Seeking a competitive advantage, some professional service firms (for

Question

Seeking a competitive advantage, some professional service firms (for example, firms providing advertising, accounting, or health care services) have considered offering unconditional guarantees of satisfaction. Such guarantees specify what clients can expect and what the firm will do if it fails to fulfill these expectations. Particularly with first-time clients, an unconditional guarantee can be an effective marketing tool if the client is very cautious, the firm's fees are high, the negative consequences of bad service are grave, or business is difficult to obtain through referrals and word-of-mouth.

However, an unconditional guarantee can sometimes hinder marketing efforts. With its implication that failure is possible, the guarantee may, paradoxically, cause clients to doubt the service firm's ability to deliver the promised level of service. It may conflict with a firm's desire to appear sophisticated, or may even suggest that a firm is begging for business. In legal and health care services, it may mislead clients by suggesting that law-suits or medical procedures will have guaranteed outcomes. Indeed,  professional service firms  with outstanding reputations and performance to match have little to gain from offering unconditional guarantees. And any firm that implements an unconditional guarantee without undertaking a commensurate commitment to quality of service is merely employing a potentially costly marketing gimmick.   1 
 1. The primary function of the passage as a whole is to

(A) account for the popularity of a practice
(B) evaluate the utility of a practice
(C) demonstrate how to institute a practice
(D) weigh the ethics of using a strategy
(E) explain the reasons for pursuing a strategy

2 
 2. All of the following are mentioned in the passage as circumstances in which professional service firms can benefit from offering an unconditional guarantee EXCEPT:

(A) The firm is having difficulty retaining its clients of long standing.
(B) The firm is having difficulty getting business through client recommendations.
(C) The firm charges substantial fees for its services.
(D) The adverse effects of poor performance by the firm are significant for the client.
(E) The client is reluctant to incur risk.

3 
 3. Which of the following is cited in the passage as a goal of some professional service firms in offering unconditional guarantees of satisfaction?

(A) A limit on the firm's liability
(B) Successful competition against other firms
(C) Ability to justify fee increases
(D) Attainment of an outstanding reputation in a field
(E) Improvement in the quality of the firm's service

4 
 4. The passage's description of the issue raised by unconditional guarantees for health care or legal services most clearly implies that which of the following is true?

(A) The legal and medical professions have standards of practice that would be violated by attempts to fulfill such unconditional guarantees.
(B) The result of a lawsuit or medical procedure cannot necessarily be determined in advance by the professionals handling a client's case.
(C) The dignity of the legal and medical professions is undermined by any attempts at marketing of professional services, including unconditional guarantees.
(D) Clients whose lawsuits or medical procedures have unsatisfactory outcomes cannot be adequately compensated by financial settlements alone.
(E) Predicting the monetary cost of legal or health care services is more difficult than predicting the monetary cost of other types of professional services

5 
 5. Which of the following hypothetical situations best exemplifies the potential problem noted in the second sentence of the second paragraph (lines 14-17)?

(A) A physician's unconditional guarantee of satisfaction encourages patients to sue for malpractice if they are unhappy with the treatment they receive.
(B) A lawyer's unconditional guarantee of satisfaction makes clients suspect that the lawyer needs to find new clients quickly to increase the firm's income.
(C) A business consultant's unconditional guarantee of satisfaction is undermined when the consultant fails to provide all of the services that are promised.
(D) An architect's unconditional guarantee of satisfaction makes clients wonder how often the architect's buildings fail to please clients.
(E) An accountant's unconditional guarantee of satisfaction leads clients to believe that tax returns prepared by the accountant are certain to be accurate.

6 
 6. The passage most clearly implies which of the following about the  professional service firms  mentioned in line 22?

