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# passage 27 since the late 1970's, in the face of a severe

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passage 27 since the late 1970's, in the face of a severe [#permalink]

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10 Mar 2004, 07:47
passage 27
since the late 1970's, in the face of a severe loss of
market share in dozens of industries, manufacturers in
the united states have been trying to improve produc-
tivityтАФand therefore enhance their international
<b>(5)</b> competitivenessтАФthrough costтАФcutting programs. (cost-
cutting here is defined as raising labor output while
holding the amount of labor constant.) however, from
1978 through 1982, productivityтАФthe value of goods
manufactured divided by the amount of labor inputтАФ
<b>(10)</b> did not improve; and while the results were better in the
business upturn of the three years following, they ran 25
percent lower than productivity improvements during
earlier, post-1945 upturns. at the same time, it became clear
that the harder manufactures worked to imple-
<b>(15)</b> ment cost-cutting, the more they lost their competitive
edge.
with this paradox in mind, i recently visited 25
companies; it became clear to me that the cost-cutting
approach to increasing productivity is fundamentally
<b>(20)</b> flawed. manufacturing regularly observes a "40, 40, 20"
rule. roughly 40 percent of any manufacturing-based
competitive advantage derives from long-term changes
in manufacturing structure (decisions about the number,
size, location, and capacity of facilities) and in approaches
<b>(25)</b> to materials. another 40 percent comes from major
changes in equipment and process technology. the final
20 percent rests on implementing conventional cost-
cutting. this rule does not imply that cost-cutting should
not be tried. the well-known tools of this approachтАФ
<b>(30)</b> including simplifying jobs and retraining employees to
work smarter, not harderтАФdo produce results. but the
tools quickly reach the limits of what they can
contribute.
another problem is that the cost-cutting approach
<b>(35)</b> hinders innovation and discourages creative people. as
abernathy's study of automobile manufacturers has
shown, an industry can easily become prisoner of its
own investments in cost-cutting techniques, reducing its
ability to develop new products. and managers under
<b>(40)</b> pressure to maximize cost-cutting will resist innovation
because they know that more fundamental changes in
processes or systems will wreak havoc with the results on
which they are measured. production managers have
always seen their job as one of minimizing costs and
<b>(45)</b> maximizing output. this dimension of performance has
until recently sufficed as a basis of evaluation, but it has
created a penny-pinching, mechanistic culture in most
factories that has kept away creative managers.
every company i know that has freed itself from the
<b>(50)</b> paradox has done so, in part, by developing and imple-
menting a manufacturing strategy. such a strategy
focuses on the manufacturing structure and on equip-
ment and process technology. in one company a manu-
facturing strategy that allowed different areas of the
<b>(55)</b> factory to specialize in different markets replaced the
conventional cost-cutting approach; within three years
the company regained its competitive advantage.
together with such strategies, successful companies are
also encouraging managers to focus on a wider set of
objectives besides cutting costs. there is hope for manufacturing,
but it clearly rests on a different way of managing.

1.the author of the passage is primarily concerned with
(a) summarizing a thesis
(b) recommending a different approach
(c) comparing points of view
(d) making a series of predictions
(e) describing a number of paradoxes

2. it can be inferred from the passage that the manufacturrs mentioned in line 2 expected that the measures they implemented would
(a) encourage innovation
(b) keep labor output constant
(d) permit business upturns to be more easily predicted
(e) cause managers to focus on a wider set of objectives

3. the primary function of the first paragraph of the passage is to
(a) outline in brief the author's argument
(b) anticipate challenges to the prescriptions that follow
(c) clarify some disputed definitions of economic terms
(d) summarize a number of long-accepted explanations
(e) present a historical context for the author's observations

4. the author refers to abernathy's study (line 36) most probably in order to
(a) qualify an observation about one rule governing manufacturing
(c) support an earlier assertion about one method of increasing productivity
(d) suggest the centrality in the united states economy of a particular manufacturing industry
(e) given an example of research that has questioned the wisdom of revising a manufacturing strategy

5. the author's attitude toward the culture in most factories is best described as
(a) cautious
(b) critical
(c) disinterested
(d) respectful

6. in the passage, the author includes all of the following EXCEPT
(a) personal observation
(c) a definition of productivity
(d) an example of a successful company
(e) an illustration of a process technology

