The modern multinational corporation is described as having : Reading Comprehension (RC)

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moind

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Re: The modern multinational corporation is described as having [#permalink]

27 Sep 2012, 06:27

mikemcgarry wrote:

harshavmrg wrote:

i had the answer of CDAE..clearly wrong and got confused at many places...

harshavmrg: Do you have any specific questions you would like to ask? I am happy to help if you'd like something explained.

Mike

Hey Mike

Can you please help understand the answer to question 3, i feel the answer should not be E because no where in the passage is it explicitly mentioned about the national interests not governing the modern multinationals

It should be B according to me, thanks

Looking forward to your response, thanks

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Re: The modern multinational corporation is described as having [#permalink]

01 Oct 2012, 10:19

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moind wrote:

mikemcgarry wrote:

harshavmrg wrote:

i had the answer of CDAE..clearly wrong and got confused at many places...

harshavmrg: Do you have any specific questions you would like to ask? I am happy to help if you'd like something explained.
Mike

Hey Mike
Can you please help understand the answer to question 3, i feel the answer should not be E because nowhere in the passage is it explicitly mentioned about the national interests not governing the modern multinationals. It should be B according to me, thanks
Looking forward to your response, thanks

I'm happy to help. :-)

Because we are weighing B vs. E, I will simply discuss those two.

3. The passage suggests that modern multinationals differ from early chartered trading companies in that
(A) the top managers of modern multinationals own stock in their own companies rather than simply receiving a salary
(B) modern multinationals depend on a system of capitalist international trade rather than on less modern trading systems
(C) modern multinationals have operations in a number of different foreign countries rather than merely in one or two
(D) the operations of modern multinationals are highly profitable despite the more stringent environmental and safety regulations of modern governments
(E) the overseas operations of modern multinationals are not governed by the national interests of their home countries

This question focuses on differences between modern multinationals vs. early chartered trading companies, and that is discussed explicitly in paragraph three of the passage. Here is paragraph three:
The early trading companies did differ strikingly from modern multinationals in many respects. They depended heavily on the national governments of their home countries and thus characteristically acted abroad to promote national interests. Their top managers were typically owners with a substantial minority share, whereas senior managers' holdings in modern multinationals are usually insignificant. They operated in a preindustrial world, grafting a system of capitalist international trade onto a premodern system of artisan and peasant production. Despite these differences, however, early trading companies organized effectively in remarkably modern ways and merit further study as analogues of more modern structures.

(B) modern multinationals depend on a system of capitalist international trade rather than on less modern trading systems
Clearly, the modern multinational are as capitalistic as an entity can be. The early chartered trading companies "[grafted] a system of capitalist international trade onto a premodern system of artisan and peasant production." Here, they are using the metaphor of the graft of a plant --- when you cut the branch of one species of plant, and attach the branch of another species so that it grows. Here, they are saying that the local systems, for example Native Americans in North American, were using less modern systems, i.e. artisan and peasant production, but the chartered trading companies themselves were using capitalism --- they were, as it were, attaching their own capitalist "stem" onto the "branch" of the less modern system. The early chartered trading companies were dealing with folks who used modern trading systems, but the trading companies themselves were thoroughly capitalist, just as much as the modern multinationals. Choice (B) is not correct.

(E) the overseas operations of modern multinationals are not governed by the national interests of their home countries
The third paragraph say explicitly: "[The early chartered trading companies] depended heavily on the national governments of their home countries and thus characteristically acted abroad to promote national interests." It cites this as the first and therefore the most significant difference in this comparison. In other words, an early Dutch trading company, in the course of doing whatever money-making things it was doing, would try to promote the interest of Holland. By contrast, modern multinational don't necessarily do anything to promote the national interests of their home countries. In fact, modern multinational may not give two hoots for the vital interests of their own home country. This interest, the national interests of their home country, was a governing priority for the early chartered trading companies but not for modern multinationals. Thus, choice (E) is correct.

Does all that make sense?

