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Why firms adhere to or deviate from their strategic plans is

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Why firms adhere to or deviate from their strategic plans is [#permalink]

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Why firms adhere to or deviate from their strategic plans is poorly understood.  However, theory and limited research suggest that the 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 likelihood that firms will adhere to their plans, because those involved in the decision-making may be more committed to the chosen course of action, thereby increasing the likelihood that organizations will subsequently adhere to their plans.

However, the relationship between top management decision-sharing and adherence to plans may be affected by a firm’s strategic mission (its fundamental approach to increasing sales revenue and market share, and generating cash flow and short-term profits). At one end of the strategic 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 are used when a firm is willing to sacrifice marked share for short-term profitability and cash-flow maximization. Research and theory suggest that top management decision-sharing 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 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 “Typically all a manager has to do [when implementing a harvest strategy] is that which was done last year.” Additionally, managers under harvest strategies may have fewer strategic options than do those under build strategies; it may therefore be easier to reach agreement on a particular course of action through decision-sharing, which will in turn tend to promote adherence to plans. Conversely, in a “build” strategy scenario, individual leadership, rather than decision-sharing, may promote adherence to plans. Build strategies—which typically require leaders with strong personal visions for a firm’s future, rather than the negotiated compromise of the team-based decision—may be most closely adhered to when implemented in the context of a clear strategic vision of an individual leader, rather than through the practice of decision-sharing.

[Reveal] Spoiler:
D

VRC000400-01
1. 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 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 regarding two different kinds of strategic missions


[Reveal] Spoiler:
B

VRC000400-03
2. It can be inferred from the passage that which of the following firms would be most likely to adhere to it strategic plans?

(A) One that is pursuing a build strategy and whose strategic plans were developed through the process of decision-sharing
(B) One that is pursuing a harvest strategy and whose strategic plans were developed through the process of decision-sharing
(C) One that is pursuing a harvest strategy and whose strategic-plans were developed by an individual leader with a strong personal vision for the firm's future
(D) One that does not fluctuate between build and harvest strategies
(E) One that has a long-established practice of top-management decision-sharing


[Reveal] Spoiler:
A

VRC000400-04
3. The author includes the quotation in lines 44-47 [“Typically all a manager has to do [when implementing a harvest strategy] is that which was done last year.”] of the passage most probably in order to

(A) lend support to the claim that firms utilizing harvest strategies may be more likely to adhere to their strategic plans
(B) suggest a reason that many managers of large firm prefer harvest strategies to build strategies
(C) provide an example of a firm that adhered to its strategic plan because of the degree of its managers’ commitment
(D) demonstrate that managers implementing harvest strategies generally have better strategic options than do managers implementing build strategies
(E) give an example of a large firm that successfully implemented a harvest strategy


[Reveal] Spoiler:
C

VRC000400-06
4. According to the theory and research discussed in the first paragraph of the passage, which of the following may be true of firms that use teams to develop their strategic plans?

(A) They are more to pursue build strategies rather than harvest strategies.
(B) They are less likely to have a well-defined strategic mission than are firms with individual leaders.
(C) They are less to deviate from their strategic plans because team members may be more committed to the plans.
(D) They generally follow a similar pattern in alternating efforts to increase revenues and market share with efforts to generate short-term profits.
(E) They are less likely to adhere to their strategic plans because they tend to lack a clear strategic vision.


[Reveal] Spoiler:
E

VRC000400-07
5. The primary purpose of the passage is to

(A) identify some of the obstacles that make it difficult for firms to adhere to their strategic business plans
(B) compare two different theories concerning why firms adhere to or deviate from their strategic plans
(C) evaluate the utility of top management decision-sharing as a method of implementing the strategic mission of a business
(D) discuss the respective advantages and disadvantages of build and harvest strategies among several large firms
(E) examine some of the factors that may affect whether or not firms adhere to their strategic plans

[Reveal] Spoiler: Question #1 OA
[Reveal] Spoiler: Question #2 OA
[Reveal] Spoiler: Question #3 OA
[Reveal] Spoiler: Question #4 OA
[Reveal] Spoiler: Question #5 OA

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New post 05 Aug 2017, 23:11
Can someone explain Question No.1

I selected Option C

i too agree that there is a problem with OA of question no. 5 ! Advantages and Disadvantages are not discussed in the paragraph

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Re: Why firms adhere to or deviate from their strategic plans is [#permalink]

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New post 07 Aug 2017, 10:24
A very good passage and questions are also very good
Question 5 i feel is dicey as disadvantages and advantages are not discussed .
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Re: Why firms adhere to or deviate from their strategic plans is [#permalink]

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New post 08 Aug 2017, 04:15
Can someone please explain me question 5 (Primary Purpose)?
I was confused between choices B, D, and E?
Why D, and why not B and E?
Thanks!

