CIMA Exam CIMAPRA19-E03-1 Topic 5 Question 72 Discussion

Actual exam question for CIMA's CIMAPRA19-E03-1 exam

Question #: 72
Topic #: 5

LLL is an international oil and gas exploration company. It is considering investing S300 million in developing new oil fields in Country D. For this it will need to obtain a license from the government of Country D.

These new oil fields will bring much wealth to Country D because a large proportion of the revenue from the production of oil will be paid to the government as part of the licensing agreement.

However, oil production in Country D will have some undesirable social effects, such as the threat of pollution, congestion to the roads and pressure on local amenities such as housing, electricity and clean water.

Which of the following approaches to stakeholder management should LLL NOT undertake in order to enter Country D?

AIssue free shares in a Joint Venture to develop oil fields to government ministers from Country D.

BCommit to improving the local amenities and roads as a part of the application for a license in Country D.

CDevelop and circulate a promotional video showing the benefits enjoyed by other countries in which LLL operates.

DUndertake stakeholder mapping to identify the interests of the most powerful players in the decision to grant a license to LLL.

Show Suggested Answer

Suggested Answer: A, C

by Salena at Aug 09, 2023, 11:50 AM

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Sommer

2 months ago

I hear they're also considering offering a year's supply of free donuts to the local residents. That's sure to win over the hearts and minds of the community!

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Lettie

25 days ago

C) Develop and circulate a promotional video showing the benefits enjoyed by other countries in which LLL operates.

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Glenn

1 months ago

B) Commit to improving the local amenities and roads as a part of the application for a license in Country D.

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Quentin

1 months ago

A) Issue free shares in a Joint Venture to develop oil fields to government ministers from Country D.

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Bernadine

2 months ago

Stakeholder mapping is crucial to understand the power dynamics and interests involved. Option D is a must-do, not something to avoid.

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Harris

2 months ago

Promotional videos are great, but they don't actually address the real concerns of the local stakeholders. Option C is not enough on its own.

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Timothy

2 days ago

I agree, a promotional video alone won't address the real concerns of the local stakeholders.

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Lavelle

4 days ago

C) Develop and circulate a promotional video showing the benefits enjoyed by other countries in which LLL operates.

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Cheryll

16 days ago

B) Commit to improving the local amenities and roads as a part of the application for a license in Country D.

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Argelia

1 months ago

A) Issue free shares in a Joint Venture to develop oil fields to government ministers from Country D.

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Charlie

2 months ago

Option A is a clear conflict of interest and should not be considered. Bribing government officials is unethical and illegal.

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Aleisha

2 months ago

I think option B is the best approach. Committing to improving local amenities and infrastructure shows that LLL is taking the social impact seriously and trying to mitigate it.

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