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 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 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 2 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 3 VRC000400-04 3. The author includes the quotation in lines 44-47 “Typically all a manager has to do 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 4 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. 5 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 ID 00400

Question 5 Question 5 asks for the primary purpose of the passage. In other words, WHY did the author write the thing? Well, he/she first introduces something that is poorly understood: why some firms stick to their strategic plans and other don't. Then, he/she discusses some factors that might shed light on this issue: certain types of leadership (top management decision-sharing vs. individual leadership) work better in different contexts (harvest vs. build). Overall, then, the author's purpose is to answer the question of why some firms adhere to their plans and others do not. Here's (C): What (C) is missing is the question of adherence. Sure, the author spends a lot of time talking about top management decision-sharing, but only to explain the bigger question of why some firms stick to their plans while others do not. The author's primary purpose isn't to evaluate the utility of top management decision-sharing -- that's just one piece of the puzzle. Compare that to (E): Bingo. The author discusses the two different leadership styles and two different strategies that affect whether or not firms adhere to their strategic plans. (C) is out, and (E) is the correct answer. I hope that helps!

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

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GMATNinja

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20 Jul 2023, 20:01

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Question 5

adityashikhar4

Hi! Could you please provide the solution for question 5 because as per my logic the answer should be option c as the whole passage seems to be about the top management decision sharing and strategic mission & leadership vision as factors influencing it.

Question 5 asks for the primary purpose of the passage. In other words, WHY did the author write the thing?

Well, he/she first introduces something that is poorly understood: why some firms stick to their strategic plans and other don't. Then, he/she discusses some factors that might shed light on this issue: certain types of leadership (top management decision-sharing vs. individual leadership) work better in different contexts (harvest vs. build).

Overall, then, the author's purpose is to answer the question of why some firms adhere to their plans and others do not.

Here's (C):

Quote:

(C) evaluate the utility of top management decision-sharing as a method of implementing the strategic mission of a business

What (C) is missing is the question of adherence. Sure, the author spends a lot of time talking about top management decision-sharing, but only to explain the bigger question of why some firms stick to their plans while others do not. The author's primary purpose isn't to evaluate the utility of top management decision-sharing -- that's just one piece of the puzzle.

Compare that to (E):

Quote:

(E) examine some of the factors that may affect whether or not firms adhere to their strategic plans

Bingo. The author discusses the two different leadership styles and two different strategies that affect whether or not firms adhere to their strategic plans.

(C) is out, and (E) is the correct answer.

I hope that helps!

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10 Sep 2023, 05:05

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GMATNinja

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.

Can you explain how the author is examining these factors? I believe the author has only stated the factors that why build strategies are difficult to implement and harvest strategies are not. Nowhere the author has examined those factors

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13 Dec 2023, 12:50

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Question 5

nikitathegreat

GMATNinja

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

To "examine" something is just to look closely at that thing. The author examines the effects of decision-sharing vs. individual leadership in the context of build vs. harvest strategies.

Additionally, the author isn't really saying that "build strategies are difficult to implement and harvest strategies are not." He/she makes a much more nuanced and specific set of points: on one hand, firms with a harvest strategy are more likely to stick to their strategic plans when decisions are shared. On the other hand, firms with a build strategy are more likely to stick to their strategic plans when decisions are made by an individual leader.

(E) is the correct answer to question 5.

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what does a dash mean in GMAT. Like in sentence top management decision - sharing - consensus -oriented - team- based decision- making - may increase may likelihood that firms will adhere to their plans

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23 May 2024, 12:24

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AshishDevliyal

The two bigger dashes act like parentheses here, separating something that modifies "top management decision sharing": consensus-oriented, team-based decision-making. (Because that modifier contains commas itself, it would be confusing to replace those two big dashes with commas.)

The three smaller dashes are hyphens used to create compound words: "decision-making" is a noun, while "consensus-oriented" and "team-based" are modifiers that describe that noun.

Again, the key is to notice that the dashes have different sizes. The GMAT definitely isn't trying to trick you with esoteric rules governing dash and hyphen usage.

I hope that helps!

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