The function of strategic planning is to position a company for long term growth and expansion in a variety of markets by analyzing its strengths and weaknesses and examining current and potential opportunities. Based on this information, the company develops strategy for itself. That strategy then becomes the basis for supporting strategies for its various departments. This is where all too many strategic plans go astray-at implementation. The recent business management surveys show that most CEOs who have a strategic plan are concerned with the potential breakdown in the implementation of the plan. Unlike nineteen eighties and nineties corporations that blindly followed their five year plans even when they were misguided, today’s corporations tend to second guess. Outsiders can help facilitate the process, but in the final analysis, if the company doesn’t make the plan, the company won’t follow the plan. This was one of the problems with strategic planning in the nineteen eighties. In that era, it was an abstract, top down process involving only a few top corporate officers and hired guns. Number crunching experts came into a company and generated tome-like volumes filled with a mixture of abstruse facts and grand theories which had little to do with the day to day realities of the company. Key middle managers were left out of the planning sessions, resulting in lost opportunities and ruffled feelings. However, more hands-on strategic planning can produce startling results. A recent surveys queries over a thousand small to medium sized business to compare companies with the strategic plan to companies without one. The survey found that companies with strategic plans had annual revenue growth of 6.2 percent as opposed to 3.8 percent for the other companies. Perhaps most importantly, a strategic plan helps companies anticipate – and survive – change. New technology and the mobility of capital mean that markets can shift faster than ever before. Some financial analysts wonder why they should do the planning two years ahead when market dynamics may be transformed by next quarter. The fact is that it is the very pace of change that makes planning so crucial. Now, more than ever, companies have to stay alert to the marketplace. In an environment of continual and rapid change, long range planning expands options and organizational flexibility. 1 B 1. The primary purpose of the passage is to (A) refute the idea that change is bad for a corporation’s long-term health (B) describe how long-term planning, despite some potential pitfalls, can help a corporation to grow (C) compare and contrast two styles of corporate planning (D) evaluate the strategic planning goals of corporate America today (E) defend a methodology that has come under sharp attack 2 C 2. It can be inferred from the passage that, in general, strategic planning during the 1980s had all of the following shortcomings EXCEPT (A) a reliance on outside consultants who did not necessarily understand the nuts and bolts of the business (B) a dependence on theoretical models that did not always perfectly describe the workings of the company (C) an inherent weakness in the company’s own ability to implement the strategic plan (D) an excess of information and data that made it difficult to get to key concepts (E) the lack of a forum for middle managers to express their ideas 3 D 3. The author most likely mentions the results of the survey of 1,000 companies in order to (A) put forth an opposing view on strategic plans so that she can then refute it (B) illustrate that when strategic planning is “hands-on,” it produces uninspiring results (C) give a concrete example of why strategic planning did not work during the 1980s (D) support her contention that strategic planning, when done correctly, can be very successful (E) give supporting data to prove that many companies have implemented strategic plans 4 D 4. The passage suggests which of the following about the “financial analysts” ( Highlighted )? (A) They believe that strategic planning is the key to weathering the rapid changes of the marketplace. (B) They are working to understand and anticipate market developments that are two years ahead. (C) Their study of market dynamics has led them to question the reliability of short-term planning strategies. (D) They might not agree with the author that one way to survive rapidly changing conditions comes from long-range planning. (E) They consider the mobility of capital to be a necessary condition for the growth of new technology.

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The function of strategic planning is to position a company for long-

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XyLan

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18 Apr 2019, 14:14

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Experts, Could you please explain question 2?
dabaobao, can you pitch in, since your passage map was on similar lines as mine is?

Quote:

It can be inferred from the passage that, in general, strategic planning during the 1980s had all of the following shortcomings EXCEPT
(A) reliance on outside consultants who did not necessarily understand the nuts and bolts of the business
(B) a dependence on theoretical models that did not always perfectly describe the workings of the company
(C) an inherent weakness in the company’s own ability to implement the strategic plan
(D) an excess of information and data that made it difficult to get to key concepts
(E) the lack of a forum for middle managers to express their ideas

Q-structure:

NOT

I understand HOW the correct answer is C:

Passage states:

The gist: The corporation in the 1980s blindly followed the plans without bothering about the repercussions, i.e.,

NOT

However, I am skeptical about A.
(A) reliance on outside consultants who did not necessarily understand the nuts and bolts of the business

Passage states:

can help

doesn’t

won’t

- The company is accounted for shortcomings because of its inactions.

facilitating the process

shortcomings

Reasoning for above stance - Since A is NOT the answer, we ARE regarding outsiders as the shortcomings.

consultants did not necessarily understand the nuts and bolts of the business.

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Hello from the GMAT Club VerbalBot!

Thanks to another GMAT Club member, I have just discovered this valuable topic, yet it had no discussion for over a year. I am now bumping it up - doing my job. I think you may find it valuable (esp those replies with Kudos).

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