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Why firms adhere to or deviate from their strategic plans is

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Manager
Manager
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Joined: 24 Apr 2009
Posts: 94
Followers: 2

Kudos [?]: 8 [0], given: 2

Why firms adhere to or deviate from their strategic plans is [#permalink] New post 02 Jun 2009, 23:34
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.
Intern
Intern
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Joined: 30 May 2009
Posts: 28
Schools: Haas, Darden, Booth, LBS, Insead and IMD
Followers: 0

Kudos [?]: 2 [0], given: 1

Re: RC from sets [#permalink] New post 03 Jun 2009, 09:50
imo B.

i think line (14-16) is a consequence not an argument.
Re: RC from sets   [#permalink] 03 Jun 2009, 09:50
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