The Definitive Guide to Structuring Management Case Study Answers

management case study answer structure

Even before you attempt your actual sitting, it’s important to always try and improve your management case study mock exam scripts.

Because these will get you into the habit of writing clear and well presented answers which address the likely questions you’ll get on the case.

But that’s easier said than done, right?

Because, there’s a common challenge to overcome at management case study level.

In fact, it’s one that has been highlighted as a worrying trend in recent examiner reports.

Let’s take a look at what the examiner has said…

management case study exam

 

Clearly, students are struggling to write a well balanced – and well structured – script within the time constraints of the exam.

But it doesn’t have to be this way.

So how do you avoid this?

It all depends on your approach to answer planning.

Because some students make the mistake of not planning at all before they start typing.

While others waste valuable exam time on creating a plan that simply doesn’t help.

If this currently describes you, don’t worry.  There’s an approach I learned that I thoroughly recommend.

And I’ll now walk you through this step-by-step process, which has proven to be successful for me and many other students.

Step #1: Initial skim reading of the scenario

This is where you want to identify what the requirements are.   And confirm whether there are any separate elements to  address in your answer.

So at this stage you’re simply looking out for what you’re being asked to do.  Not what information would be helpful to reference in your answer.  We’ll do that in a minute.

Let’s take a look at the requirements for  Section 1 of Variant 1 for the August 2017 Management Case Study Exam,

 

 

As you can see, the requirements are usually pretty clear.  But just be aware they could appear anywhere in the information provided.

Okay, so we know what we are being asked to do.  Onto the next stage.

Step #2: Create a structure around those requirements

Firstly, we need to decide where we will create our plan.  I advise using the answer area like the one below.

 

This allows you to:

  • Underline and bold the headings and sub headings you will use.
  • Copy and paste your headings and bullet points underneath your plan to quickly format your answer.
  • Avoid switching between windows on screen

We can then start off our plan by breaking down the requirements into the separate parts we need to address, which we will use as our sub-headings in our written answer.

For requirement 1, we basically need to assess the strength of the argument that we should go ahead with the project. Based on the financial analysis that has been provided.  (the pros and cons of coming to this conclusion).  It would therefore make sense to divide our answer into two parts – 1) the pros, and 2) the cons.  And use these as sub-headings.

For requirement 2, we need to assess the extent of the political risks resulting from the proposed redundancies, in 3 different areas – 1) the country where the plant is located, 2) our home country, 3) globally. So we can use each area as a sub heading and then assess the impact underneath.

Next, we need to estimate the number of marks to allocate to each part of the two requirements.  Now, section 1 of the exam was 45 minutes long.  And given we know the exam overall is 3 hours long, it is fair to assume that a 45 minute section is worth a quarter of the marks in total – so that’s 25 marks.

And as we learned from the examiner earlier, case study writers create the requirements with an equal (or very similar) number of marks.

So without even knowing the marking guidance, we could have guessed that the two requirements were worth around 12 marks each.

And as we want to try and write strong, in-depth points that earn us two marks each, we can then structure our plan as follows…

Requirement 1 – 12 marks

Strength of argument  –  6 marks

  • Point 1 – 2 marks
  • Point 2 – 2 marks
  • Point 3 – 2 marks

Weakness of argument  – 6 marks

  • Point 1 – 2 marks
  • Point 2 – 2 marks
  • Point 3 – 2 marks

Requirement 2 – 11 marks

Strength of Political Risks – Essland  – 4 marks

  • Point 1 – 2 marks
  • Point 2 – 2 marks

Strength of Political Risks – Westland –  4 marks

  • Point 1 – 2 marks
  • Point 2 – 2 marks

Strength of Political Risks – Globally – 4 marks

  • Point 1 – 2 marks
  • Point 2 – 2 marks

Remember this is just a quick estimate of the breakdown of marks.  It doesn’t have to be precise.  Just use it as a guide for how many points you need to make.