(A) They are unlikely to have offered unconditional guarantees of satisfaction in the past.
(B) They are usually profitable enough to be able to compensate clients according to the terms of an unconditional guarantee.
(C) They usually practice in fields in which the outcomes are predictable.
(D) Their fees are usually more affordable than those charged by other professional service firms.
(E) Their clients are usually already satisfied with the quality of service that is delivered.

mbaiseasy · Accepted Answer

1. The primary function of the passage as a whole is to

A account for the popularity of a practice
  The passage mentions that "unconditional guarantees" are performed by "some firms." "Some" is not strong enough to exude "popularity". OUT!

B evaluate the utility of a practice
  CORRECT!

C demonstrate how to institute a practice
  The passage mentions that the practice entails a promise to customers in case of failure. However, in the second paragraph it discusses the cons of such practice. "How" of the practice is definitely not the primary purpose. OUT!

D weigh the ethics of using a strategy
  Ethics is irrelevant to the whole passage. OUT!

E explain the reasons for pursuing a strategy
  Reasons are mentioned in the first paragraph but not in the second. Definitely, not the main purpose. OUT!

2. All of the following are mentioned in the passage as circumstances in which professional service firms can benefit from offering an unconditional guarantee EXCEPT:

A The firm is having difficulty retaining its clients of long standing.
  CORRECT!

B  The firm is having difficulty getting business through client recommendations.
  Mentioned in line 11

C  The firm charges substantial fees for its services.
  line 9

D  The adverse effects of poor performance by the firm are significant for the client.
  line 10

E  The client is reluctant to incur risk.
  line 9

3. Which of the following is cited in the passage as a goal of some professional service firms in offering unconditional guarantees of satisfaction?

In the first sentence of the passage: "Seeking a competitive advantage, some professional
service firms(for example, firms providing advertising,
accounting, or health care services) have considered
offering unconditional guarantees of satisfaction"

B Successful competition against other firms
  CORRECT!

4. The passage's description of the issue raised by unconditional guarantees for health care or legal services most clearly implies that which of the following is true?

In the first paragraph: "In legal and health care
(20) services, it may MISLEAD clients BY SUGGESTING THAT law-
suits or medical procedures  will have guaranteed  out-
comes" - This means there is no such guaranteed outcomes.

A standards of practice IRRELEVANT TO THE PARTICULAR SENTENCE

B The result of a lawsuit of medical procedure cannot necessarily be determined in advance by the professionals handling a client's case.
  CORRECT

C dignity IRRELEVANT TO THE PARTICULAR SENTENCE 
 D outcomes cannot be adequately compensated IRRELEVANT TO THE PARTICULAR SENTENCE 
 E monetary cost IRRELEVANT TO THE PARTICULAR SENTENCE

5. Which of the following hypothetical situations best exemplifies the potential problem noted in the second sentence of the second paragraph (lines 14-17)?

Doubt the firm's ability -
" With its implication that fail-
(15) ure is possible, the guarantee may, paradoxically, cause
clients to doubt the service firm's ability to deliver the
promised level of service"

D An architect's unconditional guarantee of satisfaction makes clients wonder how often the architect's buildings  fail to please clients .

6. The passage most clearly implies which of the following about the professional service firms mentioned in line 22? 
  
Indeed, professional service firms with  outstandin
reputations and performance  to match have little to gain
from offering unconditional guarantees

E Their clients are usually already satisfied with the quality of service that is delivered.

ontheway · Answer

4. The passage's description of the issue raised by unconditional guarantees for health care or legal services most clearly implies that which of the following is true?

However, an  unconditional guarantee  can sometimes hinder marketing efforts. With its implication that failure is possible, the guarantee may, paradoxically, cause clients to doubt the service firm's ability to deliver the promised level of service. it  may  mislead  clients  by suggesting  that lawsuits or medical procedures will have guaranteed outcomes .

6. The passage most clearly implies which of the following about the professional service firms mentioned in line 22?

professional service firms with outstanding  reputations and  performance  to match  have little to gain from offering unconditional guarantees . And  any firm  that implements an  unconditional guarantee without  undertaking a commensurate commitment to  quality of service  is merely  employing a potentially costly marketing gimmick.