Mike :-)

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Re: The modern multinational corporation is described as having [#permalink]

24 Oct 2012, 09:47

Mike,
I am sorry to open this old thread. Here's the question I got:
3. It can be inferred from the passage that the author would characterize the activities engaged in by early chartered trading companies as being
(A) complex enough in scope to requrie a substantial amount of planning and coordination on the part of management
(B) too simple to be considered similar to those of a modern multinational corporation
(C) as intricate as those carried out by the largest multinational corporations today
(D) often unprofitable due to slow communications and unreliable means of transportation
(E) hampered by the political demands imposed on them by the governments of their home countries

Can you please explain why is C incorrect? I kept bouncing between A and C. OA is A.

About A - I thought that the author doesn't say that the early trading companies were 'complex' -- she says that the company indeed have a high volume of transaction. I thought that that was a scope creep. secondly, "substantial amount of planning etc" -- is a bit far from what author says. She just talks about salaried agent, who carried out trade with NAmericans and a lawyer (I didn't understand that exact title) ..Hence, I was a bit suspicious.

Now C - I liked this answer choice because author says "..merit further study as analogues of modern structure" -- However, after re-reading I noticed that C has "the largest" MNC. I checked the passage, and nowhere the author talks about 'the largest' MNCs.

Now, I have an equal number of positive points and negative points for A and C. GMAC likes A. Can you please comment on the negatives pointed out by me for A and C?

Thanks

G

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Re: The modern multinational corporation is described as having [#permalink]

24 Oct 2012, 14:08

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voodoochild wrote:

Mike,
I am sorry to open this old thread. Here's the question I got:
3. It can be inferred from the passage that the author would characterize the activities engaged in by early chartered trading companies as being
(A) complex enough in scope to requrie a substantial amount of planning and coordination on the part of management
(B) too simple to be considered similar to those of a modern multinational corporation
(C) as intricate as those carried out by the largest multinational corporations today
(D) often unprofitable due to slow communications and unreliable means of transportation
(E) hampered by the political demands imposed on them by the governments of their home countries

Can you please explain why is C incorrect? I kept bouncing between A and C. OA is A.

About A - I thought that the author doesn't say that the early trading companies were 'complex' -- she says that the company indeed have a high volume of transaction. I thought that that was a scope creep. secondly, "substantial amount of planning etc" -- is a bit far from what author says. She just talks about salaried agent, who carried out trade with NAmericans and a lawyer (I didn't understand that exact title) ..Hence, I was a bit suspicious.

The passage said: "In reality, however, early trading companies successfully purchased and outfitted ships, built and operated offices and warehouses, manufactured trade goods for use abroad, maintained trading posts and production facilities overseas, procured goods for import, and sold those goods both at home and in other countries. The large volume of transactions associated with these activities seems to have necessitated hierarchical management structures ..." The author may not use the word "complex", but look at this first sentence quoted here ---- that's complexity! THE GMAT ruthless punishes literalistic thinking on the RC --- it often uses one word or term in the passage, and then uses a different word or term meaning the same thing in the question ----- here, the passage describes a situation, and the question uses a descriptive word that could characterize that situation ---- if you look for the literal word, you won't find it. You always need to be working at the level of ideas, not just words. The second sentence quoted says quite clearly that, because of this complex level of detail, those early trading companies needed "management." This is solid evidence for (A).

voodoochild wrote:

Now C - I liked this answer choice because author says "..merit further study as analogues of modern structure" -- However, after re-reading I noticed that C has "the largest" MNC. I checked the passage, and nowhere the author talks about 'the largest' MNCs.

First of all, this is a wildly illogical statement. I would argue that --- even ignoring anything the passage says, we can reject this one because it is simply so over-the-top unreasonable. The "largest multinational corporations today" ---- take Coke --- think of the bewildering array of different places in which you can (a) buy Coke, or (b) see an ad for Coke. Then they have keep track of website visitors, folks clicking on ads, folks sending in codes under the bottle caps, prize, promotions, affiliations with other business, etc. etc. Truly mind-boggling complexity! No single person could possibly keep track of everything the company Coke does. It's off the charts. Nothing in the sixteenth century could come anything vaguely close to this! Sixteenth century folks could not even imagine that kind of complexity. Thus, this statement is totally illogical. You have to check for that sort of thing. I would say this choice was designed so that, if you think about what it's saying, it's so unreasonable that there's no way the passage could possibly support it. It's designed to trap people who scour for words without thinking deeply about meaning.