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Re: Why firms adhere to or deviate from their strategic plans is [#permalink]

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New post 04 Sep 2017, 05:25
Hi,

I think Answer to Question 5 is wrong. It should be B because the whole passage is actually trying the answer the question raised in 1st sentence of the passage.

E cannot be the answer because its scope is limited to only 2nd paragraph.

D can NEVER be correct.

Please confirm before we update the OA.
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Re: Why firms adhere to or deviate from their strategic plans is [#permalink]

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New post 05 Sep 2017, 04:18
Took 10 mins, including 3 mins to read the passage and got the last question incorrect :?


1. Which of the following best describes the function of the first sentence (lines 17-24) of the second paragraph of the passage?

(D) To qualify an assertion made in the preceding sentence about how top management decision-making affects the likelihood that firms will adhere to their strategic plans - Correct

In particular, top management decision sharing—consensus-oriented, team-based decision-making—may increase the likelihood that firms will adhere to their plans, because those involved in the decision-making may be more committed to the chosen course of action, thereby increasing the likelihood that organizations will subsequently adhere to their plans.


2. It can be inferred from the passage that which of the following firms would be most likely to adhere to it strategic plans?

(B) One that is pursuing a harvest strategy and whose strategic plans were developed through the process of decision-sharing - Correct

- In particular, top management decision sharing—consensus-oriented, team-based decision-making—may increase the likelihood that firms will adhere to their plans
-In a study of strategic practices in several large firms, managers in harvest strategy scenarios were more able to adhere to their business plans.

3. The author includes the quotation in lines 44-47 of the passage most probably in order to

(A) lend support to the claim that firms utilizing harvest strategies may be more likely to adhere to their strategic plans

“Typically all a manager has to do [when implementing a harvest strategy] is that which was done last year.” Additionally, managers under harvest strategies may have fewer strategic options than do those under build strategies


4. According to the theory and research discussed in the first paragraph of the passage, which of the following may be true of firms that use teams to develop their strategic plans?

(C) They are less to deviate from their strategic plans because team members may be more committed to the plans.
In particular, top management decision sharing—consensus-oriented, team-based decision-making—may increase the likelihood that firms will adhere to their plans, because those involved in the decision-making may be more committed to the chosen course of action, thereby increasing the likelihood that organizations will subsequently adhere to their plans.


5. The primary purpose of the passage is to

(A) identify some of the obstacles that make it difficult for firms to adhere to their strategic business plans - Incorrect
(B) compare two different theories concerning why firms adhere to or deviate from their strategic plans
(C) evaluate the utility of top management decision-sharing as a method of implementing the strategic mission of a business - Incorrect - too narrow
(D) discuss the respective advantages and disadvantages of build and harvest strategies among several large firms - Incorrect - Only second paragraph discusses about build and harvest strategies
(E) examine some of the factors that may affect whether or not firms adhere to their strategic plans

Even I could not decide between options B and E :? As per BTG , the OA is B . hazelnut - can you please confirm ?

Below is an excerpt from a discussion on BTG .

It has to do with the topic and scope of the passage, which come in the very first sentence of this passage:

"Why firms adhere to or deviate from their strategic plans is poorly understood."

Do you see how the language here is replicated word for word in the second half of choice B? This first sentence tells us that the author is interested in the fact that it is poorly understood why firms adhere to or deviate from the strategic plans that they made for themselves. The second sentence of the passage begins with the important contrast keyword "however". This tells us that although we don't really know why firms choose to follow or stray from their plans, there is theory and research that "suggest" certain conclusions. So, just from the first sentence, and the first word of the second sentence, we can tell that the author's purpose is, roughly: "to discuss theory that will shed light as to why firms adhere to or deviate from their strategic plans." (We learn later that he ends up comparing two theories but we already had enough info to answer the global question).

This analysis clearly matches choice B.

Choice E is tempting but it is a little bid too broad and not quite precise enough to match the author's intent in writing the passage. Choice E makes it sound as though the factors (that influence whether a firm adheres to or deviates from plan) are well understood; otherwise, how would he be able to "examine" them? But he said that the reason firms adhere to or deviate from are "poorly understood". (And, of course, if the factors were well known, there would be no need to turn to theory or research). So, choice E, in addition to being imprecise, also tends to contradict the author's opening sentence.
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New post 05 Sep 2017, 08:39
Question 5's OA should be "B". It clearly takes into account the complete picture of the passage.
Nowhere the passage discusses the individual advantages and disadvantages of the 2 theories.
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Re: Why firms adhere to or deviate from their strategic plans is [#permalink]

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New post 08 Sep 2017, 01:33
Why firms adhere to or deviate from their strategic plans is poorly understood. However, theory and limited research suggest that the 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 likelihood that firms will adhere to their plans, because those involved in the decision-making may be more committed to the chosen course of action, thereby increasing the likelihood that organizations will subsequently adhere to their plans.

