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An emerging genre of management texts purports to catalogue the

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New Project RC Butler 2019 - Practice 2 RC Passages Everyday
Passage # 166, Date : 24-APR-2019
This post is a part of New Project RC Butler 2019. Click here for Details


An emerging genre of management texts purports to catalogue the qualities and practices that distinguish financially successful businesses from those that fail. Based on an underlying belief that success is primarily driven by malleable characteristics—such as management policies, hiring practices, and the personal qualities of company leadership—authors of these texts have suggested that financial success can come from carefully observing, then imitating, the practices of companies that have consistently performed several standard deviations above the market average.

However, all businesses, regardless of their financial success under historical conditions, may become vulnerable to failure as the economic climate changes. One well-known text, published in 2001, identified eleven “great companies” that had consistently outperformed hundreds of other companies in their markets; over the following decade, only one of the eleven companies continued to enjoy above-average financial returns, while the remaining companies, on average, actually underperformed their competitors. Despite the common factors identified in the culture of these “great companies,” external factors—most notably, the Great Recession of the late 2000s overwhelmed any effect that may have come from ambitious decision-making or aggressive replacement of unproductive leadership. In addition, far more businesses, despite sharing these supposed success-driving characteristics, have quietly failed. More than one hundred thousand new businesses are started each year in the United States alone; whatever qualities that may be shared among the relatively small number of long-term survivors are inevitably shared as well by far more businesses that never achieve financial success.
1. The author of the passage would likely agree that the addition of which of the following would most improve the quality of the management texts described in the passage?

(A) An analysis of the causes and effects of the Great Recession of the late 2000s
(B) Practical advice for business owners hoping to adopt the practices implemented by successful companies
(C) Descriptions of the practices of companies that became highly successful despite a period of below-average financial returns
(D) Evidence suggesting that certain practices are shared by most businesses that successfully weather economic change
(E) A more rigorous definition of what constitutes a financially successful business



2. Which of the following practices would the author of the passage most likely believe would increase the odds of a company’s future financial success?

(A) Replacing members of upper management whose teams do not meet financial goals
(B) Setting highly ambitious financial goals for the entire company
(C) Imitating similar companies that have consistently had financial success in the past
(D) Avoiding patterns of hiring decisions that correlate with poor financial returns
(E) Taking preemptive steps to minimize the impact of possible negative economic changes



3. In the last sentence of the passage, the author refers to “one hundred thousand new businesses” most likely in order to

(A) criticize the authors of certain management texts for studying an inadequate number of companies
(B) demonstrate that the authors of certain management texts have drawn faulty conclusions regarding the causes of financial success
(C) suggest that the authors of certain management texts have incorrectly identified the qualities that are shared among financially successful companies
(D) emphasize the importance of studying companies that can be considered “long-term survivors”
(E) illustrate a potential negative consequence of the practice of imitating financially successful companies




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Originally posted by MikeScarn on 22 Apr 2019, 12:22.
Last edited by SajjadAhmad on 26 Sep 2019, 23:51, edited 2 times in total.
Updated - Complete topic (693).
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Re: An emerging genre of management texts purports to catalogue the  [#permalink]

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New post 22 Apr 2019, 16:13
4 mins all correct

1) D
on the whole author is trying to impart the idea that managing economic change is very important for any company future, that is why he has used the study of 11 companies done in 2001.

2)E
Again same reason

3)B
Author says" In addition, far more businesses, despite sharing these supposed success-driving characteristics, have quietly failed"

which means there must be some other reason why certain companies are successful and others are not which is not been adequately addressed by the text.
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New post 25 Apr 2019, 17:40
Could someone please explain Q1? I chose C instead
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New post 28 Apr 2019, 01:45
1
JS1290 wrote:
Could someone please explain Q1? I chose C instead


Let's solve it mathematically

Set A: companies perform above average

SubSet of A: Companies survive climate change

Set B: companies perform below average

Author convey those companies observe and imitate set A may go down because all of them do not survive climate change, But if The companies observe and imitate a subset of A, they are likely to become successful.

Set B: always put companies down

Hence, C is incorrect and D is the right answer

Hope it helps

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New post 28 Apr 2019, 19:53
Not sure if I missed anything but for Q2, why "Taking preemptive steps to minimize the impact of possible negative economic changes" would increase the odds of the future financial success of the company? Isn't it great that way ? cos the author mentioned that the economics change will affect the company's performance...
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New post 15 Jun 2019, 15:26
2
Labmalo wrote:
Not sure if I missed anything but for Q2, why "Taking preemptive steps to minimize the impact of possible negative economic changes" would increase the odds of the future financial success of the company? Isn't it great that way ? cos the author mentioned that the economics change will affect the company's performance...