7. the author suggests that implementing conventional cost-cutting as a way of increasing manufacturing competitiveness is a strategy that is
(a) flawed and ruinous
(b) shortsighted and difficult to sustain
(c) popular and easily accomplished
(e) misunderstood but promising
Senior Manager
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10 Mar 2004, 13:02
10 mins

1) B
2) C
3) E
4) C
5) B
6) E
7) D
SVP
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Posts: 1790
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10 Mar 2004, 22:19
Took 8 minutes

1)B
2)C
3)E
4)E
5)B
6)E
7)D
Senior Manager
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11 Mar 2004, 12:10
B
C
E
B
A
E
D

Vivek.
_________________

"Start By Doing What Is Necessary ,Then What Is Possible & Suddenly You Will Realise That You Are Doing The Impossible"

Senior Manager
Joined: 05 May 2003
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11 Mar 2004, 14:28
Took 9 mins

1. B
2. C
3. A
4. B
5. B
6. D
7. D
Manager
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11 Mar 2004, 22:16
Geethu wrote:
1. B
2. C
3. A
4. B
5. B
6. D
7. D

1. B
2. C
3. E
4. C
5. B
6. E
7. D
Director
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Posts: 652
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11 Mar 2004, 22:34
5. the author's attitude toward the culture in most factories is best described as
(a) cautious
(b) critical
(c) disinterested
(d) respectful

Why the answer choice B is correct and not A?

7. the author suggests that implementing conventional cost-cutting as a way of increasing manufacturing competitiveness is a strategy that is
(a) flawed and ruinous
(b) shortsighted and difficult to sustain
(c) popular and easily accomplished
(e) misunderstood but promising

Why the answer choice D is correct and not A?
Senior Manager
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Posts: 293
Location: US
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12 Mar 2004, 08:29

Quote:
5. the author's attitude toward the culture in most factories is best
described as

(a) cautious
(b) critical
(c) disinterested
(d) respectful

Why the answer choice B is correct and not A?

The answer choice is B and not A because of the author's general disapproval with the cost-cutting methods employed by most factories. A sentence which exemplifies his feelings is this:

"with this paradox in mind, i recently visited 25 companies; it became clear to me that the cost-cutting approach to increasing productivity is fundamentally flawed."

That is very critical. I find no caution in his choice of words. Why do you think his tone was cautious? Being cautious implies that the writer does not use strong words which, as we can see from the above example, he in fact does.

Quote:
7. the author suggests that implementing conventional cost-cutting as a way of increasing manufacturing competitiveness is a strategy that is
(a) flawed and ruinous
(b) shortsighted and difficult to sustain
(c) popular and easily accomplished
(e) misunderstood but promising

Why the answer choice D is correct and not A?

I too initially selected A as the answer but with further analysis, I came out with D because the author stated that cost-cutting wasn't such a bad idea but that it shouldn't be the ONLY approach. His grouse was that managers did not entertain other possible ideas. Here is the statement that establishes D as the right answer:

"this rule does not imply that cost-cutting should not be tried. the well-known tools of this approachтАФ including simplifying jobs and retraining employees to work smarter, not harderтАФdo produce results. but the tools quickly reach the limits of what they can contribute. "
Director
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09 Nov 2007, 12:15
Can someone explain answers for questions 4 and 6?

4. the author refers to abernathy's study (line 36) most probably in order to
(a) qualify an observation about one rule governing manufacturing
(c) support an earlier assertion about one method of increasing productivity
(d) suggest the centrality in the united states economy of a particular manufacturing industry
(e) given an example of research that has questioned the wisdom of revising a manufacturing strategy

