In an effort to explain why business acquisitions often fail, scholars

Question

In an effort to explain why business acquisitions often fail, scholars have begun to focus on the role of top executives of acquired companies. Acquired companies that retain their top executives tend to have more successful outcomes than those that do not. Furthermore, existing research suggests that retaining the highest-level top executives, such as the CEO (chief executive officer) and COO (chief operating officer), is related more positively to postacquisition success than retaining lower-ranked top executives. However, this explanation, while insightful, suffers from two limitations. First, the focus on positional rank does not recognize the variation in length of service that may exist in top executive posts across companies, nor does it address which particular top executives (with respect to length of service) should be retained to achieve a successful acquisition outcome. Second, the relationship between retained top executives and acquisition outcomes offered by existing research is subject to opposing theoretical explanations related to length of service. The resource-based view (RBV) suggests that keeping acquired company top executives with longer organizational tenure would lead to more successful outcomes, as those executives have idiosyncratic and nontransferable knowledge of the acquired company that would be valuable for the effective implementation of the acquisition. The opposing position, offered by the upper echelons perspective (UEP), suggests that retaining top executives having short organizational tenure would lead to more successful outcomes, as they would have the adaptability to manage most effectively during the uncertainty of the acquisition process.

Responding to these limitations, Bergh conducted a study of executive retention and acquisition outcome that focused on the organizational tenure of retained company top executives in 104 acquisitions, followed over 5 years. Bergh considered the acquisition successful if the acquired company was retained and unsuccessful if it was divested. Bergh’s findings support the RBV position. Apparently, the benefits of long organizational tenure lead to more successful outcomes than the benefits of short organizational tenure. While longer tenured top executives may have trouble adapting to change, it appears that their perspectives and knowledge bases offer unique value after the acquisition. Although from the UEP position it seems sensible to retain less tenured executives and allow more tenured ones to leave, such a strategy appears to lower the probability of acquisition success.

(Book Question: 427)

1. According to the passage, the research mentioned in line 6 suggests which of the following about lower-ranked top executives and postacquisition success?

(A) Given that these executives are unlikely to contribute to postacquisition success, little effort should be spent trying to retain them.
(B) The shorter their length of service, the less likely it is that these executives will play a significant role in postacquisition success.
(C) These executives are less important to postacquisition success than are more highly ranked top executives.
(D) If they have long tenures, these executives may prove to be as important to postacquisition success as are more highly ranked top executives.
(E) Postacquisition success is unlikely if these executives are retained.

(Book Question: 428)

2. The resource-based view, as described in the passage, is based on which of the following ideas?

(A) The managerial skills of top executives become strongest after the first five years of their tenure.
(B) Company-specific knowledge is an important factor in the success of an acquisition process.
(C) The amount of nontransferable knowledge possessed by long-tenured top executives tends to be underestimated.
(D) Effective implementation of an acquisition depends primarily on the ability of executives to adapt to change.
(E) Short-tenured executives are likely to impede the implementation of a successful acquisition strategy.

(Book Question: 429)

3. The passage suggests that Bergh and a proponent of the upper echelons perspective would be most likely to disagree over which of the following?

(A) Whether there is a positive correlation between short organizational tenure and managerial adaptability
(B) Whether there is a positive correlation between long organizational tenure and the acquisition of idiosyncratic and nontransferable knowledge
(C) Whether adaptability is a useful trait for an executive who is managing an acquisition process
(D) Whether retaining less-tenured top executives of an acquired company is an optimal strategy for achieving postacquisition success
(E) Whether retaining highest-level top executives of acquired companies is more important than retaining lower-ranked top executives

(Book Question: 430)

4. According to the passage, prior to Bergh’s study, research on the role of top executives of acquired companies in business acquisition success was limited in which of the following ways?

(A) It did not address how the organizational tenure of top executives affects postacquisition success.
(B) It did not address why some companies have longer-tenured CEOs than others.
(C) It did not consider strategies for retaining long-tenured top executives of acquired companies.
(D) It failed to differentiate between the contribution of highest-level top executives to postacquisition success and that of lower-ranked top executives.
(E) It underestimated the potential contribution that lower-level top executives can make to postacquisition success.

