RC--Why firms adhere to or deviate from their strategic plan

[hfhongyb]

Help!!!!

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 largefirms, 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 "[t] ypically 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 leader-ship, 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-maybe 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.

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

OA is E. But I really don't understand.....E is clearly mentioned near the end of the 2nd paragraph

[methevoid]

Hi,
I assume you believe OA is not E because of the word trap - "the practice of decision sharing", otherwise

It is a straight find -the-nut- type question where every difference between "Build" and "Harvest" strategy mentioned from chioices A to D has been clearly covered in the second para, except the part which you think to be incorrect.

Never in the second para, the author discusses the like likelihood of deploying decision-sharing in developing strategic plans, the end of second para just writes about how a "build" strategy needs an individual leader rather than a negotiated compromise of decision sharing action taken by a team in "harvest" strategy.

This was an easy pick; you must have run away with the flow of passage. It happens to most of us.

[RonPurewal]

Hi,
I assume you believe OA is not E because of the word trap - "the practice of decision sharing", otherwise

It is a straight find -the-nut- type question where every difference between "Build" and "Harvest" strategy mentioned from chioices A to D has been clearly covered in the second para, except the part which you think to be incorrect.

Never in the second para, the author discusses the like likelihood of deploying decision-sharing in developing strategic plans, the end of second para just writes about how a "build" strategy needs an individual leader rather than a negotiated compromise of decision sharing action taken by a team in "harvest" strategy.

This was an easy pick; you must have run away with the flow of passage. It happens to most of us.

this is an accurate summary.

[rajatvmittal]

I really don't understand the answer to this question. How can the answer be E as in my view C fits better.
for haverst : -
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


for build
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-maybe 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.

[Khush]

Hi,
I assume you believe OA is not E because of the word trap - "the practice of decision sharing", otherwise

It is a straight find -the-nut- type question where every difference between "Build" and "Harvest" strategy mentioned from chioices A to D has been clearly covered in the second para, except the part which you think to be incorrect.

Never in the second para, the author discusses the like likelihood of deploying decision-sharing in developing strategic plans, the end of second para just writes about how a "build" strategy needs an individual leader rather than a negotiated compromise of decision sharing action taken by a team in "harvest" strategy.

This was an easy pick; you must have run away with the flow of passage. It happens to most of us.

this is an accurate summary.

Hi Ron,

Though i do understand why is E the correct answer, i don't get why is D incorrect. Isn't "cash-maximization" mentioned only for "Harvest Strategy" in the passage? did we infer so for the build strategy ? On the other hand all other choices ( A through C) show the differences between both the strategies.

[RonPurewal]

Though i do understand why is E the correct answer, i don't get why is D incorrect. Isn't "cash-maximization" mentioned only for "Harvest Strategy" in the passage? did we infer so for the build strategy ? On the other hand all other choices ( A through C) show the differences between both the strategies.

The passage describes "sacrificing market share for xxxx and cash-flow maximization" as one end of a spectrum"”implying that the other end reverses these roles. It doesn't have to be spelled out.

Analogy:
"Cutting" diet and workout programs have as their primary goal the reduction of body fat, usually at the expense of muscle gain. On the other end of the spectrum lie "bulking" diets, focused primarily on muscle gain.
--> Here it's clear that bulking diets place less emphasis on body-fat reduction.

[Khush]

This analogy makes things crystal clear.

Thanks much Ron!

[RonPurewal]

You're welcome.

[gbyhats]

Hi Dear Manhattan Instructors ;)

Is there any strategy to tackle this type of questions?

It appears that we have to understand almost every details inside the second paragraph in order to tackle this question (Because , to me, almost every detail in the second paragraph can be potential candidate to be tested).

[RonPurewal]

the trade-off is that the answer choices will be literal, almost verbatim, reproductions of the stuff you find in that paragraph. MUCH less processing time.

also ... some questions will take longer than others. that's how life works.

[gbyhats]

the trade-off is that the answer choices will be literal, almost verbatim, reproductions of the stuff you find in that paragraph. MUCH less processing time.

also ... some questions will take longer than others. that's how life works.

Sounds like both a good news and a bad news to me ;)

Good news is correct answer will be easier to identify

Bad news is that there are really no shortcuts

[RonPurewal]

that's pretty much it.

[OanhN715]

I am sorry about digging this problem again but I am not clear the reason why E is the correct answer.

In harvest 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."

In build strategies, "individual leadership, rather than decision- sharing, may almost adherence to plans."

So build strategies and harvest strategies are difference in level of deploying decision-sharing, harvest strategies put priority on it while build strateties do not. So they are different.

Please helps me! Thank you.

[RonPurewal]

that part of the passage just says that, in theory, different things (decision-sharing vs. individual leadership) may produce ideal results.
it says nothing at all about the FREQUENCY with which ACTUAL FIRMS employ these things, which is what choice E is talking about.