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Why firms adhere to or deviate from their strategic plans is [#permalink]
03 Jun 2009, 00:34
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.
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
please answer the question above and also answer whether the last statement in the first para is an argument or not.. in my opinion its not.. please elaborate ur opinion.