Show Spoiler

Executive retention and acquisition outcomes: A test of opposing views on the influence of organizational tenure
Donald D. Bergh
First Published October 1, 2001
Journal of Management
https://journals.sagepub.com/doi/10.1177/014920630102700506

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OG 2019 ID's
RC0097-02
RC0097-03
RC0097-04
RC0097-05

Passage: Failed Acquisitions

Question: Lower-Ranked Executives

The Simple Story

Research has shown that acquired companies that retain their top executives are more successful post-acquisition. This research does not provide an explanation for how the executives’ tenure influences this relationship. The resource-based view (RBV) suggests that executives with longer tenures should result in better performance because they have company-specific knowledge. Alternatively, the upper echelons perspective (UEP) suggests that executives with shorter tenures should result in better performance because they are more adaptable. A study by Bergh provides data supporting RBV.

Sample Passage Map

Here is one way to map this passage. (Note: abbreviate as desired!)

1) Acq à better when CEO/CFO retained

Effect of tenure?

RBV – longer better (knowledge)

UEP – shorter better (adaptable)

2) Bergh study à support RBV

Step 1: Identify the Question

The words According to the passage normally indicate that a question a Specific Detail question. However, this question stem also includes the word suggests, which indicates an Inference question. When you have both markers, the Inference clue is the more important clue. This is an Inference question.

Step 2: Find the Support

You are asked about the research in a particular line of the passage. Read the sentence describing this research.

“Furthermore, existing research suggests that retaining the highest-level top executives, such as the CEO and COO, is related more positively to postacquisition success than retaining lower-ranked top executives.”

Step 3: Predict an Answer

The text states that retaining the top-level executives relates more positively to success. This suggests, then, that retention of lower-ranked executives is less related to positive outcomes after acquisitions.

Step 4: Eliminate and Find a Match

(A) The passage suggests that lower-ranked executives contribute less to positive outcomes than top-ranked executives. It does not state that the lower-ranked executives are unlikely to contribute at all. Further, it does not discuss whether any efforts should be made to retain these executives.

(B) The influence of length of service is discussed later in the passage and with respect to higher-ranked executives, not in this portion related to lower-ranked executives.

(C) CORRECT. The sentence describing the research says that retention of top-ranked executives is related more positively, so it follows that the lower-ranked executives are less important to postacquisition success.

(D) The influence of tenure is discussed later in the passage and with respect to higher-ranked executives, not in this portion related to lower-ranked executives.

(E) The research states that these lower-ranked executives are less associated with positive outcomes than top executives, but it does not state that retaining the lower-ranked executives harms outcomes.

Show Answer Question #1

Official Answer

C

Show Answer Question #2

Official Answer

B

Show Answer Question #3

Official Answer

D

Show Answer Question #4

Official Answer

A

Drill more questions that test the same idea in GMAT Club Timed Quiz → Free.

zvazviri · Accepted Answer

Strategy: Time per passage = No. of questions * 2 mins. This includes reading time. 4 questions, 8 mins max.
Short passages 2.5-3 mins reading. Long passages 3:5-4 mins reading

1. Read the first question before reading the passage
2. For long passages, take notes (you shouldn't have to refer to these notes - they help with comprehension) and make sure you understand the first paragraph as this contains most of the info. Then identify the main point of the first paragraph. 
3. Pick up pace as you read the rest of the passage, focusing on the first two sentences of each paragraph as they are bound to be topical sentences. 
4. Don't get bogged down in details and specifics.
5. Look out for Big Results, unexpected outcomes and surprising twists
6. Identify the Point of the passage and then proceed to the questions.
7. You should be able to answer general questions without going back to passage
8. For specific questions, refer to relevant text in the passage and read the sentences surrounding that text and make sure you understand it, then start Process of Elimination.
9. JUSTIFY EVERY WORD in the correct answer

GMATNinja · Answer

adkikani , I think I understand your confusion...

We are not looking for a statement that BOTH Bergh and UEP would disagree with. Remember, each answer choice starts with "whether" and thus represents multiple perspectives. Each answer choice essentially presents a question.

