corporate profits

This topic has expert replies
User avatar
Legendary Member
Posts: 758
Joined: Sat Aug 29, 2009 9:32 pm
Location: Bangalore,India
Thanked: 67 times
Followed by:2 members

corporate profits

by sumanr84 » Wed Jun 30, 2010 6:07 am
Economist: Drastically cutting payroll costs by reducing employees will bolster corporate profits and the national economy. In such a restructuring, the remaining employes must be organized to work more efficiently, which includes increasing their amount of overtime work, rather than hiring new underutilized personnel. The resulting increase in national productivity will then allow those who were made jobless to find work in new positions that will have sprung up with the healthier economy.

Which of the following, if true, casts most doubt on the economist's conclusion above?

a. If employees are made to work longer hours, the additional hours worked will not be as productive as the regular hours these same employees have already worked.
b. Most corporations are already at the minimum numbers of employees needed to effectively maintain their operations.
c. Some economists predict that the national economy will substantially improve in the next two years even without drastic reductions in payroll costs.
d. If corporations reduce the number of employees, the average number of employees per company will decrease.
e. Many of the new positions in a restructured economy would be lower paying than those lost during the restructuring.
[spoiler]Source : kaplan cat2, OA later[/spoiler]
I got this wrong today..easy peesy..damn.. :(
I am on a break !!
Source: — Critical Reasoning |

User avatar
Master | Next Rank: 500 Posts
Posts: 392
Joined: Sun May 16, 2010 2:42 am
Location: Bangalore, India
Thanked: 116 times
Followed by:10 members
GMAT Score:770

by albatross86 » Wed Jun 30, 2010 6:40 am
A. The overtime hours are not as productive. This doesn't break the argument since there are other ways that efficiency will increase - overtime is only one example.

B. Exactly. If they are already at the minimum, reducing it further will affect operations negatively and could result in reduced profits.

C. It will improve anyway, but perhaps even more with this proposal.

D. Irrelevant. This is expected and doesn't attack the conclusion.

E. New positions - lower paying. So what, we are only concerned with the overall impact on the economy, which may still be positive.

Pick B.
~Abhay

Believe those who are seeking the truth. Doubt those who find it. -- Andre Gide

Master | Next Rank: 500 Posts
Posts: 437
Joined: Sat Nov 22, 2008 5:06 am
Location: India
Thanked: 50 times
Followed by:1 members
GMAT Score:580

by beat_gmat_09 » Wed Jun 30, 2010 6:41 am
sumanr84 wrote:Economist: Drastically cutting payroll costs by reducing employees will bolster corporate profits and the national economy. In such a restructuring, the remaining employes must be organized to work more efficiently, which includes increasing their amount of overtime work, rather than hiring new underutilized personnel. The resulting increase in national productivity will then allow those who were made jobless to find work in new positions that will have sprung up with the healthier economy.

Which of the following, if true, casts most doubt on the economist's conclusion above?

a. If employees are made to work longer hours, the additional hours worked will not be as productive as the regular hours these same employees have already worked.
b. Most corporations are already at the minimum numbers of employees needed to effectively maintain their operations.
c. Some economists predict that the national economy will substantially improve in the next two years even without drastic reductions in payroll costs.
d. If corporations reduce the number of employees, the average number of employees per company will decrease.
e. Many of the new positions in a restructured economy would be lower paying than those lost during the restructuring.
[spoiler]Source : kaplan cat2, OA later[/spoiler]
I got this wrong today..easy peesy..damn.. :(
Choice B.
Conclusion - Bolster Profits by cutting costs by reducing employees
Point to attack - Drastically cutting payroll costs by reducing employees will bolster corporate profits
A - Productivity does not weaken
C - not relevant
D - This point only mentions reducing number of employees and average no of employees, no effect of profits, moreover this point does nothing to weaken the arg
E - This strengthens and does not weaken.

Master | Next Rank: 500 Posts
Posts: 379
Joined: Wed Apr 07, 2010 12:53 am
Location: Chennai,India
Thanked: 3 times

User avatar
Legendary Member
Posts: 758
Joined: Sat Aug 29, 2009 9:32 pm
Location: Bangalore,India
Thanked: 67 times
Followed by:2 members

by sumanr84 » Wed Jun 30, 2010 9:05 am
OA : B
I am on a break !!

User avatar
Legendary Member
Posts: 1261
Joined: Sun Sep 14, 2008 3:46 am
Thanked: 27 times
GMAT Score:570

by reply2spg » Fri Jul 23, 2010 6:16 pm
Damn it is easy but took me almost 3 minute....if employees are already at minimum level then what is the need of employing new employees?

B is correct
sumanr84 wrote:Economist: Drastically cutting payroll costs by reducing employees will bolster corporate profits and the national economy. In such a restructuring, the remaining employes must be organized to work more efficiently, which includes increasing their amount of overtime work, rather than hiring new underutilized personnel. The resulting increase in national productivity will then allow those who were made jobless to find work in new positions that will have sprung up with the healthier economy.

Which of the following, if true, casts most doubt on the economist's conclusion above?

a. If employees are made to work longer hours, the additional hours worked will not be as productive as the regular hours these same employees have already worked.
b. Most corporations are already at the minimum numbers of employees needed to effectively maintain their operations.
c. Some economists predict that the national economy will substantially improve in the next two years even without drastic reductions in payroll costs.
d. If corporations reduce the number of employees, the average number of employees per company will decrease.
e. Many of the new positions in a restructured economy would be lower paying than those lost during the restructuring.
[spoiler]Source : kaplan cat2, OA later[/spoiler]
I got this wrong today..easy peesy..damn.. :(
Sudhanshu
(have lot of things to learn from all of you)

Legendary Member
Posts: 784
Joined: Sun Apr 03, 2011 3:51 am
Thanked: 114 times
Followed by:12 members

by patanjali.purpose » Wed Nov 21, 2012 10:41 pm
Economist: Drastically cutting payroll costs by reducing employees will bolster corporate profits and the national economy. In such a restructuring, the remaining employees must be organized to work more efficiently, which includes increasing their amount of overtime work, rather than hiring new underutilized personnel. The resulting increase in national productivity will then allow those who were made jobless to find work in new positions that will have sprung up with the healthier economy.

Which of the following, if true, casts most doubt on the economist's conclusion above?

a. If employees are made to work longer hours, the additional hours worked will not be as productive as the regular hours these same employees have already worked.
Can anyone explain why is A INCORRECT?

Since the argument says "employees must be organized to work more efficiently, which includes increasing their amount of overtime". It means INCREASING AMOUNT OF OVERTIME (one of the ways) WILL LEAD TO HIGHER PRODUCTIVITY. But, if during OVERTIME employees are NOT AS PRODUCTIVE AS regular hours, then how can we say that RESTRUCTURING WILL lead to increase in national productivity. Pls help