Practice Test: Reading Comprehension - 49 | 100 RCs for GMAT PDF Download

Directions: Read the given passage carefully and answer the questions as follows:

Over the last decade, a number of businesses have experimented with giving regional offices greater leeway in making decisions that traditionally had been handed down from headquarters. Local retailers have been given the latitude to devise regional branding that differs substantially from the company’s national image. In the corporate world, two offices within the same firm in the same state might have differing hiring practices, hierarchical structures, and a different set of job benefits. One nationwide high technology firm went so far as to give each of its regional offices a turn at doing business for three weeks in which all but the most urgent communications with the head office were discouraged.

One case study, involving a company that offers automobile, homeowner, and office insurance at a dozen locations in the Midwest and the South, provides a lesson in the pitfalls and advantages of “added autonomy,” as this approach is sometimes called. At first, regional managers were wary of taking on too much self-governance, despite personal assurances from the company’s president. This hesitancy initially led to less initiative, precisely the opposite of what was intended. Aggravating matters, many of the top people in the national office felt psychologically uneasy loosening the controls, especially when they realized that local offices were communicating more than ever with one another not under the watchful eyes of the head office. However, this region-to-region sharing of concerns and ideas proved to be genuinely beneficial. A discussion between managers at the firm’s Atlanta and Oklahoma City offices led them both to abandon a new policy for drivers with substandard records, a decision that in retrospect saved the company millions of dollars.

Some regional offices went too far or moved too swiftly. When the firm’s Topeka office decided to step up its marketing efforts to home business owners, a manager thought to save time by using promotional material that was based largely on the company’s homeowner’s insurance material. Eventually, the home office’s legal department discov -ered that certain terms that applied to the homeowner’s insurance should have been removed from the home business material. By the time this discovery was made, the firm was forced to honor the terms that had been offered.

Despite problems with the retention of personnel at both the regional and national levels, the company has decided to continue along with this program. In light of the company’s slowed economic growth, the ability to find individuals who are comfortable with added autonomy may remain the biggest challenge to the program’s proper implementation, for this or any other company that wishes to pursue an “added autonomy” initiative.