GMAT Reading Comprehension

Home > GMAT Test > GMAT Reading Comprehension Questions

Next steps

Source: GWD

Level: 3

In recent years, Western business managers have been heeding the exhortations of busi-ness journalists and academics to move their companies toward long-term, collaborative "strategic partnerships" with their external business partners (e.g., suppliers). The experts' advice comes as a natural reaction to numerous studies conducted during the past decade that compared Japanese production and supply practices with those of the rest of the world. The link between the success of a certain well-known Japanese automaker and its effective management of its suppliers, for example, has led to an unques- tioning belief within Western management circles in the value of strategic partnerships. Indeed, in the automobile sector all three United States manufacturers and most of their European competitors have launched programs to reduce their total number of suppliers and move toward having strategic partnerships with a few.

However, new research concerning supplier relationships in various industries demonstrates that the widespread assumption of Western managers and business consultants that Japanese firms manage their suppliers primarily through strategic partnerships is unjustified. Not only do Japanese irms appear to conduct a far smaller proportion of their business through strategic partnerships than is commonly believed, but they also make extensive use of "market-exchange" relationships, in which either party can turn to the marketplace and shift to different business partners at will, a practice usually associated with Western manufacturers.

Question List: 1 2 3 4

The passage is primarily concerned with

  • A examining economic factors that may have contributed to the success of certain Japanese companies
  • B discussing the relative merits of strategic partnerships as compared with those of market-exchange relationship
  • C challenging the validity of a widely held assumption about how Japanese firms operate
  • D explaining why Western companies have been slow to adopt a particular practice favored by Japanese companies
  • E pointing out certain differences between Japanese and Western supplier relationships

Show Answer

Previous       Next