However, the relationship between top management decision-sharing and adherence to plans may be affected by a firm’s strategic mission (its fundamental approach to increasing sales revenue and market share, and generating cash flow and short-term profits). At one end of the strategic 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 are used when a firm is willing to sacrifice market share for short-term profitability and cash-flow maximization. Research and theory suggest that top management decision-sharing 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 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 “typically all a manager has to do [when implementing a harvest strategy] is that which was done last year.” Additionally, managers under harvest strategies may have fewer strategic options than do those under build strategies; it may therefore be easier to reach agreement on a particular course of action through decision-sharing, which will in turn tend to promote adherence to plans. Conversely, in a “build” strategy scenario, individual leadership, rather than decision-sharing, may promote adherence to plans. Build strategies—which typically require leaders with strong personal visions for a firm’s future, rather than the negotiated compromise of the team-based decision—may be most closely adhered to when implemented in the context of a clear strategic vision of an individual leader, rather than through the practice of decision-sharing.


1. Which of the following best describes the function of the first sentence of the second paragraph of the passage? (refer to highlighted text)

To answer a question posed in the first sentence of the passage about why firms adopt particular strategic missions
To refute an argument made in the first paragraph about how top management decision-making affects whether firms will adhere to their strategic plans
To provide evidence supporting a theory introduced in the first paragraph about what makes firms adhere to or deviate from their strategic plants
To qualify an assertion made in the last sentence of the first paragraph about how top management decision-making affects the likelihood that firms will adhere to their strategic plans
To explain a distinction relied on in the second paragraph regarding two different kinds of strategic missions

2. The passage cites all of the following as differences between firms using build strategies and firms using harvest strategies EXCEPT

their willingness to sacrifice short term profits in order to build market share
their willingness to sacrifice building market share in order to increase short-term profitability
the number of strategic options available to their managers
the relative importance they assign to maximizing cash-flow
how likely they are to employ decision-sharing in developing strategic plans

3. The primary purpose of the passage is to

identify some of the obstacles that make it difficult for firms to adhere to their strategic business plans
compare two different theories concerning why firms adhere to or deviate from their strategic plans
evaluate the utility of top management decision-sharing as a method of implementing the strategic mission of a business
discuss the respective advantages and disadvantages of build and harvest strategies among several large firms
examine some of the factors that may affect whether or not firms adhere to their strategic plans

4. The author includes the quotation in lines 44-47 of the passage most probably in order to

lend support to the claim that firms utilizing harvest strategies may be more likely to adhere to their strategic plans
suggest a reason that many managers of large firm prefer harvest strategies to build strategies
provide an example of a firm that adhered to its strategic plan because of the degree of its managers' commitment
demonstrate that managers implementing harvest strategies generally have better strategic options than do managers implementing build strategies
give an example of a large firm that successfully implemented a harvest strategy
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Last edited by broall on 08 Sep 2017, 03:34, edited 1 time in total.
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Re: Why firms adhere to or deviate from their strategic plans is [#permalink]

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New post 20 Sep 2017, 20:46
The OA has been updated for question #5 (E).

Quote:
5. The primary purpose of the passage is to

(A) identify some of the obstacles that make it difficult for firms to adhere to their strategic business plans
(B) compare two different theories concerning why firms adhere to or deviate from their strategic plans
(C) evaluate the utility of top management decision-sharing as a method of implementing the strategic mission of a business
(D) discuss the respective advantages and disadvantages of build and harvest strategies among several large firms
(E) examine some of the factors that may affect whether or not firms adhere to their strategic plans

Choice (B) is tempting, but the passage does not only compare two different theories. Rather, the passage examines a few different factors that may affect whether or not firms adhere to their strategic plans: namely, "the process through which such plans emerge" (i.e. top management decision-sharing), a firm’s strategic mission (i.e. build vs harvest), and individual leadership (i.e. leaders with strong personal visions for a firm’s future).

These factors are shown to be inter-dependent. For example, decision-sharing might be beneficial in a harvest setting but detrimental in a build setting. The passage does not simply compare two distinct theories. Instead, the passage examines multiple factors and how they are connected. Choice (E) is the best answer.
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Re: Why firms adhere to or deviate from their strategic plans is   [#permalink] 20 Sep 2017, 20:46
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