The passage says that "nineteenth-century inventions like the steamship and the telegraph, by facilitating coordination of managerial activities" increased the volume, and therefore necessarily the complexity, and this increase caused a structural change in the nineteenth century, so the companies in the 19th century were more complex than what came before. I take it as self-evident that (a) a few centuries before that, when they had no modern communication or transport at all, the entire operation and life in general was necessarily less complex, and that (b) life today is way way more complex than it was in the middle of the 19th century.

The sixteenth century trading companies "merit further study as analogues of more modern structures' means only that some features will be analogous. Saying there's an analogy between two things is not saying that two things are equivalent, or even largely similar. The whole point of that paragraph is to talk about differences between early trading companies and modern multinationals, so this sentence is simply a moderating, qualifying sentence in that context. Saying there's an analogy is way that the author can argue that, despite differences, this study is somewhat relevant in a historical sense. Despite obvious differences, there are some analogies to be made. If ANYTHING is different about life in the sixteen century and life now, it is the level of complexity. Whatever else may be similar or analogous, the sheer level of complexity will be different by several orders of magnitude.

The fact that you found (C) attractive suggests to me that you are missing the forest for the trees. You are so concentrated on finding word & quotes in the passage with the right words that you are not thinking, holistically, about what the statement is saying, and what that would really mean. Again, the RC will punish you for being too literalistic, too focused at the level of individual words, and not thinking about logic & argumentative flow & meaning & context. All that right brain stuff is hugely important on the RC. If you play GMAT RC as if it is mathematics, you will lose.

Does all this make sense?

Mike :-)

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Re: The modern multinational corporation is described as having [#permalink]

27 Nov 2012, 09:28

I dont understand why D is not the answer for Question 4.

I would argue that Option A is a strict paraphrase of the paragraph and goes against what the author is trying to argue. The author states that while 19th century companies are considered as an early form of the modern multinational, early industries were in fact the real source and that they were already organized under a hierarchy and had complex enough operations to warrant such hierarchies. They also indulged in volumes of trade higher than those previously believed. Ergo, 16-17th century industries predated the modern multinational and were early and rudimentary forms of it.

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Re: The modern multinational corporation is described as having [#permalink]

27 Nov 2012, 12:05

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nmehta3 wrote:

I dont understand why D is not the answer for Question 4.
I would argue that Option A is a strict paraphrase of the paragraph and goes against what the author is trying to argue. The author states that while 19th century companies are considered as an early form of the modern multinational, early industries were in fact the real source and that they were already organized under a hierarchy and had complex enough operations to warrant such hierarchies. They also indulged in volumes of trade higher than those previously believed. Ergo, 16-17th century industries predated the modern multinational and were early and rudimentary forms of it.

Dear nmehta3

I'm happy to help with this. :-)

Here's the question, with some key words highlighted.
4. According to the passage, early chartered trading companies are usually described as
(A) irrelevant to a discussion of the origins of the modern multinational corporation
(B) interesting but ultimately too unusual to be good subjects for economic study
(C) analogues of nineteenth-century British trading firms
(D) rudimentary and very early forms of the modern multinational corporation
(E) important national institutions because they existed to further the political aims of the governments of their home countries

That phrase "usually described" means --- how most authors discussing the topic have treated the early chartered trading companies, but not necessarily how this author does. In particular, if this author is making an original claim, what he says will not be the same as what most previous authors have said. This author is clearly arguing for a point of view that, apparently, has not been considered before, or at least is not the prevailing view, and so the perspective of this author is in direct opposition to what previous authors have "usually described."

We even have the proof-text: "Sixteenth- and seventeenth-century chartered trading companies, despite the international scope of their activities, are usually considered irrelevant to this discussion." You're right --- this is against what the author argued. That's the point! The questions is asking about what most authors have said --- most authors, NOT including the current author.

