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Senior Manager
Joined: 24 Mar 2011
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Several internet-based companies that use open-source [#permalink]
 07 Jul 2011, 13:30
Question Stats:
30% (01:57) correct
70% (02:00) wrong based on 0 sessions
Several internet-based companies that use open-source software for their day-to-day operations have been surprised at the degree to which volunteer contributions increase productivity. At the same time, the overall profits of most of these companies have increased, since a much smaller percentage of overall revenue per working hour must be directed toward salaries. Beginning internet companies should imitate this successful model by hiring only a small core staff and leaving the rest of the tasks to volunteers.
The argument above that internet companies will increase profits by hiring fewer full-time employees is based on which of the following assumptions?
A) Internet companies that use open-source software are better suited to function efficiently with only a small core staff than traditional companies.
B) The amount of administrative work to be performed in internet companies is small enough that it can reasonably be completed by fewer full-time employees.
C) Full-time employees and volunteers will have different levels of access to most projects undertaken by the company.
D) Internet companies will hire more full-time employees as they become more profitable due to volunteer contributions.
E) Companies that rely on both full-time employees and volunteer labor increase their overall revenue per working hour.
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Current Student
Joined: 26 May 2005
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Re: Internet companies vs traditional companies - assumption [#permalink]
08 Jul 2011, 01:23
Clean B
clue here is 'Several internet-based companies that use open-source software for their day-to-day operations '
hence they assume the few FT employees can also do all the admin work.
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Manager
Joined: 10 Jan 2011
Posts: 238
Location: India
GMAT Date: 07-16-2012
GPA: 3.4
WE: Consulting (Consulting)
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Re: Internet companies vs traditional companies - assumption [#permalink]
16 Sep 2011, 02:52
Clearly the answer is B as explained above
_________________
-------Analyze why option A in SC wrong-------
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Senior Manager
Status: MBAing!!!!
Joined: 24 Jun 2011
Posts: 314
Location: United States (FL)
Concentration: Finance, Real Estate
Schools: Wharton '14 (D), CBS '14 (WL), Ross '14 (WL), Haas '14 (D), Johnson '14 (A), McCombs '14, Kenan-Flagler '14 (M), Madison (A), Consortium (D), Consortium (A), Consortium (M), Consortium, Consortium (A), Consortium (WL)
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Re: Internet companies vs traditional companies - assumption [#permalink]
16 Sep 2011, 15:22
I picked E...If you negate E the argument falls apart.
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Manager
Status: Retaking next month
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Joined: 05 Mar 2011
Posts: 232
Location: India
Concentration: Marketing, Entrepreneurship
GMAT 1: 570 Q42 V27
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WE: Sales (Manufacturing)
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Re: Internet companies vs traditional companies - assumption [#permalink]
17 Sep 2011, 00:25
Gud question . Tricked me into A. 
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Re: Internet companies vs traditional companies - assumption [#permalink]
17 Sep 2011, 02:27
i chose B too.. pretty much the similar reasoning as given by Sudhir...
while E is a good candidate, I feel E does not talk about the conclusion of hiring only a small core staff...
whats the OA and OE?
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Manager
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Re: Internet companies vs traditional companies - assumption [#permalink]
17 Sep 2011, 02:29
GMATPASSION wrote: Gud question . Tricked me into A. yea it was a good trick.... which is why, although i had nailed the answer in 2:00 mins, i had to go back to the argument and hunt for "traditional companies". took me an whooping extra 25 sec
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Manager
Joined: 01 Jun 2011
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Re: Internet companies vs traditional companies - assumption [#permalink]
18 Sep 2011, 02:11
I shall go with E
Several internet-based companies that use open-source software for their day-to-day operations have been surprised at the degree to which volunteer contributions increase productivity. At the same time, the overall profits of most of these companies have increased, since a much smaller percentage of overall revenue per working hour must be directed toward salaries. Beginning internet companies should imitate this successful model by hiring only a small core staff and leaving the rest of the tasks to volunteers.
The argument above that internet companies will increase profits by hiring fewer full-time employees is based on which of the following assumptions?
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Intern
Joined: 01 Oct 2006
Posts: 48
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Re: Internet companies vs traditional companies - assumption [#permalink]
19 Sep 2011, 04:15
B for me.
If the amount of administrative work to be performed in an internet company is NOT small enough to be completed by a small task-force of full time employees, then the "hire fewer employees" model does not work
E is wrong because it is Irrelevant
The argument tells us that the companies become more profitable because of reduced expenses, not because of increased revenues.
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Manager
Status: Target MBA
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Re: Internet companies vs traditional companies - assumption [#permalink]
27 Sep 2011, 02:58
agdimple333 wrote: Several internet-based companies that use open-source software for their day-to-day operations have been surprised at the degree to which volunteer contributions increase productivity. At the same time, the overall profits of most of these companies have increased, since a much smaller percentage of overall revenue per working hour must be directed toward salaries. Beginning internet companies should imitate this successful model by hiring only a small core staff and leaving the rest of the tasks to volunteers.
The argument above that internet companies will increase profits by hiring fewer full-time employees is based on which of the following assumptions?
A) Internet companies that use open-source software are better suited to function efficiently with only a small core staff than traditional companies.
B) The amount of administrative work to be performed in internet companies is small enough that it can reasonably be completed by fewer full-time employees.
C) Full-time employees and volunteers will have different levels of access to most projects undertaken by the company.
D) Internet companies will hire more full-time employees as they become more profitable due to volunteer contributions.
E) Companies that rely on both full-time employees and volunteer labor increase their overall revenue per working hour. agdimple333, can you please post the OA. I got B.
_________________
Thanks and Regards,
GM.
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Re: Internet companies vs traditional companies - assumption
[#permalink]
27 Sep 2011, 02:58
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