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GWD3-Q23 to Q26:
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 (10) 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 (15) organizations will subsequently adhere to their plans.
However, the relationship between top management decision-sharing and adherence to plans may be affected (20) 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.
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GWD3-Q23:
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 (lines 6-16) 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 (lines 17-68) regarding two different kinds of strategic missions
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GWD3-Q24:
The passage cites all of the following as differences between firms using build strategies and firms using harvest strategies EXCEPT
A. their willingness to sacrifice short-term profits in order to build market share
B. their willingness to sacrifice building market share in order to increase short-term profitability
C. the number of strategic options available to their managers
D. the relative importance they assign to maximizing cash-flow
E. how likely they are to employ decision-sharing in developing strategic plans
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GWD3-Q25:
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
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GWD3-Q26:
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
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