The author of this passage is clearly arguing for (D), and if the question were something along the lines of "summarize the author's viewpoint", then (D) would be a viable answer. Instead, we are getting just the opposite --- what do most authors, and not the current author, think? That would be (A).

In any passage in which the current author is arguing against something previously held, you have to distinguish the former view from the current view, and for any question that alludes to the former view (e.g. how something is "usually described"), then you have to take that as representative of the former view, which is in clear opposition to the current author's view.

Does all this make sense?

Mike :-)

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Re: The modern multinational corporation is described as having [#permalink]

10 Sep 2013, 13:51

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gmacforjyoab wrote:

mikemcgarry wrote:

Prompt:
According to the passage, early chartered trading companies are usually described as

I got thrown off between A and C . I couldnt figure out if the question was referring to what the author has described "early chartered trading companies" as or what other it was usually thought off about those companies , to which the author is refuting . How do I figure differentiate this in this particular question ?

Sometimes in a GMAT RC, an author will say: issue X traditionally has been analyzed this way, but I recommend advocating it that way. In other word, the author pits himself as the new expert against a long line a previous experts. That's exactly this particular author's situation. Therefore, the "usually" refers to the majority that came before the current author, not to the current author.
Does this make sense?
Mike :-)

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Re: The modern multinational corporation is described as having [#permalink]

22 Aug 2016, 00:25

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Took 8 mins , including 2 mins 40 seconds to read

-The author is interested in making comparisons between early trading companies and modern day multinationals
- He eventually believes that they should be studied for their similarity with modern day multinationals

1.
"Despite these differences, however, early trading companies organized effectively in remarkably modern ways and merit further study as analogues of more modern structures."
Option (C) clearly reflects the above main point and is hence the right option.

2.
"Increases in the volume of transactions in such firms are commonly believed to have necessitated this structural change"
Option (B) is a clear word justification of the above excerpt.

3.
"The early trading companies did differ strikingly from modern multinationals in many respects. They depended heavily on the national governments of their home countries and thus characteristically acted abroad to promote national interests"
This clearly suggests that modern multinationals are not governed by the national interest of their home countries whereas early trading companies were. Hence option (E) is the right answer.

4.
"Sixteenth- and seventeenth-century chartered trading companies, despite the international scope of their activities, are usually considered irrelevant to this discussion"
Option (A) clearly states the meaning of the above excerpt – Infact, it is a clear word justification of it.

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Re: The modern multinational corporation is described as having [#permalink]

20 May 2017, 06:22

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Kritesh wrote:

Hi ,

I just wanted to know the reason for selecting option E for the 3rd Question. I had to make a decision between C and E and chose C.

Could you help me out with this ??

Hi,

If you look at paragraph 3, we are given the following:

"The early trading companies did differ strikingly from modern multinationals in many respects. They depended heavily on the national governments of their home countries and thus characteristically acted abroad to promote national interests.".

It means 1st difference between early and modern one is early rely heavily on national govts. of their home country. I can also say that modern doesn't rely on/too heavily rely on national govts. of their home country.

This is what option E is saying. "(E) the overseas operations of modern multinationals are not governed by the national interests of their home countries".

Now, let's talk about option C. "(C) modern multinationals have operations in a number of different foreign countries rather than merely in one or two"

It says modern have operations on more than two countries . This is no where given in the passage. Hence, this point is irrelevant and OFS.

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Re: The modern multinational corporation is described as having [#permalink]

12 Nov 2017, 00:14

mikemcgarry GMATNinja

I narrowed the main point Q to C/D and here is my POE:

(A)

Quote:

modern multinationals originated in the sixteenth and seventeenth centuries with the establishment of chartered trading companies

This is an opposite answer, since as per passage:

Quote:

Sixteenth- and seventeenth century chartered trading companies, despite the international scope of their activities, are usually considered irrelevant to this discussion:

(B)

Quote:

the success of early chartered trading companies, like that of modern multinationals, depended primarily on their ability to carry out complex operations

Talking about success is out of scope since as per passage

Quote:

The large volume of transactions associated with these activities seems to have necessitated hierarchical management structures well before the advent of modern communications and transportation.

