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Dear Friends,

Here is a detailed explanation to this question-

SajjadAhmad
On the basis of their review of first quarter operating results, management’s decision was to forgo expansion plans and pursue a more conservative marketing approach aimed at streamlining product offerings.

A) On the basis of their review of first quarter operating results, management’s decision was
B) On the basis of its review of first quarter operating results, management decided
C) Based on reviewing first quarter operating results, a decision was made by management
D) Based on their review of first quarter operating results, management decided
E) Based on first quarter operating results, management decided

Choice A: This answer choice uses the plural possessive pronoun "their" to refer to the singular possessive noun "management's". Thus, this answer choice is incorrect.

Choice B: This answer choice maintains proper pronoun use, avoids construction errors, and conveys the intended meaning of the sentence. Thus, this answer choice is correct.

Choice C: This answer choice suffers from a construction error; the phrase "based on" cannot be used with a verb such as "reviewing"; the correct construction is "Based on...the review". Thus, this answer choice is incorrect.

Choice D: This answer choice uses the plural pronoun "their" to refer to the singular noun "management". Thus, this answer choice is incorrect.

Choice E: This answer choice changes the meaning of the sentence by omitting the word "review"; due to this omission, this answer choice does not clearly imply that the management's decision was based on a review that management conducted. Thus, this answer choice is incorrect.

Hence, B is the best answer choice.

To understand the concept of "Possessive Pronoun can be Used with Possessive Noun on GMAT", you may want to watch the following video (~2 minutes):


All the best!
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