PrepTest 117, Section 3, Question 3
Chairperson: The board of directors of our corporation(48 more words not shown)
The chairperson's reasoning most closely(8 more words not shown)
- AA corporation should(9 more words not shown)
- BCorporations should expand(11 more words not shown)
- CPolitical stability is(13 more words not shown)
- DCorporations should always(9 more words not shown)
- EBoards of directors(12 more words not shown)
Reading the argument
More profit sounds attractive. I'd still want to know what we're getting into.
The chairperson isn't telling the board to reject expansion. The recommendation is to think further before accepting the foreign governments' incentives. That distinction matters: asking for consideration leaves both eventual decisions open.
And there is a reason to pause. Neither country is politically stable. Could the instability threaten the employees' safety? Could it interrupt operations and create a headache that outweighs the extra profit? Those are questions the company should investigate before committing, not facts the passage has already established about these countries.
What we’re looking for
I find that caution reasonable. We'd have to think the chance to make money settled the whole decision to dismiss every other concern. The question asks for the principle that best fits this reasoning. I'd predict a rule telling companies to be careful about entering unstable countries, while leaving room to expand after considering the risks. Keep that modest recommendation intact when reading the answers.
Working the answers
- A
Never expand is a much stronger policy than think carefully before expanding. Under A, further investigation couldn't change the answer: political instability would automatically rule the country out. The chairperson hasn't gone that far. The board might consider the risks and still decide that expansion makes sense.
- B
A chance to increase profits is already present, yet the chairperson still wants further consideration. This rule treats that chance as a reason companies should go ahead. It doesn't capture the caution that is the point of the recommendation.
- C
Political stability matters here, but that doesn't establish that it matters more than every other consideration. Employee safety, expected profits, operating costs, or other factors might also deserve attention. We shouldn't turn the fact that the chairperson raises one concern into a ranking of all possible concerns.
- DCorrect
Be cautious about expanding into politically unstable countries. The company faces exactly that situation, and the chairperson responds by asking the board to think further before being enticed by the incentives. Caution can lead to a considered approval or a considered rejection; it doesn't require either result in advance.
- E
The chairperson doesn't say to ignore the incentives. They may be valuable and may help make expansion worthwhile. The objection is to letting them settle the decision without considering the instability. We need to weigh the incentives alongside other concerns, not pretend the incentives don't exist.
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