Step #3: Brainstorm your initial thoughts

This step involves brainstorming any initial ideas that come to you BEFORE you read the scenario in detail.

We do this now as it’s easy to get lost in the detail of the scenario and miss some obvious points which can earn you marks.

Here, you want to ask yourself:  “is there any technical knowledge I can use which would make my answer more helpful?”  If so, jot down any models or theories that would be relevant.

After all, the Management case study examiner recently said in their post exam report:

“Technical tasks are still proving challenging for candidates, there were many weak answers on financial reporting issues and management accounting”

Also, consider any common sense ideas that come to mind which would be useful.

This should only be a very quick process  – one or two minutes max – but it will give you confidence that you have some relevant points you can expand on in your answer.

If we take requirement 2 from above, we should have some initial thoughts on the extent of political risk faced in each of the three areas.

For instance, in the country where the redundancies would take place, is where the biggest political risk is likely to be faced.  The local Government could put pressure on us in a bid to prevent an increase in unemployment.

So what could they do?

Perhaps place trade restrictions on us…impose new legislation that hurts us…

How about our home government?

It’s unlikely they would be that concerned.

Globally?

Perhaps other local Governments (where we have plants) would follow in the footsteps of those in Essland and put pressure on us.  They would want to deter any potential redundancies and rise in unemployment in their own countries.

So we can add those ideas to our plan for requirement 2…

Requirement 2 – 11 marks

Strength of  Political Risks – Essland  – 4 marks

  • Point 1 – 2 marks – possible trade restrictions
  • Point 2 – 2 marks – possible new legislation

Strength of Political Risks – Westland –  4 marks

  • Point 1 – 2 marks – likely to be low
  • Point 2 – 2 marks

Strength of Political Risks – Globally – 4 marks

  • Point 1 – 2 marks – Encouraged by Essland Govt
  • Point 2 – 2 marks – pre emptive measures

Step #4:  Read the scenario carefully and add notes to your plan

Let’s start with the first paragraph in section 1, variant 1, of the August 2017 exam:

“The board has decided to upgrade our automated production lines to take advantage of improvements such as cobots (collaborative robots).   I have been put in charge of the implementation of this upgrade”

Okay, so presumably collaborative robots are able to assemble more vehicles in less time than humans or existing machinery.  Whilst still maintaining or even improving quality.   On this basis, it would make sense to replicate this in all factories.  And so this would add weight to the argument that we should go ahead with the proposal at Essland.

We can add this as a “pro” to our requirement 1 answer plan.

We should also note from this paragraph that it’s our boss – the Senior Financial Manager – who is “in charge of the implementation“ process.   So it is he who we are trying to help make a decision.  This will shape how we communicate our answer because we won’t need to explain technical accounting matters to him like we would a non financial senior manager.

For example, as a Senior Financial Manager, he’ll already be aware of the purpose of using NPV in investment appraisal.

Next, in paragraph 2, we are told:

“Most of our factories are already equipped with advanced robots and so the upgrades are generally replacements of electronics and sensors rather than the total replacement of whole production lines.”

We can use this information in our answer when assessing the political risks faced globally as a result of the potential redundancies in Essland.

As most of our factories around the world already have advanced robots, rather than a large workforce, there isn’t the same potential for large scale redundancies as in Essland.  So most governments on a global level will be less concerned about this issue being replicated in their countries, and therefore will be unlikely to put much political pressure on us.

In paragraph 3, we then discover more information about the plant in Essland:

“The plant is located in Essland, a low-wage country.  It assembles our Dateline van for sale around the world.  The plant’s production line is very basic, it does little more than move van bodies between work stations.   Almost all of the actual assembly, paint and trim work are done by hand.  Upgrading the plant to the latest technology would be expensive.  The plant produces vans to a good standard and at an acceptable cost, and I saw little point in upgrading it.”

So how can we apply this information in our answers to requirement 1 and 2?

