3.4 Formulating & Evaluating a Plan of Action
Key Takeaways
- GMAC says Critical Reasoning questions measure the ability to make arguments, evaluate arguments, and formulate or evaluate a plan of action.
- Every plan question has three parts to map: the goal, the proposed action, and the mechanism by which the action is supposed to reach the goal.
- A plan can fail even when its first step works, so check feasibility, the strength of the mechanism, net effect after costs, side effects, and how other people respond.
- Plan stems ask you to strengthen or weaken a plan, identify what is most useful to know about it, or choose the action most likely to achieve a stated goal.
- Correct answers stay tied to the stated goal; a choice about a different benefit or cost of the plan, such as profit when the goal is lower turnover, is out of scope.
Why Plans Get Their Own Category
GMAC's Exam Content page says Critical Reasoning questions measure your ability "to make arguments, evaluate arguments, and formulate or evaluate a plan of action." Plans deserve separate practice because they fail in ways that ordinary arguments do not. A typical argument claims that something is true. A plan claims that doing something will produce an outcome, and that forward-looking claim depends on how people and markets respond to the action.
Mapping a Plan: Goal, Action, Mechanism
Before reading the answer choices, write three short labels:
- Goal: What does the decision-maker want? Note the exact metric, because revenue, profit, market share, and customer satisfaction are different goals.
- Action: What will be done? Note the scale and timing, such as "all branches" or "within two years."
- Mechanism: How is the action supposed to produce the goal? The unstated assumptions live here.
Example stimulus: "To reduce employee turnover, a call-center company plans to raise its customer-service agents' pay by 12 percent, since exit surveys show that most departing agents cite pay as a reason for leaving."
- Goal: lower turnover among agents.
- Action: a 12 percent raise for agents.
- Mechanism: pay is what drives agents to leave, and a 12 percent raise is enough to change their decisions.
The Five Plan Tests
| Test | Question to Ask | How a Bad Answer Sinks the Call-Center Plan |
|---|---|---|
| Feasibility | Can the organization actually carry out the action? | The budget cannot fund the raise without laying off agents |
| Strength of the mechanism | Will the action produce enough of the intended effect? | Departing agents cite pay but actually leave over unpredictable schedules |
| Net effect | Do the benefits outweigh the costs, including new costs the plan creates? | Matters only if the stimulus also names profit or cost as a goal or constraint |
| Side effects | Does the action create a new problem that undercuts the goal? | The raise draws applicants who treat the job as short-term, so turnover stays high |
| Responses of others | How will customers, competitors, or employees react? | Rival call centers match the raise, so agents keep equally attractive outside offers |
Scope discipline matters. If the goal is lower turnover, a choice showing that the raise will reduce profits does not weaken the plan unless the stimulus makes profit part of the goal. Swapping one goal for another is a classic trap in plan questions.
Question Stems You Will See
- Strengthen the plan: "Which of the following, if true, most strongly supports the prediction that the plan will succeed?" Correct answers confirm the mechanism or rule out an obstacle.
- Weaken the plan: "Which of the following, if true, most strongly suggests that the plan will not achieve its goal?" Correct answers show that the mechanism fails, the action is infeasible, or a side effect cancels the benefit.
- Evaluate the plan: "Which of the following would it be most useful to know in determining whether the plan is likely to succeed?" Apply the Two-Way Variance Test from Section 3.3.
- Formulate a plan: "Which of the following would most help the company achieve its goal?" The correct action addresses the specific cause of the problem described, not a general improvement.
Worked Example: Weakening a Plan
Stimulus: "A regional airline plans to raise its on-time arrival rate by adding ten minutes to the scheduled duration of every flight, since most of its late arrivals are fewer than ten minutes behind schedule."
- Goal: a higher on-time arrival rate.
- Action: pad every flight schedule by ten minutes.
- Mechanism: flights that now arrive a few minutes late will arrive within the longer scheduled time.
Now test three possible answer choices:
- "Longer scheduled durations will make the airline's flights look slower in online booking searches." This may hurt ticket sales, but the goal is on-time performance, so the choice is out of scope unless the stimulus adds a sales goal.
- "At the airline's hub, gates are assigned by scheduled arrival time, so flights with later scheduled arrivals will often find no gate available when they land." This side effect undercuts the goal: a padded flight could land on time and still reach the gate late. It is a strong weakener.
- "Most of the airline's late arrivals result from late departures." Padding the scheduled duration absorbs short delays whatever their cause, so this choice does not defeat the mechanism.
The second choice wins because it attacks the plan through the plan's own mechanism.
Formulating a Plan: Match the Action to the Cause
When a question asks for the best course of action, diagnose the problem first. Suppose a stimulus says that a hospital's emergency-room waits have grown because patients with minor ailments come to the emergency room after their primary-care clinics close. The best plan targets that cause, such as extending clinic hours or opening an after-hours urgent-care desk, rather than a generic fix like hiring more emergency surgeons. Eliminate choices that address a different cause, help a group that is not part of the problem, or would create a larger new problem.
Three final checks before you confirm a plan answer:
- Does the choice speak to the goal exactly as the stimulus states it?
- Does it depend on an assumption the stimulus contradicts?
- Would a reasonable manager, reading only the stimulus and this choice, see why it matters?
A regional grocery chain wants to reduce the amount of food it throws away. It plans to install new refrigerated display cases that keep produce fresh for two extra days, reasoning that most of the produce it discards spoils before it can be sold. Which of the following, if true, most strongly suggests that the plan will fail to reduce the chain's food waste significantly?
Over the past year, a software company's customer-support costs have doubled. An internal review found that 70 percent of support calls come from new customers who cannot complete the product's initial setup, and that these customers usually call only once. Which of the following plans would most likely reduce the company's customer-support costs?
A city plans to reduce downtown traffic congestion by charging drivers a fee to enter the downtown core during weekday rush hours. City officials expect many commuters to switch to the city's buses and trains. Which of the following, if true, most strongly supports the officials' expectation that the plan will reduce congestion?