Strategic Level, the third and final level of the CIMA exams, often sends jitters across the candidates. This level focusses on making the candidates adept at strategic decision making. Naturally, the approach towards the examination will be different and more matured. Let’s take a look at a detailed conversation between a student and trainer to understand the nuances of the examination at strategic level.

Student: Okay, before asking you how to prepare for the exam. Can you please let me know about the subjects?

Trainer: First of all please accept my congratulations. You are just one step away from the globally recognised management accountant qualification. Exam pattern would remain more or less similar to your previously completed ‘Operation’ and ‘Management’ levels. But you need to understand that there is a significant change in the level of thinking required to prepare for the exams.

Student: What do you mean by level of thinking and how do you think there is a difference from the ‘Operation’ and ‘Management’ levels which I have completed already?

Trainer: As I said the nature of assessment would remain almost similar i.e. 3 OTs (Objective Tests) followed by a Strategic Case study. However, ‘Operation’ level is similar to a fresher in the organisation whose main objective is in the implementation of work/decisions which are already taken by your Senior Managers. Of course ‘Management’ level pertains to your immediate manager whose responsibility is to monitor and update his reporting manager on the progress made.

But now you are in a Strategic level wherein you are in a position to make the decisions which shall improve the profitability and benefit the organisation in all aspects.

Student: Okay. But can you please add something more so that I can get more clarity.

Trainer: Sure. You can assume your Senior Manager’squalities to be the exact course content in ‘Strategic Level’. Evaluating the current position of the organisation and there by taking decisions as well as using leadership skills, and communication skills and to manage changes in the organisations. Though the organisational and interpersonal skills are essential, it is also imperative to have sharp finance acumen such as knowledge of capital availability, profitability analysis, stakeholder’s expectations/returns etc. When I mention all these parameters, it is equally important to note that every business involves a certain degree of risk. and a good leadership knows  how to avoid, control, mitigate and transfer risks in varied business scenarios. In the Strategic level, you will learn to face those challenges.

Student: Very nice Sir and topics seem to be interesting. Now I understand why a different level of thinking is required.

Student: Can you please go in depth on each of the three strategic level papers.

Trainer: CIMA has brought in clarity and I will make use of the following table for your easy understanding.

CIMA – Strategic level Examination explained with Conversation

From the above picture, it is clear that the topics that you will be preparing in all the three papers with approximate percentage of marks distribution in the exam.

Student: Can I make selective study of topics in strategic papers?

Trainer: It is really not recommended. It may be extremely difficult to clear CIMA papers by selective reading leaving random luck favoured instances. You do not study these points only from the exam point of view. It is already made clear that the knowledge/expertise on these topics is very important to deal with the real time business situations once you are part of the organisations.

Student: Can you please throw some light on the topics that are discussed in these papers individually.

E3: Strategic Management

Trainer: You may feel that E3 is slightly boring. But the topics which are discussed are essentially applied in the real time scenarios for the better results.

– There are few models you will study to understand the factors which will impact the organisations environment. Please note that there will be specific discussion on both the internal and external factors.

– Evaluating strategic options is a topic which is even closer to reality. Here you will study few models to expand the business both domestically as well as internationally. It is good if you correlate the concepts with a real company. This is very important from the strategic case study perspective.

Change management is always a focus of interest in the strategic case study. You know that change is inevitable. Whenever you try to bring in change in the organisation, there will be resistance. How you need to deal with it will be taught in this level. Understanding of organisation’s IT system is certainly important as a change in one function will impact both upstream and downstream operations. Isn’t this a topic of interest for you?

P3: Risk Management

Student: That is really nice. How about the topics that are discussed in P3.

Trainer: Good to see your interest. Following are the key notes:

– P3 is an important subject from the strategic case study perspective. In simple terms, the subject deals with the nature of risks that a company faces and the strategies built to counter these risks.

– Ways to mitigate risks to ensure the business’s cash flows are not affected much in comparison with the projection. Eg: A company operating from multiple countries will obviously be exposed to exchange risk, global economic risks with many other risks. P3 helps you to understand the strategies by which you can mitigate these.

– Internal control model –Different people are involved in the organisation to ensure that the controls are working effectively. The subjects in P3 helps to understand the challenges faced to maintain the internal controls.

F3: Financial Strategy

Student: Seem to be challenging. How about F3 paper.

Trainer: Yes as you said it is challenging at the same time interesting too.

Following are the key points taught in F3 subjects:

– Capital structure of the organisation i.e. optimal level of debt, equity and preferential capital that a company should have. Ways to raise finance and its effect on the capital structure, stake holders such as debtors, shareholders in the form of dividend etc.

– Dividend is one of the key aspects for any organisation. What part of earnings should be given as dividend and how much a company should retain for future investments/growth?

Nature of Examination

Student: Now, I am clear with the subject contents. Please brief me about the exam pattern and nature of questions.

Trainer: There are three OTs (Objective Tests) followed by a Strategic case study exam. Please ensure to keep the following points in mind to prioritise the questions during the OT exam:

Student: What are the variants of questions we can expect during the exam?

Trainer: You can expect multiple choice, drag and drop, match the following, scenario based, fill in the blanks etc. Please keep in mind that MCQs are not easy!

Student: What are the other things which should be kept in mind before the exam?

Trainer: Ensure you follow the following instructions:

– You have to study the entire syllabus, understand the concepts and revise them.

– Since the exams are computer based, do not forget to download the exam editor and practice to get a feel of it. You have to get acquainted with the use of calculator, time value tables etc.

– Please go through few past exam question papers and solve it.

– Be calm on the day of exam and prioritise the questions.

Student: Can you share your experience on the strategic case study exam.

Trainer: You need to go through the Pre-seen material thoroughly. Understand the industry dynamics of the company very well before interpreting the financials. The questions that will be asked can be somewhere compared to the scenario based questions of OT (Object Test). I have already mentioned the topics of interest for case study in the content section earlier.

Student: Thank you for sharing your thoughts.

Trainer: You are welcome.