Admission Tests Graduate Management Admission Test (2022) GMAT Question # 35 Topic 4 Discussion

Admission Tests Graduate Management Admission Test (2022) GMAT Question # 35 Topic 4 Discussion

GMAT Exam Topic 4 Question 35 Discussion:
Question #: 35
Topic #: 4

Many companies today are making new product development a central element of their competitive strategy. Because the potential benefits of successful product innovation are great—prolonged growth, superior financial returns, and strong investor interest-many companies offer employees incentives such as promotions and bonuses for developing new products, incentives not offered for innovations in other areas of the business, firms' priorities can also be shaped by their measurement systems, since these systems can directly measure returns from new products more immediately than they can measure returns from investments in such areas as organizational restructuring or innovations in marketing.

But the organizational culture of such companies can hurt them in the marketplace because a narrow focus on product development can ultimately detract from a firm's performance. For instance, a company's ability to profit from new products can be severely hampered if it has neglected other functions and business processes. If a company develops a superior new product but is unable to distribute and promote t rapidly, competitors with better distribution systems may copy the product and introduce It into the market before the innovator can profit from its innovation. In contrast, effective distribution, marketing, and accounting systems-that is, strong overall business systems -can act as entry barriers, deterring would-be competitors from entering a particular

It can be inferred from the passage that the author would be most likely to agree with which of the following statements about organizational culture?


A.

Organizational culture is the primary determinant of a company's competitive position in a given market.


B.

Many companies' organizational cultures are such that employee contributions in certain areas that might enhance those companies' competitiveness are not rewarded.


C.

The narrowness of many companies' organizational cultures is evident in those companies' failure to reward sufficiently those employees who help to develop successful new products.


D.

A company's organizational culture is likely to undergo significant change if the company is able to develop a new product and market it successfully.


E.

The nature of a company's organizational culture tends to be more evident in Is distribution system than in its degree of commitment to new product development.


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