L6M5 Questions and Answers

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Company 1 - Power Culture & Control System

The founder has centralised power, meaning this is a Power Culture.

The Control System is strong due to the strict financial management and reward structure.

Company 2 - Person Culture & Symbols

Employees work independently and focus on their own clients, indicating a Person Culture.

The Symbols aspect comes from the strong corporate branding and identity.

Company 3 - Role Culture & Organisation Structure

A Role Culture is present due to the strict hierarchy and bureaucracy.

The Organisation Structure influences this, as it determines salary and responsibilities.

Company 4 - Task Culture & Ritual

The focus on small teams and dynamic work assignments suggests a Task Culture.

The weekly meetings reflect an important ritual in the company’s culture.

Company 5 - Power Culture & Stories

Power is concentrated in senior leadership, making this a Power Culture.

The company culture is reinforced through Stories of past successes.

The Human-Relations Model (p.193) values flexibility and internal focus.

Organizations encourage open communication and participative decision-making.

Option 2 (low flexibility) is incorrect.

Option 4 (external focus) describes a market-driven structure. [P.193]

Failure to meet contractual obligations is classified as Default (p.123).

Consequential Loss (A) refers to indirect financial loss due to contract failure.

Damages (B) are legal remedies for breaches.

Direct Loss (D) relates to immediate financial impact, but default is the correct term for a failure to meet obligations. [P.123]

Improved performance, increased productivity, and higher retention are benefits of a positive work culture.

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Ali is implying negative consequences rather than stating them directly, which is known as implied coercion.

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Hofstede's dimension contrasts individualism with collectivism. In individualistic cultures, the individual is prioritised over the group.

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The CFO is well-liked and uses personal influence (charisma) rather than authority based solely on position.

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Payback period = Investment Cost ÷ Annual Cash Flow = £10,000 ÷ £2,000 = 5 years.

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A termination for convenience clause outlines the responsibilities when a contract is ended early by mutual agreement (p.135).

Returning advance payments ensures fairness.

Destroying confidential data prevents misuse.

Smooth service transition minimizes disruptions.

A review meeting is not mandatory, so it is incorrect. [P.135]

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Project 1 - Full Turnkey & Top-down Pricing

The project is a full turnkey contract because XYZ is responsible for both design and construction, and ownership is transferred to the client upon completion.

The pricing mechanism is top-down, as it is determined based on past experience of similar projects.

Project 2 - Design and Operate & Rolling Pricing

This is a design and operate contract since XYZ is managing the facility for 6 years after construction.

The rolling pricing mechanism applies because the budget changes continuously over the years due to industry volatility.

Project 3 - Management Contracting & Zero Pricing

Management contracting applies because XYZ was involved early but does not carry design risk.

The pricing mechanism is zero, meaning the budget resets at the beginning of each new accounting period.

Project 4 - Partial Turnkey & Activity-Based Pricing

This is a partial turnkey contract because XYZ is responsible for only certain aspects of the design and build, while another contractor is also involved.

Activity-based pricing is used since XYZ is paid upon milestone completion.

Project 5 - Design Build Operate and Ownership & Bottom-up Pricing

This project follows a Design Build Operate and Ownership (DBOO) model because XYZ is responsible for construction and will operate the toll bridge for 6 years before transferring full control.

The pricing is bottom-up, as it includes raw materials, labor costs, and a profit margin.

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Project 1 - Parametric & Positional Power

Parametric estimation uses an algorithm based on existing data to estimate project costs.

Positional power applies because the leader is the founder of the organisation.

Project 2 - Analogous & Expert Power

Analogous estimation uses historical project data to estimate costs, aligning with the Head of R&D using past projects.

Expert power applies since the project lead is a PhD-qualified Data Scientist.

Project 3 - Bottom-up & Positional Power

Bottom-up estimation involves creating a Bill of Materials and summing up individual costs, which matches this project.

Positional power applies because the project leader is a key stakeholder.

Project 4 - 3-Point Estimate & Negative Power

3-Point Estimation calculates the best, worst, and most likely cost scenarios, matching the given description.

Negative power applies because the leader has the authority to cancel the project at any time.

Project 5 - Expert Judgement & Personal Power

Expert Judgement applies because the leader used his own research to determine the budget.

Personal power applies because the project leader is well-liked and selected a team he is comfortable with.