Comprehension
Read the passage and answer the following question.
The function of strategic planning is to position a company for long-term growth and ex- pansion in a variety of markets by analyzing its strengths and weaknesses and examining current and potential opportunities. Based on this information, the company develops strat- egy for itself. That strategy then becomes the basis for supporting strategies for its various departments.
This is where all too many strategic plans go astray at implementation. Recent business management surveys show that most CEOs who have a strategic plan are concerned with the potential breakdown in the implementation of the plan. Unlike 1980s corporations that blindly followed their 5-year plans, even when they were misguided, today’s corporations tend to second-guess.
Outsiders can help facilitate the process, but in the final analysis, if the company doesn’t make the plan, the company won’t follow the plan. This was one of the problems with strategic planning in the 1980s. In that era, it was an abstract, top-down process involving only a few top corporate officers and hired guns. Number-crunching experts came into a company and generated tome-like volumes filled with a mixture of abstruse facts and grand theories which had little to do with the day-to-day realities of the company. Key middle managers were left out of planning sessions, resulting in lost opportunities and ruffled feelings.
However, more hands-on strategic planning can produce startling results. A recent survey queried more than a thousand small-to-medium sized businesses to compare companies with a strategic plan to companies without one. The survey found that companies with strategic plans had annual revenue growth of 6.2 percent as opposed to 3.8 percent for the other companies.
Perhaps most important, a strategic plan helps companies anticipate and survive change. New technology and the mobility of capital mean that markets can shift faster than ever be- fore. Some financial analysts wonder why they should bother planning two years ahead when market dynamics might be transformed by next quarter. The fact is that it’s the very pace of change that makes planning so crucial. Now, more than ever, companies have to stay alert to the marketplace. In an environment of continual and rapid change, long range planning expands options and organizational flexibility.
The function of strategic planning is to position a company for long-term growth and ex- pansion in a variety of markets by analyzing its strengths and weaknesses and examining current and potential opportunities. Based on this information, the company develops strat- egy for itself. That strategy then becomes the basis for supporting strategies for its various departments.
This is where all too many strategic plans go astray at implementation. Recent business management surveys show that most CEOs who have a strategic plan are concerned with the potential breakdown in the implementation of the plan. Unlike 1980s corporations that blindly followed their 5-year plans, even when they were misguided, today’s corporations tend to second-guess.
Outsiders can help facilitate the process, but in the final analysis, if the company doesn’t make the plan, the company won’t follow the plan. This was one of the problems with strategic planning in the 1980s. In that era, it was an abstract, top-down process involving only a few top corporate officers and hired guns. Number-crunching experts came into a company and generated tome-like volumes filled with a mixture of abstruse facts and grand theories which had little to do with the day-to-day realities of the company. Key middle managers were left out of planning sessions, resulting in lost opportunities and ruffled feelings.
However, more hands-on strategic planning can produce startling results. A recent survey queried more than a thousand small-to-medium sized businesses to compare companies with a strategic plan to companies without one. The survey found that companies with strategic plans had annual revenue growth of 6.2 percent as opposed to 3.8 percent for the other companies.
Perhaps most important, a strategic plan helps companies anticipate and survive change. New technology and the mobility of capital mean that markets can shift faster than ever be- fore. Some financial analysts wonder why they should bother planning two years ahead when market dynamics might be transformed by next quarter. The fact is that it’s the very pace of change that makes planning so crucial. Now, more than ever, companies have to stay alert to the marketplace. In an environment of continual and rapid change, long range planning expands options and organizational flexibility.
Question: 1
The primary purpose of the passage is to:
The primary purpose of the passage is to:
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Look for both the challenges and solutions presented — a balanced analysis often signals an explanatory purpose.
Updated On: Jul 29, 2025
- refute the idea that change is bad for a corporation’s long-term health
- describe how long-term planning, despite some potential pitfalls, can help a corporation to grow
- compare and contrast two styles of corporate planning
- evaluate the strategic planning of corporate America today
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The Correct Option is B
Solution and Explanation
The passage outlines both the benefits and drawbacks of strategic planning. It acknowledges problems from the 1980s approach but ultimately stresses that strategic planning helps companies anticipate change, survive market shifts, and stay competitive. This balanced, explanatory approach matches option (B). It doesn’t focus solely on disproving an idea (A), direct comparison (C), or current-day evaluation (D).
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Question: 2
It can be inferred from the passage that, in general, strategic planning during the 1980s had all of the following shortcomings EXCEPT:
It can be inferred from the passage that, in general, strategic planning during the 1980s had all of the following shortcomings EXCEPT:
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For “EXCEPT” questions, find the option that is not supported or implied in the passage — even if it sounds plausible.
Updated On: Jul 29, 2025
- a reliance on outside consultants who did not necessarily understand the nuts and bolts of the business
- dependence on theoretical models that did not always perfectly describe the workings of the company
- an inherent weakness in the company’s own ability to implement the strategic plan
- an excess of information and data that made it difficult to get to key concepts
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The Correct Option is C
Solution and Explanation
The passage does point out that 1980s strategic planning often relied heavily on outside consultants (A) and theoretical models detached from reality (B).
It also suggests that information overload (D) could obscure key ideas.
However, it does not indicate that companies had a fundamental internal inability to implement their plans — rather, the issues were about planning approach and focus.
This makes (C) the correct “EXCEPT” choice.
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Question: 3
The author most likely mentions the results of the survey of 1,000 companies in order to:
The author most likely mentions the results of the survey of 1,000 companies in order to:
Show Hint
Surveys in RC passages often serve as evidence — note whether they support or contradict the author’s thesis.
Updated On: Jul 29, 2025
- put forth an opposing view on strategic plans so that she can then refute it
- illustrate that when strategic planning is “hands-on,” it produces uninspiring results
- give a concrete example of why strategic planning did not work during the 1980s
- support her contention that strategic planning when done correctly can be very successful
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The Correct Option is D
Solution and Explanation
The survey showed companies with strategic plans had higher average growth rates than those without — directly reinforcing the author’s argument that strategic planning, when applied effectively, yields positive results. This matches (D). It’s not a refutation (A), a criticism of “hands-on” work (B), or a failure example (C).
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