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605-655 Level|   Business|   Long Passage|                     
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The modern multinational corporation is described as having 17 Jul 2019, 23:36
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Overall the passage argues that even though earlier chartered trading firms aren't typically considered relevant to the origination of the modern day multinational corporate structures they should be.
Examples are given to support this argument.

2. With which of the following generalizations regarding management structures would the author of the passage most probably agree?
A is incorrect - we cannot support this.
B is correct because we are explicitly told in the first Para that "increases in volume of transactions in (multinational corporations) are commonly believed to have necessitated" the structural change - that owner-managers were replaced by teams of salaried managers.
C is incorrect because the author actually argues against this by providing examples of the limitations 16th century trading organisations navigated
D is incorrect, but is a lure answer as we are given information to support the contrary, but we cannot support this statement. I.e. we are told volumes influenced the change (above), but we aren't told the opposite.
E No - we aren't told anything to support this. Foreign trade is lightly discussed.

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

This is really really easy to get tripped over on.

Re-read the question: According to the passage, early chartered trading companies are usually described as

Now, the author argues that chartered trading companies are relevant to the origination of the modern corporation, but chartered trading companies aren't usually described this way.

A is correct - we are told in the first paragraph that these trading companies are "usually considered irrelevant to" the discussion on the origination of modern corporations. "considered" / "described" are essentially the same.

B is incorrect - nowhere is it stated that the companies are described as unusual or not good enough. The opposite is argued.
C is incorrect - no. We are told the early trading firms influenced latter, not the other way around.
D is incorrect because the early firms were in no way organised to function as modern corporations do. The activities of these early firms dictated a management an owner-manager structure.
E is incorrect - we cannot conclude that the early firms "existed" to further government aims, they merely focused on government type work.
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The modern multinational corporation is described as having 28 Jul 2019, 00:26
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Hi,

Would love it if someone could explain Q6.

From what I inferred, plainly listing activities doesn't by itself indicate large volumes. Besides the following statement, "The large volumes associated with these activities" is the one that does the job of refuting previously held notions of the volumes in which early trading companies dealt. Whereas, the listing of activities illustrates the complexity and scope of operations, that still existed in the age of relatively priomitive tech and communication (a condition that contributed to the emergence of the modern multinational, as laid out by the passage), making (E) the more tempting choice?

Could someone explain?
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The modern multinational corporation is described as having 17 Aug 2019, 18:11
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this is official gmat prep ques ? prep 1 ?
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The modern multinational corporation is described as having 19 Aug 2019, 23:04
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Dear experts, as a non-native speaker, i have a poor interpretation, always make incorrect interpretations. So i genuinely need your help.

1st paragraph of this passage,
Quote:
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
Show more

It talks about the origination of MMC, and manager structural change.

Quote:
Increases in the volume of transactions in such firms are commonly believed to have necessitated this structural change.
Show more
 

It talks about the structural change.

Quote:
Nineteenth-century inventions like the steamship and the telegraph, by facilitating coordination of managerial activities, are described as key factors.
Show more
It talks about some key factors, although i have no idea why it appears here

 
Quote:
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.
Show more

It says 16&17 cent companies are not need to discuss.

Then i thought this passage’s topic is structural change.

I think i must have some interpretation bugs, but i have no idea what are they, would you experts please help me?
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The modern multinational corporation is described as having 06 Apr 2020, 06:25
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Hi , Need help with question 4 and 7 , GMATNinja , need some help here !


kraizada84
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

Show Spoiler
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.

Show Spoiler
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

Show Spoiler
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

Show Spoiler
A

5. 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 require 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

Show Spoiler
A

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

(A) analyze the various ways in which these activities contributed to changes in management structure in such companies
(B) demonstrate that the volume of business transactions of such companies exceeded that of earlier firms
(C) refute the view that the volume of business undertaken by such companies was relatively low
(D) emphasize the international scope of these companies’ operations
(E) support the argument that such firms coordinated such activities by using available means of communication and transport

Show Spoiler
C

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

(A) an area of operations of these companies that was unhampered by rudimentary systems of communications and transport
(B) a similarity that allows fruitful comparison of these companies with modern multinationals
(C) a positive achievement of these companies in the face of various difficulties
(D) a system that could not have emerged in the absence of management hierarchies
(E) a characteristic that distinguishes these companies from modern multinationals

Show Spoiler
E

8. The passage suggests that one of the reasons that early chartered trading companies deserve comparison with early modern multinationals is

(A) the degree to which they both depended on new technology
(B) the similar nature of their management structures
(C) similarities in their top managements’ degree of ownership in the company
(D) their common dependence on political stability abroad in order to carry on foreign operations
(E) their common tendency to revolutionize systems of production

Show Spoiler
B


Show Spoiler
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.
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The modern multinational corporation is described as having 17 Apr 2020, 14:39
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Arpitkumar
Hi , Need help with question 4 and 7 , GMATNinja , need some help here !
Show more

Question 4


Question 4 asks how early chartered trading companies are "usually described."

