GMAT Reading Comprehension

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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

According to the passage, the advice(highlight text) referred to was a response to which of the following?

  • A A recent decrease in the number of available suppliers within the United States automobile industry
  • B A debate within Western management circles during the past decade regarding the value of strategic partnerships
  • C The success of certain European automobile manufacturers that have adopted strategic partnerships
  • D An increase in demand over the past decade for automobiles made by Western manufacturers
  • E Research comparing Japanese business practices with those of other nations

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