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Free ACCA Strategic Business Leader Practice Questions & Answers
300 exam-style Strategic Business Leader questions. Pick your answer, hit Check answer, and see the worked solution — free to start, no signup.
100% free · No login to startQuestion 31
What is organisational culture?
Select an option first.
Correct answer: B — The shared values, beliefs, assumptions, and behaviours that characterise how people in an organisation think and act
Explanation: B is correct. Organisational culture is the 'way we do things around here' — the unwritten, often unconscious assumptions and values that shape behaviour. It differs from formal structure (A) and written policies (C). Physical environment (D) may reflect culture but is not culture itself.
Question 32
What are the four cultural types in Charles Handy's model?
Select an option first.
Correct answer: B — Power, role, task, and person culture
Explanation: B is correct. Handy's cultural model identifies: power culture (centralised around a key individual), role culture (bureaucratic, rules-based), task culture (project-oriented, flexible), and person culture (individuals are supreme). A describes structural types. C is Quinn's competing values. D is Miles and Snow's strategic orientations.
Question 33
According to Schein's model of organisational culture, what are the three levels of culture?
Select an option first.
Correct answer: B — Artefacts, espoused values, and basic underlying assumptions
Explanation: B is correct. Schein's three levels: artefacts (visible behaviours, symbols, dress), espoused values (stated beliefs and norms), and basic underlying assumptions (unconscious, taken-for-granted beliefs). The deepest level drives actual behaviour. A, C and D are different frameworks.
Question 34
What is the 'cultural web' developed by Johnson and Scholes?
Select an option first.
Correct answer: B — A diagnostic framework mapping culture through six elements: stories, rituals, symbols, power structures, control systems, and organisational structure
Explanation: B is correct. The cultural web reveals the organisational paradigm (the deep cultural assumptions) through six surrounding elements. It helps leaders understand the current culture before attempting to change it. A, C and D are unrelated.
Question 35
Why is organisational culture difficult to change?
Select an option first.
Correct answer: B — Because culture is deeply embedded in unconscious assumptions, informal norms, and behaviours that are resistant to formal directives
Explanation: B is correct. Culture operates at the level of unconscious assumptions and informal norms — it cannot be changed simply by issuing a directive. Sustainable cultural change requires alignment of leadership behaviour, systems, symbols, and structures over an extended period.
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Question 36
What is the Mendelow stakeholder matrix used for?
Select an option first.
Correct answer: B — Mapping stakeholders by their level of power and interest to determine appropriate engagement strategies
Explanation: B is correct. The Mendelow matrix plots stakeholders on axes of power (ability to affect the organisation) and interest (motivation to do so), producing four quadrants — key players (manage closely), keep satisfied, keep informed, and minimal effort. This guides stakeholder management strategy.
Question 37
Who are 'primary stakeholders' of an organisation?
Select an option first.
Correct answer: B — Those whose participation is essential to the organisation's survival — typically employees, customers, suppliers, investors, and the community
Explanation: B is correct. Primary stakeholders have a direct transactional relationship with the organisation. Secondary stakeholders (media, pressure groups, regulators) influence the organisation but are not essential to its basic operation. A and C are too narrow. D describes a subset of secondary stakeholders.
Question 38
What is the 'agency problem' in corporate governance?
Select an option first.
Correct answer: B — A conflict of interest between shareholders (principals) and managers (agents) when managers pursue their own interests rather than maximising shareholder value
Explanation: B is correct. Agency theory recognises that shareholders delegate authority to managers, who may not always act in shareholders' best interests (they may prioritise pay, job security, or prestige). Corporate governance mechanisms seek to align incentives and reduce this conflict.
Question 39
What is 'tone at the top' in an organisational context?
Select an option first.
Correct answer: B — The ethical standards, values, and culture set by senior leadership that cascades throughout the organisation
Explanation: B is correct. Tone at the top refers to the culture and ethical standards demonstrated by the most senior leaders. If the leadership behaves with integrity, this signals expected behaviour throughout the organisation. Formal rules (C) alone cannot create the right culture.
Question 40
What does the concept of 'emotional intelligence' (EI) refer to in leadership?
Select an option first.
Correct answer: B — The ability to recognise, understand, and manage one's own emotions and those of others effectively
Explanation: B is correct. Goleman's emotional intelligence comprises self-awareness, self-regulation, motivation, empathy, and social skills. Leaders with high EI build better relationships, manage conflict more effectively, and inspire commitment. A, C and D describe cognitive or technical abilities.
