As formal organizations, business corporations are distinguished by

Question

Aristotle RC 99 - Passage 38     
   As formal organizations, business corporations are distinguished by their particular goals, which include maximization of profits, growth, and survival. Providing goods and services is a means to this end. If, for example, a number of individuals (outsiders or even insiders) believe that a company‘s aggressive marketing of infant formula in third world countries is morally wrong, the company is unlikely to be moved by arguments based on ethos alone as long as what it is doing remains profitable. But if those opposed to the company‘s practice organize a highly effective boycott of the company‘s products, their moral views will soon enter into the company‘s deliberations indirectly as limiting operating conditions. They can, at this point, no more be ignored than a prohibitive increase in the costs of certain raw materials.

Although the concepts and categories of ethics may be applied to the conduct of corporations, there are important differences between the values and principles underlying corporate behaviour and those underlying the actions of most individuals. If corporations are by their nature end- or goal-directed how can they acknowledge acts as wrong in and of themselves? Is it possible to hold one criminally responsible for acts that if performed by a human person would result in criminal liability?

The first case of this type to achieve widespread public attention was the attempt to prosecute the Ford Motor Company for manslaughter as the result of alleged negligent or reckless decision making concerning the safety engineering of the Pinto vehicle. Although the defendant corporation and its officers were found innocent after trial, the case can serve as an exemplar for our purposes.

In essence, the prosecution in this case attempted to show that the corporation had produced and distributed a vehicle that was known to be defective at the time of production and sale, and that even after a great deal of additional information accumulated regarding the nature of the problems, the corporation took no action to correct them. The obvious non-corporate analogy would be the prosecution of a person who was driving a car with brakes known to be faulty, who does not have them repaired because it would cost too much, and who kills someone when the brakes eventually fail and the car does not stop in time. Such cases involving individuals are prosecuted and won regularly.

If corporations have no concept of right or wrong because they are exclusively goal-directed, can they be convicted in cases of this type, and what purpose would be served by such a conviction? Perhaps we can make a utilitarian argument for convicting corporations of such crimes. The argument would be that of deterrence; conviction and punishment would deter other corporations from taking similar actions under similar circumstances. However, there appears to be considerable evidence that deterrence does not work on corporations, even if, arguably, it works on individuals. The possibility of being discovered and the potential magnitude of the fine merely become more data to be included in the analysis of limiting conditions.  
 1 
 1. A claim that things have ethical value to corporations only insofar as they are instrumental in furthering the ultimate goals of the corporation is:

A. necessarily true, given the information presented in the passage.
B. perhaps true, and supported by the information presented in the passage.
C. perhaps true, but not supported by any information in the passage.
D. necessarily false, given the information presented in the passage.
E. a figment of the author‘s imagination

2 
 2. If a company that produced shampoo products opted to stop the routine testing of its products on animals because it decided that it is wrong to cause the animals pain, what effect would this have on the argument made in the passage?

A. It would strongly support the argument.
B. It would support the argument somewhat, but not conclusively.
C. It would neither support nor substantially weaken the argument.
D. It would substantially weaken the argument.
E. It would weaken the argument only if the company is a government owned company

3 
 3. Which of the following assertions would most strengthen the author‘s claim that deterrence will not work on corporations?

A. The possibility of punishment does not deter many individuals from committing crimes.
B. The penalties imposed on companies have amounted to a small fraction of their profits.
C. Strict anti-pollution laws have cut down on the waste dumped by companies into rivers.
D. The trial of a corporation is often extended over a period of several years
E. Corporation have a battery of lawyers protecting their interests

RC Butler 2021  -  Practice Two RC Questions Everyday.   
Passage # 72 Date: 19-Feb-2021
 This question is a part of RC Butler 2021 .  Click here for Details

Chatenya · Accepted Answer

1. A claim that things have ethical value to corporations only insofar as they are instrumental in furthering the ultimate goals of the corporation is:

we are choosing perheps because in the passage author stated again again that company will switch between moral and immoral stance only if it is profitable for it so saying that it will choose ethics only if it is profitable is wrong may be from the beginnig both types of behaviour is not giving any profit or loss.

A. necessarily true, given the information presented in the passage.
 B. perhaps true, and supported by the information presented in the passage. 
C. perhaps true, but not supported by any information in the passage.
D. necessarily false, given the information presented in the passage.
E. a figment of the author‘s imagination

2. If a company that produced shampoo products opted to stop the routine testing of its products on animals because it decided that it is wrong to cause the animals pain, what effect would this have on the argument made in the passage?

-- ARGUMENT IN THE PASSAGE IS things are not morral for any organization untill and unless there is mass boycott against it , untill then company will continue to with wrong doing.

now according to the question company is taking moral stance on its own which will weaken the argument of the passage.

