An emerging genre of management texts purports to catalogue the

Question

New Project RC Butler 2019  -  Practice 2 RC Passages Everyday   
Passage # 166, Date : 24-APR-2019
 This post is a part of New Project RC Butler 2019 .  Click here for Details

An emerging genre of management texts purports to catalogue the qualities and practices that distinguish financially successful businesses from those that fail. Based on an underlying belief that success is primarily driven by malleable characteristics—such as management policies, hiring practices, and the personal qualities of company leadership—authors of these texts have suggested that financial success can come from carefully observing, then imitating, the practices of companies that have consistently performed several standard deviations above the market average.

However, all businesses, regardless of their financial success under historical conditions, may become vulnerable to failure as the economic climate changes. One well-known text, published in 2001, identified eleven “great companies” that had consistently outperformed hundreds of other companies in their markets; over the following decade, only one of the eleven companies continued to enjoy above-average financial returns, while the remaining companies, on average, actually underperformed their competitors. Despite the common factors identified in the culture of these “great companies,” external factors—most notably, the Great Recession of the late 2000s overwhelmed any effect that may have come from ambitious decision-making or aggressive replacement of unproductive leadership. In addition, far more businesses, despite sharing these supposed success-driving characteristics, have quietly failed. More than  one hundred thousand new businesses  are started each year in the United States alone; whatever qualities that may be shared among the relatively small number of long-term survivors are inevitably shared as well by far more businesses that never achieve financial success.   1 
 D 
 1. The author of the passage would likely agree that the addition of which of the following would most improve the quality of the management texts described in the passage?

(A) An analysis of the causes and effects of the Great Recession of the late 2000s
(B) Practical advice for business owners hoping to adopt the practices implemented by successful companies
(C) Descriptions of the practices of companies that became highly successful despite a period of below-average financial returns
(D) Evidence suggesting that certain practices are shared by most businesses that successfully weather economic change
(E) A more rigorous definition of what constitutes a financially successful business

2 
 E 
 2. Which of the following practices would the author of the passage most likely believe would increase the odds of a company’s future financial success?

(A) Replacing members of upper management whose teams do not meet financial goals
(B) Setting highly ambitious financial goals for the entire company
(C) Imitating similar companies that have consistently had financial success in the past
(D) Avoiding patterns of hiring decisions that correlate with poor financial returns
(E) Taking preemptive steps to minimize the impact of possible negative economic changes

3 
 B 
 3. In the last sentence of the passage, the author refers to “one hundred thousand new businesses” most likely in order to

(A) criticize the authors of certain management texts for studying an inadequate number of companies
(B) demonstrate that the authors of certain management texts have drawn faulty conclusions regarding the causes of financial success
(C) suggest that the authors of certain management texts have incorrectly identified the qualities that are shared among financially successful companies
(D) emphasize the importance of studying companies that can be considered “long-term survivors”
(E) illustrate a potential negative consequence of the practice of imitating financially successful companies

Manhattan CAT 5

XyLan · Accepted Answer

The gist of the passage:   
 1st line of the 2nd-paragraph -   However, all businesses, regardless of their financial success under historical conditions, may become vulnerable to failure as the economic climate changes.

The author asserts that companies emulating the practices of other successful companies need  NOT   necessarily  be successful.
   Paraphrase   the  sentiment  of the argument in fewer words:
 Copying others is NOT necessarily GOOD.
External factors DO play an important role.     - Use simple and fewer words. Make sure -  You  understand!

1.   The author of the passage would likely   AGREE   that the addition of which of the following would most improve the quality of the management texts described in the passage?
 Pre-Think: 
 Hopefully, the author wants to forwarn that copying will NOT  necessarily  yield in success.
Also, Other factors ( external ) CAN play a substantial role in determining success.

Answer choice analysis:   
 (A) An analysis of the causes and effects of the Great Recession of the late 2000s. 
 - This analysis has  NO  connection with the intent of the passage 
(B) Practical advice for business owners hoping to adopt the practices implemented by successful companies
  - May look deceptive. However, There is  NO  actual  advice  (  let alone practical  ) for business owners adopting practices implemented by successful companies.
It's  dicey  to map  Other factors(  factors affecting economic climate  )  with  Practical Advice , unless backed by the argument. 
If you STILL want to keep it. Let's hold it for now.  
(C) Descriptions of the practices of companies that became highly successful despite a period of below-average financial returns
 The author is  NOT  in favor of  simply  copying the practices of companies. Thus, There is  NO  point in discussing the practices of the companies  whether  they became highly successful despite a period of below-average financial returns. 
(D) Evidence suggesting that certain practices are shared by most businesses that successfully weather economic change
   Aha  ! Certain practices are shared by  most   successful  businesses.
It  DOES  look like a contender - in line with the Pre-Think and Paraphrase.   Let's keep D over B!   
(E) A more rigorous definition of what constitutes a financially successful business
 Completely  OUT  of the park.

2.   Which of the following practices would the author of the passage  most  likely  believe  would increase the odds of a company’s future financial success?
 Pre-Think: 
The author is asserting NOT to COPY other successful companies.
Be aware - Other factors ( external ) CAN play a substantial role in determining success.

Any option choice that suggests copying the practices is WRONG.   - Let this fact be the guiding star!  
 Excerpt from the passage: 
  1) The Great Recession (TGC) of the late 2000s  overwhelmed   any  effect that may have come from ambitious decision-making or aggressive replacement of unproductive leadership.
2) Success is primarily driven by malleable characteristics—such as management policies,  hiring practices , and the personal qualities of company leadership
  
TGC (external factor) had a more deleterious effect than any other effect. 
The author is  NOT  in favor of  ambitious decision - making  and of  aggressive replacement of unproductive leadership .

