Here is the summary of what the APM June 2019 exam was all about including some recent comments made by the examiner on the performance of candidates in this sitting.
The APM Examiner Report will highlight strengths and weaknesses in candidates 2019 performance and therefore offers constructive advice for future candidates including those who are planning to re-attempt this paper in September 2019.
- As is now common at APM, those candidates who had practised writing professional answers prior to the examination performed admirably in the presentation area (4 marks).
- The markers were looking for suitable report headings, an introduction, a logical structure, signposted by the good
use of subheadings in the answer, and a clear, concise style.
- Performance in this area was generally very good with most candidates scoring 3 or 4 marks.
Reviews from Question 1
Question required to consider issues of justifying performance measures, undertaking target costing exercise, examining division of responsibility for quality costs in outsourcing contract and assessing impact of sources of information on management of quality within an outsourcing contract.
The company in question was a manufacturer.
Part (i) for 16 marks required recommendation and justification of two key performance indicators (KPIs) for each critical success factor (CSF) and assessment of use of resultant KPIs in measuring strategic performance of company.
Candidates generally scored about half the marks available.
Part of the problem candidates encountered here appeared to be in not fully comprehending, for the first CSF, that it was two particular groups of capital providers who had to be satisfied.
Many responses suggested KPIs that were clearly not relevant to the scenario in this regard.
It is also clear that many candidates felt that justifying the measure they had offered could be undertaken by providing a definition of that term. Clearly, such comments are not appropriate when a justification is being sought.
Candidates also found it challenging to offer KPIs for CSFs that were essentially non-financial in nature and many responses offered financial KPIs which were not justified in the context of the CSF they were discussing.
Almost all candidates ignored the second part of the requirement and examination team cannot comprehend why. The requirement made clear that the CEO wanted an assessment of the group of KPIs to measure strategic performance.
The relation of KPIs in measuring strategic performance is a topic which is examined almost every diet in APM and it is not possible that candidates could have been unaware of this topic area or that they found it too challenging.
It is essentially the fundamental skill that is being tested in the evaluation of any performance report and it is something that candidates should realise is one of the main learning outcomes of the APM examination – put simply,
are the measures that they have come up with appropriate and fitting for the company to help it achieve its overall aims?
Reviews from Question 2
This question required to assess how characteristics of a service business may create problems in the performance measurement and management of quality of service and resource utilisation and, to use the Fitzgerald and Moon building block model to evaluate whether a proposed reward scheme would encourage set standards to be achieved.
Part a) worth 10 marks tested candidates’ knowledge on the specifics of the applicability of intangibility, heterogeneity, perishability and simultaneity in relation to organisation which provided cosmetic procedures to customers.
Most candidates could offer definitions, with an example appropriate to the scenario, of the terms, though it was also clear that some candidates had not undertaken any revision in this area and were unclear as to any of the meanings of the characteristics.
Most candidates narrowly failed this part of the question.
Other candidates erred in assuming that a term such as heterogeneity related to the different types of cosmetic procedure the company undertook, rather than the fact that no two procedures are exactly the same.
Most candidates did not address the main demands of question with regard to discussing quality of service and resource utilisation. Instead of discussing the implications with regard to quality of how unlikely the procedures would be performed to exactly the same standard on different occasions, candidates who correctly defined heterogeneity tended to only indicate that this state existed and then moved on to defining the next characteristic.
There was also little discussion or analysis of resource utilisation, which would have been particularly appropriate to perishability when there is unpredictable demand.
Candidates tended to indicate that the organisation could not keep inventory but did not address the problems of having resources available when there is increased demand.
Candidates also repeated themselves in this question to significant extent, perhaps because they did not develop analysis to level required. Comments would end, in discussion of each of the characteristics, with observations on how it was very hard to have a consistent standard and how no two procedures were the same. Whereas such comments are certainly relevant, the repetition of them throughout the response should have acted as a prompt to candidates that further analysis was required.
Reviews from Question 3
This question required candidates to evaluate whether a clothing retailer should change its budgeting system to an activity based one and then to complete some figure work for an activity based budget, offering an explanation for any variances.
Part (a) worth 13 marks required consideration of the advantages and disadvantages of both the current system (incremental) and activity based budgeting (ABB) before offering a justified conclusion as to what the company should do.
Candidates generally performed well in this part, if not in all parts of the evaluation.
Candidates would rarely undertake all of these requirements: some, for example, would focus exclusively on ABB and not refer in any detail or level of analysis to the current system whereas others might suggest disadvantages of the current system without explaining the advantages.
It was evident from the scenario that advantages must have existed as the company had been successful over the 18 years it had used the current budget method. Most frequent of all, however, was the lack of any conclusion or, alternatively, the suggestion of a conclusion – “the company should adopt ABB”, for example – without any justification offered.
This highlights an area where candidates should be more prepared. The use of the word “evaluate”, as has been highlighted in previous Examiner’s Reports for this examination, means that candidates should assess the strengths and weaknesses of the arguments that arise, in relation to the scenario that is detailed, before coming to a justified conclusion as to what the company should do. Seen in that light, this should have been a question where most candidates were scoring at least ten marks.
Both budgeting methods would have been well known to from Performance Management and the issues that arose from them were very clear from the scenario.
One other area where candidates did not score as well was in offering definitions of terms such as incremental budgeting and, in particular, on ABB without directing the comments that they made towards answering the question’s requirement.
It is always worthwhile offering a very brief definition of any technique or technical term to demonstrate comprehension but candidates should be aware that such comments are not worthy of many, if any, marks and that it is evaluation of those techniques with regard to the specifics of the scenario that the examining team wish to see.
Candidates also tended to bring in other techniques that were not relevant to requirement here and such practice is generally to be avoided as examining team has focused candidates’ attention on specific areas that they wish to examine.
In this part of the question, for example, candidates frequently commented on zero-based budgeting (ZBB) or rolling budgeting. An analysis of such techniques may have been relevant had the question requirement been more open – “evaluate whether the company should change its current budgeting system”, but the requirement in this case was to evaluate a prospective change from the current system to ABB.
In terms of examination technique, candidates should focus their responses on what they have specifically been asked to address and, in this case, discussion of any other budgeting technique is irrelevant and represents a waste of time which candidates could have deployed better elsewhere.
Advice for the Future
There were a number of issues that arose which, while not common to all answers, would certainly represent broad generic areas where candidates should be able to improve upon their performance in the future:
- Failing to read the specific requirement around the question, particularly appropriate to Questions 1(i) and 2b).
- Spending a great deal of time giving definitions – Questions 2a), 3a) and 1(ii) in particular – rather than in evaluating the scenario as requested.
Understand from previous Examiner’s Reports that APM is an examination based on justification and analysis. Writing almost exclusively in single sentence paragraphs is not conducive to justification and analysis as such a style tends to introduce a point and does not offer anything further by way of analysis or justification. It is important in APM that points made are supported and justified and it is clear that a single sentence paragraph, bullet-point style, is the very antithesis of this.
- Not sticking to specific question requirements – Question1(i) asked for two key performance indicators only per critical success factor and many candidates offered three or sometimes four.
- Offering unjustified, commercially naive suggestions which demonstrate a lack of understanding of the scenario – for example, the suggestion of adopting an ERP system for both questions 1(iv) and 3a).
- Making the same point repetitively. This was evident particularly in 2a) where the issue of service being different every time it was delivered was made on several occasions by many candidates.
- Trying to ensure both handwriting and layout of answers is as clear as possible.