Passage says that professional service firms with  outstanding reputation and performance  don't gain much from offering unconditional guarantees. In the next sentence author refers to the commitment to the quality of service. Therefore we can infer that their clients are usually already satisfied with the quality of service that is delivered, then only we can say that firms have outstanding reputation and performance.

Other things is that none other answer choice comes close to this.

nikitamaheshwari · Answer

Can someone explain why Q6 A is incorrect and E is correct?

The firms that employs unconditional guarantees does that because of the following reasons 
Particularly with first-time clients, an unconditional guarantee can be an effective marketing tool if the client is very cautious, the firm's fees are high, the negative consequences of bad service are grave, or business is difficult to obtain through referrals and word-of-mouth.

Quality of service is not mentioned here. Firms that do not employ such strategies means they already have enough business or their word of mouth works? How can we conclude about their quality of service.

Thanks

VeritasKarishma   GMATNinja

GMATNinja · Answer

Question 6 
 
The question asks specifically about the professional service firms  mentioned in line 22 . That’s not the same as the professional service firms mentioned throughout the passage. With that in mind, let’s take a look at (A):

Line 22 mentions professional service firms that “have little to gain from offering unconditional guarantees”  in the present . But we simply don’t know whether these firms have offered those guarantees  in the past . So, we can eliminate (A).

And here’s (E):

Line 22 specifies that these professional service firms have “outstanding reputations.” If they have outstanding reputations, then it’s fair to conclude that their clients are probably satisfied with the quality of service. This is exactly what (E) says, so it is the best answer choice.

I hope that helps!

Sajjad1994 · Answer

Official Explanation

1. The primary function of the passage as a whole is to

Difficulty Level:   Easy

Explanation

Main idea

This question explicitly requires looking at the passage as a whole in order to determine the author’s purpose. The first paragraph explains the practice of offering guarantees and lists circumstances in which an unconditional guarantee may be an appropriate marketing tool. The second paragraph begins with However, implying that a contradiction is about to follow. The serious drawbacks to guarantees are examined, and the passage closes with a warning.

A.  The passage does not discuss the popularity of guarantees.

B.  Correct.   The passage examines and judges the advantages and disadvantages of a business practice.

C.  The passage does not show how to put guarantees into place.

D.  The passage does not discuss ethics.

E.  The first paragraph does explain the reasons for offering guarantees, but that is only a portion of the passage, not the passage as a whole.

The correct answer is B.

Sajjad1994 · Answer

Official Explanation

2. All of the following are mentioned in the passage as circumstances in which professional service firms can benefit from offering an unconditional guarantee EXCEPT:

Difficulty Level:   Medium

Explanation

Supporting ideas

The phrase mentioned in the passage indicates that the necessary information is explicitly stated. To answer this question, use the process of elimination to find the one example that is NOT mentioned in the passage. The question refers to lines 8–13, where the circumstances in which an unconditional guarantee might be beneficial to a firm are listed. Check each of the responses to the question against the list; the one that does not appear in the list is the correct answer.

A.  Correct.   The sentence begins by noting that unconditional guarantees are particularly important with new clients; clients of long standing are not discussed.

B.  Lines 12–13 include the difficulty of getting business through referrals and word-of-mouth.

C.  Line 10 cites high fees as such a circumstance.

D.  Lines 10–11 include the severe repercussions of bad service.

E.  Lines 9–10 cite the cautiousness of the client.

The correct answer is A.

Sajjad1994 · Answer

Official Explanation

3. Which of the following is cited in the passage as a goal of some professional service firms in offering unconditional guarantees of satisfaction?

Difficulty Level:   Medium to Hard

Explanation

Supporting ideas

When the question says to find an answer cited in the passage, the answer will be explicitly stated information. The passage opens with an explanation of why some firms want to offer unconditional guarantees: Seeking a competitive advantage explains their rationale. Firms offer the guarantees to compete more effectively against firms that do not offer guarantees.

A.  The passage does not mention liability limits.

B.  Correct.   Some firms offer unconditional guarantees as a way to compete successfully against firms that do not offer them.