To answer this, it is helpful to look back to the overall structure of the passage:

  • Paragraph 1: the author introduces a general belief: the origin of modern multinational corporations (MMCs) is generally traced back to nineteenth-century British firms.
  • Still Paragraph 1: The author then states that "sixteenth- and seventeenth century chartered trading companies are usually considered irrelevant to this discussion."
  • Paragraph 2: the author then argues that these early chartered trading companies actually ARE relevant to the discussion -- they had a bunch of things in common with modern MMCs
  • Paragraph 3: The author admits that chartered trading companies did differ from MMCs, but then reaffirms his/her position that the trading companies "merit further study as analogues of more modern structures."

So, overall the author argues against the usual description of sixteenth- and seventeenth century chartered trading companies as irrelevant to the origins of MMCs.

Question 4 asks us about that usual description, which is most plainly stately near the end of paragraph 1: "Sixteenth- and seventeenth century chartered trading companies, despite the international scope of their activities, are usually considered irrelevant" to the discussion about when MMCs originated.

This is captured nicely in (A):
Quote:
(A) [early chartered trading companies are usually described as] irrelevant to a discussion of the origins of the modern multinational corporation
Show more

None of the other answer choices come close, so (A) is the answer to question 4.

Question 7


Quote:
7. The author mentions the artisan and peasant production systems of early chartered trading companies as an example of
Show more
Artisan and peasant production are mentioned in the third paragraph. From our analysis above, we know that the author's purpose in that paragraph is to:

  • admit that there are differences between early trading companies and MMCs, and
  • reaffirm that the analogy has merit, despite these differences

The artisans and peasants are mentioned as part of the author's admission that there are, in fact, differences between early trading companies and MMCs.

(A) through (D) do not capture this purpose at all, so we're left with (E):
Quote:
(E)[The author mentions the artisan and peasant production systems of early chartered trading companies as an example of] a characteristic that distinguishes these companies from modern multinationals
Show more
(E) is the correct answer to question 7.

I hope that helps!
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The modern multinational corporation is described as having 30 Oct 2020, 07:13
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I need help on question 5. Honestly I kinda not looked at the passage 1 since the author's view about early trade companies is not listed. @Verbalexperts: could you please help arrive at the right answer choice?
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The modern multinational corporation is described as having 05 Nov 2020, 05:04
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Hi Mike
I am confused in Q5, option A & C.
As the passage says that Operations of earlier charter companies were as complex as modern MNCs.
Why is C wrong? I sit because of the word LARGEST?
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The modern multinational corporation is described as having 09 Nov 2020, 09:17
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VIBHOJAIN
Hi Mike
I am confused in Q5, option A & C.
As the passage says that Operations of earlier charter companies were as complex as modern MNCs.
Why is C wrong? I sit because of the word LARGEST?
Show more


Hi VIBHOJAIN,

Quote:
(C) as intricate as those carried out by the largest multinational corporations today
Show more

Answer to Question 5 can be inferred from the lines: "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."
The does mentioned that the activities are complex but he doesn't mention any comparison of these complexities with those carried out by the largest multinational corporations. Thus, its not because of the word "largest" it's simply because this comparison is not present in the passage.

Hope This Helps.
Thanks.
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The modern multinational corporation is described as having 09 Nov 2020, 19:00
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GMATNinja abhimahna mikemcgarry

Could you please provide a strong reason to eliminate E in Q5?

It is mentioned in the passage - They depended heavily on the national governments of their home countries and thus characteristically acted abroad to promote national interests
Can't E be inferred from this?
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The modern multinational corporation is described as having 09 Nov 2020, 19:47
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GMATNinja abhimahna mikemcgarry

Could you please provide a strong reason to eliminate E in Q5?

It is mentioned in the passage - They depended heavily on the national governments of their home countries and thus characteristically acted abroad to promote national interests
Can't E be inferred from this?
Show more

Quote:

5. 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 require 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
Show more

E says hampered by the political demands . No where it is mentioned that activities were hampered by any means. Yes, these activities objectives were to promote national interests. But that's ok.
Promote national interests and hampered by politica demands are not same things. So this option is wrong because it is not given, so we can' t say. Reject

Close options could be
A and C
C: will be rejected because comparison is not given.
But A is given directly in
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
Show more

Hence A is direct correct answer
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The modern multinational corporation is described as having 15 Nov 2020, 09:36
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Paragraph 1: The modern multinational corporation originated in the 19th century, believed to have been caused by a few key factors. 16th and 17th century companies are not believed to have been a factor.

Paragraph 2: These early companies actually had a role in the development of modern multinational corporations.