For example, consider choice (D): "  Whether   retaining less-tenured top executives of an acquired company is an optimal strategy for achieving post-acquisition success." In other words, is retaining less-tenured top executives of an acquired company is an optimal strategy for achieving post-acquisition success? Bergh/RBV-supporters would say, "No." UEP-supporters would say yes. Thus, Bergh and UEP supporters would  disagree  over choice (D), making (D) our answer.

Make sense?

Nightfury14 · Answer

(Book Question: 427)
According to the passage, the research mentioned in line 6 suggests which of the following about lower-ranked top executives and post acquisition success?
 A. Given that these executives are  unlikely to contribute  to postacquisition success, little effort should be spent trying to retain them.
 B. The shorter their length of service, the less likely it is that these executives will play a significant role in postacquisition success. -  This is a RBV proponent view. 
 C. These executives are less important to postacquisition success than are more highly ranked top executives. -  Stated in passage 
 D. If they have long tenures, these executives may prove to be as important to postacquisition success as are more highly ranked top executives. -  Not stated in passage 
 E. Postacquisition success is unlikely if these executives are retained. -  Out of scope/ Passage does not mention about failure of acquisition if such employees are retained, instead it talks about success if top executives are retained.

Question Type - Supporting Idea
Answer - (C)
Line No. 7 to 10 states - "Furthermore, existing research suggests that retaining the highest-level top executives, such as the CEO (chief executive officer) and COO (chief operating officer), is related more positively to post acquisition success than retaining lower-ranked top executives."
 C

(Book Question: 428)
The resource-based view, as described in the passage, is based on which of the following ideas?
 A. The managerial skills of top executives become strongest after the first five years of their tenure. -  Out of Scope 
 B. Company-specific knowledge is an important factor in the success of an acquisition process.
 C. The amount of nontransferable knowledge possessed by long-tenured top executives tends to be underestimated. -  RBV does not underestimate 
 D. Effective implementation of an acquisition depends primarily on the ability of executives to adapt to change. -  UEP View 
 E. Short-tenured executives are likely to impede the implementation of a successful acquisition strategy. -  RBV talks about positive inputs from retained top executives and not ill-effect of short tenured eecutives

Question Type - Evaluate
Answer - (B)
My query with the ans is, it mentions success of an   acquisition process   - (Acquisition process/ Implementation/ Post acquisition) Such differences would matter if solving a 700+ lvl question
Line 21 says - The resource-based view (RBV) suggests that keeping acquired company top executives with longer organizational tenure would lead to more successful outcomes, as those executives have idiosyncratic and nontransferable knowledge of the acquired company that would be valuable for the   effective implementation   of the acquisition.
Line No 45 - While longer tenured top executives may have trouble adapting to change, it appears that their perspectives and knowledge bases offer unique value    after the acquisition.   
 B

(Book Question: 429)
The passage suggests that Bergh and a proponent of the upper echelons perspective would be most likely to disagree over which of the following?
 A. Whether there is a positive correlation between short organizational tenure and managerial adaptability
 B. Whether there is a positive correlation between long organizational tenure and the acquisition of idiosyncratic and nontransferable knowledge
 C. Whether adaptability is a useful trait for an executive who is managing an acquisition process
 D. Whether retaining less-tenured top executives of an acquired company is an optimal strategy for achieving postacquisition success
 E. Whether retaining highest-level top executives of acquired companies is more important than retaining lower-ranked top executives

Question Type - Evaluate
Answer - D
The justification here is Bergh discussed only about the (tenure = knowledge) of the executive in his study, 
whereas UCP discussed only about (tenure = adaptability) 
Hence an option talking about adaptability or knowledge is out -  A  /  B  /  C 
Option (E) talks about highest ranked and lower ranked executives and not their tenures. - Out
After elimination - Answer is D - and it also follows the flow of the question - disagreement is on optimal acquisition strategy.