Well, let’s think about requirement 1.   With Essland being a low wage country, this is presumably a big reason why we chose this location for our Dateline assembly plant in the first place.  To minimise cost.

If we replaced low wage workers with “the latest technology” which “would be expensive”, would this be a good use of funds? Particularly as the plant already “produces vans to a good standard and at an acceptable cost.”

On the other hand, if “Almost all of the actual assembly, paint and trim work are done by hand”, would we be better off using the new technology available to speed this process up?  As we could probably produce more vans than we currently do, and hopefully increase sales as a result.

This gives us evidence to use when debating the conclusion that we should go ahead with the proposal.  And so we can add these points to our answer plan.

If we then look at the executive summary, we are told that in Essland:

“growing prosperity is putting upward pressure on wage rates.  We have a large workforce and even a small percentage increase in wages is expensive.”

This then adds weight to the argument for going ahead with the proposal as we can mitigate the threat of a large increase in labour costs.    We can add this point to our answer plan for requirement 1.

And for requirement 2, the Essland government will clearly want to maintain this trend of growing prosperity in the country, and so will try to do anything in their powers to prevent us making large scale redundancies as it would be damaging economically as well as politically. We can apply this to our answer on political risk in Essland.

Further down we find out that there is a 30% probability that only a small increase in prosperity will occur in Essland over the next 10 years.  This would mean that the potential saving on labour costs would only be $2m a year for 10 years (before accounting for the time value of money).  Compared to a $50m up-front investment.

This makes the project sound more risky.   And we should add this as a “con” to our answer plan for requirement 1.

Next we learn that “2,000 production staff” would be made redundant.  And that “there is no legal requirement to make redundancy payments, so the only cost would be the cost of equipment. “

Okay, so let’s think about how easy it would be to make 2,000 staff redundant.    Could they go on strike and disrupt current production in response?  Could they refuse to help install and test the new equipment?  If so, this would be hugely damaging to our Dateline production and reputation with customers.   Another  “con” to add to our answer plan for requirement 1.

But on the face of it, having “no legal requirement to make redundancy payments” is a benefit to going ahead with the proposal.

The next paragraph says:

“Our local cost of debt is 12%.  I am assuming that we would borrow locally and not at Aurora’s weighted average cost of capital of 18%.”

But the point is that borrowing $50m, with no guaranteed return, runs the risk that we cannot pay back the principal or the interest.  Or at least will weaken our financial position and performance.  So this is an argument against going ahead with the proposal.

Finally, we get to the discounted cash flow model.  The crux of the financial analysis.

The most striking thing to note is that although the anticipated NPV is indeed positive, it is only $2.5m.  When we consider that the initial investment is 20 times this amount, then it does make you question whether this is a worthwhile project.

And if the WACC of 18% was used rather than the 12% discount factor, the result of the financial analysis would almost certainly be a negative NPV.  As would be the case if the annual cost savings were lower than the assumed average savings of $9.3m.  Again, this is evidence that proceeding with the project is not such a good idea.

Okay, let’s include all the key points we’ve learned from the scenario onto our plan…

Requirement 1 – 12 marks

Strength of argument  –  6 marks

  • Point 1 – 2 marks – NPV is positive, no redundancy costs legally
  • Point 2 – 2 marks – could increase capacity at Essland, speed of production increased
  • Point 3 – 2 marks –

Weakness of argument  – 6 marks

  • Point 1 – 2 marks – NPV is only $2.5m, would probably be negative if WACC used and/or annual cost savings were lower (esp if only $2m a year)
  • Point 2 – 2 marks – problems enforcing 2,000 redundancies – disruption, strike etc
  • Point 3 – 2 marks – replacing low wage workers defeats object of Essland location. Could invest $50m in a factory elsewhere.

