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profitable companies

by nahid078 » Fri Jul 03, 2015 11:03 am
Among the one hundred most profitable
companies in the United States, nearly half
qualify as "socially responsible companies,"
including seven of the top ten most profitable on
that list. This designation means that these
companies donate a significant portion of their
revenues to charity; that they adhere to all
relevant environmental and product safety
standards; and that their hiring and employment
policies encourage commitments to diversity,
gender pay equality, and work-life balance.
Which of the following conclusions can be drawn
based on the statements above?

A) Socially responsible companies are, on
average, more profitable than other companies.
B) Consumers prefer to purchase products from
socially responsible companies.
C) It is possible for any company to be both
socially responsible and profitable.
D) Companies do not have to be socially
responsible in order to be profitable.
E) Not all socially responsible companies are
profitable.
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by theCEO » Fri Jul 03, 2015 8:11 pm
nahid078 wrote:Among the one hundred most profitable
companies in the United States, nearly half
qualify as "socially responsible companies,"
including seven of the top ten most profitable on
that list. This designation means that these
companies donate a significant portion of their
revenues to charity; that they adhere to all
relevant environmental and product safety
standards; and that their hiring and employment
policies encourage commitments to diversity,
gender pay equality, and work-life balance.
Which of the following conclusions can be drawn
based on the statements above?

A) Socially responsible companies are, on
average, more profitable than other companies.
B) Consumers prefer to purchase products from
socially responsible companies.
C) It is possible for any company to be both
socially responsible and profitable.
D) Companies do not have to be socially
responsible in order to be profitable.
E) Not all socially responsible companies are
profitable.
A) Socially responsible companies are, on average, more profitable than other companies.
Incorrect - the passage did not say this

B) Consumers prefer to purchase products from socially responsible companies
Incorrect - The passage did not mention anything about consumers.

E) Not all socially responsible companies are profitable
Incorrect - We were not told this. Here is the analogy . A -> B, this doesnot mean not B -> not A.

D) Companies do not have to be socially responsible in order to be profitable
Incorrect - This signifies that profitabilty either or not comes from social responsibility. Not true from the info. we have, profitability can come from for example having a great product or great marketing.

C) It is possible for any company to be both socially responsible and profitable.
Correct.
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by src_saurav » Sun Jul 05, 2015 6:56 am
Answer is C

The passage says that half of the companies qualify.
This indicates that it is possible to be both profitable and socially responsible.
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by bubbliiiiiiii » Wed Jul 08, 2015 1:12 am
A) Socially responsible companies are, on
average, more profitable than other companies.
There are 100 companies under discussion out of which nearly 50 are are socially responsible. Moreover 7 of top 10 most profitable are socially responsible. While this is applicable to top 10 but not to top 100. Thus, incorrect.
B) Consumers prefer to purchase products from
socially responsible companies.


If this were true, then there would be no non socially profitable company in top 10 or top 100. Thus, incorrect.
C) It is possible for any company to be both
socially responsible and profitable.
If this were true then for all companies will be socially responsible. However, there are a few that are and few that are not! Thus, only few companies can manage to be both. Thus, I eliminated. Can you please help me understand this?
D) Companies do not have to be socially
responsible in order to be profitable.
There are nearly 50% of companies in most profitable that aren't socially reponsible yet profitable. Thus, I picked this! But turned out to be wrong. Please help me understand.
E) Not all socially responsible companies are
profitable.
This is too extreme since we aren't discussing ALL social responsible companies but only socially responsible in top 100 most profitable. Thus, incorrect.

Can someone please elaborate on both C and D?
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Pranay
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by src_saurav » Wed Jul 08, 2015 6:43 am
The reason for your elimination is the reason for acceptance. The arguments wants to prove that if top companies can do both, so can every company. That is the conclusion.
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by Sun Light » Wed Jul 15, 2015 4:07 am
C) It is possible for any company to be both
socially responsible and profitable.
If this were true then for all companies will be socially responsible. However, there are a few that are and few that are not! Thus, only few companies can manage to be both. Thus, I eliminated. Can you please help me understand this?

Key Info from the argument:-
"Nearly half are socially responsible.Among the companies that are socially responsible, 7 companies are highly profitable (in top 10). "

A company can be both profitable and socially responsible --> Supported by the facts above,


D) Companies do not have to be socially
responsible in order to be profitable.
There are nearly 50% of companies in most profitable that aren't socially responsible yet profitable. Thus, I picked this! But turned out to be wrong. Please help me understand.