Now my query in question (2) solidifies - Question 2 states Implementation process whereas this question states post acquisition.
It is a nimble difference but if noticed can alter the answer for a specific question.
 D

(Book Question: 430)
According to the passage, prior to Bergh’s study, research on the role of top executives of acquired companies in business acquisition success was limited in which of the following ways?
 A. It did not address how the organizational tenure of top executives affects postacquisition success.
 B. It did not address why some companies have longer-tenured CEOs than others.
 C. It did not consider strategies for retaining long-tenured top executives of acquired companies.
 D. It failed to differentiate between the contribution of highest-level top executives to postacquisition success and that of lower-ranked top executives.
 E. It underestimated the potential contribution that lower-level top executives can make to postacquisition success.

Question type - Inference
Answer - A
Justification - Line no. 12 - "two limitations. First, the focus on positional rank does not recognize the variation in length of service that may exist in top executive posts across companies"
 A

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GMATNinja · Answer

Passage breakdown 
In the first paragraph (P1), the author  exposes some flaws in a study, then presents a debate regarding those flaws :

The flaws: the study failed to examine how acquisition success is impacted by  how long  retained executives had worked for the company  
 One side of the debate (the RBV view): keeping executives with  longer  tenure leads to success 
 The other side (UEP): keeping executives with  shorter  tenure leads to success.

In the second paragraph, the author  cites research that supports the RBV theory introduced in P1.

For more on the process of breaking down RC passages, check out  this article  and  our live RC videos .

Explanations for individual questions 
 
  Question 2  
  Question 3  
 Question 4
 
  Part 1  
  Part 2

solitaryreaper · Answer

(Book Question: 430)
According to the passage, prior to Bergh’s study, research on the role of top executives of acquired companies in business acquisition success was limited in which of the following ways?
 A. It did not address how the organizational tenure of top executives affects postacquisition success.
 B. It did not address why some companies have longer-tenured CEOs than others.
 C. It did not consider strategies for retaining long-tenured top executives of acquired companies.
 D. It failed to differentiate between the contribution of highest-level top executives to postacquisition success and that of lower-ranked top executives.
 E. It underestimated the potential contribution that lower-level top executives can make to postacquisition success.

Question type - Inference
Answer - A
  Justification - Line no. 12 - "two limitations. First, the focus on positional rank does not recognize the variation in length of service that may exist in top executive posts across companies"

You're quoting the wrong section here. Limitation 1 as stated in the passage talks about the variation in length of service that may exist in top executive posts   across companies  ....it talks about inter-companies variance in the respective tenures.

It was the theoretical explanations regarding the second Limitation (pertaining to length of service ) that had opposing view. .. Berjh collected data for 5 years and hence was able to support one theory and addressed how the organizational tenure of top executives affects post-acquisition success i.e. length of tenure is directly proportional to the post acquisition success(same as option A) . Hence he addressed Limitation 2.

Regards
SR

rkandula · Answer

This passage should not take more than 6 minutes to solve .

you should take 15min to 2 min at max to rad the paragraph

STEP 1 : Read the first few line of Passage.Get the TOPIC/SCOPE of the passage
Topic/Scope : 
Write down on the scratch pad

STEP 2: Specialty of the passage as to why Author is writing this passage.
Mostly this will be in the second line of the passage
Specialty : 
Write down on the scratch pad.

STEP 3: Next lines should simply describe either topic or specialty or supporting ideas or evidence.
Don't Even read these lines , you can always come back to these lines as long as you have your notes from STEP 1/STEP 2.

STEP 4: Very important , 
4a) SKIM for change in direction (Ex: However , yet , but, Despite, in spite, Although , even though ,Nonetheless, )
And note this change in Idea.
4b) SKIM for Tonal Words and note this tonal idea.(Ex: Unfortunately, one enemy , someone came in right timing, 
truly , admittedly, unwillingly , and note this down.

Now you have to look at the scratch pad between STEP 1/STEP 2 and STEP 4 and carefully look what exactly is the CHANGE OF IDEA/Tonal Variation.

Repeat this for every Paragraph.Overall you should read only 4 to 5 sentences in the entire Passage in 1 to 2 minutes.

