Why firms adhere to or deviate from their strategic plans is : GMAT Reading Comprehension (RC)
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# Why firms adhere to or deviate from their strategic plans is

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Manager
Joined: 21 Aug 2012
Posts: 210
Concentration: General Management, Operations
Schools: HBS '19 (S)
GMAT 1: 740 Q49 V42
Followers: 0

Kudos [?]: 29 [1] , given: 349

Why firms adhere to or deviate from their strategic plans is [#permalink]

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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
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
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”
ship, rather than decision-sharing,
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
[Reveal] Spoiler:
D

--------------------------------------------------------------------------------
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
[Reveal] Spoiler:
E

--------------------------------------------------------------------------------
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
[Reveal] Spoiler:
E

--------------------------------------------------------------------------------
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:
A

[Reveal] Spoiler: Question #1 OA
[Reveal] Spoiler: Question #2 OA
[Reveal] Spoiler: Question #3 OA
[Reveal] Spoiler: Question #4 OA
If you have any questions
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Kudos [?]: 60 [0], given: 562

Re: Why firms adhere to or deviate from their strategic plans is [#permalink]

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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
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
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”
ship, rather than decision-sharing,
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?
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Manager
Joined: 21 Aug 2012
Posts: 210
Concentration: General Management, Operations
Schools: HBS '19 (S)
GMAT 1: 740 Q49 V42
Followers: 0

Kudos [?]: 29 [0], given: 349

Re: Why firms adhere to or deviate from their strategic plans is [#permalink]

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13 Feb 2013, 04:34
I wanted the explanation for first question...
Senior Manager
Joined: 21 Oct 2013
Posts: 419
Followers: 13

Kudos [?]: 1312 [0], given: 289

Re: Why firms adhere to or deviate from their strategic plans is [#permalink]

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27 Mar 2014, 10:01
Hi,
Senior Manager
Joined: 10 Mar 2013
Posts: 290
GMAT 1: 620 Q44 V31
GMAT 2: 690 Q47 V37
GMAT 3: 610 Q47 V28
GMAT 4: 700 Q50 V34
GMAT 5: 700 Q49 V36
GMAT 6: 690 Q48 V35
GMAT 7: 750 Q49 V42
GMAT 8: 730 Q50 V39
Followers: 9

Kudos [?]: 97 [0], given: 2405

Re: Why firms adhere to or deviate from their strategic plans is [#permalink]

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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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