In their most recent press release the new management stated that they

I picked D over C because of the second "it" in C. The only thing "it" can refer to is "the new management". If we replace the "its" in C, the sentence reads:
In the new management's most recent press release, the new management stated that the new management plans on expanding into the global software market via a series of acquisitions in Asia and Latin America.
This makes it read as if the new management is expanding, which doesn't make much sense. The new management wants to expand its organization, or entity, (essentially something not referred to here) into the global software market.
While D doesn't make it clear what is expanding, we can eliminate all the other answer choices where we're sure that it's not the management that should be expanding.

Normally in reported statements, the verb tense should be maintained without a shift. We say here that the management stated that ‘it plans’, leading to a past tense and present tense combo, which is an obvious shift of tense. It should be --- the new management stated that it planned on expanding
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Using Subject verb agreement: Management is singular, so use its and it instead of their and they - this eliminates A, B and E
Between C and D, D makes is concise and uses "to expand" correctly. The use of "on expanding" in C does not seem correct.
D is best choice.

In their most recent press release, the new management stated that they plan to expand into the global software market via a series of acquisitions in Asia and Latin America.

A. their most recent press release, the new management stated that they plan to expand
Incorrect. "The new management" is singular (their/they).
B. its most recent press release, the new management stated that they plan to expand
Incorrect. "The new management" is singular (they).
C. its most recent press release, the new management stated that it plans on expanding
Correct, but wordy.
D. its most recent press release, the new management stated an intention to expand
Correct.
E. its most recent press release, the new management stated their intention to expand
Incorrect. "The new management" is singular (their).

The presence of "they/their" clearly makes A, B and E out.

Between C and D, we have a tough choice. In eliminating C, it boils down to the idiomatic usage. "plans on expanding" should have been "plans to expand".

However, what is slightly worrying me about D is that it uses a new word "intention", which is not mentioned in the original sentence at all! Is this a common case, because I don't remember seeing any such sentences on any official question.

Also, is it logical to say that the new management stated an intention to expand into the global software market? Because this seems to suggest that the "management" is expanding into the global software market.

It should ideally be the "company" (that this management is representing) that should be expanding into the global software market.

My 2 cent:
Between C and D, I selected D. Because in C, management stated that it plans on expanding > past tense(stated) then present tense(plans). And it also seems awkward stated its plan on expanding could have been right, but stated that it plans does not seems right.

In answer C, "the new management stated that it plans on expanding," I think there is sth wrong in tense here. The first clause is "stated" so the subjunctive clause it must be past perfect tense.

Does somebody help me clear that?

The typical error in the sentence is of pronoun and meaning. (No Sunjuctive mood as such). The pronoun "it" refers to "management" and seems to be illogical w.r.t plans on expanding.

The new management desires "to expand" into other markets rather than "expanding" itself.

Hope this helps.

Isn't intention to expand changes the meaning a bit? I marked C only for this reason. Please provide your inputs.
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Yes, it does - "a plan to expand" would be better.

However option C is wrong because "plan on" is unidiomatic here.

generis GMATNinja VeritasKarishma

There is a contention between C and D. I chose C because I thought stated should be followed by that.

However the answer is D. Some have claimed that "plan on" is unidiomatic.

Is that correct?? Could you please shed some light.

"plan on doing something" is not wrong. Dictionaries accept the usage so I doubt GMAC will make that the decision point.

The two do mean slightly different things in my mind:

"plan to do A" - I intend to do A.

"plan on doing A" - is a bit more ambiguous. It's a thought rather than a strong intention.

Keeping this in mind, I might pick "plan to do A" since if the management is making an announcement, it does have concrete plans.

But I think the question maker can better clarify the thought behind this question.

Apart from the "meaning change" in option C, Can we also say - "That" used in option C is a connector primarily because there is sub+verb after it, making it an Independent clause, however, the sentence before that is a dependent clause and not an IC.

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