Notes should look like for each paragraph, 
TOPIC/SCOPE:
SPECIALTY :
CHANGE in IDEA:
Not down any Nouns, Dates, Names etc....You can always come back to this section

Note:for some paragraphs you might not see any CHANGE in IDEA or any tonal variation so just get STEP 1/STEP 2 for that Paragraph

SPEND most of the time in reading question and reading ALL answer choices very carefully.
With this you can easily crack RC.

adkikani · Answer

GMATNinja   GMATNinjaTwo 
Book Q: 429
The passage suggests that Bergh and a proponent of the upper echelons perspective would be most likely to disagree over which of the following?
A. Whether there is a positive correlation between short organizational tenure and managerial adaptability
B. Whether there is a positive correlation between long organizational tenure and the acquisition of idiosyncratic and nontransferable knowledge
C. Whether adaptability is a useful trait for an executive who is managing an acquisition process
D. Whether retaining less-tenured top executives of an acquired company is an optimal strategy for achieving postacquisition success
E. Whether retaining highest-level top executives of acquired companies is more important than retaining lower-ranked top executives

I am confused with correct strategy to answer this question. The passage suggests that Bergh supported RBV and this question asks what people who supported UEP (or opposed RBV) would disagree with? How can both mean the same thing?

jabhatta2 · Answer

According to the passage, prior to Bergh’s study, research on the role of top executives of acquired companies in business acquisition success was limited in which of the following ways?

(A) It did not address how the organizational tenure of top executives affects postacquisition success.
(B) It did not address why some companies have longer-tenured CEOs than others.
(C) It did not consider strategies for retaining long-tenured top executives of acquired companies.
(D) It failed to differentiate between the contribution of highest-level top executives to postacquisition success and that of lower-ranked top executives.
(E) It underestimated the potential contribution that lower-level top executives can make to postacquisition success.

Hi  GMATNinja

On Question 430, Why isn't B right ...

Below is an excerpt in blue specifically from the passage that refers to B does it not ? The blue clearly says, there is a limitation because 
a) across companies, some people may be forced to be at certain levels longer based on organizational structure (Atleast thats my inference of the blue) ...This is exactly what option B is per my understanding

Excerpt from passage 
 
   First, the focus on positional rank does not recognize the variation in length of service that may exist in top executive posts across companie s, nor does it address which particular top executives (with respect to length of service) should be retained to achieve a successful acquisition outcome

GMATNinja · Answer

The portion of the passage that you highlighted in blue doesn't actually contain the information you added in your inference!

How long top executives have been in their roles could vary because of any number of factors. Maybe they stayed in the same role forever because their commute to work is convenient, or maybe they just got promoted because they bribed HR with donuts every day. It could be that they were "forced to be at certain levels longer based on organizational structure," as you inferred, but the passage does not specify this information.

Our task in answering this question is to determine how research prior to Bergh's study was limited. Answer choice (B) focuses on  why  some companies have longer-tenured CEOs, but that is not the limitation that Bergh identifies addresses in his study.

You found the relevant portion of the passage to answer this question, but misinterpreted the exact meaning of the sentence. Let's take a closer look:

This means that just studying someone based on their position (CEO, CFO, etc.) does not account for how long they have been in that role.

This means that the previous research does not provide a link between keeping long vs. short tenured executives and the success of an acquisition.

With this in mind, let's go back to answer choice (A):

This answer choice mirrors the limitation in the previous research as explained above. (A) is our answer.

I hope this helps!

nitesh50 · Answer

Hi

IN question 429
Can someone please explain why option E is a statement that is agreed by Bergh and UEP?

I eliminated this option since I inferred that UEP doesnot talk about preference between high ranked top executives and low ranked top executives.

My understanding:

Uep is one of the theories that are presented as part of the objection to the following explanation:

Retaining the highest-level top executives is related more positively to post-acquisition success than retaining lower-ranked top executives.

UEP states that low tenure leads to more postacquision success.

Now Bergh conducted research whose findings suggested that high ranked top executives (long tenure) are more successful than other top executives(short tenure) in post-acquisition success.

Now in both these explanations, it doesnot talk about the preference of higest level top executives to lower ranked top executives.

then how can both of them agree on option E?

Regards

Nitesh

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 Gladiator59 
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 MartyTargetTestPrep

MartyTargetTestPrep · Answer

Hi Nitesh.

RC questions can be set up to challenge test takers by involving concepts that seem the same or can somehow be confused with each other by test-takers. So, to correctly answer RC questions, one has to be sure to keep concepts straight.