C.  Line 10 mentions that high fees would be a reason to offer guarantees, but fee increases are not discussed.

D.  The second paragraph suggests the reverse: offering a guarantee may hurt a firm’s reputation.

E.  Improving the quality of service is not mentioned as a reason to offer guarantees.

The correct answer is B.

Sajjad1994 · Answer

Official Explanation

4. The passage's description of the issue raised by unconditional guarantees for health care or legal services most clearly implies that which of the following is true?

Difficulty Level:   Medium

Explanation

Inference

The question’s use of the word implies means that the answer depends on making an inference. This question refers to one sentence in the passage (lines 21–24), so it is essential to review what that sentence says in order to understand what it implies. An unconditional guarantee of satisfaction may have a particular disadvantage in the case of health care and legal services because clients may be misled into believing that lawsuits or medical procedures have guaranteed outcomes when they do not. Since an inference may be drawn only from explicitly stated information, the correct response must be about the problem of guarantees and outcomes.

A.  Although this statement may be true, it cannot be derived from the cited reference.

B.  Correct.   Legal and medical professionals cannot guarantee the outcomes of their work.

C.  This statement cannot be drawn from the description of the issue.

D.  Compensation is not discussed in the reference.

E.  Predicting costs is not discussed in the reference.

The correct answer is B.

Sajjad1994 · Answer

Official Explanation

5. Which of the following hypothetical situations best exemplifies the potential problem noted in the second sentence of the second paragraph (lines 14-17)?

Difficulty Level:   Hard

Explanation

Application

This question involves taking the problem identified in lines 15–19 and applying it to the hypothetical situation that best fits it. Offering an unconditional guarantee may not work as a marketing strategy because potential clients may doubt the firm’s ability to deliver the promised level of service. This strategy may actually introduce doubts or reservations on the part of potential clients and in fact discourage them from ever hiring the firm or the individual providing the service.

A.  In this case, the problem occurs after, not before, the service is rendered.

B.  This situation exemplifies another problem of unconditional guarantees, the suggestion that a firm is begging for business (line 21).

C.  The problem occurs after, not before, the service is rendered.

D.  Correct.   The architect’s apparent need to offer an unconditional guarantee makes potential clients question the outcome of the architect’s work by suggesting the likelihood of their dissatisfaction with the architectural services.

E.  This situation contradicts the problem.

The correct answer is D.

Sajjad1994 · Answer

Official Explanation

6. The passage most clearly implies which of the following about the professional service firms mentioned in line 22?

Difficulty Level:   Easy

Explanation

Inference

The question asks for the implications of the statement in lines 24–27: professional service firms with outstanding reputations and performance to match have little to gain from offering unconditional guarantees. Why is it logical to infer that these firms have little to gain from this strategy? If their performance and reputation are both outstanding, it is likely that their clients are already satisfied with the quality of the work they provide and that offering such guarantees would provide no competitive advantage.

A.  The statement in the passage concerns the present; nothing is implied about what may have been true in the past.

B.  The statement includes no information about profitability, so no inference may be drawn.

C.  No information is provided about specific fields or likely outcomes.

D.  Fees are not discussed in this statement.

E.  Correct.   No guarantee is needed when clients are already satisfied with the quality of work provided.

The correct answer is E.

KittyDoodles · Answer

Hi  VeritasKarishma   GMATNinja

As per the passage we have  Indeed, professional service firms with outstanding reputations and performance to match have little to gain from offering unconditional guarantees.

and we have Option C which states  They usually practice in fields in which the outcomes are predictable.

Can't we infer from the passage that when the firms offer services whose performance they have to match, these services have outcomes that are predictable.

I understand the above is just covering the a part of option C. The 1st part of Option C "They usually practice in such fields" is no where stated in the passage.

I had selected option C over option E as the passage doesn't explicitly state that clients are satisfied with the services.

Thanks

GMATNinja · Answer

As we noted in our post that you've quoted above, (E) may not be explicitly stated in the passage, but it's very strongly implied. So, we have good reason to  infer  (E). The very fact that the prompt asks about which of the answer choices is  implied  suggests that the answer choice may not be explicitly stated in the passage.

