Corporations exist to make money for their shareholders

Question

Corporations exist to make money for their shareholders. Corporations have no money to give away because any excess funds belong to the shareholders. Therefore, corporations should not contribute to charities.

Which of the following most seriously weakens the reasoning in the argument above?

(A) Managers are being trained to consider the ethical, moral and social effects of their decisions in addition to the economic factors.
(B) Some of the largest corporations in the country are known to be major contributors to philanthropic organizations.
(C) Shareholders tend to make larger individual donations to charities than do people who hold no shares in corporations.
(D) Most corporations contribute solely to large, well-known, and highly organized charitable organizations rather than to individuals in need.
(E) The favorable publicity and tax advantages gained by corporate charity often result in an increase in profits greater than the actual costs of making the donations.

sun01 · Answer

Under what condition, the corporation that gives away the excess money shall in some other way be conducive to generating more money.

If we find that, the argument shall be weakened.

Option E does that.

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AkshdeepS · Answer

We need to find an alternate cause that shows charities are also profitable. E says exact the same. Sometimes it is better to go from E to A for POE.

sahilhafnia · Answer

Corporations should not give money to charities because these donations are the excess funds not owned by the corporations themselves. The reasoning quite straight forward.

But what if these the shareholders won't be getting enough money as expected by them if the charities were not made?
I believe such a situation won't let us conclude that corporations should not donate funds to charities.

Looking at options :

A) We have to focus on what corporations should be doing and not on what are the managers being trained about or for. Even if managers are trained in such good values, there is no point of being aware of such an information because we don't know if these managers will work for these corporations, or in fact, they will be doing as trained. This option has no impact on the conclusion. Incorrect choice.

B) Even if some large corporations are major donors, does that mean all corporations should follow them in the same way? I don't think this option answers this question, so this option has no bearing on the conclusion. Incorrect choice.

C) Again, our focus is being diverted to what the shareholders tend to do. Does this option in any way hint that these shareholders want the same to be done by the corporations. We have no idea. Hence incorrect choice.

D) This option tells us about which entities most corporations prefer to donate to . But our question is "should they be making charities with the extra funds they have? " The option does not answer this or provides us a link or hint towards it. Incorrect choice.

E) If the profits received by making charities are so good, why shouldn't corporations make charities ? 
This will only benefit the shareholders as the goal of making money for them will be fulfilled by the corporations. This option hints that corporations should be diverting funds to charities and hence weakens our conclusion. Should be the correct choice.

VerbalBot · Answer

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Corporations exist to make money for their shareholders

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Corporations exist to make money for their shareholders

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