(C)

Quote:

early chartered trading companies should be more seriously considered by scholars studying the origins of modern multinationals

See below relevant portion from the passage from which I inferred this choice:

Quote:

Despite these differences, however, early trading companies organized effectively in remarkably modern ways and merit further study as analogues of more modern structures

(D)

Quote:

scholars are quite mistaken concerning the origins of modern multinationals

mikemcgarry wrote:
Here, the author says --- scholars studying the the origins of modern multinationals usually start with the period when "when the owner-managers of nineteenth-century British firms carrying on international trade were replaced by teams of salaried managers organized into hierarchies." That's a perfectly sensible and appropriate thing to study, but the author is saying --- they would understand a little bit better if they also paid some attention to the early chartered trading companies. That not at all the same as saying they are "quite mistaken." This is OUT.

I can not infer this from passage at all. In the first paragraph the complete facts are stated by author and no where scholars are mentioned. I did read your comment - Again, if the passage is about an academic topic, as many many RC passages are, then don't be the least bit surprised if the word "scholar" or "professor" or similar words don't appear in the passage but do appear in the answer choices.
but then how did you infer from passage the distinction between narrator - author / scholars?

(E)

Quote:

the management structures of early chartered trading companies are fundamentally the same as those of modern multinationals

Agreeing with expert's comments since this is an opposite answer too.

Also usually I see words like evaluate, discuss, criticize as first starting word in POE for main point Qs, whereas here all POE and solutions seem to approach this Q as an inference since POE are facts. Am I correct?

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Re: The modern multinational corporation is described as having [#permalink]

13 Nov 2017, 23:30

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adkikani wrote:

mikemcgarry wrote:
Here, the author says --- scholars studying the the origins of modern multinationals usually start with the period when "when the owner-managers of nineteenth-century British firms carrying on international trade were replaced by teams of salaried managers organized into hierarchies." That's a perfectly sensible and appropriate thing to study, but the author is saying --- they would understand a little bit better if they also paid some attention to the early chartered trading companies. That not at all the same as saying they are "quite mistaken." This is OUT.

I can not infer this from passage at all. In the first paragraph the complete facts are stated by author and no where scholars are mentioned. I did read your comment - Again, if the passage is about an academic topic, as many many RC passages are, then don't be the least bit surprised if the word "scholar" or "professor" or similar words don't appear in the passage but do appear in the answer choices.
but then how did you infer from passage the distinction between narrator - author / scholars?

Hi adkikani! Carolyn from Magoosh here - I'll step in for Mike

First, let's talk about the mention of "scholars". Here are a few excerpts from the text:

The modern multinational corporation is described as having originated when the owner-managers of nineteenth-century British firms carrying on international trade were replaced by teams of salaried managers organized into hierarchies.

Sixteenth- and seventeenth century chartered trading companies, despite the international scope of their activities, are usually considered irrelevant to this discussion

Despite these differences, however, early trading companies organized effectively in remarkably modern ways and merit further study as analogues of more modern structures.

Most of the passage here is written in a passive tense, like the first two sentences here, which we can see from the verbs "is described..." and "are usually considered...", and the last sentence talks about further studying this concept. The passage voice here shows that the narrator is simply describing research or information that has been collected by others (not him- or herself), implying that other people, most likely scholars of some sort, are or were studying these ideas. Also, whenever we have historical passages like this, we have to assume that the information was collected by someone - and that someone is pretty much always going to be a scholar of some sort

So whenever we see an academic text, "scholars", generally referring to the people who study the topic or compiled the information, are directly implied. The narrator here is likely also a scholar of some sort, but that doesn't change our interpretation

We can distinguish between the narrator's perspective and the general view of other scholars by the tense that is used. So again, anything in passive tense ("is described", "are typically considered") reflects the perspective of other scholars. In those cases, the narrator is simply describing the typical view held by others (scholars). Anything that's in a more active tense ("did differ strikingly", "depended") is probably information that the narrator is adding in, reflecting his or her own viewpoint.