With (C), it seems like you may be misinterpreting the phrase "performance to match" in the context of the passage. The passage states that certain firms have an outstanding reputation and "performance to match...." But the question becomes: performance to match what? In the context of the sentence, it's clear that these firms have the performance to match  their outstanding reputation .

The simple fact that firms have performance that matches their reputation does NOT imply that the firms work in predictable fields. It only means that their reputation is pretty accurate. For example, even if the outcome is unpredictable, if they have a great reputation, they do a great job. So, because we can't assume anything about the industry that these firms work in (in fact, they likely work in a wide variety of industries), we can eliminate (C).

I hope that helps!

krndatta · Answer

KarishmaB  Ma'am,

In Q-5, Opt-B, Isn't this option also talking about the scenario before offering a service. The Lawyer is offering a service. So won't this one be too a probable contender.

KarishmaB · Answer

5. Which of the following hypothetical situations best exemplifies the potential problem noted in the second sentence of the second paragraph (lines 14-17)?

(A) A physician's unconditional guarantee of satisfaction encourages patients to sue for malpractice if they are unhappy with the treatment they receive.
(B) A lawyer's unconditional guarantee of satisfaction makes clients suspect that the lawyer needs to find new clients quickly to increase the firm's income.
(C) A business consultant's unconditional guarantee of satisfaction is undermined when the consultant fails to provide all of the services that are promised.
(D) An architect's unconditional guarantee of satisfaction makes clients wonder how often the architect's buildings fail to please clients.
(E) An accountant's unconditional guarantee of satisfaction leads clients to believe that tax returns prepared by the accountant are certain to be accurate.

This is what the relevant lines say: 
 With its implication that failure is possible, the guarantee may, paradoxically, cause clients to doubt the service firm's ability to deliver the promised level of service.

What does this mean? It means that if a business claims, say, "full refund in case of failure", it causes clients to worry that the business is saying that failure is a possible case.

Option (D) exemplifies this: 
(D) An architect's unconditional guarantee of satisfaction makes clients wonder how often the architect's buildings fail to please clients.

but option (B) doesn't
(B) A lawyer's unconditional guarantee of satisfaction makes clients suspect that the lawyer needs to find new clients quickly to increase the firm's income.
To exemplify, it needed to be something like this:
(B) A lawyer's unconditional guarantee of satisfaction makes clients suspect that the lawyer might be losing some cases.

gullyboy09 · Answer

Hi  KarishmaB , in Q3, option D, can't we infer it from the second para "It may conflict with a firm's desire to appear sophisticated"?

guddo · Answer

3. Which of the following is cited in the passage as a goal of some professional service firms in offering unconditional guarantees of satisfaction?

The passage says some firms consider unconditional guarantees because they want a  marketing advantage  over competitors. The first sentence gives that goal directly: “seeking a competitive advantage.” The rest of the passage explains when that strategy may help and when it may backfire.

(A) A limit on the firm's liability

This is not mentioned. The guarantee describes what the firm will do if expectations are not met, but the passage does not say the goal is to reduce liability.

(B) Successful competition against other firms

This is correct. The passage explicitly says some firms consider guarantees because they are “seeking a competitive advantage.”

(C) Ability to justify fee increases

This is not stated. The passage mentions that high fees can make a guarantee more effective, but not that the guarantee is meant to justify raising fees.

(D) Attainment of an outstanding reputation in a field

This is not the goal given. In fact, the passage says firms that already have outstanding reputations have little to gain from such guarantees.

(E) Improvement in the quality of the firm's service

This is not cited as the goal. The passage says a firm should have a matching commitment to quality, but that is a condition for using the guarantee well, not the goal of offering it.

Answer: (B)

Seeking a competitive advantage, some professional service firms (for

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GMAT Reading Comprehension (RC) Questions

Seeking a competitive advantage, some professional service firms (for

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