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Since the late 1970's, in the face of a severe loss of

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Since the late 1970's, in the face of a severe loss of [#permalink] New post 29 Nov 2010, 18:54
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Since the late 1970’s, in the face of a severe loss of market share in dozens of industries, manufacturers in the United States have been trying to improve productivity—and therefore enhance their international competitiveness—through cost-cutting programs. (Cost-cutting here is defined as raising labor output while holding the amount of labor constant.) However, from 1978 through 1982, productivity—the value of goods manufactured divided by the amount of labor input—did not improve; and while the results were better in the business upturn of the three years following, they ran 25 percent lower than productivity improvements during earlier, post-1945 upturns. At the same time, it became clear that the harder manufactures worked to implement cost-cutting, the more they lost their competitive edge.
With this paradox in mind, I recently visited 25 companies; it became clear to me that the cost-cutting approach to increasing productivity is fundamentally flawed. Manufacturing regularly observes a “40, 40, 20” rule. Roughly 40 percent of any manufacturing-based competitive advantage derives from long-term changes in manufacturing structure (decisions about the number, size, location, and capacity of facilities) and in approaches to materials. Another 40 percent comes from major changes in equipment and process technology. The final 20 percent rests on implementing conventional cost-cutting. This rule does not imply that cost-cutting should not be tried. The well-known tools of this approach—including simplifying jobs and retraining employees to work smarter, not harder—do produce results. But the tools quickly reach the limits of what they can contribute.
Another problem is that the cost-cutting approach hinders innovation and discourages creative people. As Abernathy’s study of automobile manufacturers has shown, an industry can easily become prisoner of its own investments in cost-cutting techniques, reducing its ability to develop new products. And managers under pressure to maximize cost-cutting will resist innovation because they know that more fundamental changes in processes or systems will wreak havoc with the results on which they are measured. Production managers have always seen their job as one of minimizing costs and maximizing output. This dimension of performance has until recently sufficed as a basis of evaluation, but it has created a penny-pinching, mechanistic culture in most factories that has kept away creative managers.
Every company I know that has freed itself from the paradox has done so, in part, by developing and implementing a manufacturing strategy. Such a strategy focuses on the manufacturing structure and on equipment and process technology. In one company a manufacturing strategy that allowed different areas of the factory to specialize in different markets replaced the conventional cost-cutting approach; within three years the company regained its competitive advantage. Together with such strategies, successful companies are also encouraging managers to focus on a wider set of objectives besides cutting costs. There is hope for manufacturing, but it clearly rests on a different way of managing.
1. The author of the passage is primarily concerned with
(A) summarizing a thesis
(B) recommending a different approach
(C) comparing points of view
(D) making a series of predictions
(E) describing a number of paradoxes
2. It can be inferred from the passage that the manufacturers mentioned in line 2
expected that the measures they implemented would
(A) encourage innovation
(B) keep labor output constant
(C) increase their competitive advantage
(D) permit business upturns to be more easily predicted
(E) cause managers to focus on a wider set of objectives
3. The primary function of the first paragraph of the passage is to
(A) outline in brief the author’s argument
(B) anticipate challenges to the prescriptions that follow
(C) clarify some disputed definitions of economic terms
(D) summarize a number of long-accepted explanations
(E) present a historical context for the author’s observations
4. The author refers to Abernathy’s study (line 36) most probably in order to
(A) qualify an observation about one rule governing manufacturing
(B) address possible objections to a recommendation about improving manufacturing competitiveness
(C) support an earlier assertion about one method of increasing productivity
(D) suggest the centrality in the United States economy of a particular manufacturing industry
(E) given an example of research that has questioned the wisdom of revising a manufacturing strategy
5. The author’s attitude toward the culture in most factories is best described as
(A) cautious
(B) critical
(C) disinterested
(D) respectful
(E) adulatory
6. In the passage, the author includes all of the following EXCEPT
(A) personal observation
(B) a business principle
(C) a definition of productivity
(D) an example of a successful company
(E) an illustration of a process technology
7. The author suggests that implementing conventional cost-cutting as a way of increasing manufacturing competitiveness is a strategy that is
(A) flawed and ruinous
(B) shortsighted and difficult to sustain
(C) popular and easily accomplished
(D) useful but inadequate
(E) misunderstood but promising
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Re: mass of market share [#permalink] New post 29 Nov 2010, 18:55
oa will be provided after an explanation