Requirement 2 – 11 marks

Strength of  Political Risks – Essland  – 4 marks

  • Point 1 – 2 marks – possible trade restrictions – on importing new equipment, exporting finished vehicles
  • Point 2 – 2 marks – possible new legislation – making redundancy pay mandatory, tax increases

Strength of Political Risks – Westland –  4 marks

  • Point 1 – 2 marks – likely to be low as no redundancy threat here
  • Point 2 – 2 marks –

Strength of Political Risks – Globally – 4 marks

  • Point 1 – 2 marks – Encouraged by Essland Govt, most factories in most countries are already automated so minimal threat of large scale redundancies outside Essland
  • Point 2 – 2 marks – pre emptive measures if similar plants to Essland

Step #5: Apply to Pre Seen

Next up, you want to consider if there are any elements from the pre seen that would be relevant to reference. As this will help you demonstrate your commercial awareness by showing you understand the business and its industry.  And earn you marks for business skills.

Now, you don’t want to re-read the pre seen (even though it is available in your exam) as this is not a good use of your time.  But it is helpful if you can remember some key points that would add value to your answer.

For instance, for requirement 1, the pre seen tells us that robotics provide “far greater precision” than when using humans in the production process. So it is fair to assume that the quality of vans produced at the Essland plant would improve compared to the actual assembly, paint and trim work being done by hand.

This would in turn help us maintain brand loyalty and perhaps enhance our reputation for high quality and offering good value for money.

We are also told the company has been able to grow during the 21st century in part because it pays close attention to local market conditions and consumer taste.  So being aware of the rising prosperity in Essland offers both an opportunity as well as the threat of rising labour costs.

The opportunity being that Essland could be an emerging market we can tap into.  With increasing prosperity in Essland, local consumers may be able to afford the cars that we manufacture elsewhere.

If there was sufficient demand, it would be worth considering manufacturing cars as well as vans at the Essland plant.  And so an investment in robotics would help us do this because the pre seen tells us robotics offer “greater flexibility where different versions of the same basic vehicle can be produced in a single run, without interruption or retooling“

This information adds strength to the argument for going ahead with the upgrade at Essland.

On the other hand, the pre seen also tells us that collaborative robots work hand in hand with humans, where workers carry out tests, repair equipment and check for quality.  So we would still need to retain and train a number of staff at the Essland plant to work with the new machinery.  Would making 2,000 people redundant be too many?  If so, this will mean that the anticipated labour cost savings will be overestimated.

For requirement 2, we can apply our pre seen knowledge that the group has subsidiaries across the world including Europe, the US and Asia.  So any significant political pressure exerted on us in these regions could be very damaging.

Step #6: Consider Ethics

As I said in my recommended weekly study schedule for the management case study exam revision of ethics is vitally important in your preparation. Because ethical issues can come up in any exam sitting.

Now, it might be that one of the requirements asks you to specifically advise on an ethical issue in the scenario.  So you’d have to come up with ethical related ideas in your plan anyway.

But also, you should consider whether there are any ethical or CSR related points that you could include which would add depth to your answer.  And impress the examiner.

For instance, when answering requirement 1 from above, you could make the point that as part of the company’s corporate social responsibility, we have an obligation to the local community to provide employment.

But also that we have a moral obligation to make redundancy payments should we go ahead with the project.  Because these workers will have living costs to pay for and may find it difficult to find suitable employment straight away, elsewhere in Essland.

Clearly, if we included redundancy payments in the financial analysis, it would likely result in a negative NPV.

Step #7: Final brainstorm considering all 3 OT paper theory

Even after the steps above, you’ll still probably find that some sections of your plan have few, if any, points on them.

So this is your chance to add any final ideas to your plan – in particular, is there any theory, pre seen knowledge or element of the scenario that you can reference?

For instance, for requirement 2, we don’t really have much on the strength of political risks likely to be faced in our home country of Westland, if we make the redundancies in Essland.

So what else could we say, other than they are unlikely to be too concerned?

Well, there may be some pressure to relocate our Dateline factory to our home country.  Or at least use the inves more on our existing operations nationally.  After all, our home government will want to increase more wealth and employment in Westland.

