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Why firms adhere to or deviate from their strategic plans is

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Why firms adhere to or deviate from their strategic plans is [#permalink] New post 06 Feb 2013, 04:36
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Why firms adhere to or deviate
from their strategic plans is poorly
understood. However, theory and
Line limited research suggest that the
(5) process through which such plans
emerge may play a part. In particular,
top management decision-sharing-
consensus-oriented, team-based
decision-making-may increase the
(10) likelihood that firms will adhere to their
plans, because those involved in the
decision-making may be more com-
mitted to the chosen course of action,
thereby increasing the likelihood that
(15) organizations will subsequently adhere
to their plans.
However, the relationship between
top management decision-sharing and
adherence to plans may be affected
(20) by a firm’s strategic mission (its fun-
damental approach to increasing
sales revenue and market share, and
generating cash flow and short-term
profits). At one end of the strategic
(25) mission continuum, “build” strategies
are pursued when a firm desires to
increase its market share and is willing
to sacrifice short-term profits to do so.
At the other end, “harvest” strategies
(30) are used when a firm is willing to
sacrifice marked share for short-term
profitability and cash-flow maximiza-
tion. Research and theory suggest
that top management decision-sharing
(35) may have a more positive relationship
with adherence to plans among firms
with harvest strategies than among
firms with build strategies. In a study
of strategic practices in several large
(40) firms, managers in harvest strategy
scenarios were more able to adhere
to their business plans. As one of the
managers in the study explained it,
this is partly because “[t]ypically all a
(45) manager has to do [when implementing
a harvest strategy] is that which was
done last year.” Additionally, man-
agers under harvest strategies may
have fewer strategic options than do
(50) those under build strategies; it may
therefore be easier to reach agree-
ment on a particular course of action
through decision-sharing, which will
in turn tend to promote adherence
(55) to plans. Conversely, in a “build”
strategy scenario, individual leader-
ship, rather than decision-sharing,
may promote adherence to plans.
Build strategies-which typically
(60) require leaders with strong perso-
nal visions for a firm’s future, rather
than the negotiated compromise
of the team-based decision-may
be most closely adhered to when
(65) implemented in the context of a clear
strategic vision of an individual leader,
rather than through the practice of
decision-sharing.

Q23:
Which of the following best describes the function of the first sentence (lines 17-24) of the second paragraph of the passage?

A. To answer a question posed in the first sentence of the passage about why firms adopt particular strategic missions
B. To refute an argument made in the first paragraph about how top management decision-making affects whether firms will adhere to their strategic plans
C. To provide evidence supporting a theory introduced in the first paragraph about what makes firms adhere to or deviate from their strategic plants
D. To qualify an assertion made in the preceding sentence (lines 6-16) about how top management decision-making affects the likelihood that firms will adhere to their strategic plans
E. To explain a distinction relied on in the second paragraph (lines 17-68) regarding two different kinds of strategic missions

--------------------------------------------------------------------------------
Q24:
The passage cites all of the following as differences between firms using build strategies and firms using harvest strategies EXCEPT

A. their willingness to sacrifice short-term profits in order to build market share
B. their willingness to sacrifice building market share in order to increase short-term profitability
C. the number of strategic options available to their managers
D. the relative importance they assign to maximizing cash-flow
E. how likely they are to employ decision-sharing in developing strategic plans

--------------------------------------------------------------------------------
Q25:
The primary purpose of the passage is to

A. identify some of the obstacles that make it difficult for firms to adhere to their strategic business plans
B. compare two different theories concerning why firms adhere to or deviate from their strategic plans
C. evaluate the utility of top management decision-sharing as a method of implementing the strategic mission of a business
D. discuss the respective advantages and disadvantages of build and harvest strategies among several large firms
E. examine some of the factors that may affect whether or not firms adhere to their strategic plans

--------------------------------------------------------------------------------
Q26:
The author includes the quotation in lines 44-47 of the passage most probably in order to

A. lend support to the claim that firms utilizing harvest strategies may be more likely to adhere to their strategic plans
B. suggest a reason that many managers of large firm prefer harvest strategies to build strategies
C. provide an example of a firm that adhered to its strategic plan because of the degree of its managers’ commitment
D. demonstrate that managers implementing harvest strategies generally have better strategic options than do managers implementing build strategies
E. give an example of a large firm that successfully implemented a harvest strategy

[Reveal] Spoiler:
DEEA
Director
Director
avatar
Status: Gonna rock this time!!!
Joined: 22 Jul 2012
Posts: 550
Location: India
GMAT 1: 640 Q43 V34
GMAT 2: 630 Q47 V29
WE: Information Technology (Computer Software)
Followers: 2

