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Outsourcing, or the allocation of specific aspects of a corporation

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Outsourcing, or the allocation of specific aspects of a corporation  [#permalink]

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New post 06 Apr 2015, 04:46
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Part of New Project-->[url=http://gmatclub.com/forum/new-project-reading-comprehension-review-practice-195318.html]Reading Comprehension!!- Review/ Practice[/url]


Outsourcing, or the allocation of specific aspects of a corporation to a business entity specializing in those areas, has become such an integral part of a company’s organizational structure that few question outsourcing’s long-term viability. Two recent studies on this topic are no exception; both focus on ways in which outsourcing can be improved. Each, for the most part, discusses different aspects of outsourcing. Yet, there is one area in which there commendations of both theories overlap somewhat. Peavy chiefly discusses ways in which companies can mitigate the potential negative effects of confidential information reaching competitors. Presently, when a corporation outsources even a small operational function, it must share information pertaining to this function. In other words, the more of its operation a company entrusts to another business entity, the more confidential information that company will have to release. According to Peavy, one way to minimize the negative consequences should any of that information fall into a competitor’s hands is to impose stronger penalties on any business entity entrusted with such information, should it divulge that information. However, Peavy is concerned mostly with exploring the effect of increasing the severity of penalties for any one instance of leaked information, and he devotes only one chapter to an existing structural check on such “information leaks”: as a company specializing in outsourcing assumes more clients, its legal liability will increase with each company that becomes a client, an effect, he notes, that becomes more conspicuous the more a company diversifies.

Morgan, on the other hand, looks at those business entities that performed the outsourced work. As such entities grow, their ability to provide specialized services to a specific client diminishes. Since, like most business entities, they are driven to grow profits, often doing so by diversifying, the needs of a specific client are often subordinate to this larger goal. Morgan’s aim is to educate corporations engaged in outsourcing so that they choose a firm that focuses on providing one service. This view, however, is somewhat shortsighted, since the long-term trajectory of a company is not always clear and a firm may end up diversifying.

In this regard, there is a curious overlap between the two studies: in some ways both see problems with diversification, Peavy focusing on the liability and Morgan the diminishment in quality of the services rendered. Yet, it is important to note that Peavy focuses on how diversification negatively affects a company providing services to companies outsourcing, whereas Morgan focus on how the latter is negatively impacted.

1. The author of the passage considers Morgan’s plan to educate corporations “shortsighted” since it

A. seeks to educate only corporations and not business entities to which corporations outsource work
B. assumes that companies that plan to diversify may not end up doing so
C. provides advice that might not be relevant in the near future
D. fails to distinguish between corporations and companies to which corporations outsource work
E. confuses specialized services with services pertaining to the entire operation



2. The primary purpose of the passage is to

A. describe the way in which two theories conflict
B. propose two different solutions to the same problem
C. discuss how two studies arrive at contradictory conclusions
D. explore two reactions to a phenomenon and draw a parallel
E. support one theory and discredit a second



3. It can be inferred from the passage that which of the following would be most immune to the “structural check”?

A. A company doing outsourcing work that does not diversify in terms of the services it provides.
B. A company involved in outsourcing that has been entrusted with confidential information from a large number of companies across varying industries.
C. A business entity that provides one narrow function for a number of corporations.
D. A company that does not have a clear vision of its long-term trajectory
E. A business whose sole existence is based on providing ancillary services to exactly one corporation.



4. According to the passage, which of the following is common to both Peavy’s and Morgan’s studies?

A. Both welcome diversification in business entities providing services for corporations.
B. Both discuss the effect that outsourcing has on the long-term viability of a corporation.
C. Both explore the way in which diversification and growth within a corporation can affect outsourcing.
D. Neither focus on the impact of diversification on business entities providing services for companies outsourcing.
E. Neither questions whether outsourcing itself is a beneficial practice for corporations.



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Re: Outsourcing, or the allocation of specific aspects of a corporation  [#permalink]

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New post 25 Apr 2015, 07:57
Took 11 minutes for this simple passage.
In q1 , how does option C fits? C specifically mentions near future whereas the passage mentions long term trajectory!!
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Outsourcing, or the allocation of specific aspects of a corporation  [#permalink]

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New post 22 Jul 2015, 05:56
3
10 mins. Got tricked by last question in rush Q4 :(

1. The author of the passage considers Morgan’s plan to educate corporations “shortsighted” since it
C. provides advice that might not be relevant in the near future
>>This view, however, is somewhat shortsighted, since the long-term trajectory of a company is not always clear and a firm may end up diversifying.

4. According to the passage, which of the following is common to both Peavy’s and Morgan’s studies?
C. Both explore the way in which diversification and growth within a corporation can affect outsourcing.
>>In this regard, there is a curious overlap between the two studies: in some ways both see problems with diversification, Peavy focusing on the liability and Morgan
E. Neither questions whether outsourcing itself is a beneficial practice for corporations.

>> Correct.
Outsourcing, or the allocation of specific aspects of a corporation to a business entity specializing in those areas, has become such an integral part of a company’s organizational structure that few question outsourcing’s long-term viability. Two recent studies on this topic are no exception; both focus on ways in which outsourcing can be improved.
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Re: Outsourcing, or the allocation of specific aspects of a corporation  [#permalink]

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New post 20 Aug 2015, 07:14
Can someone please explain question 3?
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Re: Outsourcing, or the allocation of specific aspects of a corporation  [#permalink]

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New post 20 Mar 2016, 05:20
anindame wrote:
Can someone please explain question 3?