But as we are a global group, they can’t exert too much pressure on us as we could threaten to base our operations elsewhere, and thus reduce employment and tax receipts in Westland.

So let’s update our plan…

Requirement 1 – 12 marks

Strength of argument  –  6 marks

  • Point 1 – 2 marks – NPV is positive, no redundancy costs legally.
  • Point 2 – 2 marks – could increase capacity, speed of production, and quality of van at Essland. Also, enhance customer satisfaction and loyalty.
  • Point 3 – 2 marks – potential to tap into Essland car market as prosperity increases., Robotics offers us flexibility in producing different models with minimal disruption.

Weakness of argument  – 6 marks

  • Point 1 – 2 marks – NPV is only $2.5m, would probably be negative if WACC used and /or annual cost savings were lower (esp if only $2m a year). Moral obligation to make redundancy payments. Local employment is good CSR.
  • Point 2 – 2 marks – problems enforcing 2,000 redundancies – disruption, strike etc
  • Point 3 – 2 marks – replacing low wage workers defeats object of Essland location. Could invest $50m in a factory elsewhere.

Requirement 2 – 11 marks

Strength of  Political Risks – Essland  – 4 marks

  • Point 1 – 2 marks – possible trade restrictions – on importing new equipment, exporting finished vehicles
  • Point 2 – 2 marks – possible new legislation – making redundancy pay mandatory, tax increases

Strength of Political Risks – Westland –  4 marks

  • Point 1 – 2 marks – likely to be low as no redundancy threat here, plus will want us to keep operations based in Westland (for employment and tax receipts)
  • Point 2 – 2 marks – May exert some pressure on us to invest more in Westland, rather than Essland. Perhaps to manufacture dateline van in Westland.

Strength of Political Risks – Globally – 4 marks

  • Point 1 – 2 marks – Encouraged by Essland Govt, most factories in most countries are already automated so minimal threat of large scale redundancies outside Essland
  • Point 2 – 2 marks – we have operations in a number of regions across the world so any pre emptive measures to prevent similar redundancies in Essland, could be very damaging.

Step #8:  Make any relevant recommendations

As part of your role in the exam, you’ll be tested on your ability to influence your boss.   Or other senior management.

So where possible, you want to try and make clear recommendations in response to the requirements.

Can you think of any recommended courses of action that senior management should take for requirement 1 or 2?

Well, based on the points we have come up with for requirement 1, we could recommend that the financial analysis be remodelled to better account for the risk involved.  Such as using our group WACC of 18% as the discount factor, instead of the assumed 12% cost of borrowing.  And an estimation of potential redundancy payments.

Our boss could then make a more informed decision about the potential financial viability of the investment in Essland.

For requirement 2, we could recommend making redundancy payments to ease some political pressure from the Government in Essland. As we will be seen as helping to mitigate the financial impact on the local workers.

Step #9: Plan your writing time

This final step in the planning process will make a huge difference to your exam success.

You must monitor your time regularly throughout your exam.  And be strict on yourself when it comes to moving on to the next part of your answer.  Otherwise you will simply end up writing too much for one element and not enough for another.   And you run the risk that your answer is incomplete when you are timed out for that section of the exam.

This will clearly harm your chances of passing.

So you should plan how long you have to write for each individual part of your answer, based on the number marks you have allocated them.

I recommend you spend around 25% of your section time on planning (including reading). That means for a 45 minute section you want to be spending around 11 minutes on your plan and 34 minutes on writing.  So that’s about 17 minutes of writing time for each of the two requirements.

We then want to break down those minutes as precisely as we can for both requirements.  And add those timings on our plan.

That way we know how long each part of answer should take to write.  And if we also include how much time we should have remaining after completing each element of our answer, it will allow us to monitor our time against the clock on the screen in the exam.