The relationship between being socially responsible and profitable is an observation/co-incidence.

The argument doesn't tell us either that if a company is socially responsible then it can be profitable or that if a company is not socially responsible then it can't be profitable.

The argument doesn't establish any condition or relationship between responsibility and profitability.


Sort of tough..Hope it helps..
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by bubbliiiiiiii » Wed Jul 15, 2015 4:10 am
Sun Light wrote:
C) It is possible for any company to be both
socially responsible and profitable.
If this were true then for all companies will be socially responsible. However, there are a few that are and few that are not! Thus, only few companies can manage to be both. Thus, I eliminated. Can you please help me understand this?

Key Info from the argument:-
"Nearly half are socially responsible.Among the companies that are socially responsible, 7 companies are highly profitable (in top 10). "

A company can be both profitable and socially responsible --> Supported by the facts above,


Agreed with A company can be both profitable and socially responsible. I have issue with the word any.
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Pranay
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by Sun Light » Wed Jul 15, 2015 4:24 am
theCEO wrote:
nahid078 wrote:Among the one hundred most profitable
companies in the United States, nearly half
qualify as "socially responsible companies,"
including seven of the top ten most profitable on
that list. This designation means that these
companies donate a significant portion of their
revenues to charity; that they adhere to all
relevant environmental and product safety
standards; and that their hiring and employment
policies encourage commitments to diversity,
gender pay equality, and work-life balance.
Which of the following conclusions can be drawn
based on the statements above?

A) Socially responsible companies are, on
average, more profitable than other companies.
B) Consumers prefer to purchase products from
socially responsible companies.
C) It is possible for any company to be both
socially responsible and profitable.
D) Companies do not have to be socially
responsible in order to be profitable.
E) Not all socially responsible companies are
profitable.
A) Socially responsible companies are, on average, more profitable than other companies.
Incorrect - the passage did not say this

B) Consumers prefer to purchase products from socially responsible companies
Incorrect - The passage did not mention anything about consumers.

E) Not all socially responsible companies are profitable
Incorrect - We were not told this. Here is the analogy . A -> B, this doesnot mean not B -> not A.

D) Companies do not have to be socially responsible in order to be profitable
Incorrect - This signifies that profitabilty either or not comes from social responsibility. Not true from the info. we have, profitability can come from for example having a great product or great marketing.

C) It is possible for any company to be both socially responsible and profitable.
Correct.
I am not getting a good feeling about the reasoning in 'E'.

We are told that among ~50 companies that are SR, 7 companies are listed and these 7 companies are among the top 10 most profitable companies.

It might be the case where all the companies that are SR are profitable. The number of SR companies that are profitable is not mentioned and would be incorrect to infer.

Analyzing incorrect answers seems to be more important than analyzing right answers.
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by nikhilgmat31 » Thu Jul 30, 2015 4:23 am
Answer is C. it is possible for company to be both.
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by JohnTran » Wed Oct 21, 2015 7:57 am
Hi all,

Just come accross a post a found out the answer in D.

Please refer to the post here:
https://www.businessinsider.com/explaine ... ons-2015-7

Cheers.
Correct answer: D

Almost half of examinees choose C, Galvin says, which is unfortunate, because C is wrong. The test makers know that future MBAs want socially responsible businesses to be profitable and successful, he explains, and they're "praying on that mental inertia that has you rooting for socially responsible businesses."

"Plus," he adds, "choice C is two letters away from being a valid inference: if 'any' were just 'a' ('it is possible for a company to be both socially responsible and profitable'), C would be absolutely correct." But it doesn't say that, and "any" goes a step too far - " particularly when the standard of proof for an Inference question is that the correct answer 'must be true,'" Galvin says.

The correct answer, D, is tricky because "it isn't what you're expecting to hear after a prompt that seems to be glorifying the surge in socially responsible companies," he notes. "But look at the proof: since more than half of the most profitable companies - and three of the top 10 - are not socially responsible, then it must be true that companies don't have to be socially responsible in order to be profitable. Those companies on the list that aren't socially responsible are the proof."

The takeaways from this one: "The 'must be true' standard is critical - and tread extra-carefully when you're evaluating subject matter that's especially meaningful for you."
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