So now let's think about the whole passage in that context

The first paragraph is setting the scene - it's pretty much completely written in passive voice, talking about things that are "commonly believed" or "usually considered irrelevant" (again, by scholars). After that, we start seeing the narrator's personal view: "In reality...". So this passage is setting up a contrast between what scholars typically believe and what the narrator believes. One of those differences is the view of how modern multinationals originated. Again, the author says:

The modern multinational corporation is described as having originated when the owner-managers of nineteenth-century British firms carrying on international trade were replaced by teams of salaried managers organized into hierarchies.

Here we see passive voice, indicating the view of "scholars", rather than the narrator's personal view.

adkikani wrote:

Also usually I see words like evaluate, discuss, criticize as first starting word in POE for main point Qs, whereas here all POE and solutions seem to approach this Q as an inference since POE are facts. Am I correct?

Awesome catch

Words like "evaluate", "discuss", and "criticize" are very commonly used in the answer choices for questions that ask about the main or primary purpose of a passage. However, "main point" isn't quite the same thing. A point can also be interpreted as the main thing that the author is trying to say. So when we're asked about the main point, we want to ask ourselves, "What is the main thing that the author is trying to get across here?" Whereas when we're asked about the main purpose of a passage, we ask "Why is the author writing this?" While these are very related, they're not quite identical. In the case of a primary purpose question, the answer choices will typically be verbs, like "evaluate", "discuss", etc.. But when we're asked for the main point, the answer choices will look more like pieces of information - what is the main piece of information that the author is trying to convey? So again, there is a subtle difference

I hope that helps clear things up here!

-Carolyn

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Re: The modern multinational corporation is described as having [#permalink]

15 Nov 2017, 04:04

MagooshExpert mikemcgarry GMATNinja

Quote:

Awesome catch

Words like "evaluate", "discuss", and "criticize" are very commonly used in the answer choices for questions that ask about the main or primary purpose of a passage. However, "main point" isn't quite the same thing. A point can also be interpreted as the main thing that the author is trying to say. So when we're asked about the main point, we want to ask ourselves, "What is the main thing that the author is trying to get across here?" Whereas when we're asked about the main purpose of a passage, we ask "Why is the author writing this?" While these are very related, they're not quite identical. In the case of a primary purpose question, the answer choices will typically be verbs, like "evaluate", "discuss", etc.. But when we're asked for the main point, the answer choices will look more like pieces of information - what is the main piece of information that the author is trying to convey? So again, there is a subtle difference

I wanted to ask a bit different question for this part. What I meant was-
while reading Expert's approach or even on GmatPrep solutions, I meant that for this main purpose question,
we approached as if we are trying to infer something from the passage (must be true).
As per me main point of RC is much like conclusion for CR but MUST BE TRUE statements that
follow from argument / passage in CR/RC are almost identical which are better knows as inferences.

Let me know if I made my query more clear.

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Re: The modern multinational corporation is described as having [#permalink]

15 Nov 2017, 20:23

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adkikani wrote:

MagooshExpert
I wanted to ask a bit different question for this part. What I meant was-
while reading Expert's approach or even on GmatPrep solutions, I meant that for this main purpose question,
we approached as if we are trying to infer something from the passage (must be true).
As per me main point of RC is much like conclusion for CR but MUST BE TRUE statements that
follow from argument / passage in CR/RC are almost identical which are better knows as inferences.

Let me know if I made my query more clear.

Hi adkikani,

I'd like to help, but I'm not sure if I completely understand your question still! The differences between "conclusion" questions and "inference" questions are sometimes very small and very subtle. I think that's the case here - this "main point" question isn't 100% a "conclusion"-type question, but it also isn't 100% an "inference"-type question - it's something in between. But we can and should use strategies from both of those question types to answer "main point" questions like this one

We just can't necessarily categorize them into one "type" or another.