Let’s do this for each requirement from above…

Requirement 1:  12 marks – 17 minutes

Strength of argument  –  6 marks – 8.5 minutes (start with 34 minutes to go)

  • Point 1 – 2 marks – NPV is positive, no redundancy costs legally.
  • Point 2 – 2 marks – could increase capacity, speed of production, and quality of van at Essland. Also, enhance customer satisfaction and loyalty.
  • Point 3 – 2 marks – potential to tap into Essland car market as prosperity increases., Robotics offers us flexibility in producing different models with minimal disruption.

Weakness of argument  – 6 marks – 8.5 minutes (start with 25.5 minutes to go)

  • Point 1 – 2 marks – NPV is only $2.5m, would probably be negative if WACC used and /or annual cost savings were lower (esp if only $2m a year). Moral obligation to make redundancy payments. Local employment is good CSR.
  • Point 2 – 2 marks – problems enforcing 2,000 redundancies – disruption, strike etc
  • Point 3 – 2 marks – replacing low wage workers defeats object of Essland location. Could invest $50m in a factory elsewhere.

Requirement 2 – 11 marks – 17 minutes

Strength of  Political Risks – Essland  – 4 marks – 5.5 minutes (start with 17 minutes to go)

  • Point 1 – 2 marks – possible trade restrictions – on importing new equipment, exporting finished vehicles
  • Point 2 – 2 marks – possible new legislation – making redundancy pay mandatory, tax increases

Strength of Political Risks – Westland –  4 marks – 5.5 minutes (start with 11.5 minutes to go)

  • Point 1 – 2 marks – likely to be low as no redundancy threat here, plus will want us to keep operations based in Westland (for employment and tax receipts)
  • Point 2 – 2 marks – May exert some pressure on us to invest more in Westland, rather than Essland. Perhaps to manufacture dateline van in Westland.

Strength of Political Risks – Globally – 4 marks – 5.5 minutes (start with 5.5 minutes to go)

  • Point 1 – 2 marks – Encouraged by Essland Govt, most factories in most countries are already automated so minimal threat of large scale redundancies outside Essland
  • Point 2 – 2 marks – we have operations in a number of regions across the world so any pre emptive measures to prevent similar redundancies in Essland, could be very damaging.

Remember to keep your eye on the clock throughout each section of your exam and move on according to your planned timings.

Why You Don’t Need a Completed Plan

The above final plan goes into greater detail than you’ll need in your mocks and real exam.  But I’ve made it this way to help you get a better understanding of the planning process.

And you don’t even need a fully completed plan.

If your plan is 80% complete then you should easily have enough to work with when it comes to writing a strong answer.   (And even a half complete plan will give you a good structure to use).

Remember, your answer plan won’t be getting marked so don’t get bogged down with it.   Your writing time must always take priority.

Try using as few words as possible when jotting down your plan.  You just want enough information to remind you of the headings you will use, and the key points you will expand on in your answer.  This will enable you to plan more quickly.

And sometimes fewer points will come into your head than you’d like during your planning phase.

But don’t worry.

When it comes to writing up your answer, you can just go into greater depth on the points you do have.  And new ideas may well come to you as you’re typing away.

Conclusion

Your answer plan has three main jobs:

  1. To ensure you structure your answer around the specific requirements
  2. To come up with enough points to earn you pass marks
  3. To allocate your writing time precisely for a balanced and completed answer

So why would you ignore using one in your exam?

All you have to do is complete as many of the recommended steps as you can before you have to start writing.

But you can’t just try this answer planning approach once and expect to be an expert at it.

Like all elements of case study exam technique, you need to put in the practice.

So give this 9-step approach a go in your practice exams

If you put in the work now, you’ll soon be able to perform the steps quickly and accurately, when under the time pressure of exam conditions.

And not only will your plans improve, but your exam score, too.

Now, I realise that we’ve covered a load of detail here, so if you have any questions, just email me below.

Thanks for your time,

Matt

P.S. For a great tuition video walking you through the answer planning process,  click here

 

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