The gist of the passage:
    1st line of the 2nd-paragraph - However, all businesses, regardless of their financial success under historical conditions, may become vulnerable to failure as the economic climate changes.

The author asserts that companies emulating the practices of other successful companies need NOT necessarily be successful.
    Paraphrase the sentiment of the argument in fewer words:
      Copying others is NOT necessarily GOOD.
      External factors DO play an important role.
    - Use simple and fewer words. Make sure - You understand!

1. The author of the passage would likely AGREE that the addition of which of the following would most improve the quality of the management texts described in the passage?
    Pre-Think:
      Hopefully, the author wants to forwarn that copying will NOT necessarily yield in success.
      Also, Other factors (external) CAN play a substantial role in determining success.

    Answer choice analysis:
      (A) An analysis of the causes and effects of the Great Recession of the late 2000s.
        - This analysis has NO connection with the intent of the passage
      (B) Practical advice for business owners hoping to adopt the practices implemented by successful companies
        - May look deceptive. However, There is NO actual advice (let alone practical) for business owners adopting practices implemented by successful companies.
        It's dicey to map Other factors( factors affecting economic climate ) with Practical Advice, unless backed by the argument.
        If you STILL want to keep it. Let's hold it for now.
      (C) Descriptions of the practices of companies that became highly successful despite a period of below-average financial returns
        The author is NOT in favor of simply copying the practices of companies. Thus, There is NO point in discussing the practices of the companies whether they became highly successful despite a period of below-average financial returns.
      (D) Evidence suggesting that certain practices are shared by most businesses that successfully weather economic change
        Aha! Certain practices are shared by most successful businesses.
        It DOES look like a contender - in line with the Pre-Think and Paraphrase. Let's keep D over B!
      (E) A more rigorous definition of what constitutes a financially successful business
        Completely OUT of the park.

2. Which of the following practices would the author of the passage most likely believe would increase the odds of a company’s future financial success?
    Pre-Think:
      The author is asserting NOT to COPY other successful companies.
      Be aware - Other factors (external) CAN play a substantial role in determining success.

    Any option choice that suggests copying the practices is WRONG. - Let this fact be the guiding star!
    Excerpt from the passage:
      1) The Great Recession (TGC) of the late 2000s overwhelmed any effect that may have come from ambitious decision-making or aggressive replacement of unproductive leadership.
      2) Success is primarily driven by malleable characteristics—such as management policies, hiring practices, and the personal qualities of company leadership

    TGC (external factor) had a more deleterious effect than any other effect.
    The author is NOT in favor of ambitious decision - making and of aggressive replacement of unproductive leadership.

    Answer choice analysis:
      (A) Replacing members of upper management whose teams do not meet financial goals - Incorrect for above reasons
      (B) Setting highly ambitious financial goals for the entire company - Incorrect for above reasons
      (C) Imitating similar companies that have consistently had financial success in the past - Imitating = Copying - OUT!
      (D) Avoiding patterns of hiring decisions that correlate with poor financial returns
        - The author is asking NOT to imitate the practices of successful companies. CANNOT substantiate OptionD from the argument.
      (E) Taking preemptive steps to minimize the impact of possible negative economic changes
        - Taking a cautitous step for a probable external change. Fits the bill!

3. In the last sentence of the passage, the author refers to “one hundred thousand new businesses” most likely in order to
    Pre-Think:
      Excerpt: In addition, far more businesses, despite sharing these supposed success-driving characteristics, have quietly failed. More than one hundred thousand new businesses are started each year in the United States alone.
      The usage of the term is to highlight even though a plethora of companies follow the same principles and emulate similar practices, they DO sink.
      - A contrast! Thus, drawing inferences from those characteristics is NOT Right.


    Answer choice analysis:
      (A) criticize the authors of certain management texts for studying an inadequate number of companies
        NO. Not even remotely close.
      (B) demonstrate that the authors of certain management texts have drawn faulty conclusions regarding the causes of financial success
        Better!
        The reason for companies' success is NOT those malleable characteristics—such as management policies, hiring practices, and the personal qualities of company leadership. Thus, drawing conclusions on the basis of them (characteristics) is an OUTRIGHT flaw.
      (C) suggest that the authors of certain management texts have incorrectly identified the qualities that are shared among financially successful companies
        The identification of the qualities, which are shared among financially successful companies, has NEVER been the issue.
      (D) emphasize the importance of studying companies that can be considered “long-term survivors”
        NO. Not even remotely close.
      (E) illustrate a potential negative consequence of the practice of imitating financially successful companies
        - May seem true-in-general; however, OptionE does NOT answer the question.
        The term is used to highlight the contrast and NOT to illustrate A (potential) negative consequence.
        Beware of such inconsistent, true-in-general choices.
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Re: An emerging genre of management texts purports to catalogue the   [#permalink] 15 Jun 2019, 15:26
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