Does that help at all? If not, let me know

-Carolyn

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Re: The modern multinational corporation is described as having [#permalink]

14 Sep 2018, 09:23

kraizada84 wrote:

The modern multinational corporation is described as having originated when the owner-managers of nineteenth-century British firms carrying on international trade were replaced by teams of salaried managers organized into hierarchies. Increases in the volume of transactions in such firms are commonly believed to have necessitated this structural change. Nineteenth-century inventions like the steamship and the telegraph, by facilitating coordination of managerial activities, are described as key factors. Sixteenth- and seventeenth century chartered trading companies, despite the international scope of their activities, are usually considered irrelevant to this discussion: the volume of their transactions is assumed to have been too low and the communications and transport of their day too primitive to make comparisons with modern multinationals interesting.

In reality, however, early trading companies successfully purchased and outfitted ships, built and operated offices and warehouses, manufactured trade goods for use abroad, maintained trading posts and production facilities overseas, procured goods for import, and sold those goods both at home and in other countries. The large volume of transactions associated with these activities seems to have necessitated hierarchical management structures well before the advent of modern communications and transportation. For example, in the Hudson's Bay Company, each far-flung trading outpost was managed by a salaried agent, who carried out the trade with the Native Americans, managed day-to-day operations, and oversaw the post's workers and servants. One chief agent, answerable to the Court of Directors in London through the correspondence committee, was appointed with control over all of the agents on the bay.

The early trading companies did differ strikingly from modern multinationals in many respects. They depended heavily on the national governments of their home countries and thus characteristically acted abroad to promote national interests. Their top managers were typically owners with a substantial minority share, whereas senior managers' holdings in modern multinationals are usually insignificant. They operated in a pre-industrial world, grafting a system of capitalist international trade onto a pre-modern system of artisan and peasant production. Despite these differences, however, early trading companies organized effectively in remarkably modern ways and merit further study as analogues of more modern structures.

1. The author's main point is that

(A) modern multinationals originated in the sixteenth and seventeenth centuries with the establishment of chartered trading companies
(B) the success of early chartered trading companies, like that of modern multinationals, depended primarily on their ability to carry out complex operations
(C) early chartered trading companies should be more seriously considered by scholars studying the origins of modern multinationals
(D) scholars are quite mistaken concerning the origins of modern multinationals
(E) the management structures of early chartered trading companies are fundamentally the same as those of modern multinationals

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C

2. With which of the following generalizations regarding management structures would the author of the passage most probably agree?

(A) Hierarchical management structures are the most efficient management structures possible in a modern context.
(B) Firms that routinely have a high volume of business transactions find it necessary to adopt hierarchical management structures.
(C) Hierarchical management structures cannot be successfully implemented without modern communications and transportation.
(D) Modern multinational firms with a relatively small volume of business transactions usually do not have hierarchically organized management structures.
(E) Companies that adopt hierarchical management structures usually do so in order to facilitate expansion into foreign trade.

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B

3. The passage suggests that modern multinationals differ from early chartered trading companies in that

(A) the top managers of modern multinationals own stock in their own companies rather than simply receiving a salary
(B) modern multinationals depend on a system of capitalist international trade rather than on less modern trading systems
(C) modern multinationals have operations in a number of different foreign countries rather than merely in one or two
(D) the operations of modern multinationals are highly profitable despite the more stringent environmental and safety regulations of modern governments
(E) the overseas operations of modern multinationals are not governed by the national interests of their home countries

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E

4. According to the passage, early chartered trading companies are usually described as

(A) irrelevant to a discussion of the origins of the modern multinational corporation
(B) interesting but ultimately too unusual to be good subjects for economic study
(C) analogues of nineteenth-century British trading firms
(D) rudimentary and very early forms of the modern multinational corporation
(E) important national institutions because they existed to further the political aims of the governments of their home countries

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A

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Solve with timing.

P.S.: guys I was stuck with Q-4marked E (Someone pls explain why its incorrect), DOUBT: according to passage and according to author, are they different? Someone explain.

1) C
Despite these differences, however, early trading companies organized effectively in remarkably modern ways and merit further study as analogues of more modern structures.

2) B
Increases in the volume of transactions in such firms are commonly believed to have necessitated this structural change.

3) E
They depended heavily on the national governments of their home countries and thus characteristically acted abroad to promote national interests.