In this case we have two concepts that can be confused with each other. They are:

- level within the company.

- length of tenure (or length of time spent) at the company.

If you go back through the passage, you will see that RBV, and specifically Bergh, and UEP actually agree on the need to retain high level executives and that their disagreement centers on executive tenure, in other words, how long the executives have been at the companies.

So, (E) mentions something that they agree on, while (D) mentions something that they disagree on.

nitesh50 · Answer

Hi  MartyTargetTestPrep 
 If you go back through the passage, you will see that RBV, and specifically Bergh, and UEP actually agree on the need to retain high level executives and that their disagreement centers on executive tenure, in other words, how long the executives have been at the companies.
 
^^^
THis is what i have not been able to find conclusively.

furthermore, existing research suggests that retaining the highest-level top executives, such as the CEO (chief executive officer) and COO (chief operating officer), is related more positively to postacquisition success than retaining lower-ranked top executives. However, this explanation, while insightful, suffers from two limitations.

The However in the text indicates the contrast/limitations of the theory.
the 2nd limitation presents 2 theories that do not agree on tenure aspect to achieve postacquisition success.
Bergh agrees with the former theory.(RBV).

How can we infer that both of RBV and UEV positions agree on highest-level top executives of acquired companies is more important than retaining lower-ranked top executives?

Can you try quoting the passage to try and explain me the inference?

Thank you for your time

Regards
Nitesh

MartyTargetTestPrep · Answer

"existing research suggests that retaining the highest-level top executives, such as the CEO (chief executive officer) and COO (chief operating officer), is related more positively to postacquisition success than retaining lower-ranked top executives."

Neither RBV nor UEP is described as disagreeing with the above suggestion. Rather the more logical interpretation of the passage is that they are examples of schools of thought in that that agree with that suggestion as the passage describes the two schools of thought as different in their takes on retaining "top executives."

At the same time the passage describes the two as disagreeing as described below.

"The resource-based view  (RBV)  suggests that keeping acquired company  top executives  with  longer organizational tenure  would lead to more successful outcomes, as those executives have idiosyncratic and nontransferable knowledge of the acquired company that would be valuable for the effective implementation of the acquisition. The opposing position, offered by the upper echelons perspective  (UEP) . suggests that retaining  top executives  having  short organizational tenure  would lead to more successful outcomes ..."

We can concede that the passage never directly states that the two schools of thought agree on the point related to level of executives. However, by introducing the highest-level top executives conclusion and then the two schools of thought, and by associating both schools of thought with "top executives" it does seem to indicate that they agree on the point related to level of executives. At the same time, what you are saying makes some sense, and perhaps I went slightly too far in saying that the passage indicates that they agree on that point.

At the same time, question 429, does not ask us whether they agree on that point. Rather it asks us to identify a point of DISAGREEMENT, and the passage clearly does not indicate that they disagree on the the point related to levels of executives. It indicates that they disagree on the point related to tenure.

Vision, finding key details, and clarity are key.

Argp · Answer

According to the passage, prior to Bergh’s study, research on the role of top executives of acquired companies in business acquisition success was limited in which of the following ways?

(A) It did not address how the organizational tenure of top executives affects postacquisition success.
(B) It did not address why some companies have longer-tenured CEOs than others.
(C) It did not consider strategies for retaining long-tenured top executives of acquired companies.
(D) It failed to differentiate between the contribution of highest-level top executives to postacquisition success and that of lower-ranked top executives.
(E) It underestimated the potential contribution that lower-level top executives can make to postacquisition success.

According to line 24 (para 1)-
  as those executives have idiosyncratic and nontransferable knowledge of the acquired company  that would be valuable for the effective implementation of the acquisition.

And according to line 44 (para 2) -
 While longer tenured top executives may have trouble adapting to change, it appears that  their perspectives and knowledge bases offer unique value after the acquisition .

Doesn't line 24 in para 1 already address significance of top employees with long tenures?  
I feel line 24 and line 44 have redundant information.

