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Corporate social responsibility (CSR) is based on the idea that firms

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Corporate social responsibility (CSR) is based on the idea that firms  [#permalink]

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New post 17 Feb 2019, 11:59
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38% (02:08) correct 62% (02:24) wrong based on 76 sessions

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Corporate social responsibility (CSR) is based on the idea that firms should act responsibly to promote public benefit and that they can profit through such activities, but this idea is inherently flawed. Companies inevitably try to maximize their profits, and social welfare is not the primary motive in most cases; for example, cases in which social welfare is delivered by serving healthier foods or by opting for fuel efficient vehicles. Therefore, social welfare is a by-product rather than an objective in most CSR activities.

Which of the following is an assumption made by the author?


A. Products such as fuel-efficient cars are created because of consumer demands.

B. Most CSR activities are affiliated to products such as healthier foods or fuel efficiency.

C. In most instances of CSR activities, it is not possible for companies to extract any additional profit by going the non CSR route.

D. Companies’ long-term interests are oriented more toward profit acquisition than social welfare.

E. The higher a company’s desire to maximize its profits, the lower is its prioritizing of the objective of social welfare.
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Re: Corporate social responsibility (CSR) is based on the idea that firms  [#permalink]

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New post 17 Feb 2019, 19:31
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pineapple123456 wrote:
Corporate social responsibility (CSR) is based on the idea that firms should act responsibly to promote public benefit and that they can profit through such activities, but this idea is inherently flawed. Companies inevitably try to maximize their profits, and social welfare is not the primary motive in most cases; for example, cases in which social welfare is delivered by serving healthier foods or by opting for fuel efficient vehicles. Therefore, social welfare is a by-product rather than an objective in most CSR activities.

Which of the following is an assumption made by the author?


A. Products such as fuel-efficient cars are created because of consumer demands.

B. Most CSR activities are affiliated to products such as healthier foods or fuel efficiency.

C. In most instances of CSR activities, it is not possible for companies to extract any additional profit by going the non CSR route.

D. Companies’ long-term interests are oriented more toward profit acquisition than social welfare.

E. The higher a company’s desire to maximize its profits, the lower is its prioritizing of the objective of social welfare.


Would like to weigh in here,

Conclusion: social welfare is a by-product rather than an objective in most CSR activities.

Now first i will say why Not D and E,
Because when we negate both of them, it is actually strengthening the conclusion, that yes social welfare is not a by product but an objective

Now lets see what is wrong in:
A. Products such as fuel-efficient cars are created because of consumer demands.
Fuel efficient cars, IMO does not pertain to this argument, a specific example is been used.
No relationship between consumer demands

B. Most CSR activities are affiliated to products such as healthier foods or fuel efficiency.
healthier foods or fuel efficiency ??, Out of scope

C. In most instances of CSR activities, it is not possible for companies to extract any additional profit by going the non CSR route.
This was the option, which i let go by.
Once you realize that after negation of all 4 only this option is left, let us have a look over it now

In some instances of CSR activities, it is not possible for companies to extract any additional profit by going the non CSR route.
Okay so that is why social welfare is a by product.
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Re: Corporate social responsibility (CSR) is based on the idea that firms  [#permalink]

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New post 18 Feb 2019, 01:25
pineapple123456 wrote:
Corporate social responsibility (CSR) is based on the idea that firms should act responsibly to promote public benefit and that they can profit through such activities, but this idea is inherently flawed. Companies inevitably try to maximize their profits, and social welfare is not the primary motive in most cases; for example, cases in which social welfare is delivered by serving healthier foods or by opting for fuel efficient vehicles. Therefore, social welfare is a by-product rather than an objective in most CSR activities.

Which of the following is an assumption made by the author?


A. Products such as fuel-efficient cars are created because of consumer demands.

B. Most CSR activities are affiliated to products such as healthier foods or fuel efficiency.

C. In most instances of CSR activities, it is not possible for companies to extract any additional profit by going the non CSR route.

D. Companies’ long-term interests are oriented more toward profit acquisition than social welfare.

E. The higher a company’s desire to maximize its profits, the lower is its prioritizing of the objective of social welfare.


From experience, I have seen that in the case of CR, most of the time the correct answer choice has a keyword on which the whole passage is based. In this case, it is "CSR". Again this is not a rule but more of an insight from experience. I guess it basically tells us that we talking about something specific to the passage and not making a generic statement.

Let's look at the answer choices:

A. Products such as fuel-efficient cars are created because of consumer demands.
This is not relevant to the passage as we are not focussing on the products vs consumer demands but on CSR activities.

B. Most CSR activities are affiliated to products such as healthier foods or fuel efficiency.
Again not relevant to our discussion. It does not matter if healthier foods or fuel efficiency are the most common CSR activities or not.

C. In most instances of CSR activities, it is not possible for companies to extract any additional profit by going the non CSR route.
Seems to be the right answer. This could be a motivating factor for the companies. If they are not able to earn enough profit through the non-CSR route they would want to maximize profits through the CSR route. Also heavy use of "CSR" keywords which helps to keep the discussion within the scope of the argument.

D. Companies’ long-term interests are oriented more toward profit acquisition than social welfare.
This is not relevant to the passage as we are not focussing on the long term interests of the company.

E. The higher a company’s desire to maximize its profits, the lower is its prioritizing of the objective of social welfare.
Though this may seem right to a few people, it basically brings another aspect to the discussion which is not really relevant to the point of the view of the passage. In the passage, we are focussed on whether CSR activities are important for a company or they focus only on the profit within the CSR activities, hence we are looking from the CSR perspective. Whereas in this option we are looking at things from profit perspective and then think about whether social welfare is important or not.

Hence C is the correct answer.
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Re: Corporate social responsibility (CSR) is based on the idea that firms   [#permalink] 18 Feb 2019, 01:25
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