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Transnational cooperation among corporations is experiencing

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Transnational cooperation among corporations is experiencing

by RBBmba@2014 » Sat Oct 03, 2015 6:45 am
Transnational cooperation among corporations is experiencing a modest 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?

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."

OA: B
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by MartyMurray » Sat Oct 03, 2015 10:23 pm
As is generally the case with CR questions, the key to getting the right answer to this one is understanding the logic of what is going on in the prompt and answer choices.

As you read the prompt you notice that the idea being discussed is that while business done in partnerships is not as profitable as business done by a firm on its own, United states firms get involved in transnational partnerships in order to win contracts that they would not win were they not to get into such partnerships.

As I read it I was wondering what exactly the nature of the partnerships is and whether the American firms get involved with firms in particular countries in order to do business in the countries in which the partner firms are located, but these details are not provided, and so I guess one has to go with the information that is clearly provided and leave it at that. It turns out that doing that works fine for determining the right answer.

A) This statement implies that the United States corporation is doing something to mitigate the risk of loss, but that's not the reason for cooperation described in the prompt.

B) This sounds as if it could be it. The prompt describes firms cooperating transnationally to get business they would not otherwise get, even if that business is less profitable than business engaged in alone, and this statement discusses making a share of a modest profit rather than making no profit at all. That's pretty close.

C) This statement is not about getting business but about maintaining good will.

D) This statement, while it does discuss transnational cooperation, is about a preference for certain kinds of partnerships rather than about reasons for engaging in partnerships. Further it's about doing business at home rather than winning foreign contracts. So it does not fit.

E) Unlike most of the other answer choices, this statement discusses what is discussed in the prompt. However, this statement discusses a reason for not getting into collaborative agreements while the prompt talks about firms that are getting into such agreements.

So the best answer is B.
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by RBBmba@2014 » Mon Oct 05, 2015 7:38 am
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."
Marty - (1) I think, another reason why option A is WRONG is that it talks about LOSS, which is NOT discussed in the argument and hence, IRRELEVANT.

(2) Also, in any business, NO PROFIT doesn't necessarily mean there is LOSS incurred. Right ?

Please let me know your thoughts on my above queries.Thank you!
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by MartyMurray » Mon Oct 05, 2015 9:05 am
RBBmba@2014 wrote:
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."
Marty - (1) I think, another reason why option A is WRONG is that it talks about LOSS, which is NOT discussed in the argument and hence, IRRELEVANT.
I agree. At the same time it sounds to me as if you need to be a little more careful about using simple rationales for eliminating answer choices. In this case doing that works, but in other cases there can be convoluted reasons why something that seems irrelevant, because it seems to be discussing something unrelated to the argument, is actually relevant. Notice, while I also mentioned the discussion of loss, I went further by considering the overall nature of the answer choice.
(2) Also, in any business, NO PROFIT doesn't necessarily mean there is LOSS incurred. Right ?
Right.
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by RBBmba@2014 » Mon Oct 05, 2015 10:26 am
Marty Murray wrote:
RBBmba@2014 wrote:
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."
Marty - (1) I think, another reason why option A is WRONG is that it talks about LOSS, which is NOT discussed in the argument and hence, IRRELEVANT.
I agree. At the same time it sounds to me as if you need to be a little more careful about using simple rationales for eliminating answer choices. In this case doing that works, but in other cases there can be convoluted reasons why something that seems irrelevant, because it seems to be discussing something unrelated to the argument, is actually relevant. Notice, while I also mentioned the discussion of loss, I went further by considering the overall nature of the answer choice.
Marty Murray wrote:A) This statement implies that the United States corporation is doing something to mitigate the risk of loss, but that's not the reason for cooperation described in the prompt.
Marty - In relation to TWO of the above RED parts in your quotes, just would like to be sure whether I got you right or not ?

When you say to mitigate the risk of loss , I guess,you ACTUALLY mean that to mitigate the risk of FULL loss by making partial profit...Correct ?

Please clarify.
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by MartyMurray » Mon Oct 05, 2015 4:08 pm
RBBmba@2014 wrote:When you say to mitigate the risk of loss , I guess,you ACTUALLY mean that to mitigate the risk of FULL loss by making partial profit...Correct ?
I guess what I mean is reducing or eliminating the risk of a full loss by entering into a cooperative agreement and by doing so also making only a partial profit.
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