GMATNinja   egmat   TeamGMATIFY   aragonn   MartyTargetTestPrep   GMATPill

GMATNinja · Answer

To understand why the author included that seemingly redundant information, let's break down the structure of the passage as a whole:

In the first paragraph, the author:
 
 Introduces some research on why business acquisitions fail 
 Lists two limitations to that research 
 Explains that, because of these limitations, two "opposing theoretical explanations" exist and the current research can't support one theory over the other

Then, in the second paragraph, the author:
 
 Introduces research that responds to the limitations listed in the first paragraph 
 Tells us that this new research supports one of the two "opposing theoretical explanations"

In context, the two lines that you've quoted serve entirely different purposes. In the one from the first paragraph, the author is  explaining one of two opposing views  (the RBV theory). At that point, the author is completely neutral -- he/she doesn't support one position over another.

In the line from the second paragraph, however, the author is affirming that Bergh's study  supports the RBV theory.  So, even though the two statements are similar, they serve entirely different purposes and are therefore not redundant.

Consider this simplified example:

"There are two opposing theories. One is that the Broncos are the best team, one is that the Patriots are the best team. A new study supports the theory that the Broncos are the best team."

Here, I've repeated the statement that "the Broncos are the best team," but it's not redundant because the two statements serve different functions in my passage. If you read the actual RC passage for purpose, you'll see that the author does the same thing.

In addtion, to answer Question 4 (book question 430), we don't need to suss out redundancy in the passage. Instead, we just need to choose the answer choice that most closely aligns with the two limitations listed in the first paragraph.

According to the author, the research conducted before Bergh's study is limited in two ways:
 
 First, the focus on positional rank  does not recognize the variation in length of service  that may exist in top executive posts across companies, nor does it address which particular top executives (with respect to length of service) should be retained to achieve a successful acquisition outcome.  
 Second, the relationship between retained top executives and acquisition outcomes offered by existing research is subject to opposing theoretical explanations related to length of service.

(A) aligns nicely with the first limitation, so (A) is the correct answer to question 4.

I hope that helps!

akadiyan · Answer

GMATNinja

Need your help.

Though i selected the correct answer choice B, i am stuck with difference between  Post Aquisition success  (As mentioned in the passage) and  success of the acquisition process  (as mentioned in option B)

I was thinking both conveys different meaning. Can you please let me know whether both conveys same meaning.

Thanks much

GMATNinja · Answer

In a literal sense, “post-acquisition success” and “the success of an acquisition process” do not have the same meaning. But the two concepts are closely related. “Post-acquisition” refers to the period following the actual acquisition. On the other hand, the “acquisition process” encompasses not only the period following the acquisition, but also the period leading up to and including the acquisition.

Nevertheless, when we think about these two concepts practically and in context, it’s apparent that “the success of an acquisition process” is going to be dependent on the level of “post-acquisition success.” For example, it’s highly unlikely that a company’s successful acquisition process includes a disastrous post-acquisition bankruptcy. Likewise, a profitable post-acquisition integration is unlikely to be the result of a poor acquisition process. So, as it relates to question 2, the resource-based view is based on the idea that company-specific knowledge, is an important factor in both the success of an acquisition process and post-acquisition success.

More broadly, this question is a great example of where seeing the big picture on RC can be beneficial. It would be easy get caught in the weeds and obsess over the nuances of these two terms, but it’s far better to zoom out and identify how the concepts overlap and interact. These two terms are highly unlikely to ever appear in a RC passage on your test, but developing the ability to stay above the fray and keep the big picture in mind will serve you well on many passages.

I hope that helps!

GMATRockstar · Answer

QUESTION #3 Explanation:
 
 https://www.youtube.com/watch?v=PfpR1KLidaA

GMATRockstar · Answer

QUESTION #4 Explanation: 
 
 https://www.youtube.com/watch?v=vPquA0bW_s0

In an effort to explain why business acquisitions often fail, scholars

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In an effort to explain why business acquisitions often fail, scholars

Prep Toolkit

615 to 715 in 15 Days (Ria's Strategies)

More than Quant/Verbal Abilities: Speed vs. Accuracy

745 with Only Self-Prep and GMAT Club

From 555 to 765: 210-point Improvement

Perfect 805 Score Debrief by Julia

My Rewards