Paragraph 3: Early trading companies compared to modern multinational corporations had some differences but in may respects were similar. Further study between the two is necessary.

_____________________________

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

Quote:
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
Show more

_____________________________

5. 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 require 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

The first paragraph speaks to complex nature of early chartered trading companies -- A is correct. Choice C is a trap answer; the author compares the two and believes there are many similarities but doesn't go as far as stating that the activities of early chartered trading companies are as intricate as those carried out by the largest multinational corporations today.
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The modern multinational corporation is described as having 22 Nov 2020, 09:35
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Question 5


smile2
I need help on question 5. Honestly I kinda not looked at the passage 1 since the author's view about early trade companies is not listed. @Verbalexperts: could you please help arrive at the right answer choice?
Show more
Quote:
5. It can be inferred from the passage that the author would characterize the activities engaged in by early chartered trading companies as being
Show more
The question asks for the author's view of early trading companies -- the companies from the sixteenth and seventeenth centuries. Before looking at the the answer choices, it may be helpful to get a general sense of the author's views. The first paragraph tells us that the general view is that these early companies are "considered irrelevant" to the history of modern multinational corporations. But the author disagrees: he or she argues that these early corporations had hierarchical structures with significant organizational capacity. The author believes that this early sophistication is an important predecessor to modern multinational corporations.

Quote:
(A) complex enough in scope to require a substantial amount of planning and coordination on the part of management
Show more
Answer choice (A) does a pretty good job of conveying the author's view, so we'll leave it in for now.

Quote:
(B) too simple to be considered similar to those of a modern multinational corporation
Show more
Answer choice (B) is actually the exact opposite of the author's view, so we'll eliminate it.

Quote:
(C) as intricate as those carried out by the largest multinational corporations today
Show more
Answer choice (C) looks good at first glance because it conveys the author's view that these earlier companies contained sophisticated hierarchies. But does the author believe that these early companies engaged in activities "as intricate as" modern corporations? There isn't any statement in the passage quite that strong. So we'll have to eliminate answer choice (C).

Quote:
(D) often unprofitable due to slow communications and unreliable means of transportation
Show more
There is no discussion of profitability of these early companies, so we can eliminate answer choice (D).

Quote:
(E) hampered by the political demands imposed on them by the governments of their home countries
Show more
In the last paragraph there is a short discussion of the political situation of these early companies. It says that they "depended heavily" on their governments and therefore tended to promote their nation's interests abroad. This makes answer choice (E) interesting. But does this mean that the companies were hampered by their political situation? Maybe, maybe not. It could have helped the companies, hurt the companies, or had no effect on the companies. Based on the text, you could argue that the political situation helped the companies since they were dependent on their governments and presumably got necessary help from their governments. So we'll have to eliminate answer choice (E).

So answer choice (A) is our best answer.

I hope that helps!
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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 - Incorrect (That is not the focus of the passage)
(B) the success of early chartered trading companies, like that of modern multinationals, depended primarily on their ability to carry out complex operations - Incorrect (The passage isnt focused on what early charted trading companies and modern multinationls depend on to carry out complex operations)
(C) early chartered trading companies should be more seriously considered by scholars studying the origins of modern multinationals - Correct (The last sentence of the passage states "Despite these differences, however, early trading companies organized effectively in remarkably modern ways and merit further study as analogues of more modern structures")
(D) scholars are quite mistaken concerning the origins of modern multinationals - Incorrect (Not strong enough answer)
(E) the management structures of early chartered trading companies are fundamentally the same as those of modern multinationals - Incorrect (Nothing in the passage implies this)

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. - Incorrect (Not stated in the passage)
(B) Firms that routinely have a high volume of business transactions find it necessary to adopt hierarchical management structures. - Correct ( "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" Implies this)
(C) Hierarchical management structures cannot be successfully implemented without modern communications and transportation. - Incorrect (Nothing in the passage implies at this)
(D) Modern multinational firms with a relatively small volume of business transactions usually do not have hierarchically organized management structures. - Incorrect ( Not stated in the passage)
(E) Companies that adopt hierarchical management structures usually do so in order to facilitate expansion into foreign trade. - Incorrect ( Not stated in the passage)

3. The passage suggests that modern multinationals differ from early chartered trading companies in that
TIP: For these questions, the answer should be directly in the passage
(A) the top managers of modern multinationals own stock in their own companies rather than simply receiving a salary - Incorrect (Not stated in the passage)
(B) modern multinationals depend on a system of capitalist international trade rather than on less modern trading systems - Incorrect (Not stated in the passage)
(C) modern multinationals have operations in a number of different foreign countries rather than merely in one or two - Incorrect (Not stated in the passage)
(D) the operations of modern multinationals are highly profitable despite the more stringent environmental and safety regulations of modern governments - Incorrect (Not stated in the passage)
(E) the overseas operations of modern multinationals are not governed by the national interests of their home countries - Correct ( First sentence last paragraph "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")