4)A
Sixteenth- and seventeenth century chartered trading companies, despite the international scope of their activities, are usually considered irrelevant to this discussion: the volume of their transactions is assumed to have been too low and the communications and transport of their day too primitive to make comparisons with modern multinationals interesting.

hsinyu

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Re: The modern multinational corporation is described as having [#permalink]

14 Oct 2018, 01:07

Hello experts,

I am a new member here.
I had a question about Q2 (With which of the following generalizations regarding management structures would the author of the passage most probably agree?), and wondered why the choice D cannot be the answer?

Thanks a lot!

L

aragonn

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Re: The modern multinational corporation is described as having [#permalink]

14 Oct 2018, 08:44

2

Kudos

1

Bookmarks

P1 - a transition and a comparison.
P2 - some success for early trading companies.
P3 - early trading companies diff with now.
Main point - despite so many diff with modern companies, how early companies were great.

1. The author's main point is that

(C) early chartered trading companies should be more seriously considered by scholars studying the origins of modern multinationals - seems best of the lot. in first para such companies were not important for author, but later they were, proved in p3.
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2. With which of the following generalizations regarding management structures would the author of the passage most probably agree?

Lines to read - The large volume of transactions associated with these activities seems to have necessitated hierarchical management structures well before the advent of modern communications and transportation.

(A) Hierarchical management structures are the most efficient management structures possible in a modern context.- no
(B) Firms that routinely have a high volume of business transactions find it necessary to adopt hierarchical management structures. - best of the lot.
(C) Hierarchical management structures cannot be successfully implemented without modern communications and transportation. - too extreme choice.
(D) Modern multinational firms with a relatively small volume of business transactions usually do not have hierarchically organized management structures. - as above lines said > it is for large volume of transactions.
(E) Companies that adopt hierarchical management structures usually do so in order to facilitate expansion into foreign trade. too narrow, also not mentioned in passage.

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3. The passage suggests that modern multinationals differ from early chartered trading companies in that
this should be in p2/p3

They depended heavily on the national governments of their home countries and thus characteristically acted abroad to promote national interests.

(E) the overseas operations of modern multinationals are not governed by the national interests of their home countries

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4. According to the passage, early chartered trading companies are usually described as

despite the international scope of their activities, are usually considered irrelevant to this discussion

(A) irrelevant to a discussion of the origins of the modern multinational corporation
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5. It can be inferred from the passage that the author would characterize the activities engaged in by early chartered trading companies as being

should be from P1 - the volume of their transactions is assumed to have been too low and the communications and transport of their day too primitive to make comparisons with modern multinationals interesting.

(A) complex enough in scope to require a substantial amount of planning and coordination on the part of management

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6. The author lists the various activities of early chartered trading companies in order to

last line of P1 say - the volume of their transactions is assumed to have been too low and the communications and transport of their day too primitive to make comparisons with modern multinationals interesting.
'however' in first line of P2 says something against above lines.

(C) refute the view that the volume of business undertaken by such companies was relatively low

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7. The author mentions the artisan and peasant production systems of early chartered trading companies as an example of

They operated in a pre-industrial world, grafting a system of capitalist international trade onto a pre-modern system of artisan and peasant production.

next sentence talking about the similarity, a point raised in p1/p2 , above lines are proving it.

(B) a similarity that allows fruitful comparison of these companies with modern multinationals

L

aragonn

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Re: The modern multinational corporation is described as having [#permalink]

23 Jan 2019, 06:44

warrior1991 - let me know if still any doubt.

Look at the beginning of the second paragraph. The previous paragraph had ended with the prevailing dismissal of these companies as unimportant. The author begins the second paragraph with a transitional expression, in reality, however, to emphasize a contrasting point of view. The first sentence lists an impressive array of complex activities and then the author notes that the large volume of transactions associated with these activities seems to have necessitated hierarchical management structures. The author believes the complex activities of the early companies required a multi- leveled management structure to oversee them.

gmatclubot

Re: The modern multinational corporation is described as having [#permalink]

23 Jan 2019, 06:44

GMAT Reading Comprehension (RC) Questions

The modern multinational corporation is described as having