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GMATPREP ChallengeQ -Many managers are influenced by dangerous

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Re: GMATPREP ChallengeQ -Many managers are influenced by dangerous [#permalink]

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New post 02 Nov 2015, 19:16
saroshgilani wrote:
the OA for the last question...?
i chose E


5. E is OA

http://gmatclub.com/forum/many-managers-are-influenced-by-dangerous-myths-about-pay-66930.html

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Re: GMATPREP ChallengeQ -Many managers are influenced by dangerous [#permalink]

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New post 09 Nov 2015, 11:35
A lil on the slower side..11:30min...1 wrong!
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Re: GMAT Prep RC: Many managers are influenced by dangerous myths [#permalink]

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Many managers are influenced by dangerous myths about pay that lead to counterproductive decisions about how their companies compensate employees. One such myth is that labor rates, the rate per hour paid to workers, are identical with labor costs, the money spent on labor in relation to the productivity of the labor force. This myth leads to the assumption that a company can simply lower its labor costs by cutting wages.But labor costs and labor rates are not in fact the same: one company could pay its workers considerably more than another and yet have lower labor costs if that company’s productivity were higher due to the talent of its workforce, the efficiency of its work processes, or other factors. The confusion of costs with rates persists partly because labor rates are a convenient target for managers who want to make an impact on their company’s budgets. Because labor rates are highly visible, managers can easily compare their company’s rates with those of competitors.Furthermore, labor rates often appear to be a company’s most malleable financial variable: cutting wages appears an easier way to control costs than such options as reconfiguring work processes or altering product design.

The myth that labor rates and labor costs are equivalent is supported by business journalists, who frequently confound the two. For example, prominent
business journals often remark on the “high” cost of German labor, citing as evidence the average amount paid to German workers. The myth is also perpetuated by the compensation consulting industry, which has its own incentives to keep such myths alive. First,although some of these consulting firms have recently broadened their practices beyond the area of compensation, their mainstay continues to be advising companies on changing their compensation practices.Suggesting that a company’s performance can be improved in some other way than by altering its pay system may be empirically correct but contrary to the consultants’ interests. Furthermore, changes to the compensation system may appear to be simpler to implement than changes to other aspects of an organization, so managers are more likely to find such advice from consultants palatable. Finally, to the extent that changes in compensation create new problems, the consultants will continue to have work solving the problems that result from their advice.

1) The passage suggests that the “myth” mentioned in the highlighted text persists partly because
A. managers find it easier to compare their companies’ labor rates with those of competitors than to compare labor costs
B. managers tend to assume that labor rates affect their companies’ budgets less than they actually do
C. managers tend to believe that labor rates can have an impact on the efficiency of their companies’ work processes
D. the average amount paid to workers differs significantly from one country to another
E. many companies fail to rely on compensation consultants when making decisions about labor rates

[Reveal] Spoiler:
A


2) The author of the passage mentions business journals the highlighted text primarily in order to
A. demonstrate how a particular kind of evidence can be used to support two different conclusions
B. cast doubt on a particular view about the average amount paid to German workers
C. suggest that business journalists may have a vested interest in perpetuating a particular view
D. identify one source of support for a view common among business managers
E. indicate a way in which a particular myth could be dispelled

[Reveal] Spoiler:
D


3) It can be inferred from the passage that the author would be most likely to agree with which of the following statements about compensation?
A. A company’s labor costs are not affected by the efficiency of its work processes.
B. High labor rates are not necessarily inconsistent with the goals of companies that want to reduce costs.
C. It is more difficult for managers to compare their companies’ labor rates with those of competitors than to compare labor costs.
D. A company whose labor rates are high is unlikely to have lower labor costs than other companies.
E. Managers often use information about competitors’ labor costs to calculate those companies’ labor rates.

[Reveal] Spoiler:
B


4) The author of the passage suggests which of the following about the advice that the consulting firms discussed in the passage customarily give to companies attempting to control costs?
A. It often fails to bring about the intended changes in companies’ compensation systems.
B. It has highly influenced views that predominate in prominent business journals.
C. It tends to result in decreased labor rates but increased labor costs.
D. It leads to changes in companies’ compensation practices that are less visible than changes to work processes would be.
E. It might be different if the consulting firms were less narrowly specialized.