5. 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 require a substantial amount of planning and coordination on the part of management - Correct ( The last sentence "early trading companies organized effectively in remarkably modern ways " implies this)
(B) too simple to be considered similar to those of a modern multinational corporation - Incorrect (Actually refutes this)
(C) as intricate as those carried out by the largest multinational corporations today - Incorrect ( The intricacies is not what is in focus)
(D) often unprofitable due to slow communications and unreliable means of transportation - Incorrect (The passage is actually against this)
(E) hampered by the political demands imposed on them by the governments of their home countries - Incorrect (Nothing in the passage implies this)
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The modern multinational corporation is described as having 07 Jun 2021, 01:21
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dear AndrewN,

5. 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 require 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

I didd not pick up A because I thought " amount of planning and coordination on the part of management" is not mentioned in the passage, all the second paragraph talks a lot of actions of early trading companies necessirated hierarchical management,

would you please point out what I missed ?
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7. The author mentions the artisan and peasant production systems of early chartered trading companies as an example of
(A) an area of operations of these companies that was unhampered by rudimentary systems of communications and transport
(B) a similarity that allows fruitful comparison of these companies with modern multinationals
(C) a positive achievement of these companies in the face of various difficulties
(D) a system that could not have emerged in the absence of management hierarchies
(E) a characteristic that distinguishes these companies from modern multinationals

Hi, may I know why 'E' is the correct answer? Doesn't this sentence from the passage 'They operated in a pre-industrial world, grafting a system of capitalist international trade onto a pre-modern system of artisan and peasant production.' show how early chartered trading companies are similar to modern multinationals in terms of their capitalist systems?
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aragonn
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.
------------------------------------------------
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.

-----------------------------------------------

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

-------------------------------------------------

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
-------------------------------------------------

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

-------------------------------------------

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

----------------------------------------------
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
Show more


hi, your explanation on question 5 is incorrect. The first paragraph talks about how other people assume what early trading companies was like, not what the author thinks. In the second paragraph, the author actually rejected the view in the first paragraph. The author wirtes" in reality, early trading companies successfully purchased and outfitted ships.... the large volume of transactions seems necessitated the hierarchical management structures well before the advent of modern communications and transposition." so the author thinks that the activities were complex enough to have necessitated some changes in management structures.
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The modern multinational corporation is described as having 02 Nov 2021, 08:11
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smackmyface
7. The author mentions the artisan and peasant production systems of early chartered trading companies as an example of
(A) an area of operations of these companies that was unhampered by rudimentary systems of communications and transport
(B) a similarity that allows fruitful comparison of these companies with modern multinationals
(C) a positive achievement of these companies in the face of various difficulties
(D) a system that could not have emerged in the absence of management hierarchies
(E) a characteristic that distinguishes these companies from modern multinationals

Hi, may I know why 'E' is the correct answer? Doesn't this sentence from the passage 'They operated in a pre-industrial world, grafting a system of capitalist international trade onto a pre-modern system of artisan and peasant production.' show how early chartered trading companies are similar to modern multinationals in terms of their capitalist systems?
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Check out our earlier analysis of this question, and let us know whether that clears things up!
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The modern multinational corporation is described as having 05 Dec 2021, 02:59
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I want to understand why for the 8th question answer is B and not C
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The modern multinational corporation is described as having 10 Dec 2021, 20:31
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Question 8


Dhwanii
I want to understand why for the 8th question answer is B and not C
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Here's question 8:
Quote:
8. The passage suggests that one of the reasons that early chartered trading companies deserve comparison with early modern multinationals is
Show more
The author describes similarities between early chartered trading companies and modern multinationals in the second paragraph. Then, he/she describes differences between the two in the third paragraph.

So, to answer this question, we'll likely draw our evidence from the second paragraph.

Here's (B):
Quote:
(B) the similar nature of their management structures
Show more
In the second paragraph, the author states that the complexity of trading by chartered companies "seems to have necessitated hierarchical management structures."

This is similar to how the author describes the structure of modern multinationals in paragraph 1. There, he/she says that these modern companies are run by "teams of salaried managers organized into hierarchies."

So, the passage suggests that both types of companies had similar management structures. Keep (B).

Here's (C):
Quote:
(C) similarities in their top managements’ degree of ownership in the company
Show more
Degree of ownership is discussed in the third paragraph, where the author talks about differences between the two types of company. Specifically, we learn that in early chartered companies "top managers were typically owners with a substantial minority share," while in modern multinationals, "senior managers' holdings[...] are usually insignificant."

So, top management had very different degrees of ownership, rather than similar degrees of ownership.

(C) is out, and (B) is the correct answer to question 8.

I hope that helps!
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