Corporate social responsibility (CSR) is based on the idea that firms

Question

Corporate social responsibility (CSR) is based on the idea that firms should act responsibly to promote public benefit and that they can profit through such activities, but this idea is inherently flawed. Companies inevitably try to maximize their profits, and social welfare is not the primary motive in most cases; for example, cases in which social welfare is delivered by serving healthier foods or by opting for fuel-efficient vehicles. Therefore, social welfare is a by-product rather than an objective in most CSR activities.

Which of the following is an assumption made by the author?

A. Products such as fuel-efficient cars are created because of consumer demands.

B. Most CSR activities are affiliated to products such as healthier foods or fuel-efficiency.

C. In most instances of CSR activities, it is not possible for companies to extract any additional profit by going the non-CSR route.

D. Companies’ long-term interests are oriented more toward profit acquisition than social welfare.

E. The higher a company’s desire to maximize its profits, the lower is it's prioritizing of the objective of social welfare.

KarishmaB · Accepted Answer

CSR idea - Promote public benefit and profit will come as a byproduct. 
But companies try to maximize their profits, and social welfare is not the primary motive in most cases; (e.g. serving healthier foods or by opting for fuel-efficient vehicles)

Conclusion: Social welfare is a by-product rather than an objective in most CSR activities.

The argument says that as per CSR idea, public welfare should be the primary motive, but companies keep profit as primary motive and public welfare is a byproduct. e.g. they get maximum profit by serving healthier food and fuel efficient vehicles presumably because people want them and they generate max profit. The fact that they improve people's health or are good for the environment is a by-product.

A. Products such as fuel-efficient cars are created because of consumer demands.

An attractive option but not correct. An option that makes assumptions about examples given isn't great. Those are just examples and we may not be able to generalise the principle. Also, these products are created because they yield maximum profit would be better fit than "consumer demand".

B. Most CSR activities are affiliated to products such as healthier foods or fuel-efficiency.

Not necessary for our argument. Those are just examples given.

C. In most instances of CSR activities, it is not possible for companies to extract any additional profit by going the non-CSR route.

Correct. The argument says "Companies inevitably try to maximize their profits, and social welfare is not the primary motive in most cases"
It is assuming that in most CSR activities, companies are doing those activities because they give them maximum profit and they cannot get additional profit by going non-CSR way. If the companies could get more profit non-CSR way, then max profit would not be their primary motive. Then public benefit might be the primary motive and profit just a byproduct.

D. Companies’ long-term interests are oriented more toward profit acquisition than social welfare.

Long term interests are irrelevant.

E. The higher a company’s desire to maximize its profits, the lower is it's prioritizing of the objective of social welfare.

CSR activities (and not the overall targets) are the topic of discussion.

Answer (C)

dips1122 · Answer

VeritasKarishma  can you please check this question? How is C an assumption? I chose A by negation.

If we negate A "Products such as fuel-efficient cars are NOT created because of consumer demands", then the conclusion "social welfare is a by-product rather than an objective in most CSR activities" will break and not hold true.

Ruchi007 · Answer

Why is option E not a correct choice?

Feb2024 · Answer

KarishmaB 
 IanStewart 
 GMATNinja 
 MartyMurray

Hello Experts! I'm uncertain if I have clearly understood the appropriateness of the answer choice C.

It may or may not be possible for companies to generate additional profit by their regular business methods (i.e., non-CSR route). There is no mention about that here.

Or the second statement, where it is said that "Companies inevitably try to maximize their profits..." implies there profit by the regular business methods is saturated, and hence they turn to CSR activities?

Can you provide your inputs for this question?

IanStewart · Answer

The question is so poorly written and conceived that you should just ignore it. Right from the start, it tells us what CSR is "based on", but not what it  is . No actual GMAT question would do that -- if a GMAT question is going to present an argument about a potentially unfamiliar term or concept, the question will actually define that term directly, not in some roundabout way as this question does.

And even ignoring the language problems throughout (there are too many to list), I think the question writer is confused about what a premise is. We are told in the stem that companies inevitably try to maximize profits. That is a premise of the argument, and in GMAT CR, premises are facts; they cannot be wrong. If companies inevitably try to maximize profits, naturally it follows that a CSR company has chosen CSR because it maximizes their profit, and these companies cannot make more profit some other way. So answer C is not an assumption -- it is an inference. The best answer here to my view is A, but it's just not a good question, so it doesn't matter what the best answer is.

Corporate social responsibility (CSR) is based on the idea that firms

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Corporate social responsibility (CSR) is based on the idea that firms

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