[Reveal] Spoiler:
A


4) According to the passage, which of the following is true about changes to a company’s compensation system?
A. They are often implemented in conjunction with a company’s efforts to reconfigure its work processes.
B. They have been advocated by prominent business journals as the most direct way for a company to bring about changes in its labor costs.
C. They are more likely to result in an increase in labor costs than they are to bring about competitive advantages for the company.
D. They sometimes result in significant cost savings but are likely to create labor-relations problems for the company.
E. They may seem to managers to be relatively easy to implement compared with other kinds of changes managers might consider.

[Reveal] Spoiler:
E


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Re: GMAT Prep RC: Many managers are influenced by dangerous myths [#permalink]

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New post 13 Jun 2016, 10:02
14 minutes... All correct..
WOW how to reduce this time....

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Re: GMAT Prep RC: Many managers are influenced by dangerous myths [#permalink]

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New post 13 Jun 2016, 12:53
7:48

4 right and 1 wrong. However, understood the question after reading it again.

4) The author of the passage suggests which of the following about the advice that the consulting firms discussed in the passage customarily give to companies attempting to control costs?
A. It often fails to bring about the intended changes in companies’ compensation systems. Correct
B. It has highly influenced views that predominate in prominent business journals. BJs are not influenced by CFs
C. It tends to result in decreased labor rates but increased labor costs. It actually reduces labour rates but leads to other problems (not necessarily increased labour costs)
D. It leads to changes in companies’ compensation practices that are less visible than changes to work processes would be. compensation practices are actually more visible.
E. It might be different if the consulting firms were less narrowly specialized. No supporting evidence cited.
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Re: GMAT Prep RC: Many managers are influenced by dangerous myths [#permalink]

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New post 21 Jul 2016, 10:47
Interesting passage , A D B B E , got 4th incorrect :? , Time taken -10 mins and 30 seconds :| , 3 mins to read
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Re: GMAT Prep RC: Many managers are influenced by dangerous myths [#permalink]

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New post 29 Jul 2016, 11:56
sayantanc2k mcelroytutoring

Can anyone help me with the tone of the passage here? Is it neutral or negative? I find it "neutral" as the author is concerned with highlighting a prevailing view among the business managers and citing reasons for its prevalence and widespread acceptance. On the other hand, I am a little confused with the usage of word "myth". It seems quite strong and looks like that the author is sad about the counterproductive decisions.

Please help me with the same.

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Re: GMAT Prep RC: Many managers are influenced by dangerous myths [#permalink]

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New post 29 Jul 2016, 12:00
sayantanc2k mcelroytutoring

Can anyone help me with the tone of the passage here? Is it neutral or negative? I find it "neutral" as the author is concerned with highlighting a prevailing view among the business managers and citing reasons for its prevalence and widespread acceptance. On the other hand, I am a little confused with the usage of word "myth". It seems quite strong and looks like that the author is sad about the counterproductive decisions.

Please help me with the same.

Thanks a lot for your unconditional support till date :)

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New post 03 Aug 2016, 02:58
Can anyone help me here with my question above^

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Re: GMATPREP ChallengeQ -Many managers are influenced by dangerous [#permalink]

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New post 03 Aug 2016, 02:59
Posting it here as well in case anyone attends it here-

Can anyone help me with the tone of the passage here? Is it neutral or negative? I find it "neutral" as the author is concerned with highlighting a prevailing view among the business managers and citing reasons for its prevalence and widespread acceptance. On the other hand, I am a little confused with the usage of word "myth". It seems quite strong and looks like that the author is sad about the counterproductive decisions.

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Re: GMAT Prep RC: Many managers are influenced by dangerous myths [#permalink]

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New post 08 Sep 2016, 04:29
Keats wrote:
Can anyone help me here with my question above^

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I would say that the tone is moderately negative. Indeed, the author considers a certain view as a myth and therefore tries to dismiss it by explaining the underlying reasons why this myth exists.

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Thanks manlog, I got your point. Lets see if any expert is interested in sharing his/her opinion!

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Re: GMAT Prep RC: Many managers are influenced by dangerous myths [#permalink]

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New post 17 Sep 2016, 19:54
Additional question :
The primary purpose of the passage is to
A. describe a common practice used by managers to control labor costs
B. examine the relation between labor costs and other costs incurred by businesses
C. explain why labor rates are a more significant factor than labor costs for most businesses
D. identify a common misperception held by managers and point out some of the reasons for
its persistence
E. distinguish between a factor that companies can easily control and another that is more
difficult to change

Answer : D
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Re: GMAT Prep RC: Many managers are influenced by dangerous myths [#permalink]

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New post 26 Nov 2016, 00:08
13 min overall

3 correct 2 wrong.