May be i am a little late ,but i will try to explain.

However, Peavy is concerned mostly with exploring the effect of increasing the severity of penalties for any one instance of leaked information, and he devotes only one chapter to an existing structural check on such “information leaks”: as a company specializing in outsourcing assumes more clients, its legal liability will increase with each company that becomes a client,

From the above we can deduce that companies focused on one particular client can withstand the structural check.
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Re: Outsourcing, or the allocation of specific aspects of a corporation  [#permalink]

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New post 05 Sep 2018, 15:49

Official Explanation for Q2



The passage describes how two theories relate to outsourcing. His focus is not how these two theories are similar. Indeed, he says that they deal with different aspects of outsourcing. The author does, however, make a connection between these two seemingly disparate studies (“Yet, there is one area in which the recommendations of both theories overlap somewhat.”). In the last couple of sentences of the passage, the author describes this overlap. This points best to (D).

(A) The author does not describe a conflict between the two points of view. He says that they are different, but overlap slightly. Though the way in which they overlap slightly is not exactly similar. One focuses on how diversification can out the outsourcing company and the company work is outsourced to. This observation is not the same as saying the two theories are in conflict.

(B) Neither Morgan or Peavy’s insights can be described as a solution.

(C) This one is the best trap answer. If (C) were the answer, however, the passage would be focused on how the two theories have conclusions that clash. The passage, though, just says that the two theories don’t overlap, except for one small area: diversification. In order to adequately describe that one specific area, the author gives a background on the subject. The very last sentences discuss how Morgan and Peavy focus on different aspects of diversification: Morgan says it hurts the outsourcing company and Peavy that it hurts the company that does outsourced work. These, however, are not contradictory conclusions.

(D) See above.

(E) The author does not discredit either theory.
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Re: Outsourcing, or the allocation of specific aspects of a corporation  [#permalink]

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New post 05 Sep 2018, 15:51

Official Explanation for Q1



Relevant text, “Morgan’s aim is to educate corporations engaged in outsourcing so that they choose a firm that specializes in providing one service. This view, however, is somewhat shortsighted, since the long-term trajectory of a company is not always clear and a firm may end up diversifying.”

In other words, a company that presently specializes in one service may end up diversifying in the future. This matches best with (C).

(A) While this answer accurately describes Morgan’s work, it does not describe why he considers a view shortsighted.

(B) reverses the meaning. Morgan is focused on companies that may not be planning to diversify that end up diversifying, not, as this answer states, companies, who plan to diversify but then don’t end up doing so.

(C) See above.

(D) is wrong since no such distinction is mentioned in relation to short-sightedness.

(E) While Morgan does focus on specialized services, it is within the context of companies providing outsourced services becoming less specialized as they diversify.
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Re: Outsourcing, or the allocation of specific aspects of a corporation  [#permalink]

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New post 05 Sep 2018, 15:52

Official Explanation for Q3



Relevant text: “devotes only one chapter to an existing structural check on such “information leaks”: as a company specializing in outsourcing assumes more clients, its legal liability will increase with each company that becomes a client, an effect, he notes, that becomes more conspicuous the more a company diversifies.”

Simplified: a company that does outsourced work is more at risk for leaked information the more companies it provides services for.

Anticipating the answer:

The question asks us for the most immune from this outcome. Therefore, an answer choice that describes some company that does outsourcing that limits the number of companies it represents. Ideally, a company to which exactly one company outsources work to.

(A) is tempting. But remember, it is not the number of distinct services that is a factor here, but the number of clients a company doing outsourced work takes on.

(B) is the opposite of what we are looking for. Remember, the question said, “immune”.

(C) The “number of corporations” indicates that there would be a great structural check.

(D) A company’s long-term trajectory does not relate to the issue of structural checks and liability.

(E) Since a company is providing a service for exactly one company, it would be highly immune to the structural check.
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Re: Outsourcing, or the allocation of specific aspects of a corporation  [#permalink]

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New post 05 Sep 2018, 15:53

Official Explanation for Q4


Relevant text: “Outsourcing, or the allocation of specific aspects of a corporation to a business entity specializing in those areas, has become such an integral part of a company’s organizational structure that few question outsourcing’s long-term viability. Two recent studies on this topic are no exception”.

Key takeaway: This question is tricky, since the answer could come from anywhere in the passage. Presumably since we are dealing with overlap, we’d expect the relevant text to come at the end. This kind of “trick” is quite common on higher-level questions. So if you find yourself unable to justify an answer based on the text, you might have the wrong part of the passage.

(A) is incorrect since both Peavy and Morgan regard diversification as something that can exercise a negative impact.

(B) The long-term viability of a corporation is not discussed in the passage.

(C) The diversification in the passage is focused on the business entity work that does the outsourced work, not the corporation that outsources work. Notice that throughout the passage “corporation” is only used to refer to the latter.

(D) Both focus on the impact of diversification in business entities that do outsourced work.

(E) See relevant text.
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Re: Outsourcing, or the allocation of specific aspects of a corporation &nbs [#permalink] 05 Sep 2018, 15:53
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