PREP2012-Pack1-RC-006
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—c0nsensusoriented,
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 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 to sacrifice short-term profits to do so. At the other end, “harvest" strategies are used when a firm is to sacrifice market share for short-term profitability and 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 harveststrategy 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 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.
Which of the following best describes the function of the first sentence (see highlighted text) of the second paragraph of the passage?
PREP2012-Pack1-RC-006-01 VRC000400-01 Hard
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 plans
D. To an assertion made in the preceding sentence about how top management
decisi0n—making affects the likelihood that firms will adhere to their strategic plans