please provide ur answers with explanations
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Re: mass of market share [#permalink] New post 29 Nov 2010, 23:20
anilnandyala wrote:
Since the late 1970’s, in the face of a severe loss of market share in dozens of industries, manufacturers in the United States have been trying to improve productivity—and therefore enhance their international competitiveness—through cost-cutting programs. (Cost-cutting here is defined as raising labor output while holding the amount of labor constant.) However, from 1978 through 1982, productivity—the value of goods manufactured divided by the amount of labor input—did not improve; and while the results were better in the business upturn of the three years following, they ran 25 percent lower than productivity improvements during earlier, post-1945 upturns. At the same time, it became clear that the harder manufactures worked to implement cost-cutting, the more they lost their competitive edge.
With this paradox in mind, I recently visited 25 companies; it became clear to me that the cost-cutting approach to increasing productivity is fundamentally flawed. Manufacturing regularly observes a “40, 40, 20” rule. Roughly 40 percent of any manufacturing-based competitive advantage derives from long-term changes in manufacturing structure (decisions about the number, size, location, and capacity of facilities) and in approaches to materials. Another 40 percent comes from major changes in equipment and process technology. The final 20 percent rests on implementing conventional cost-cutting. This rule does not imply that cost-cutting should not be tried. The well-known tools of this approach—including simplifying jobs and retraining employees to work smarter, not harder—do produce results. But the tools quickly reach the limits of what they can contribute.
Another problem is that the cost-cutting approach hinders innovation and discourages creative people. As Abernathy’s study of automobile manufacturers has shown, an industry can easily become prisoner of its own investments in cost-cutting techniques, reducing its ability to develop new products. And managers under pressure to maximize cost-cutting will resist innovation because they know that more fundamental changes in processes or systems will wreak havoc with the results on which they are measured. Production managers have always seen their job as one of minimizing costs and maximizing output. This dimension of performance has until recently sufficed as a basis of evaluation, but it has created a penny-pinching, mechanistic culture in most factories that has kept away creative managers.
Every company I know that has freed itself from the paradox has done so, in part, by developing and implementing a manufacturing strategy. Such a strategy focuses on the manufacturing structure and on equipment and process technology. In one company a manufacturing strategy that allowed different areas of the factory to specialize in different markets replaced the conventional cost-cutting approach; within three years the company regained its competitive advantage. Together with such strategies, successful companies are also encouraging managers to focus on a wider set of objectives besides cutting costs. There is hope for manufacturing, but it clearly rests on a different way of managing.
1. The author of the passage is primarily concerned with
(A) summarizing a thesis - POE
(B) recommending a different approach - Correct Final Para
(C) comparing points of view - none mentioned
(D) making a series of predictions - POE
(E) describing a number of paradoxes - POE

2. It can be inferred from the passage that the manufacturers mentioned in line 2
expected that the measures they implemented would
(A) encourage innovation - POE
(B) keep labor output constant - Not intended
(C) increase their competitive advantage - Mentioned in Line 2 correct
(D) permit business upturns to be more easily predicted - POE
(E) cause managers to focus on a wider set of objectives - POE

3. The primary function of the first paragraph of the passage is to
(A) outline in brief the author’s argument - Correct rest all POE
(B) anticipate challenges to the prescriptions that follow
(C) clarify some disputed definitions of economic terms
(D) summarize a number of long-accepted explanations
(E) present a historical context for the author’s observations

4. The author refers to Abernathy’s study (line 36) most probably in order to
(A) qualify an observation about one rule governing manufacturing - Cost cuttings isn't rule - POE
(B) address possible objections to a recommendation about improving manufacturing competitiveness - Correct
(C) support an earlier assertion about one method of increasing productivity - POE
(D) suggest the centrality in the United States economy of a particular manufacturing industry - POE
(E) given an example of research that has questioned the wisdom of revising a manufacturing strategy - Its not questioning it,rather its intention is to revise. POE

5. The author’s attitude toward the culture in most factories is best described as
(A) cautious - Correct Para 3rd and 4th
(B) critical - POE
(C) disinterested - POE
(D) respectful - No intention
(E) adulatory - POE

6. In the passage, the author includes all of the following EXCEPT
(A) personal observation - Last para
(B) a business principle - Cost cutting itself
(C) a definition of productivity - first para
(D) an example of a successful company - Last Para
(E) an illustration of a process technology - None mentioned Correct

7. The author suggests that implementing conventional cost-cutting as a way of increasing manufacturing competitiveness is a strategy that is
(A) flawed and ruinous - Correct Runious because of 2nd line in Para 3rd
(B) shortsighted and difficult to sustain - Unable to eliminate :)
(C) popular and easily accomplished - POE
(D) useful but inadequate - POE
(E) misunderstood but promising - POE


The answers and explainations are embedded.
Good RC, Anil.
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Re: mass of market share [#permalink] New post 01 Dec 2010, 01:26
B
C
A
C
B
B
d

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Re: mass of market share [#permalink] New post 01 Dec 2010, 10:35
1.B
2.C
3.E
4.A
5.B
6.E
7.B
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Re: mass of market share [#permalink] New post 06 Dec 2010, 09:58
1. B
2. C
3. E
4. B
5. B
6. E
7. D
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Re: mass of market share [#permalink] New post 10 Dec 2010, 08:15
B, B, D, E, B, E, A - That's what I got 15 mins later :mad:
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Re: mass of market share [#permalink] New post 13 Dec 2010, 23:02
B,C,E,E,B,B,B are my answers in 10 mins and 30 seconds. Wait for the OA
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Re: mass of market share [#permalink] New post 13 Dec 2010, 23:51
BCAEBEB 11.30 min
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Re: mass of market share [#permalink] New post 14 Dec 2010, 09:05
My answers b
c
e
a
b
e
b