A. It would strongly support the argument.
B. It would support the argument somewhat, but not conclusively.
C. It would neither support nor substantially weaken the argument.
 D. It would substantially weaken the argument. 
E. It would weaken the argument only if the company is a government owned company

3. Which of the following assertions would most strengthen the author‘s claim that deterrence will not work on corporations?

ITS HINT CAN BE FOUND IN LAST PARAGRAPH
-- The possibility of being discovered and the  potential magnitude of the fine merely  become more data to be included in the analysis of limiting conditions.

A. The possibility of punishment does not deter many individuals from committing crimes.
 B. The penalties imposed on companies have amounted to a small fraction of their profits. 
C. Strict anti-pollution laws have cut down on the waste dumped by companies into rivers.
D. The trial of a corporation is often extended over a period of several years
E. Corporation have a battery of lawyers protecting their interests

MacT750 · Answer

can someone explain 1 in detail confused between necessarily true and perhaps true

Sajjad1994 · Answer

Official Explanation

1. A claim that things have ethical value to corporations only insofar as they are instrumental in furthering the ultimate goals of the corporation is:

Difficulty Level:   650-700

Explanation

Topic and Scope  - Corporations hold values pursuant only to corporate goals, not traditional morals, so prosecuting them for ethical crimes doesn't work.

Mapping the Passage

Paragraph 1  discusses the goals and ethical limitations of corporations (3M example)
 Paragraph 2  explains methods for making corporations respond to moral concerns.
 Paragraph 3  contrasts the corporations with individuals and outlines some individual ethics.
 Paragraph 4  asks if corporations can be held responsible for ethical crimes.
 Paragraphs 5 and 6  describe a failed attempt to prosecute a corporation for such crimes (Pinto).
 Paragraph 7  presents a possible argument in favour of prosecution: deterrence. Evidence shows no deterring effect on corporations, though.

Strategy Point:

Persuasive passages usually address alternate and opposing views. Make sure you’re clear not only on who is arguing for what, but how the author responds to critics. Having a clear map will simplify locating each view.

The author argues that this is true, and gives an example in  Paragraph 1 and 2 .  (C)  and  (D)  can be eliminated. Does this argument have to necessarily be true? There‘s nothing in the argument to indicate that there could never be an exception.  (B)  is the only choice left standing.

(A): Distortion.  A very tempting wrong answer choice. Remember that anything necessarily true will have very strong logical support in the passage. We have only a few examples here, not a definite rule.

(B): The correct answer

(C): Distortion.  While the information is perhaps true, there‘s plenty of support for the author‘s argument in the passage.

(D): Opposite.  The information in the passage doesn‘t prove the claim, but it does support it.

(E):  Incorrect as the author clearly provides support for this fact as explained above.

Answer: B

gupta.vinit · Answer

Hello, can anyone pls explain the question 1, what exactly it asks?

Sajjad1994 · Answer

Posted here https://gmatclub.com/forum/as-formal-or ... l#p3271374 Cheers

parthwagh · Answer

This passage discusses the ethical considerations of corporate behavior, arguing that corporations prioritize profit over morals due to their inherent goal-oriented nature. It uses the Pinto case as an example of a failed attempt to hold a corporation criminally responsible and questions the effectiveness of deterrence in such cases.

Author's Tone
The tone of the author is  neutral  and objective. They present both sides of the argument fairly, without expressing personal opinions or biases. While the author highlights challenges in holding corporations accountable, they avoid emotional language or judgmental statements.

Answer Explanations
1. B) Perhaps true, and supported by the information presented in the passage.

This answer is correct because the passage explicitly states that corporations prioritize goals like profit over ethical concerns. While other factors besides instrumental value might influence corporate decisions, the information clearly supports the claim.

A) Necessarily true is too strong as the passage doesn't explore all possible motivations.
C) Perhaps true, but not supported implies the information doesn't address it, while the passage directly mentions it.
D) Necessarily false and E) A figment of the author's imagination are both incorrect as the passage discusses this claim.

2. D) Would substantially weaken the argument.

This answer is correct because if a company prioritizes animal welfare over profit (an ethical concern), it contradicts the argument that corporations solely consider instrumental value.

A) Strongly support and B) Support somewhat are incorrect as this action directly opposes the core argument.
C) Neither support nor weaken is inaccurate as it would significantly challenge the core claim.
E) Only if government-owned ignores the ethical decision based on animal welfare, not ownership.

parthwagh · Answer

3. B) The penalties imposed on companies have amounted to a small fraction of their profits.

This answer is correct because it directly addresses the author's point that fines don't deter corporations due to their minimal impact on profit, a key goal.

A) Doesn't target corporations specifically and might not apply the same way.
C) Shows success in a different area (pollution) not corporate crime.
D) Lengthy trials wouldn't necessarily impact deterrence effectiveness.
E) Lawyers wouldn't prevent deterrence if fines are significant enough.

As formal organizations, business corporations are distinguished by

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GMAT Reading Comprehension (RC) Questions

As formal organizations, business corporations are distinguished by

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