Transnational cooperation among corporations is experiencing a model

Question

Transnational cooperation among corporations is experiencing a model renaissance among United States firms, even though projects undertaken by two or more corporations under a collaborative agreement are less profitable than projects undertaken by a single corporation. The advantage of transnational cooperation is that such joint international projects may allow United States firms to win foreign contracts that they would not otherwise be able to win.

Which of the following statements by a United States corporate officer best fits the situation of United States firms as described in the passage above?

Which of the following statements by a United States corporate officer best fits the situation of United States firms as described in the passage above?

(A) “We would rather make only a share of the profit and also risk only a share of a possible loss than run the full risk of a loss.”

(B) “We would rather make a share of a relatively modest profit than end up making none of a potentially much bigger profit.”

(C) “We would rather cooperate and build good will than poison the business climate by all-out competition.”

(D) “We would rather have foreign corporations join us in American projects than join them in projects in their home countries.”

(E) “We would rather win a contract with a truly competitive bid of our own than get involved in less profitable collaborative agreements.”

CrackverbalGMAT · Accepted Answer

Let us simplify the question -

Transnational cooperations are - 
1. less profitable than if the company bids alone
2. but more likely to win projects than if the company bids alone

and they are growing in popularity.

So, the Corporate officer opts for something that is less profitable but more likely to win projects than if the company bids alone.

Which option closely states this? Option B.

A - Incorrect.
Note that the argument talks about winning bids, not about losses. While option A may very well be true, we cannot infer this from the argument.
Also, failure to win transnational contracts need not necessarily lead to "full risk of loss".

B - correct answer.
we know that such agreements are "less profitable" than bidding alone. But bidding by the company without such agreements carries the risk of not winning the contracts.

C - incorrect.
No mention of "good-will" and "poisoning the business climate". the paragraph only talks about the possibility of winning bids.

D - Incorrect.
No mention of American projects. No mention of transnational projects being American projects.

E - Incorrect.
Not true. Otherwise, transnational projects would not be so popular.

Kurtosis · Answer

Transnational cooperation --> Disadvantage: joint projects less profitable than independently handed projects. Advantage: Win contracts that they wouldn't have won without forming a cooperation.

Question tests us on similar reasoning.

(A) “We would rather make only a share of the profit and also risk only a share of a possible loss than run the full risk of a loss.” - Incorrect. Argument does not provide info about loss.

(B) “We would rather make a share of a relatively modest profit than end up making none of a potentially much bigger profit.” - Correct.

(C) “We would rather cooperate and build good will than poison the business climate by all-out competition.” - Incorrect. 'Poison the business climate'? The tone of the argument is not too harsh.

(D) “We would rather have foreign corporations join us in American projects than join them in projects in their home countries.” - Incorrect. Out of scope.

(E) “We would rather win a contract with a truly competitive bid of our own than get involved in less profitable collaborative agreements.” - Incorrect. Opposite to what is stated in the argument.

Answer: B

Carcass · Answer

This is a tough one.

The real clues to solve the question are in the second part of the first sentence

The bold part actually means the share among two or more corporations is less than that which could have ONE only firm if it has the deal.

The red part is a clue that we are talking about profit.

The two indications lead us tho answer choice B. The others are out of scope.

Hope is clear now.

Regards

AkshdeepS · Answer

Which of the following statements by a United States corporate officer best fits the situation of United States firms as described in the passage above?

Using POE we can easily eliminate C, D,and E.

From A and B, (B) is the winner as in (A) we don't have any info about losses. B uses soft language.

(A) “We would rather make only a share of the profit and also risk only a share of a possible loss than run the full risk of a loss.”

( B) “We would rather make a share of a relatively modest profit than end up making none of a potentially much bigger profit.”

(C) “We would rather cooperate and build good will than poison the business climate by all-out competition.”

(D) “We would rather have foreign corporations join us in American projects than join them in projects in their home countries.”

(E) “We would rather win a contract with a truly competitive bid of our own than get involved in less profitable collaborative agreements.”

anothermillenial · Answer

The stimulus tells us that transnational cooperation is changing amongst US firms. The author states that the future advantage of winning foreign contracts is considered to be a factor in the “model renaissance” occurring even though such joint projects are “less profitable.” We are looking for an answer choice that combines the premises into the corporate officers most likely statement.
 
(A) “We would rather make only a share of the profit and also risk only a share of a possible loss than run the full risk of a loss.”

This answer choice is half right. The “full risk of a loss” is not supported by the statements - only that projects are “less profitable.” This is too extreme for the mild tone of the stimulus.  
 
(B) “We would rather make a share of a relatively modest profit than end up making none of a potentially much bigger profit.”

This is the correct answer because the project would be “less profitable” (“relatively modest profit”) but might allow US to win foreign contracts that “would not otherwise be able to win” (“none of a potentially bigger profit”).

(C) “We would rather cooperate and build good will than poison the business climate by all-out competition.”

There is no mention of good will building. This is out of scope for a must be true type question.

(D) “We would rather have foreign corporations join us in American projects than join them in projects in their home countries.”

There is no mention of joint projects in one location over the other. Out of scope

(E) “We would rather win a contract with a truly competitive bid of our own than get involved in less profitable collaborative agreements.”

There is no mention of “competitive bids”. Out of scope.

rishab0507 · Answer

POE

(A) “We would rather make only a share of the profit and also risk only a share of a possible loss than run the full risk of a loss.”
Argument doesn't talk about the loss part, Only profit So we can eliminate this choice for over assumption
(B) “We would rather make a share of a relatively modest profit than end up making none of a potentially much bigger profit.”
Correct, THis choice only concentrates on profit which is talked in question stem
(C) “We would rather cooperate and build good will than poison the business climate by all-out competition.”
No concern of good will, OFS, Incorrect
(D) “We would rather have foreign corporations join us in American projects than join them in projects in their home countries.”
OFS
(E) “We would rather win a contract with a truly competitive bid of our own than get involved in less profitable collaborative agreements.”
This is exact opposite what we need to find .

IMO B

TheUltimateWinner · Answer

ccooley 
Hello mam
Did we consider the green part to reach choice B? can you explain a bit?
Thanks__

shiva3415 · Answer

Option B says " than end up making none of a potentially much bigger profit" . However the statement gives no clue if winning international bid would be a potentially bigger profit. can someone kindly explain this ?

MBAB123 · Answer

Hey shiva3415 this information is given in the way the argument is structured. First, the argument tells us that the collaborative agreements are not as profitable as working alone, but then tells us why the firms are still doing it. The firms believe that there is a bigger profit in foreign contracts. The decision itself sounds like a decision based on profits, revenues, etc (basically, money). If a firm is giving up profit for another activity, it obviously sees more profit in that other activity. Of course, all of this above might turn out to be a blunder by these firms, but this is what they believe. Hope this helps!

Abhishek_pal · Answer

Can we say that it is parallel reasoning type question

Transnational cooperation among corporations is experiencing a model

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Transnational cooperation among corporations is experiencing a model

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