Ever since the new Marketing Head joined Crackwell

Question

Ever since the new Marketing Head joined Crackwell Corporation, its profits have increased steadily. In fact, over the past three years that the Marketing Head has been with Crackwell, the company’s profits have grown by almost 35% every year, a figure that used to hover around the 10% mark earlier. Pleased by this fact, the Board of Crackwell Corporation has decided to reward the Marketing Head with stock options in the company.

Which of the following, if true, casts the most serious doubts on the decision taken by the Board of Crackwell Corporation

(A) The Marketing Head is disliked by his team members because of his habit of criticising them in public
(B) Over the past three years, the profits of Crackwell’s closest competitor have grown by 42% every year
(C) The CFO of Crackwell Corporation has taken several cost cutting measures over the last three years, including retrenchment of unproductive employees and renegotiation of prices with vendors.
(D) A strategy consulting firm, known to have turned around several poorly performing companies, has been recently hired by Crackwell Corporation
(E) Several new marketing campaigns, which gave a lot of international exposure to the company’s products, have been successfully conducted by Crackwell Corporation over the past three years

KarishmaB · Accepted Answer

Argument tells us that profits have increased since the new marketing head has joined. So the company board has decided to reward him.

Question: We need to cast doubt on the decision of the board i.e. we need to give a reason why the head should not be rewarded.

(A) The Marketing Head is disliked by his team members because of his habit of criticising them in public
This is no reason to not reward him. If this is producing results and profits are increasing, so be it.

(B) Over the past three years, the profits of Crackwell’s closest competitor have grown by 42% every year
It doesn't matter what the profits of other people are. It is possible that the competitor had 42% or higher profits in the prior yrs too. This info does not tell us anything about the state of the economy. Had there been info that the economy has been doing particularly well for the last 3 yrs (and not before that), we could have debated that the increase in profit could be due to the improved economic conditions and not the head's efforts. All we know is that Cromwell's profit has been growing by 35% instead of 10%.

(C) The CFO of Crackwell Corporation has taken several cost cutting measures over the last three years, including retrenchment of unproductive employees and renegotiation of prices with vendors.

Profits increase when you either increase revenue or decrease costs or both. This tells us that the increase in profits could be because the CFO is cutting costs. The marketing head is supposed to push the top line i.e. increase the revenue by marketing the product better. This does make us doubt whether the increase in profit is because of the marketing head's efforts or because of the cost cutting done by CFO. So it does make us doubt the board's decision. Answer.

(D) A strategy consulting firm, known to have turned around several poorly performing companies, has been recently hired by Crackwell Corporation

Two things here - the firm has been recently hired so it can't be responsible for Crackwell's 3 yr performance. Also, we don't know whether the firm actually did any good for Crackwell. Just because it turned around other companies, it doesn't mean it was effective in this case too.

(E) Several new marketing campaigns, which gave a lot of international exposure to the company’s products, have been successfully conducted by Crackwell Corporation over the past three years

Possibly, marketing head led these campaigns and hence, did a commendable job. There is no reason to not reward him.

Answer (C)

laddaboy · Answer

I chose B. But C is the correct answer.

B is incorrect because regardless the profit of competitors, the MH grew the profits from 10% to 35% for last 3 years which is a good sign for the company hence the reward would have been justified.

C suggests the profit were huge because the spending was low.

jwalantudesai · Answer

IMO-C is the answer.

The premise and argument depends on the contribution of new Marketing head.
But option C -clearly weakens by mentioning that CFO had contributed.
Hence C is direct rebuttal to the premise over which argument is made.

shashankism · Answer

Premise: 
1. New Marketing Head joined Crackwell Corporation, its profits have increased steadily.
2. over the past three years that the Marketing Head has been with Crackwell, the company’s profits have grown by almost 35% every year, a figure that used to hover around the 10% mark earlier.
Conclusion: Pleased by this fact, the Board of Crackwell Corporation has decided to reward the Marketing Head with stock options in the company.

Weaken Question : Which of the following, if true, casts the most serious doubts on the decision taken by the Board of Crackwell Corporation?

(A) The Marketing Head is disliked by his team members because of his habit of criticising them in public 
Doesn't matter at all. If he has contributed in increasing the profits of the company, surely he will be rewarded. Out of Scope.

(B) Over the past three years, the profits of Crackwell’s closest competitor have grown by 42% every year 
There might be a possibility that the competitor company might have performed much better. Also we don't know about the past growth rate of the competitor company. There might also be a possibility that whole sector has performed well and hence both the companies has performed well. So this statement not definitely undermines the contribution of marketing head.

(C) The CFO of Crackwell Corporation has taken several cost cutting measures over the last three years, including retrenchment of unproductive employees and renegotiation of prices with vendors. 
Bingo. Since CFO has taken measures to reduce the overall cost bu removing unproductive employees and renegotiation of prices with vendors. This might be the factor to reduce the cost and hence increase the profit of the company. This definitely weakens the conclusion.

(D) A strategy consulting firm, known to have turned around several poorly performing companies, has been recently hired by Crackwell Corporation 
Strategy consulting firm might have turned around many other poorly performing companies but can the firm change this company's fortune is a subjective matter. Also the firm has been recently while the company's growth changed for last 3 years in a steady manner. So, it doesn't weaken the conclusion.

(E) Several new marketing campaigns, which gave a lot of international exposure to the company’s products, have been successfully conducted by Crackwell Corporation over the past three years 
So new marketing campaigns helped the company to showcase its product. Hmm.. well this is the action which might have been taken by marketing head. So it nor really weakens but might strengthen the conclusion.

VerbalBot · Answer

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Ever since the new Marketing Head joined Crackwell

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