explain TWO (2) benefits to the board of directors on what it means to increase long-term capital using retained profits in SavvyTech plc.

Login or create a free account to see answers

Find Related Questions by Tags, levels, etc.

Report an error

You're reporting an error for "SCS – July 2023 – L3 – Q5b – Sources of Finance"

SCS – Nov 2023 – L3 – Q6c – Professional Practice and Codes of Ethics

Identifying and explaining two limitations of the OECD Principles of Corporate Governance.

The OECD Principles of Corporate Governance, as an international statement of principles about corporate governance, establishes minimum acceptable standards of corporate governance. However, like any such document on corporate governance, it has several limitations.

Required:
Identify and explain TWO (2) limitations of the OECD Principles of Corporate Governance.
(5 marks)

Login or create a free account to see answers

Find Related Questions by Tags, levels, etc.

Report an error

You're reporting an error for "SCS – Nov 2023 – L3 – Q6c – Professional Practice and Codes of Ethics"

SCS – July 2023 – L3 – Q5a – International financial management

Calculate the group profits from the sale of HVSC based on the transfer price set at market price and 25% of Utopia's unit cost.

As the Head of Finance of SavvyTech plc, the Director of Finance and Operations has assigned you to use the forecast data (Table 8) and the “additional information” provided to calculate the following to support engagement by the management team with the Board.

Required:
Calculate the group profits to be realised from the sale of HVSC, if the transfer price for the component is set at its market price, which is GH¢26 per unit (total Ghana cost) plus 25% of Utopia’s unit cost.

Login or create a free account to see answers

Find Related Questions by Tags, levels, etc.

Report an error

You're reporting an error for "SCS – July 2023 – L3 – Q5a – International financial management"

SCS – Nov 2023 – L3 – Q6b – Controlling Risk

Explaining two key roles the Board of Directors should play in risk management and internal controls at NSL.

Risk management and internal controls are largely the responsibility of management at NSL. However, the Board of Directors has a role to play.

Required:
Identify and explain TWO (2) key roles the Board of Directors of NSL should play in relation to risk management and internal controls in accordance with the UK Corporate Governance Code and the Ghana Code of Best Practices for Corporate Governance.
(5 marks)

Login or create a free account to see answers

Find Related Questions by Tags, levels, etc.

Report an error

You're reporting an error for "SCS – Nov 2023 – L3 – Q6b – Controlling Risk"

SCS – July 2023 – L3 – Q4 – Controlling Risk

Prepare an internal memo on how SavvyTech's board can show commitment to risk management and create a risk-aware culture.

Essential aspects of risk management and control are the culture within the organisation. The culture within the organisation is set by the board of directors and senior management (the tone at the top), but it should be shared by every manager and employee.

Required:
You are the ‘Risk and Assurance Manager’ of SavvyTech plc with the responsibility of creating a culture of risk awareness in the organisation. Prepare an internal memo for the management team to be discussed with the board of directors on what they must do to show their own commitment to risk management in the things that they say and do.

Login or create a free account to see answers

Find Related Questions by Tags, levels, etc.

Report an error

You're reporting an error for "SCS – July 2023 – L3 – Q4 – Controlling Risk"

SCS – Nov 2023 – L3 – Q6a – Professional Practice and Codes of Ethics

Understanding agency costs avoided by NSL and the role of the non-executive director as per Higgs Guidance.

NSL’s current corporate governance structure consists of three executive directors and one non-executive director, with the CEO serving as the chairman of the board. The board, as presently constituted, may have its strengths and weaknesses.

Required:
i) State and explain TWO (2) agency costs that the company would avoid as postulated by Agency Theory of corporate governance that “agency costs do not exist when the owners and the managers are exactly the same individuals.”
(5 marks)

ii) Explain TWO (2) roles that the non-executive director, Daniel Aidoo, ought to play on the board as identified by the document, Higgs Guidance (2003), to strengthen NSL’s board.
(5 marks)

Login or create a free account to see answers

Find Related Questions by Tags, levels, etc.

Report an error

You're reporting an error for "SCS – Nov 2023 – L3 – Q6a – Professional Practice and Codes of Ethics"

SCS – July 2023 – L3 – Q3b – Strategy Implementation

Identify and explain four reasons why SavvyTech needs to research, innovate, and develop existing and new products.

Business entities must innovate to survive and grow. The Director of Marketing and Sales, in a meeting, presented a product market annual performance analysis report and highlighted that the sales trend of the ‘Wrist Organiser 3b’, introduced in 2018, reduced by 75% in 2022 and by 50% in 2021.

Required:
As a member of SavvyTech plc management team, identify and explain FOUR (4) reasons why it is necessary to research, innovate and develop existing and new products as an organisation.

Login or create a free account to see answers

Find Related Questions by Tags, levels, etc.

Report an error

You're reporting an error for "SCS – July 2023 – L3 – Q3b – Strategy Implementation"

Oops!

This feature is only available in selected plans.

Click on the login button below to login if you’re already subscribed to a plan or click on the upgrade button below to upgrade your current plan.

If you’re not subscribed to a plan, click on the button below to choose a plan