Time taken 6.50 mins
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Last edited by mailnavin1 on 14 Dec 2010, 09:07, edited 1 time in total.
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Re: mass of market share [#permalink] New post 14 Dec 2010, 09:06
This is from 1000 RC. OA's are
[Reveal] Spoiler:
bcecbed

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Re: mass of market share [#permalink] New post 19 Dec 2010, 20:37
mailnavin1 wrote:
My answers b
c
e
a
b
e
b

Time taken 6.50 mins


I got the same answers and time taken was 8 mins.
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Re: Since the late 1970's, in the face of a severe loss of [#permalink] New post 16 Oct 2013, 05:30
anilnandyala wrote:
Since the late 1970’s, in the face of a severe loss of market share in dozens of industries, manufacturers in the United States have been trying to improve productivity—and therefore enhance their international competitiveness—through cost-cutting programs. (Cost-cutting here is defined as raising labor output while holding the amount of labor constant.) However, from 1978 through 1982, productivity—the value of goods manufactured divided by the amount of labor input—did not improve; and while the results were better in the business upturn of the three years following, they ran 25 percent lower than productivity improvements during earlier, post-1945 upturns. At the same time, it became clear that the harder manufactures worked to implement cost-cutting, the more they lost their competitive edge.
With this paradox in mind, I recently visited 25 companies; it became clear to me that the cost-cutting approach to increasing productivity is fundamentally flawed. Manufacturing regularly observes a “40, 40, 20” rule. Roughly 40 percent of any manufacturing-based competitive advantage derives from long-term changes in manufacturing structure (decisions about the number, size, location, and capacity of facilities) and in approaches to materials. Another 40 percent comes from major changes in equipment and process technology. The final 20 percent rests on implementing conventional cost-cutting. This rule does not imply that cost-cutting should not be tried. The well-known tools of this approach—including simplifying jobs and retraining employees to work smarter, not harder—do produce results. But the tools quickly reach the limits of what they can contribute.
Another problem is that the cost-cutting approach hinders innovation and discourages creative people. As Abernathy’s study of automobile manufacturers has shown, an industry can easily become prisoner of its own investments in cost-cutting techniques, reducing its ability to develop new products. And managers under pressure to maximize cost-cutting will resist innovation because they know that more fundamental changes in processes or systems will wreak havoc with the results on which they are measured. Production managers have always seen their job as one of minimizing costs and maximizing output. This dimension of performance has until recently sufficed as a basis of evaluation, but it has created a penny-pinching, mechanistic culture in most factories that has kept away creative managers.
Every company I know that has freed itself from the paradox has done so, in part, by developing and implementing a manufacturing strategy. Such a strategy focuses on the manufacturing structure and on equipment and process technology. In one company a manufacturing strategy that allowed different areas of the factory to specialize in different markets replaced the conventional cost-cutting approach; within three years the company regained its competitive advantage. Together with such strategies, successful companies are also encouraging managers to focus on a wider set of objectives besides cutting costs. There is hope for manufacturing, but it clearly rests on a different way of managing.
1. The author of the passage is primarily concerned with
(A) summarizing a thesis
(B) recommending a different approach
(C) comparing points of view
(D) making a series of predictions
(E) describing a number of paradoxes
2. It can be inferred from the passage that the manufacturers mentioned in line 2
expected that the measures they implemented would
(A) encourage innovation
(B) keep labor output constant
(C) increase their competitive advantage
(D) permit business upturns to be more easily predicted
(E) cause managers to focus on a wider set of objectives
3. The primary function of the first paragraph of the passage is to
(A) outline in brief the author’s argument
(B) anticipate challenges to the prescriptions that follow
(C) clarify some disputed definitions of economic terms
(D) summarize a number of long-accepted explanations
(E) present a historical context for the author’s observations
4. The author refers to Abernathy’s study (line 36) most probably in order to
(A) qualify an observation about one rule governing manufacturing
(B) address possible objections to a recommendation about improving manufacturing competitiveness
(C) support an earlier assertion about one method of increasing productivity
(D) suggest the centrality in the United States economy of a particular manufacturing industry
(E) given an example of research that has questioned the wisdom of revising a manufacturing strategy
5. The author’s attitude toward the culture in most factories is best described as
(A) cautious
(B) critical
(C) disinterested
(D) respectful
(E) adulatory
6. In the passage, the author includes all of the following EXCEPT
(A) personal observation
(B) a business principle
(C) a definition of productivity
(D) an example of a successful company
(E) an illustration of a process technology
7. The author suggests that implementing conventional cost-cutting as a way of increasing manufacturing competitiveness is a strategy that is
(A) flawed and ruinous
(B) shortsighted and difficult to sustain
(C) popular and easily accomplished
(D) useful but inadequate
(E) misunderstood but promising


Good passage, now just two questions about the answer choices.
First, question 4.

How are A and C answer choices much different? They sound pretty similar to me. Would someone please elaborate on this one?

Then question 6.
Is there really an example of a successful company in the passage? Cause it's the third time I read it and I haven't able to find it
Your thoughts?

Thanks
Will provide Kudos to good analysis
Cheers
J :)
Re: Since the late 1970's, in the face of a severe loss of   [#permalink] 16 Oct 2013, 05:30
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