Answer choice analysis:   
 (A) Replacing members of upper management whose teams do not meet financial goals -  Incorrect for above reasons 
(B) Setting highly ambitious financial goals for the entire company -  Incorrect for above reasons 
(C) Imitating similar companies that have consistently had financial success in the past -  Imitating = Copying  -  OUT !
(D) Avoiding patterns of  hiring decisions  that correlate with poor financial returns
 - The author is asking  NOT  to imitate the practices of successful companies.  CANNOT  substantiate OptionD from the argument.
 (E) Taking  preemptive steps  to minimize the impact of  possible  negative economic changes
 - Taking a  cautitous step  for a  probable   external  change.   Fits the bill!

3.   In the last sentence of the passage, the author refers to “one hundred thousand new businesses” most likely in order to
 Pre-Think:
  Excerpt :  In addition, far more businesses,  despite sharing  these supposed success-driving characteristics, have quietly  failed . More than one hundred thousand new businesses are started each year in the United States alone. 
The usage of the term is to highlight  even though   a plethora of companies  follow the same principles and emulate similar practices, they  DO sink .  
 - A contrast! Thus, drawing inferences from those characteristics is  NOT Right .

Answer choice analysis:   
 (A) criticize the authors of certain management texts for studying an inadequate number of companies
  NO . Not even remotely close. 
(B) demonstrate that the authors of certain management texts have drawn  faulty  conclusions regarding the  causes  of financial success
   Better  ! 
The reason for companies' success is  NOT  those malleable characteristics—such as management policies, hiring practices, and the personal qualities of company leadership. Thus, drawing conclusions on the basis of them ( characteristics ) is an OUTRIGHT  flaw . 
(C) suggest that the authors of certain management texts have  incorrectly    identified   the qualities that are shared among financially successful companies
 The   identification   of the qualities, which are shared among financially successful companies, has  NEVER  been the issue. 
(D) emphasize the importance of studying companies that can be considered “long-term survivors”
  NO . Not even remotely close. 
(E) illustrate  a  potential  negative consequence  of the practice of imitating financially successful companies
  - May seem  true-in-general ; however, OptionE does  NOT  answer the question. 
The term is used to highlight the  contrast  and NOT to illustrate  A ( potential ) negative consequence .
Beware of such  inconsistent ,  true-in-general  choices.

shubham2312 · Answer

4 mins all correct

1) D
on the whole author is trying to impart the idea that managing economic change is very important for any company future, that is why he has used the study of 11 companies done in 2001.

2)E
Again same reason

3)B
Author says " In addition, far more businesses, despite sharing these supposed success-driving characteristics, have quietly failed"

which means there must be some other reason why certain companies are successful and others are not which is not been adequately addressed by the text.

JS1290 · Answer

Could someone please explain Q1? I chose C instead

NoMatterWhat · Answer

Let's solve it mathematically

Set A: companies perform above average

SubSet of A: Companies survive climate change

Set B: companies perform below average

Author convey those companies observe and imitate set A may go down because all of them do not survive climate change, But if The companies observe and imitate a subset of A, they are likely to become successful.

Set B: always put companies down

Hence, C is incorrect and D is the right answer

Hope it helps

Labmalo · Answer

Not sure if I missed anything but for Q2, why "Taking preemptive steps to minimize the impact of possible negative economic changes" would increase the odds of the future financial success of the company? Isn't it great that way ? cos the author mentioned that the economics change will affect the company's performance...

kartickdey · Answer

in reference to the first Question: It is given in the passage "  whatever qualities that may be shared among the relatively small number of long-term survivors are inevitably shared as well by far more businesses that never achieve financial success.  "
so even a company follows  certain practices shared by most businesses that successfully weather economic change, there is no guarantee that it will succeed. In that sense including option D would not enhance the quality of the text; rather some practical valure might. So I thought B is the correct answer. Please clarify my doubt.

egmat · Answer

Why D is correct and B is wrong:

The Author's Key Criticism:  
The passage argues that these management texts fail because: 
 1.  External factors (like the Great Recession) overwhelm any internal practices 
 2.  Failed companies share the same "success" practices as successful ones

Your Reasoning:  You thought: "If shared practices don't guarantee success, then evidence about shared practices (D) won't help. At least B adds practical value."

The Trap:  You missed a  critical phrase  in Choice D.

Look closely at D:   "Evidence suggesting that certain practices are shared by most businesses that  successfully weather economic change "
This isn't about generic "shared practices." This specifically addresses the author's complaint that external factors overwhelm internal practices.

What D offers:  Evidence that some practices actually help companies  survive through  economic turbulence- directly countering the author's criticism.

Why B fails:   The author's complaint isn't "these texts lack practical application." The author's complaint is "the underlying analysis is flawed."
Adding "practical advice" for implementing  ineffective  practices doesn't improve the text - it just makes bad advice easier to follow.

Simple test:  Does the choice  address the author's actual criticism ?
 
 B → No (adds implementation, not better analysis) 
 D → Yes (shows practices can work despite economic change)

Answer: D

An emerging genre of management texts purports to catalogue the

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GMAT Reading Comprehension (RC) Questions

An emerging genre of management texts purports to catalogue the

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