A
D
A(Wrong)
B(wrong)
E

1) In the last part of 1st para "Because labor rates are highly visible, managers can easily compare their company’s rates with those of competitors"

2) Process of elimination Option D is in line with that of managers thinking

3) In 1st para "But labor costs and labor rates are not in fact the same: one company could pay its workers considerably more than another and yet have lower labor costs if that company’s productivity were higher due to the talent of its workforce, the efficiency of its work processes, or other factors."
It shows that High labor rates might be the problem for all the companies. Might be for few but not all.

4) Question talks about "What author Suggests ABOUT the suggestions of consultancy
In last lines of the passage "Finally, to the extent that changes in compensation create new problems"
It will create new problems--Thus failing in bringing the intended change(Goal)

5) In last lines of the passage "so managers are more likely to find such advice from consultants palatable"
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Re: GMAT Prep RC: Many managers are influenced by dangerous myths [#permalink]

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-The author describes a common myth held by business managers
-He then goes on to describe how that myth is concurred by business journals and hence is finding widespread acceptance

Took 9 mins in total, including 3 mins to read .

1. Because labor rates are highly visible, managers can easily compare their company’s rates with those of competitors
Answer A

2. "The myth that labor rates and labor costs are equivalent is supported by business journalists, who frequently confound the two. For example, prominent business journals"
Since the business journals support the common view held my managers, option (D) is the right answer choice.

3.
The author is trying to point out that labor rates and labor costs are not connected and that managers would not try to reduce labor rates to reduce costs. The author is stating that high labor costs could still bring about a reduction in a company’s overall costs.
Answer B

4. "Finally, to the extent that changes in compensation create new problems, the consultants will continue to have work solving the problems that result from their advice"

Since the changes in compensation create new problems, it is contrary to its intended effect and hence option (A) is the right answer

5.
"Furthermore, changes to the compensation system may appear to be simpler to implement than changes to other aspects of an organization, so managers are more likely to find such advice from consultants palatable"

Answer E
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Re: GMAT Prep RC: Many managers are influenced by dangerous myths [#permalink]

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New post 30 Apr 2017, 08:07
Many managers are influenced by dangerous myths about pay that lead to counterproductive decisions about how their companies compensate employees. One such myth is that labor rates, the rate per hour paid to workers, are identical with labor costs, the money spent on labor in relation to the productivity of the labor force. This myth leads to the assumption that a company can simply lower its labor costs by cutting wages. But labor costs and labor rates are not in fact the same: one company could pay its workers considerably more than another and yet have lower labor costs if that company's productivity were higher due to the talent of its workforce, the efficiency of its work processes, or other factors. The confusion of costs with rates persists partly because labor rates are a convenient target for managers who want to make an impact on their company's budgets. Because labor rates are highly visible, managers can easily compare their company's rates with those of competitors. Furthermore, labor rates often appear to be a company's most malleable financial variable: cutting wages appears an easier way to control costs than such options as re-configuring work processes or altering product design.

The myth that labor rates and labor costs are equivalent is supported by business journalists, who frequently confound the two. For example, prominent business journals often remark on the "high" cost of German labor, citing as evidence the average amount paid to German workers. The myth is also perpetuated by the compensation-consulting industry, which has its own incentives to keep such myths alive. First, although some of these consulting firms have recently broadened their practices beyond the area of compensation, their mainstay continues to be advising companies on changing their compensation practices. Suggesting that a company's performance can be improved in some other way than by altering its pay system may be empirically correct but contrary to the consultants' interests. Furthermore, changes to the compensation system may appear to be simpler to implement than changes to other aspects of an organization, so managers are more likely to find such advice from consultants palatable. Finally, to the extant that changes in compensation create new problems, the consultants will continue to have work solving the problems that result from their advice.

I read only the bold part and skip the strike part but you can skim also.(A/q to your reading process)

P1 :- Talking about one myth i.e. labor rates are identical with labor costs. And then author perspective about this myth.
P2: - Who supported this myth.

1) The passage suggests that the “myth” mentioned in the highlighted text persists partly because

Background - It is mention in P1 - The confusion of costs with rates persists partly because labor rates are a convenient target for managers............