Question 41
What is a learning organisation?
Select an option first.
Correct answer: B — An organisation that continuously facilitates the learning of all its members and transforms itself by applying new knowledge to improve performance
Explanation: B is correct. Senge's learning organisation constantly acquires, creates, and transfers knowledge, changing its behaviour in response. It has five disciplines: systems thinking, personal mastery, mental models, shared vision, and team learning. A, C and D are superficial interpretations.
Question 42
What is the difference between 'single-loop' and 'double-loop' learning?
Select an option first.
Correct answer: B — Single-loop corrects errors within existing assumptions; double-loop questions and changes the underlying assumptions themselves
Explanation: B is correct. Argyris distinguished single-loop (fixing errors without questioning goals or values) from double-loop learning (questioning and potentially changing the underlying norms and objectives). Double-loop enables deeper, transformational change.
Question 43
What is the balanced scorecard's main innovation over purely financial performance measurement?
Select an option first.
Correct answer: B — It measures performance across four linked perspectives — financial, customer, internal processes, and learning and growth — connecting strategy to operational delivery
Explanation: B is correct. Kaplan and Norton's balanced scorecard broadens performance measurement beyond financial lagging indicators to include customer, internal process, and learning/growth perspectives. The four perspectives are causally linked — learning enables better processes, which improve customer outcomes, which drive financial results.
Question 44
What are the four perspectives of the balanced scorecard?
Select an option first.
Correct answer: B — Financial, customer, internal business processes, and learning and growth
Explanation: B is correct. The four balanced scorecard perspectives are: (1) Financial — how we look to shareholders; (2) Customer — how customers see us; (3) Internal processes — what we must excel at; (4) Learning and growth — how we sustain our ability to improve. A describes financial metrics only. C is McKinsey 7S. D is management functions.
Question 45
What is a key performance indicator (KPI)?
Select an option first.
Correct answer: B — A quantifiable measure used to evaluate how effectively an organisation is achieving its key business objectives
Explanation: B is correct. KPIs are specific, measurable metrics that track progress toward strategic objectives. They can be financial or non-financial, leading or lagging. A, C and D are too narrow or unrelated.
Question 46
What is 'benchmarking' as a strategic tool?
Select an option first.
Correct answer: B — Comparing an organisation's processes and performance metrics against best practice — internal, competitor, or best-in-class — to identify improvement opportunities
Explanation: B is correct. Benchmarking measures performance relative to a reference point (competitor, industry average, or best-in-class from any sector). Types include internal, competitive, functional, and generic benchmarking. A and C are financial planning activities. D is quality management.
Question 47
What is critical success factor (CSF) analysis?
Select an option first.
Correct answer: B — Identifying the limited number of areas in which performance is absolutely essential for the organisation to achieve its strategic objectives
Explanation: B is correct. CSFs are the few key areas where good performance is non-negotiable for strategic success. They are then used to derive appropriate KPIs. A, C and D are unrelated applications.
Question 48
What is 'strategic drift'?
Select an option first.
Correct answer: B — The tendency for an organisation's strategy to fall progressively out of alignment with its environment as incremental changes fail to keep pace with environmental change
Explanation: B is correct. Strategic drift occurs when the pace of strategic adaptation is slower than environmental change, causing growing misalignment. It typically ends in either transformational change or organisational failure. A, C and D describe deliberate, controlled actions.
Question 49
What is the purpose of scenario planning?
Select an option first.
Correct answer: B — To explore a range of plausible future environments to test strategy robustness and develop contingency plans
Explanation: B is correct. Scenario planning (Shell popularised it) involves constructing two to four plausible but meaningfully different pictures of the future, then testing whether the current strategy succeeds in each scenario. It builds strategic resilience under deep uncertainty. A assumes predictability. C is project planning. D is financial modelling.
Question 50
What is corporate governance?
Select an option first.
Correct answer: B — The system of rules, practices, and processes by which a company is directed and controlled to meet the interests of its stakeholders
Explanation: B is correct. Corporate governance defines how authority is exercised, how decisions are made, and how accountability is maintained — balancing the interests of shareholders, management, employees, customers, and society. A, C and D are narrower activities.
Question 51
What is the difference between a unitary and a two-tier board structure?
Select an option first.
