Free CIMA G1 Management Accountant Gateway Exam Question

Question No 8: 

Mark Grassington, Managing Director of Bild Civil Engineering, has asked for your advice.
“We have been receiving from some of our larger complaints sub-contractors about our working relationships. They feel that time and effort are being wasted because we do not properly manage our relationship with them.

To put this in perspective, Bild Civil Engineering has seventeen major subcontractors on its list of preferred suppliers. Some are general builders who provide most of the major trades, from digging foundations to bricklaying and other trades. Others are more specialised and focus on drainage or other specific tasks. We find that the specialists are more expensive than the general builders, but they have greater expertise and so they may be used for difficult tasks, such as installing drainage in unstable soil.

The regional subsidiaries of Bild Civil Engineering usually contract for a project and then invite the subcontractors to tender for the work. Subcontractors have very little input into the contract specification itself. They also find it difficult to manage their commitments because they are often invited to tender for work by more than one Bild subsidiary at the same time, even though they would not have the capacity to accept all of the work if all of their tenders were successful.

There have been times when it has been difficult to find a subcontractor for a project because many of our preferred subcontractors would choose to work with our competitors rather than with us when they have a choice.

Could you give me some ideas that I can present to the next board meeting?

•     Firstly, I have always been impressed by the balanced scorecard diagrams that you prepare for other aspects of the business. Could you outline a set of measures that could be developed into a balanced scorecard for managing the whole process of working with subcontractors? Please also provide a brief explanation for each measure.
•    Secondly, advise the company regarding processes and controls that we could adopt to manage the  whole  process of  the collaboration with