Kudos [?]: 32 [0], given: 562

Re: Why firms adhere to or deviate from their strategic plans is [#permalink] New post 06 Feb 2013, 05:39
roopika2990 wrote:
Why firms adhere to or deviate
from their strategic plans is poorly
understood. However, theory and
Line limited research suggest that the
(5) process through which such plans
emerge may play a part. In particular,
top management decision-sharing-
consensus-oriented, team-based
decision-making-may increase the
(10) likelihood that firms will adhere to their
plans, because those involved in the
decision-making may be more com-
mitted to the chosen course of action,
thereby increasing the likelihood that
(15) organizations will subsequently adhere
to their plans.
However, the relationship between
top management decision-sharing and
adherence to plans may be affected
(20) by a firm’s strategic mission (its fun-
damental approach to increasing
sales revenue and market share, and
generating cash flow and short-term
profits). At one end of the strategic
(25) mission continuum, “build” strategies
are pursued when a firm desires to
increase its market share and is willing
to sacrifice short-term profits to do so.
At the other end, “harvest” strategies
(30) are used when a firm is willing to
sacrifice marked share for short-term
profitability and cash-flow maximiza-
tion. Research and theory suggest
that top management decision-sharing
(35) may have a more positive relationship
with adherence to plans among firms
with harvest strategies than among
firms with build strategies. In a study
of strategic practices in several large
(40) firms, managers in harvest strategy
scenarios were more able to adhere
to their business plans. As one of the
managers in the study explained it,
this is partly because “[t]ypically all a
(45) manager has to do [when implementing
a harvest strategy] is that which was
done last year.” Additionally, man-
agers under harvest strategies may
have fewer strategic options than do
(50) those under build strategies; it may
therefore be easier to reach agree-
ment on a particular course of action
through decision-sharing, which will
in turn tend to promote adherence
(55) to plans. Conversely, in a “build”
strategy scenario, individual leader-
ship, rather than decision-sharing,
may promote adherence to plans.
Build strategies-which typically
(60) require leaders with strong perso-
nal visions for a firm’s future, rather
than the negotiated compromise
of the team-based decision-may
be most closely adhered to when
(65) implemented in the context of a clear
strategic vision of an individual leader,
rather than through the practice of
decision-sharing.

Q23:
Which of the following best describes the function of the first sentence (lines 17-24) of the second paragraph of the passage?

A. To answer a question posed in the first sentence of the passage about why firms adopt particular strategic missions
B. To refute an argument made in the first paragraph about how top management decision-making affects whether firms will adhere to their strategic plans
C. To provide evidence supporting a theory introduced in the first paragraph about what makes firms adhere to or deviate from their strategic plants
D. To qualify an assertion made in the preceding sentence (lines 6-16) about how top management decision-making affects the likelihood that firms will adhere to their strategic plans
E. To explain a distinction relied on in the second paragraph (lines 17-68) regarding two different kinds of strategic missions

--------------------------------------------------------------------------------
Q24:
The passage cites all of the following as differences between firms using build strategies and firms using harvest strategies EXCEPT

A. their willingness to sacrifice short-term profits in order to build market share
B. their willingness to sacrifice building market share in order to increase short-term profitability
C. the number of strategic options available to their managers
D. the relative importance they assign to maximizing cash-flow
E. how likely they are to employ decision-sharing in developing strategic plans

--------------------------------------------------------------------------------
Q25:
The primary purpose of the passage is to

A. identify some of the obstacles that make it difficult for firms to adhere to their strategic business plans
B. compare two different theories concerning why firms adhere to or deviate from their strategic plans
C. evaluate the utility of top management decision-sharing as a method of implementing the strategic mission of a business
D. discuss the respective advantages and disadvantages of build and harvest strategies among several large firms
E. examine some of the factors that may affect whether or not firms adhere to their strategic plans

--------------------------------------------------------------------------------
Q26:
The author includes the quotation in lines 44-47 of the passage most probably in order to

A. lend support to the claim that firms utilizing harvest strategies may be more likely to adhere to their strategic plans
B. suggest a reason that many managers of large firm prefer harvest strategies to build strategies
C. provide an example of a firm that adhered to its strategic plan because of the degree of its managers’ commitment
D. demonstrate that managers implementing harvest strategies generally have better strategic options than do managers implementing build strategies
E. give an example of a large firm that successfully implemented a harvest strategy

[Reveal] Spoiler:
DEEA


Whats ya doubt here, roopika?
_________________

hope is a good thing, maybe the best of things. And no good thing ever dies.

Who says you need a 700 ?Check this out : http://gmatclub.com/forum/who-says-you-need-a-149706.html#p1201595

My GMAT Journey : end-of-my-gmat-journey-149328.html#p1197992

Manager
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Joined: 21 Aug 2012
Posts: 170
Followers: 0

Kudos [?]: 10 [0], given: 7

Re: Why firms adhere to or deviate from their strategic plans is [#permalink] New post 13 Feb 2013, 04:34
I wanted the explanation for first question...
Senior Manager
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Joined: 21 Oct 2013
Posts: 449
Followers: 8

Kudos [?]: 405 [0], given: 285

CAT Tests
Re: Why firms adhere to or deviate from their strategic plans is [#permalink] New post 27 Mar 2014, 10:01
Hi,
Can anyone explain Q23, please.
Manager
Manager
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Joined: 10 Mar 2013
Posts: 212
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Kudos [?]: 15 [0], given: 1901

Re: Why firms adhere to or deviate from their strategic plans is [#permalink] New post 30 Jul 2014, 19:04
As an FYI, this is also a GMATPrep passage.
Re: Why firms adhere to or deviate from their strategic plans is   [#permalink] 30 Jul 2014, 19:04
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