Correct answer: B — A unitary board combines executive and non-executive directors in one body; a two-tier system has a separate supervisory board overseeing an executive management board
Explanation: B is correct. The UK uses a unitary board model with both executive (operational) and non-executive (oversight) directors. Germany's two-tier model has a supervisory board (Aufsichtsrat) overseeing the management board (Vorstand). A, C and D are incorrect distinctions.
Question 52
What is the primary role of a non-executive director (NED)?
Select an option first.
Correct answer: B — To provide independent oversight, scrutiny, and challenge to executive management, while contributing expertise and representing shareholder interests
Explanation: B is correct. NEDs provide independent challenge to executive decisions, chair key board committees (audit, remuneration, nomination), and protect shareholder interests. They do not manage operations (A, D) or prepare accounts (C).
Question 53
Why is it important to separate the roles of Chair and Chief Executive Officer (CEO)?
Select an option first.
Correct answer: B — To avoid the concentration of power in one individual, ensuring the board can independently oversee and challenge executive management
Explanation: B is correct. Separating Chair and CEO prevents one person from both setting the agenda (Chair) and running the business (CEO). This separation is a key corporate governance principle in most codes. A and D are irrelevant. C is not universally required — many codes operate on a comply-or-explain basis.
Question 54
What is the role of an audit committee?
Select an option first.
Correct answer: B — To provide independent oversight of financial reporting, internal controls, and the external and internal audit processes
Explanation: B is correct. The audit committee (composed mainly of NEDs) oversees the integrity of financial reporting, monitors internal controls, manages the relationship with external auditors, and oversees internal audit. It does not conduct the audit itself (A) or approve budgets (C).
Question 55
What is a remuneration committee's primary function?
Select an option first.
Correct answer: B — To determine, using independent judgment, the pay and incentive packages of executive directors to align executive remuneration with long-term company performance
Explanation: B is correct. The remuneration committee (mainly NEDs) sets executive pay to balance competitiveness with alignment to shareholder interests. It aims to prevent executives from awarding themselves excessive pay. A, C and D are not its primary functions.
Question 56
What is 'comply or explain' in the context of corporate governance codes?
Select an option first.
Correct answer: B — A principle-based approach where companies either comply with a code's provisions or explain publicly why they have departed from them
Explanation: B is correct. Comply or explain (as in the UK Corporate Governance Code) gives companies flexibility — they may depart from specific provisions if they explain their reasons. This is softer than prescriptive rules-based regulation (C). A and D are unrelated.
Question 57
What is the concept of 'integrated reporting'?
Select an option first.
Correct answer: B — A reporting approach communicating how an organisation's strategy, governance, performance, and prospects create value across financial and non-financial capitals over time
Explanation: B is correct. Integrated reporting (IR) goes beyond traditional financial reporting to show how an organisation uses and affects six capitals (financial, manufactured, intellectual, human, social/relationship, and natural) to create value — for investors and other stakeholders.
Question 58
What are the six capitals in the integrated reporting framework?
Select an option first.
Correct answer: B — Financial, manufactured, intellectual, human, social and relationship, and natural capital
Explanation: B is correct. The International Integrated Reporting Council framework identifies six capitals through which organisations create value: financial, manufactured (infrastructure, equipment), intellectual (IP, knowledge), human (skills, motivation), social and relationship (community, brands), and natural (environmental resources).
Question 59
What is ESG reporting?
Select an option first.
Correct answer: B — Disclosure of an organisation's Environmental, Social, and Governance performance to help investors and stakeholders assess non-financial risks and impacts
Explanation: B is correct. ESG reporting covers: Environmental (carbon emissions, resource use, climate risk), Social (employee welfare, human rights, community impact), and Governance (board structure, ethics, transparency). It is increasingly required by investors and regulators.
Question 60
What is Corporate Social Responsibility (CSR)?
Select an option first.
Correct answer: B — An organisation's voluntary commitment to operate in a way that is beneficial to society and the environment beyond its minimum legal requirements
Explanation: B is correct. CSR reflects an organisation's responsibility to go beyond legal compliance — addressing environmental impact, community welfare, ethical supply chains, and employee wellbeing. A, C and D represent narrower obligations.
More free ACCA topics
Management Accounting401
Financial Accounting400
Corporate and Business Law400
Performance Management400
Financial Reporting400
Financial Management400
Strategic Business Reporting400
Advanced Financial Management400
Advanced Performance Management400
Advanced Taxation400
Business and Technology300
Taxation300
Audit and Assurance300
Advanced Audit and Assurance296
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