A. managers find it easier to compare their companies’ labor rates with those of competitors than to compare labor costs ---Correct , aligned with above mentioned background.
B. managers tend to assume that labor rates affect their companies’ budgets less than they actually do
C. managers tend to believe that labor rates can have an impact on the efficiency of their companies’ work processes
D. the average amount paid to workers differs significantly from one country to another
E. many companies fail to rely on compensation consultants when making decisions about labor rates --- It is mentioned in P2

2) The author of the passage mentions business journals the highlighted text primarily in order to

Background - Business Journal mentioned in p2 , so need to reed that part.This is role base question so just apply concept of CR. It is mentioned to make reader know that who supports the myth.

A. demonstrate how a particular kind of evidence can be used to support two different conclusions
B. cast doubt on a particular view about the average amount paid to German workers
C. suggest that business journalists may have a vested interest in perpetuating a particular view
D. identify one source of support for a view common among business managers
E. indicate a way in which a particular myth could be dispelled


4) The author of the passage suggests which of the following about the advice that the consulting firms(CF) discussed in the passage customarily give to companies attempting to control costs?

Background : - Consulting Firm mentioned in p2 so need to read that part of p2. Author suggest three things about the advice of the CF.
Suggesting that a company's performance can be improved .................
Furthermore, changes to the compensation system .......................
Finally, to the extant that changes in compensation create new problems, the consultants will continue to have work solving the problems that result from their advice.


A. It often fails to bring about the intended changes in companies’ compensation systems. --- From third point we can infer this.
B. It has highly influenced views that predominate in prominent business journals.
C. It tends to result in decreased labor rates but increased labor costs.
D. It leads to changes in companies’ compensation practices that are less visible than changes to work processes would be. --- Author talk something about performance but not what this option is telling.
E. It might be different if the consulting firms were less narrowly specialized.


According to the passage, which of the following is true about changes to a company’s compensation system?

Background :- Answer for this question will be explicitly mentioned in the passage. "Changes to a company’s compensation system. --- mentioned in p2--"changes to the compensation system may appear to be simpler to implement than changes to other aspects of an organization"

A. They are often implemented in conjunction with a company’s efforts to reconfigure its work processes.
B. They have been advocated by prominent business journals as the most direct way for a company to bring about changes in its labor costs.
C. They are more likely to result in an increase in labor costs than they are to bring about competitive advantages for the company.
D. They sometimes result in significant cost savings but are likely to create labor-relations problems for the company.
E. They may seem to managers to be relatively easy to implement compared with other kinds of changes managers might consider.

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Re: GMAT Prep RC: Many managers are influenced by dangerous myths [#permalink]

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New post 31 May 2017, 03:27
Can someone explain why its option A for question 4?

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GMAT Prep RC: Many managers are influenced by dangerous myths [#permalink]

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New post 24 Jul 2017, 05:34
GMATNinja, Could you help with question 3 (Inference)?

Quote:
But labor costs and labor rates are NOT in fact the same: one company could pay its workers considerably more than another and yet have lower labor costs if that company's productivity were higher due to the talent of its workforce, the efficiency of its work processes, or other factors.


It can be inferred from the passage that the author would be most likely to agree with which of the following statements about compensation?

A. A company’s labor costs are not affected by the efficiency of its work processes.
B. High labor rates are NOT necessarily inconsistent with the goals of companies that want to reduce costs
C. It is more difficult for managers to compare their companies’ labor rates with those of competitors than to compare labor costs.
D. A company whose labor rates are high is unlikely to have lower labor costs than other companies.
E. Managers often use information about competitors’ labor costs to calculate those companies’ labor rates.
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Re: GMATPREP ChallengeQ -Many managers are influenced by dangerous [#permalink]

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New post 24 Jul 2017, 12:02
priyankur_saha@ml.com wrote:
MamtaKrishnia wrote:
1 -A
2 -D
3 -B
4 -A


Perfect. Those are OA.

You are correct. :) how much time you took for 3rd and fourth questions?



Please explain Question 4- A
I marked D
what is wrong with it?

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GMATPREP ChallengeQ -Many managers are influenced by dangerous [#permalink]

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New post 08 Aug 2017, 11:26
9min

All correct :D

Most of the time consumed was for answering the questions. Passage seemed to be easier one initially, but wasn't.

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GMATPREP ChallengeQ -Many managers are influenced by dangerous   [#permalink] 08 Aug 2017, 11:26

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