6. in the passage, the author includes all of the following EXCEPT
(a) personal observation
(c) a definition of productivity
(d) an example of a successful company
(e) an illustration of a process technology
CEO
Joined: 29 Mar 2007
Posts: 2562
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20 Dec 2007, 22:19
surat wrote:
passage 27
since the late 1970's, in the face of a severe loss of
market share in dozens of industries, manufacturers in
the united states have been trying to improve produc-
tivityтАФand therefore enhance their international
<b>(5)</b> competitivenessтАФthrough costтАФcutting programs. (cost-
cutting here is defined as raising labor output while
holding the amount of labor constant.) however, from
1978 through 1982, productivityтАФthe value of goods
manufactured divided by the amount of labor inputтАФ
<b>(10)</b> did not improve; and while the results were better in the
business upturn of the three years following, they ran 25
percent lower than productivity improvements during
earlier, post-1945 upturns. at the same time, it became clear
that the harder manufactures worked to imple-
<b>(15)</b> ment cost-cutting, the more they lost their competitive
edge.
with this paradox in mind, i recently visited 25
companies; it became clear to me that the cost-cutting
approach to increasing productivity is fundamentally
<b>(20)</b> flawed. manufacturing regularly observes a "40, 40, 20"
rule. roughly 40 percent of any manufacturing-based
competitive advantage derives from long-term changes
in manufacturing structure (decisions about the number,
size, location, and capacity of facilities) and in approaches
<b>(25)</b> to materials. another 40 percent comes from major
changes in equipment and process technology. the final
20 percent rests on implementing conventional cost-
cutting. this rule does not imply that cost-cutting should
not be tried. the well-known tools of this approachтАФ
<b>(30)</b> including simplifying jobs and retraining employees to
work smarter, not harderтАФdo produce results. but the
tools quickly reach the limits of what they can
contribute.
another problem is that the cost-cutting approach
<b>(35)</b> hinders innovation and discourages creative people. as
abernathy's study of automobile manufacturers has
shown, an industry can easily become prisoner of its
own investments in cost-cutting techniques, reducing its
ability to develop new products. and managers under
<b>(40)</b> pressure to maximize cost-cutting will resist innovation
because they know that more fundamental changes in
processes or systems will wreak havoc with the results on
which they are measured. production managers have
always seen their job as one of minimizing costs and
<b>(45)</b> maximizing output. this dimension of performance has
until recently sufficed as a basis of evaluation, but it has
created a penny-pinching, mechanistic culture in most
factories that has kept away creative managers.
every company i know that has freed itself from the
<b>(50)</b> paradox has done so, in part, by developing and imple-
menting a manufacturing strategy. such a strategy
focuses on the manufacturing structure and on equip-
ment and process technology. in one company a manu-
facturing strategy that allowed different areas of the
<b>(55)</b> factory to specialize in different markets replaced the
conventional cost-cutting approach; within three years
the company regained its competitive advantage.
together with such strategies, successful companies are
also encouraging managers to focus on a wider set of
objectives besides cutting costs. there is hope for manufacturing,
but it clearly rests on a different way of managing.

1.the author of the passage is primarily concerned with
(a) summarizing a thesis
(b) recommending a different approach
(c) comparing points of view
(d) making a series of predictions
(e) describing a number of paradoxes

2. it can be inferred from the passage that the manufacturrs mentioned in line 2 expected that the measures they implemented would
(a) encourage innovation
(b) keep labor output constant
(d) permit business upturns to be more easily predicted
(e) cause managers to focus on a wider set of objectives

3. the primary function of the first paragraph of the passage is to
(a) outline in brief the author's argument
(b) anticipate challenges to the prescriptions that follow
(c) clarify some disputed definitions of economic terms
(d) summarize a number of long-accepted explanations
(e) present a historical context for the author's observations

4. the author refers to abernathy's study (line 36) most probably in order to
(a) qualify an observation about one rule governing manufacturing
(c) support an earlier assertion about one method of increasing productivity
(d) suggest the centrality in the united states economy of a particular manufacturing industry
(e) given an example of research that has questioned the wisdom of revising a manufacturing strategy

5. the author's attitude toward the culture in most factories is best described as
(a) cautious
(b) critical
(c) disinterested
(d) respectful

6. in the passage, the author includes all of the following EXCEPT
(a) personal observation
(c) a definition of productivity
(d) an example of a successful company
(e) an illustration of a process technology

7. the author suggests that implementing conventional cost-cutting as a way of increasing manufacturing competitiveness is a strategy that is
(a) flawed and ruinous
(b) shortsighted and difficult to sustain
(c) popular and easily accomplished
(e) misunderstood but promising

1B
2C
3E
4B
5B
6E
7A
Re: rc: passage #27   [#permalink] 20 Dec 2007, 22:19
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